1. A/Prof Jeffrey Funk Division of Engineering and Technology
Management National University of Singapore Primary Sources: Beyond
the MOOC Hype: A Guide to Higher Educations High Tech Disruption,
Jeffrey Young MOOCs: Opportunities, Impacts and Challenges, Michael
Nanfito MOOC U: Who is Getting the Most Out of Online Education and
Why, Jeffrey Selingo
2. The cost and importance of education has risen Student debt
has ballooned Do universities need a new business model? With the
rising cost of education, should they try to lower their costs? try
to increases the chances their students will find better paying
jobs? Teach those skills that are in demand? Help students better
understand the job market, including skills in demand? Help forge
stronger ties with companies? Do any professors even think of these
things?
3. Traditional Business Model Change: Increasing Importance of
Research Revenues at Universities What are the implications of
increasing important of Research for current business model?
Change: Increasing availability of information from the Internet
What are the implications of this increasing availability of
information from the Internet on University Business models? What
should universities do?
4. What is value proposition? Who are the customers and how do
they vary? What is method of value capture? What is scope of
activities? What is method of strategic control?
5. What is value proposition? Provide education, enable higher
salaries Learn about life, make friends and enable social mobility
Who are customers and how do they vary? Students, parents,
governments Differ by income, major, gender, ethnicity, interests,
families What is method of value capture? Tuition, Government
subsidies, Research funding What is scope of activities? Many
universities offer wide variety of courses, do all teaching, also
do research Some outsourcing of teaching, maintenance, other things
What is method of strategic control? Monopoly on providing
certificates of capability High barriers to entry since broad
curriculum is needed Large importance of brand
6. At the moment colleges have a monopoly on the sale of
college credits, the only units of learning that can be assembled
into credentials with wide acceptance in the labor market.
Monopolies are valuable things to control, and monopolies tend not
to relinquish them voluntarily. But the MOOC explosion will
accelerate the breakup of the college credit monopoly Should
students receive credit from online courses? Students can receive
credit from a physical course with a C but online students cant
receive credit even if they receive an A Kevin Carey
7. Which US universities have graduates with the highest
salaries?
8. Rankings of US Universities by Mid-Career Salary
http://www.payscale.com/college-salary-report-2014/full-list-of-schools
RANK SCHOOL NAME STARTING SALARY MID-CAREER SALARY 1 Harvey Mudd
College $73,300 $143,000 2 United States Naval Academy (USNA) at
Annapolis * $77,100 $131,000 3 - tie California Institute of
Technology (Caltech) $68,400 $124,000 3 - tie Stevens Institute of
Technology $64,900 $124,000 5 Babson College $59,700 $123,000 6
Princeton University $56,100 $121,000 7 United States Military
Academy (USMA) at West Point * $74,000 $120,000 8 - tie Stanford
University $61,300 $119,000 8 - tie Harvard University $55,300
$119,000 8 - tie Brown University $52,300 $119,000 11 Massachusetts
Institute of Technology (MIT) $68,600 $118,000 12 - tie Colgate
University $51,800 $117,000 12 - tie Yale University $50,000
$117,000 14 - tie Polytechnic Institute of New York University
(NYU-Poly) $60,700 $116,000 14 - tie SUNY - Maritime College
$59,400 $116,000 14 - tie Cooper Union for The Advancement of
Science and Art $61,400 $116,000 17 - tie Tufts University $48,800
$115,000 17 - tie Haverford College $38,600 $115,000 19 Washington
and Lee University $48,000 $113,000 20 - tie Lehigh University
$58,500 $111,000 20 - tie Williams College $50,400 $111,000 20 -
tie University of California - Berkeley $54,700 $111,000 20 - tie
Rose-Hulman Institute of Technology (RHIT $65,100 $111,000 24 - tie
University of Notre Dame $54,000 $110,000 24 - tie Santa Clara
University $53,300 $110,000 24 - tie Manhattan College $55,200
$110,000 27 - tie Swarthmore College $51,000 $109,000 27 - tie
University of Pennsylvania $57,200 $109,000 27 - tie United States
Air Force Academy (USAFA) * $64,900 $109,000 27 - tie Virginia
Military Institute (VMI) * $54,200 $109,000 27 - tie Rice
University $55,700 $109,000 32 Georgia Institute of Technology
$60,700 $108,000 33 - tie Worcester Polytechnic Institute (WPI)
$62,100 $107,000 33 - tie Cornell University - Ithaca, NY $57,000
$107,000 33 - tie Carleton College $44,700 $107,000 36 - tie
College of the Holy Cross $45,600 $106,000 36 - tie Colorado School
of Mines $66,700 $106,000 36 - tie Rensselaer Polytechnic Institute
(RPI) $61,000 $106,000 39 Carnegie Mellon University (CMU) $60,200
$105,000 40 Amherst College ** $53,000 $104,000 41 - tie Georgetown
University - Washington D.C. $53,000 $103,000
9. And if not why arent they healthy?
10. Most universities will have to lower their cost structure
to achieve long-term financial sustainability and to fund future
initiatives The financial health of U.S. universities is weakening
Not just online universities Financial crisis of 2008 and the
continued weak economy have led to budget deficits in many
countries
11. Of 500 universities Moody Downgraded almost 40 universities
Upgraded 9 July 11, 2014
http://www.washingtonpost.com/local/education/moodys-us-college-credit-ratings-downgrades-
far-outnumber-upgrades/2014/07/11/4248f474-06c5-11e4-bbf1-
cc51275e7f8f_story.html
13. Can we expect the financial health for most universities to
rise? Or will students turn to low cost alternatives?
