University Teaching as E-Business?
Research and Policy Agendas

Summary

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The goals of the planning meeting were to:

• Begin to establish a common view of the world of e-learning, especially as it relates to research universities
• Understand some of the forces and dynamics at play in this world in order to be able to describe them to others -- to colleagues who are running universities and e-ventures, and who are faced with some very, very tough decisions.
• Plot the project’s future course.

The future work of the project should:

• Articulate a research agenda. Identify the specific critical issues in the social science of higher education - as well as policy studies, business, and law - that arise in the e-learning environment, and develop strategies for addressing those issues through a rigorous research program.
• Provide a conceptual view. The dynamics and shifts of business models are more important than a static snapshot description.
• Provide a decision tree type of analysis. What are the questions and potential answers that would lead in one direction or another to varying outcomes. Currently there is no established set of decision trees.
• Provide a component-mapping of the minimum and the variable components that are available in these models (e.g., vendor-centric point of view, curricular point of view, content point of view).
• Address the importance of standards.

The main themes that emerged can be categorized as follows:

• Balancing Internal and External Pressures: The tensions between economics, education, and culture. Issues such as autonomy, faculty buy-in, intellectual property, market and non-market cultures, and conflicts among stakeholders.
• Decision-Making: he factors which are important in decision making. How institutions define niche and determine viable structures for e-learning ventures that are 1) balanced with core institutional missions and strengths, while 2) responding to fast-changing environments.
• Models and Organization: The placement of e-learning initiatives within the institution. The array of business models currently available to institutions thinking about entering new markets. The role of Extension and continuing education divisions, and relationship of their activities to the core institution.
• Finance and Economics: The costs, benefits, and risks of e-learning ventures to the institution. The variety of models available for courseware production.

Introduction

Information and communication technologies (ICTs) are seen as a potential solution to the triad of pressures facing research universities: 1) holding down costs, 2) increasing access to an increasingly diverse demographic, and 3) maintaining quality. It is not clear, however, that any university has a clear strategic plan for tackling all three pressures with ICTs. There is an adage used in software development: clients can have it 1) good, 2) fast, 3) cheap-pick any two. The question is whether we can use ICTs to simultaneously reduce costs, increase quality, and widen access-on limited budgets. Or will we need to pick only two?

We have no common view of the world of e-learning, primarily because our ideas of what this world might look like have been changing rapidly over the last few years. The field may not be dominated by a few large players, as once seemed possible; there will be many small players in this field in addition to several large players. The whole notion of a niche market is going to be one that increasingly dominates the strategic thinking of universities.

Why is the university getting involved in e-learning, and what are its goals? For many, the first reason is money, pure and simple; the university wants to generate revenue, which may then subsidize the university’s other activities.

Balancing Internal and External Pressures: Industry and Institutional Views

Three drivers were identified in the on-line learning arena: economic, cultural, and educational. The slower pace of change and relative autonomy of the traditional university are giving way to more aggressive economic forces, and concerns about the commercialization of teaching.

There are many constituencies who have a stake in decision-making, including: 1) the Board of Governors or the Board of Regents; 2) the campus administration and/or a system-wide administration; 3) commercial or venture arms of the university; 4) the letters and science core of the university, especially faculty; 5) student expectations; 6) other universities, which generate peer pressure at the university level.

What was formerly "economics in the service of the educator" has the potential to be turned around to become "education in the service of economics." A fundamental issue is the continuing tension between market and non-market forces, and whether the development and maintenance of university autonomy will be threatened.

Serious consideration needs to be given to ways in which non-market parts of the university can be strengthened in the face of the enormous pressures that are described by these new ventures.

The success of higher education will always be that there is a piece of the enterprise that remains outside of the marketplace. The genius of the academic system is that both the faculty government and the administration allow white space or neutral space for experiments to occur.

Decision-Making: Models and Organization

There is the potential disconnect between the e-commercial enterprises and the core of the university. The major reason for creating new structures and organizations has been to create an entity that can do things under the wing of the university, but separate from it. Two advantages to this approach are providing for a faster pace of change than the university structure allows for, and minimizing the risk to the institution involved in these new ventures.

Higher education is perhaps the ultimate niche marketplace. Each of the roughly 3,000 institutions of higher learning has its own niche, whether it targets particular degrees or particular markets. One goal of a university’s involvement in the e-learning marketplace might be to generate revenues. Another purpose is to simply improve the delivery of intellectual resources on campus. Each institution will have to determine its niche(s).

One problem is preserving the richness of the university’s academic and social culture, particularly given its importance to the undergraduate experience, and trying to translate that at a distance. What other new models might there be, e.g., highly customized and/or ephemeral modules?

There are several inherent limitations that universities confront when assessing their roles in e-learning ventures. Universities have enormous intellectual capital, but this clearly is not the area that’s going to be the most lucrative, given that the maintenance of prestige depends on scarcity.

Finance and Economics

A crucial question is, how do we pay for e-learning, and how do we make it pay? Models for financing e-learning are not one size fits all, and deciding what works for each institution is part of the learning process.

There are essentially two different kinds of economic models: internal (reallocation and internal investment) and external financing (venture capital, strategic partnering, revenue sharing).

In terms of raising capital, what are viable options and opportunities? The university’s reputation is a factor in considering options for financing, in terms of balancing the university as a "brand" vs. engaging in partnerships. Another consideration is whether or not value is added by partnering with an external entity. This can be a particular problem for a public university.

Course Development Costs

Course design can be driven by the institution, by content, or by faculty.

A traditional seminar has a low set-up cost, but a high marketing cost, and quality is quickly affected beyond a max of 15-20 students; in contrast, new learning environments have a high set-up cost, up to $1 million, but once underway, little additional cost in terms of development. There are also maintenance costs for e-learning, including a faculty component, a service component, and a student services component, which is relatively costly and generally the weak spot.

Will new e-learning courses, costing half a million dollars or more, replace the traditional $30,000 courses, or is it a waste of money? Will investment in a course really improve quality of the course? This is not supported by any real data; it’s an investment decision, rather than an academic one.

Intellectual Property

The faculty member is contributing to a defined product, which is developed by a team, is then sold, and has value. Whether ownership with regard to courseware is an economic issue or not, it’s an enormous emotional issue.

Addressing the issue of intellectual property not only in terms of getting maximum economic value, but also in terms of encouraging people to be creative, is a major challenge. It’s very important to give the faculty incentives to be innovative and creative, rather than giving them disincentives.

The two models for intellectual property policy are textbooks and patents. The real question is not who owns the property, but what is the deal. The faculty may own the content, but the university has a real say in setting the parameters of allowable deals.

E-commerce may ultimately be the catalyst for a more specific IP policy. This could be good or bad; universities like the idea of not having too strict a policy, and then simply dealing with the exceptions. But when there are too many exceptions, there needs to be a policy, and working out this policy is very difficult.