My own university, the University of Queensland, has around 6 flagship courses that it puts online for free, in a deal that involves universities from around the world who put up the courses that they excel in. It typifies the current reality of online courses: it is free; it is relatively high-quality; and almost no-one uses them because it is not material that is worth something.
Online courses currently are much like bootlegged high-class literature: it enables those who are self-driven to learn something about everything without paying for it, but it does not tap into the money streams of the education market, which, after all, is a market of diplomas and accreditation. Until online courses come with accreditation, there simply is no money in online courses and we are looking at the academic equivalent of owning horses: a gentlemanly way to get rid of your money.
What would a future with accreditation look like? Since students want high-name brands, it would involve many thousands, perhaps millions, of students doing the same exam by a top-brand name at the same time, and receiving a diploma from that top-brand name based on the exam results.
How would this work? Well, since it is important for a top-brand name to maintain confidence in its brand, that top-brand would have to control the examination as it happens all around the world simultaneously. This means it will only send out the exam seconds before the start of the exam, but much more importantly, it will mean that the people doing the exam will be monitored by cameras and brand-accredited examiners all around the world.
In effect, we would thus be looking at a system of world-wide examination rooms in which one can do, say, 1st year biology from Harvard, 2nd year physics from Oxford, and 3rd year economics from a conglomeration of Dutch universities (like the Tinbergen Institute). The material on which the exam is based will then be online and for free, but local universities will have provided tutorials in which students get trained and in which their misconceptions get ironed out so that they understand the material: the ‘low-tier’ universities start to become a franchise of the high-tier universities and they mainly offer feed-back on the learning of their students.
What is in it for the high-tier universities? Lots and lots of money. One might think that Harvard is filthy rich now with reported endowments in the tens of billions of dollars, but think of what Harvard would be worth if 1 in 10 students on the planet took its exams at a designated fee? At current population levels, that would be in the vicinity of 20 million students per year, each worth several thousands of dollars. The market value of teaching 20 millions students per year would then easily run in the hundreds of billions. That’s a lot of money on the table and some high-class university is going to go for it.
What is in it for the low-tier universities? For the first-mover ones, a greater market share. A third-tier university can make a real jump quickly by pre-empting. For the later-movers, it will be a question of survival. Simple market pressures will force many low-tier universities to abandon their own courses and opt for franchise status once the franchise game gets going.
How can local universities and local academics rescue some degree of market power? By offering content that is not generic and that thus involves something unique, such as the biology of the area, the economy of the particular country, or the geology of the local mines. Universities and national academies of scientists will have a strong incentive to exaggerate the importance of that local content, but in the end it will be the market that decides how important it really is. And of course if this market becomes well-established the emerging big brand names can easily add in some national and practical content where needed, just as international car manufacturers can vary the side they put the steering wheel and the colour of the cars they produce.
What should one think the time-frame of all this to be? Well, the technology needed to do it is already there and the networks in which to trial such franchising are pretty much established as well. So all that we seem to waiting for is a top-tier university that grasp the bull by the horns and finds local partners. It needs a Bill Gates, a Steve Jobs, a Richard Branson, or some other such entrepreneur at one of the top places. And once this train is in motion it is easy to see that the market pressures can move things along very quickly.
For those in universities that do not have a top brand-name, it is a matter of either waiting in trepidation or jumping the gun and offer oneself as the meek follower of overseas fashions. In economics in Australia, it has been the norm for years now to meekly follow the big overseas textbooks (whether spruced up a bit with minimal local content or not). The next step is for the overseas suppliers to cut out the middlemen, the local academics, entirely.
Core Economics 
There are lots of accredited online programs already available but they tend to come from universities that don’t have strong research reputations or have small local markets. In Australia, they tend to involve both e.g. UNE, USQ etc. Or there are also universities set up specially to provide distance education like the Open University in the UK, which has also been modelled in many other places. So the change would be if instead universities with strong local markets and research reputations got into providing online courses in a significant way. It’s obviously been possible for quite a while but they haven’t done it for some reason.
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There are serious obstacles to the model that you propose which is why I think we won’t see some such development any time soon, if ever. For starters, many universities resist credits for courses taken elsewhere, Maybe more importantly, I yet have to see evidence that these courses — as high quality as they may be — really lead to good learning outcomes in the aggregate. In the end, they are indeed just animated high-class literature. But I learned in teaching bootcamp that listening to someone lecturing goes only so far (and is the least effective way of learning). Hence of course the current flipped-classroom fad. Wonderful concept if only those pesky students would understand that they have do come to class prepared. There are also important questions of how to evaluate learning outcomes in upper-level courses when huge numbers of students are involved. And don’t forget about the social/non-cognitive components that makes students go to class. Well, many students at least. Last but not least, Hahwad thrives on exclusivity. It seems to me some such mass production would seriously undermine that aspect of its reputation.
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Here is what I think is going to happen. We will see larger and larger classes (or at least an increase in minimal size of classes), some integration of MOOCs in lower-level classes (I experiment with that currently by giving students the option to submit a certificate for a related online course and a report instead of a term paper, and will make that mandatory probably next year). We will see in particular even more use of casuals than we already see. We will see more price differentiation across disciplines, with prices essentially extracting as much surplus from students as the market bears (and increasing the private debts at graduation to the crisis point that already exists in the USA). We will see attempts to further increase the share of foreign students with deep pockets. But it will all be in the present framework, at least here in Australia. With increasing differentiation though across universities.
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Hi David, hi Andreas,
yes, I agree that the change would be the involvement of the big brands. The main reason they have been reluctant so far is probably their penchant for exclusivity, as Andreas says. Connected with that is that the potential market hasnt been big enough so far, but that I think has really changed in the last 10 years. I think a top-brand could clean up if they did it well.
Andreas asks how would it arise in the current Australian system? Thinking just of a business degree I can imagine a place like UWS deciding it wanted to have a full business degree (including economics) but that it is cheaper to use a high-status brand. It could then fire most of its pesky academics, hire lots more tutors, and become an examination establishment for courses generated by others. The overseas suppliers get a cut and the profits go into higher VC salaries and additional bureaucrats. I dont see a reason for why that would need a change of funding (perfectly doable within the HECS context), nor what anyone else can do to stop it. The missing element is a top-brand name seeing the potential and having a whole degree available.
One road-of-least resistance scenario is where the online course by some high-brand becomes wildly popular when there is a single exam for it that is then accredited. This could happen on some innocuous issue. Think of Harvard giving out accreditation for some ‘save the planet’ course it puts out for free and that it puts on a shiny certificate. Noticing its success and the distribution of its success, such a signal might pursuade it to go for much bigger fish.
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