e-education: Boom or Bust?

Educational institutions are jumping on the web wagon to offer online learning. But does it pay to charge for courses? Tyler Watts cautions against excessive expectations.

What’s the next big money trend on the Net? Experts predict the education sector will be the overall winner of generated revenues using the Internet. If you have a hunger for knowledge, you don’t have far to go to sate your appetite. According to recent studies, there are now over 17,000 courses available online from 30 different countries. American colleges and universities lead the charge, providing over 75 percent of the available curriculum.

An array of sources ranging from academic institutions to multinational corporations feed the growth of online training courses by pumping billions of dollars into their development; however, these vast expenditures may pale in comparison to the rewards that await those who succeed. This is the "pot-of-gold" at the end of the rainbow that drives this investment. But will this new craze fall victim to the basic business principles of competition and social change?

If your company or educational institution is contemplating a foray into this increasingly competitive marketplace, several social and economic factors should be considered. With the arrival of the new millennium, the information age is having a greater impact on education and global commerce than ever before. The changing face of corporate hiring policies is another consideration. In the past, an MBA from an elite educational institute was synonymous with a high paying career. This "Ivy League" style hiring policy practiced by blue-chip America inspired students to get the best education they could, which usually meant the most expensive education they could afford. But times have changed; no longer does a good education equal a good job. Today, corporations often lend greater weight to practical experience over academic credentials when hiring new employees. If this trend continues, customers of educational institutes –real and virtual–looking for a competitive edge in the marketplace might trade in academia for an early start in the working world.

Through the advent of personal computers and the growing dominance of the Internet, there are now more multi-millionaires sans a formal higher education than ever before. Human resource managers from several large companies now say that current hiring practices reward practical experience over academic achievement. As one manager said, "there is no substitute for experience." With fierce global competition in the field of online academic training continuing to heat up, more institutions and companies may find themselves battling over an ever-shrinking piece of the pie.

Along with social and economic trends, online educational entrepreneurs find themselves faced with even greater obstacles. The easy access and availability of wired courses opens academia to competitive challenges previously unseen. The concept of MBA price wars is not such a far-fetched reality. What will become of the currently popular education-for-profit business model when the price of an MBA drops 30 or 40 percent, or even more? It is feasible that online fee-based education could become a non-viable business model.

But what happens when the price of getting an education doesn’t just drop, but is completely eliminated? This dynamic has already entered the marketplace courtesy of a number of companies and individuals promoting their model of free online education. This free-learning trend has the potential to significantly alter the existing landscape of online education.

Tyler Watts is a freelance author/journalist specializing in the business of education.