14. Traditional Business Model Change: Increasing Importance of
Research Revenues at Universities What are the implications of
increasing important of Research for current business model?
Change: Increasing availability of information from the Internet
What are the implications of this increasing availability of
information from the Internet on University Business models? What
should universities do?
15. Are research expenditures rising at universities? Where is
this money coming from? How is this part of open innovation? How do
you think open innovation is impacting universities?
16. Institution 2011 Research Expenditures 2011 Patents Issued
2011 Startups Licensing Income Northwestern U. $484,149,349 67 8
$191,541,162 U. of California 5,418,601,941 343 58 182,049,620
Columbia U. 714,343,087 88 15 146,319,455 New York U. 430,752,000
64 9 142,202,157 Princeton U. 192,940,000 33 4 115,206,000 MIT
1,490,429,000 174 25 76,120,000 U. of Washington 966,817,063 70 9
67,362,185 Stanford 66,797,246 U. of Texas 2,546,669,877 156 20
65,359,377 U. of Wisconsin 1,111,641,832 156 4 57,730,000 Wake
Forest U. 187,598,965 15 3 45,733,291 U. of Rochester 407,244,000
27 2 41,813,373 U. of Utah 410,305,757 47 19 37,054,745 U. of
Massachusetts 586,708,000 64 1 35,048,951 U. of Florida 559,156,034
86 12 29,493,522 Cal Tech 498,688,951 132 10 29,043,617
http://chronicle.com/article/Sortable-Table-Universities/133964/
17. Comparisons from year to year are difficult because number
of participating institutions changes. But.. In 1991, only about
1,500 patents were filed by institutions 2002: 6,500 2009: 12,109
2011: 11,687 (157 universities) Other figures for 2011(157
universities) Total licensing income of $1.8 billion Creation of
617 companies
18. http://larrycady.wordpress.com/
19. Source: Abrams et al, How are U.S. Technology Transfer
Tasked and MotivatedIs It All About the Money?
20. Sales of equity Dartmouths $64 million sale of its equity
stake in Medarex in 2000 Stanfords sale of its $355 million equity
stake in Google in 2005 Legal settlements University of California
won $200 million settlement from Genentech over human growth
hormone in 2000 won $30.4 million settlement from Microsoft in 2007
over accessing interactive content on web pages University of
Minnesotas won settlement from Glaxo over Ziagen in 1999, valued at
$300 million.
21. 1996-1999: $335,000 or $83,800 per year 2000-2005:
$1,515,000 or $252,500 per year 2006-2009: $3,557,500 or $508,200
per year Far below 191M per year for top US university Not even in
top 100 for U.S. universities What must NUS do in order to license
more technology? What might be the positive and negative changes
from trying to license more technology? Academic Entrepreneurship
in Asia: The Role and Impact of Universities in ...Edited by Wong,
PK
22. Institution Endowment (2010) billion USD Columbia
University $ 6.517 Cornell University $ 4.379 Duke University $
4.824 Emory University $ 4.694 Harvard University $27.557
Massachusetts Institute of Technology $ 8.317 Northwestern
University $ 5.945 Princeton University $14.391 Rice University $
4.100 Stanford University $13.851 Texas A&M University $ 5.738
University of California $ 5.441 University of Chicago $ 5.638
University of Michigan $ 6.564 University of Notre Dame $ 5.235
University of Pennsylvania $ 5.669 University of Texas System
$14.052 University of Virginia $ 4.457 Washington University in St.
Louis $ 4.473 Yale University $16.652 Not really related to open
innovation, but big money nonetheless.. And part of a Universitys
business model NUS 1.688 USD Billion Source: Wikipedia
23. From teaching to research and perhaps even more so to
commercialization Greater emphasis on research Greater emphasis on
commercialization Endowment is also partly driven by research and
commercialization Rich alumni donate money to universities
Buildings are named after generous donors
24. Traditional Business Model Change: Increasing Importance of
Research Revenues at Universities What are the implications of
increasing important of Research for current business model?
Change: Increasing availability of information from the Internet
What are the implications of this increasing availability of
information from the Internet on University Business models? What
should universities do?
25. How does it impact on: Customers? method of value capture?
What is scope of activities? What is method of strategic control?
value proposition?
26. How do the following impact on value proposition for
students: number of patents? Number of startups? licensing and
other research income?
27. Traditional Business Model Change: Increasing Importance of
Research Revenues at Universities What are the implications of
increasing important of Research for current business model?
Change: Increasing availability of information from the Internet
What new business models does this information enable? What should
universities do?
