Note: This Part 2 of MOOCs—The End to Traditional Universities? by Christian Simm, swissnex San Francisco, and Pedro Pinto, EPFL. Read Part 1.

Take a cumulative student loan debt in America of about $1 trillion (surpassing credit card debt), new developments in artificial intelligence, more affordable tools for video capturing, editing, and sharing, widespread availability of broadband Internet, innovative interactions enabled by social media, and visionary professors turned entrepreneurs. The result is MOOCs—Massively Open Online Courses—and possibly a major threat to traditional universities.

The Benefits of MOOCs

Beyond providing widespread access to education, MOOCs offer a way to connect and collaborate and to engage in the learning process. Maybe most importantly, they provide an event around which people interested in a subject come together in a structured way. Since the work done in the course is shared among all the people taking it, everyone gets to learn from the difficulties, insights, and achievements of the other participants.

A MOOC also has the potential to overcome a basic limitation of traditional education: teaching for the average, whereby weak students are left behind and strong students are slowed down. MOOCs provide a way around this through adaptive personalization, in which each student can custom-tailor the course and only advances once he or she has demonstrated mastery of the material. Although MOOCs are highly automated, with computer-graded assignments and exams, students typically ask and answer questions through discussion fora, blogs, and tweets. And with many participants distributed all over the globe, the waiting time for a reply is never long. In short, MOOCs promote independence among learners, let participants work at their own speed, and encourage networks of people that are easy to maintain after the course is over. They also present a number of challenges that promise to shake up the education establishment.

Current Players

The current commercial MOOC players (whose business plans vary widely at the moment) are lead by Udacity, co-founded by Sebastian Thrun and offering six courses at this point, and Coursera, an initiative by Stanford University AI professors Daphne Koller and Andrew Ng with about 40 courses planned. They are followed by startups including Udemy, Pathwright, P2Pu, CourseSites, and The Minerva Project. Many expect Apple, with iTunesU, and YouTube, with smart channels, to join the competition.

Universities have also gotten into the MOOC space. In May, MIT elected Rafael Reif president. Perhaps it is no coincidence that he’s also behind the development of MITx, the Institute’s new initiative in online learning. In April 2012, Harvard and MIT launched edX, a transformational new partnership in online education that received a $1 million award in June from the Gates Foundation. Princeton, Stanford, Berkeley, Michigan Ann Arbor, and the University of Pennsylvania all offer courses through Coursera and may have their own initiatives in the works as well.

Even TED launched a new educational platform, TED-ed. ClassCentral provides a directory of free online courses, and MindShift posts a “Guide to Free, Quality Higher Education.” But is more necessarily better? And again, what does it all mean for the Ivory Towers of higher education?

Questions and Concerns

As is so often the case with disruptive ideas, in particular in the Silicon Valley, the pressure is to be first to market and to maximize the number of adopters before fine-tuning the economic model. With such a ready-fire-aim approach, trial-and-error is the norm, while other fundamental questions such as monetization are postponed. It follows naturally that of all the newcomers jumping into the MOOC business, most are still figuring out how, if, and whether or not they should make money with online learning.

It is quite unclear who owns these courses, the professor or his or her institution? And not only the courses, who owns videos, quizzes, student responses to assignments, and click analytics? Perhaps instead of hundreds of parallel courses in the same subject, a worldwide standard (The Definitive Introduction to Artificial Intelligence, for example) will quickly emerge—possibly a first-comer advantage—that levels out cultural sensitivities. But if the top educators in the world turn into production houses of Hollywood-quality content, what is the role of teachers in second-tier universities with equally legitimate expertise?

If MOOCs are to be monetized individually, universities will first need to determine their value, not only in terms of cost to produce but factoring in teachers’ reputation and draw. Then there is the tuition-related wrinkle. Will online students earn course credits the same as those who are paying full tuition to attend the university? And if MOOCs enable students to receive (free) degrees from prestigious (expensive) universities, what incentives are left to enroll on campus, and what does this mean for the Harvards, MITs, and Stanfords of the world?

So far participation in MOOCs is often free and most universities have not (yet) agreed to put their official stamp on diplomas earned through these courses. This may change, though, and with that change universities will have to figure out if they want to re-brand online degrees to avoid diluting the value and exclusivity of traditional diplomas. This will certainly bring economic considerations, such as fees for certifications and recruiting. In addition, a new level of administration will enter into the equation to verify the identity of online students, if that’s even possible.

John Hennessy, President of Stanford University, recently mentioned that “there’s a tsunami coming” in online education. It will be interesting to see if this tsunami will be as revolutionary as digital marketplaces were to the music industry. While it is yet unclear which platform will be the iTunes of online education, one thing is certain: the biggest winners will be the students in developing countries, where at this very moment the next Nikola Tesla or Stephen Hawking could be learning online from a course otherwise inaccessible to them.

Go back to Part 1 of this post.

MOOCs Bibliography  prepared with the help of Gérard Escher, EPFL

About the authors
  Christian Simm is the Executive Director and Founder of swissnex San Francisco. A recovering phycisist and self-described complexity manager, he recently dove into the world of MOOCs by visiting key players in Silicon Valley. More about Christian.
Pedro Pinto is a former entrepreneur in residence at swissnex San Francisco. He holds a Ph.D. in electrical engineering and computer science from the Massachusetts Institute of Technology (MIT) and is a Postdoctoral Associate at EPFL. More about Pedro.