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What’s the MOOC Endgame?

2013 January 10
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by Eric Horowitz

Tamar Lewin’s story on the struggles of MOOCs to generate revenue has revived talk about what the future holds for online courses. A lot of the discussion pertains to partnerships between MOOCs and brick-and-mortar universities, but in the long-run I’m skeptical of these arrangements because MOOCs and traditional universities are natural competitors. In fact, MOOCs are just about the only thing with a chance of ending the bachelor’s degree’s decades long reign as the only thing that can make you employable, a reign that has been very lucrative for those that grant them.

Universities may have initially embraced elements of MOOCs, perhaps for altruistic reasons and perhaps as a way to enroll more students and collect more tuition. But as the purveyors and beneficiaries of the bachelor’s degree, universities don’t want to see any real competition in the credentialing market. Ultimately they will do whatever they can to stop the existence of a $5,000 online “degree” that’s as useful as a B.A. from a top brick-and-mortar school. To not do so would be like Apple allowing somebody to make a $20 iPhone. So while some amount of licensing between MOOC providers and Universities will take place, Universities will ultimately fight real credentialing of independent MOOCs. (And by “real credentialing,” I mean credentials that will make people sought after by employers, not certificates than mean nothing if you don’t already have a college degree.) Universities are extremely powerful, and it seems unlikely they’ll allow a world where large swaths of talented 18-year-olds are deciding to pay $5,000 to get a B.A.-equivalent credential from online classes.

The question is, if Universities lock MOOCs out of the lucrative business of providing valuable credentials, what will MOOCs do?

I think one possibility is that businesses or other non-profits will replace universities as the MOOC partner with credentialing muscle. For example, Google could say that if you take these 32 MOOCs and pass these 10 tests (some of which could be developed by the MOOC provider but some of which could be developed and administered by Google itself), then you’re approved to work certain jobs at Google. If you want a better job at Google, then you have to pass the 38 MOOC bundle. Of course somebody who passes the tests wouldn’t have to work at Google. If they to work for Microsoft or their local government a Google “degree” would be enough to earn consideration for a job. The beauty of this system is that young people will be able to take a bundle of classes that’s more specific to what they want to do. And the bundels don’t all need to be 30 classes. There could be a four-class GE engineering bundle or a six-class Brookings Institution public policy bundle.

What’s in it for businesses? Lower costs. Imagine that 10 years from now advances in MOOC and assessment technology essentially allow somebody gain the knowledge of a Harvard B.A. for a $10,000. There’s no way Harvard is going to start giving away $10,000 degrees — the school will keep charging $40,000 a year so it can preserves its financial structure. But where does all that extra tuition money go? The answer is that a lot of it goes into the paychecks of those Harvard graduates. Or more specifically, it comes out of the bank accounts of the companies that hire those graduates. Because when you’ve spent $160,000 on an education, you damn well better be paid like you have a $160,000 education. The results is a society where it’s in the best interest of employers for students to get the cheapest and most efficient education possible, but it’s in the best interest of universities for students to get the most expensive education possible. If MOOCs use employers in order to gain legitimate credentialing power it will be the first time that credentials are being doled out by parties that want them to be as inexpensive as possible. Instead of being used by universities to make more money, tuition savings from MOOCs will be distributed among course creators, students, and employers.

Does this mean a partnership between MOOC’s and corporate America is bound to happen? Of course not. But there’s a compelling case that independent MOOCs and businesses are natural allies while MOOCs and brick-and-mortar Universities are natural competitors.

One Response leave one →
  1. January 11, 2013

    Thanks for the article, you really make a compelling case for a MOOC and corporate partnership. I think that as more and more people come to the realization that a college degree doesn’t actually validate a students abilities, the likelihood of MOOCs be able to partner with corporations increases.

    I also think MOOCs have great potential in the K-12 sphere to open up new opportunities to bring high level educations to junior and high school kids.

    I’m looking forward to hearing more from you.

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