28. What is changing?
29. What is changing? More information is available on internet
Previously information was limited to textbooks and library Now
much more information is available People can learn on their own
Dont need teacher to learn as much as previously MOOCs: massive
open online courses
30. Traditional Business Model Change: Increasing Importance of
Research Revenues at Universities What are the implications of
increasing important of Research for current business model?
Change: Increasing availability of information from the Internet
What new business models does this information enable? What should
universities do?
31. New value proposition? New customers? New method of value
capture? New scope of activities? New method of strategic
control?
32. Students can view lectures anywhere and anytime for a low
price Cost of courses declines as thousands or hundreds of
thousands of students take a single class Traditional classes can
be flipped Lectures are viewed on line and discussed in class
Students interact online Learning management systems (e.g., IVLE)
Wikis, Blogs Social media, Video tools What about Big Data? Many
disadvantages: Percentage of students completing courses falls
33. Can Big Data Analytics Boost Graduation Rates, ellis booker
noted that the advent of computer-mediated and online instruction,
especially MOOCs with their tens of thousands of students per
class, are changing whats possible. MOOCs provide so much data
about student interactions, not only with the course material but
with teachers and even other students. This massive amount of data
can be parsed, compared, merged, modeled and analyzed, with the
goal of improving educational outcomes. Desire21Learn, provides
learning management systems to the education market and investing
heavily in Big Data, build algorithms to predict student
performance. Accuracy rates as high as 95%
34. Carnegie Learning Develops interactive adaptive learning
software for math instruction Acquired by Apollo Group, which owns
University of Phoenix Pearson and Learning Catalytics Cloud based
software system mines data to better engage students by creating
open-ended questions that ask for numerical, algebraic, textual, or
graphical responses Desire2Learn Provides predictive
representations of individual learners progress in a given
course
35. Online? How can identity be verified? Use webcams to verify
students during online exams Application of Big Data: use keystroke
biometrics software to analyze patterns and rhythms of typing as a
sort of keyboarding fingerprint Testing centers? Use testing
centers run by Pearson (thousands available in world) to allow
students to take final exams in person and receive a certificate of
completion Big Data: A Revolution That Will Transform How We Live,
Work, and Think, Viktor Mayer-Schonberger, Kenneth Cukier
36. New value proposition? New customers? New method of value
capture? New scope of activities New method of strategic
control?
37. Some key questions Who takes MOOCs? What is their
relationship to traditional education systems? What motivated them
to register for and complete online education programs? Respondents
to survey of students who took Machine Learning from Coursera
co-founder Andrew Ng 50% were full-time professionals employed in
technology 41% professionals working in software 9% working in
other technology 20% were graduate students in traditional
university programs 11.6% are undergraduates 3.5% unemployed or
employed outside the tech industry 1% in high school 11.5%
other
38. Completion Rate 155,000 registered (many never start) 9,300
passed mid-term 8,200 reached final exam of which 7,000 passed Ages
50% >26 45%> 18-26 5% high school students Degrees 30% no
bachelors degree 37% had bachelors degree 28% had masters 6% had
doctorate
39. Duke University, Cathy Davidson, If we profs dont reform
higher Ed, well be reformed (and we wont like it) There are far too
few colleges and universities and far too many students with
academic aspirations for the current system to accommodate them all
MOOCs offer a form of education to those for whom education is off
limits
40. MOOCs can reduce the cost of education and corresponding
bottlenecks in course registration Many students are placed on
waiting lists for courses that are needed for graduation Have you
experienced this problem?
41. New value proposition? New customers? New method of value
capture? New scope of activities New method of strategic
control?
42. Contracts between Coursera and University of Michigan
reveals that no one, not even Coursera, knows exactly how MOOCs
will generate revenues Universities will receive 6-15% of revenues
from MOOC registration fees 20% of profits after costs and previous
revenues are paid VCs say that if you build a web site that is
changing the lives of millions of people, then the money will
follow
43. Udacity launched a portal to match students with companies
350 companies have signed up Coursera uses analytics to scan
student data, identifies matches between students and employers,
and with student permission-introduce the two to one another
44. Do people take classes and attend universities to get jobs?
Should this be the primary goal of universities? If so, how can
universities help students find jobs? Should universities try to
better understand what employers want from new employees? what
kinds of jobs are available? Should universities (and
polytechnics/junior colleges) try to more quickly adjust course
offerings to available jobs
45. Traditional Business Model Change: Increasing Importance of
Research Revenues at Universities What are the implications of
increasing important of Research for current business model?
Change: Increasing availability of information from the Internet
What new business models does this information enable? What should
universities do?
46. The cost and importance of education has risen Student debt
has ballooned Do universities need a new business model? With the
rising cost of education, should they try to lower their costs? try
to increases the chances their students will find better paying
jobs? Teach those skills that are in demand? Help students better
understand the job market, including skills in demand? Help forge
stronger ties with companies? Do any professors even think of these
things?
47. People tend to think they know what school is and they know
what work is. We live in a world where anyone can learn anything,
anytime, anywhere, but we havent remotely reorganized our workplace
for this age (Cathy Davidson, Duke University)
