The Australian

The global titans of higher education are expanding their market reach

By Sean Gallagher and Geoffrey Garrett

Last month, Harvard University and the Massachusetts Institute of Technology jumped into the brave new world of massive open online courses.

With their new edX initiative, these two leading Boston-based universities have for the first time staked their credibility online by offering Harvard and MIT certificates of completion.

They are a long way from fully fledged degrees, but students all around the world will no doubt clamour to get edX certificates for classes that are free and open to anyone who wants to take them.

The student benefits of edX are clear — great classes taught by world-leading professors at no financial cost to students. Online education pioneer and former University of Southern California provost Lloyd Armstrong contends that "because of the rigour of courses, the graduates would likely be better prepared than the grads of a large fraction of accredited schools".

But why are Harvard and MIT willing to risk their priceless reputations by credentialling students they don't admit through traditional quality channels?

The simple answer is that they don't see it as a risk. Rather than potentially undermining their brands, edX intends to globalise them. And in time, Harvard and MIT probably will be able to make money from edX the way some newspapers now profit from online content they used to give away.

And, if anything, the value of the brand and the premium for Harvard and MIT on campus educations will rise still higher.

Harvard and MIT are far from alone in bringing massive open online courses (MOOCs) into their curriculums. Stanford, Princeton, Penn, Berkeley, Duke and Michigan, among others, have created MOOC platforms behind names such as Udacity, Udemy and Coursera. That all these elite American universities are investing their reputations, and almost $US100 million ($103m) with Silicon Valley backing on top, is the strongest indication yet that online learning will be a major part of the future of higher education.

Student response has been extraordinary. Some classes have already attracted enrolments of more than 100,000, with students coming from more than 100 countries. The New York Times refers to MOOCs as the "democratising of higher education". This is no doubt true. But MOOCs are also a great example of what Harvard Business School professor Clayton Christensen calls "disruptive innovation", where a new technology and a new business model disrupt incumbents by making a previously exclusive product accessible to more people, at lower cost.

Harvard and MIT stress that edX "will never replace the traditional residential model of undergraduate education". They are right. But MOOCs can and will expand the reach of the global titans of higher education, in markets that will increasingly look like "winner take all".

Why show up to an average history lecture in an ageing lecture theatre in Delhi, Durban or Durham when you can stay at home and take the class from Harvard's Niall Ferguson?

But the bigger upside to MOOCs concerns the potential credentialling they generate. Consider three possible scenarios.

First, MOOC credentials from world-class universities could come to be accepted as comparable to degree training from lesser institutions.

For instance, might some employers not value the skills and competency of someone who completed Udacity's Building a Search Engine, taught by legendary Stanford professor Sebastien Thrun over a computer science degree from a university outside the Jiao Tong 500? 

Second, MOOCs might be used as prerequisites for on-campus degrees. In Australia and other countries with large international student populations, completing MOOCs could potentially augment if not replace other admissions criteria.

Finally, universities could start incorporating elite MOOCs into their degree programs. For example, MOOCs could replace some first-year large lecture format teaching of core subjects taught the world over, with, say, introduction to macroeconomics by Harvard's Greg Mankiw.

Time will tell if any of these futures play out. After all, elite online higher education died an abrupt death when the dotcom bubble burst a decade ago. But this time it looks different.

The most striking thing about edX and other top MOOCs is the commitment of world-leading institutions to the global proliferation of knowledge. 

For centuries, universities have practised this credo, but they have done so one student, one seminar room and one lecture hall at a time.

In the MOOC world, the proliferation possibilities are limitless and instantaneous.

Traditional universities therefore face two challenges. First, they must decide how to get into the MOOC game, either by producing their own where they are competitive or integrating best-of-breed MOOCs into their educational offering. 

Second, universities must refocus on the value proposition of a costly on-campus higher education when free or lower-cost online yet higher quality options are everywhere. 

This will inevitably mean enhancing group learning skills such as communication, collaboration and leadership rather than merely imparting textbook knowledge. MOOCs are poised to turbo-charge the competitiveness challenge. The time is now for our universities to begin rising to it.