nfais 2013 conference keynote trends he rev

Trends in Higher Education:

An Overview 2013

Prepared by: Pat Sabosik, President

Elm City Consulting, LLC

April 2013

NFAIS Workshop: Trends in Higher Education: Content, Services and Business Models

© Elm City Consulting, LLC 2013


Elm City Consulting is a management consulting firm with expertise in digital content and product strategy and product management. We advise business-to-business information companies on strategic direction, market segmentation, go-to-market solutions and acquisitions. With more that 20 years of operational experience in Fortune 1000 companies, we bring an analytic and operational approach to every assignment.

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Our work is at the intersection of information, technology and applications. Our experience in corporate planning helps us identify the right solutions for our clients.

Snapshot of High Level Trends

More online programs Increase in online courses and MOOCs drives institutions to

have an online strategy

More emphasis on “self-directed” learning Increase in the number of self-paced, competency-based

programs

Southern New Hampshire University’s College for America: Direct assessment of learning program

US Department of Education endorses competency-based education

Shift in faculty hiring processes Increase in part-time faculty

Demand for master teachers for online courses

19 June 2013 © Elm City Consulting, LLC 2013 3

Source: Fox Business, Higher Education Trends to Watch for in 2013 http://www.foxbusiness.com/personal-finance/2013/01/28/higher-education-trends-to-watch-for-in-2013/ http://www.insidehighered.com/news/2013/03/19/feds-give-nudge-competency-based-education

Move towards a $10K college degree, TX and FL making plans

Online and competency combo

http://www.foxbusiness.com/personal-finance/2013/01/28/higher-education-trends-to-watch-for-in-2013/

















Trends in Higher Education 2013

Macro View


Financial/

Economic Technological

Demographic Political

“Political” category from Jeffrey Selingo, CHE Views March 8, 2013

Technological Trends

Wired campus

Bring your own device (BYOD)

Student analytics Adaptive Learning

Predictive Solutions

Learning informatics

Online & hybrid courses

Multi-user open online course (MOOC)

Mobile Apps

eBooks, content models

Course management systems


Technological

Student Behavior & Technology


Financial Trends

Tuition costs

Textbook costs

Research funding

Workforce planning/training

$10K Degree

Endowment values

Decreasing state & federal funding

Student debt

College bankruptcy

Corporate partnerships

Services


Financial/

Economic

Political Trends

Pell Grants

For-profit colleges

Increase in state funding for research vs decrease in federal dollars -- FL

Academic appointments

Competency vs knowledge-based degrees

Public regulation of post-secondary programs

DOEd and Lumina Foundation for Education goal: 60% of American workforce with a high-quality post-secondary credential by 2025*


Political

* Certificates: Gateway to Gainful Employment and College Degrees, report by Georgetown University Center on Education & the Workforce 2012

A Word About Certificates -- As a MOOC

Outcome and Revenue Opportunity

Shift to credentialing down to a certificate level, followed by an

Associate degree and then Bachelor’s degree

Potential opportunity for private, non-profit institutions to play a

role in certificate and training programs


* Certificates: Gateway to Gainful Employment and College Degrees, report by Georgetown University Center on Education & the Workforce 2012

“The rapid growth of certificates over the past 30 years is a promising signal that students and institutions are recognizing the value of certificates at an increasing rate.”

Demographic Trends

Student populations Decreasing

Older

Demand for “life-long learning”

Tenured faculty retirements Impact on Accreditation

Adjuncts standing, the majority of instructional faculty

“Outsourced” education

Courses and employment Skills and Competency


Demographic

Student Demographics Forecasted Increase Drives Online Course Delivery


Source: Campus Technology; LoudCloud Systems Presentation 2013

Driving institutions to have an online strategy

Trends at Classroom & Course Level

“Content View”

Online

Courses

Adaptive

Learning

Services


Online Hybrid MOOCs

Platforms Analytics New Content Models

Recruitment Retention

Tutoring Services Competency/

Assessment Course Dev Tools

Course Dev Services Hosting Platform

Asset Management ePortfolios

Alumni Services

Platform: LMS Adaptive Learning Publisher MOOC Combination

Adaptive Learning Solutions Personalizing Learning for Individual Students


Test Prep

+

Cengage

Mix of traditional publishers, new publisher entrants, and platforms shaping new learning solutions

Sources: Education Growth Advisors, http://edgrowthadvisors.com/gatesfoundation, Wikipedia, Web Searches

Tools to build online courses, fee-based

http://edgrowthadvisors.com/gatesfoundation/

Business Models for Adaptive Learning


Disrupts traditional assessment & textbook-test model

New entrants with new business models

Services business

Online Course Growth What’s Happening on Campuses Today

6.7 million students enrolled in one or more online courses

in the fall 2011 term, an increase of 8.5%, 570,000

students

10% growth rate for online enrollments which far

exceeded the 2% growth in overall HE student population

31% of HE students now take at least one online course

65% of HE institutions now say that online learning is a

critical part of their long-term strategy

MOOCs driving this

Stevens Institute of Technology, including Web Campus, in

new 10-year strategic plan, as example


Source: Going the Distance: Online Education in the US 2011 http://www.babson.edu/Academics/centers/blank-center/global-research/Documents/going-the-distance.pdf

Online Course Platforms (Including MOOCs and Hybrid Courses)


Big 3 from top brand institutions

Blackboard initiative

Consortium of 12 UK institutions

“Connected” learning environment

Distance learning Tools to build online courses, fee-based

Course development tools Course fees, instructor revenue

Online course network Tools and platform

http://www.mooc-list.com/

Growing list of online courses




Business Models for Online

Courses: A Few Views on Revenue

Big 3 MOOC course providers:

"The most significant short-term benefit

to the top-tier universities [from MOOCs]

is blunting public criticism that wealthy

universities do not provide enough

service to fulfill their public mission and,

therefore, maintain their tax-exempt

status in the United States" ("Shifting

Ground," September 2012, page 4) Moody's Investors

Services.

Wall Street Journal: “Online Courses Look

for a Business Model”by M. Korn & J.Levitz

http://online.wsj.com/article/SB1000142412788732433

9204578173421673664106.html

Foundation and venture funding

May not be free for long

New entrants and service providers

Venture funding

Building service and revenue

programs


Platform fees

Hosting fees

Course fees

Driving innovation in instructional material

http://online.wsj.com/article/SB10001424127887324339204578173421673664106.html




Foundation Funding for Online Courses Foundations Support Educational Innovation More than $100M invested as of spring 2013


Institution Financing Sources

California, State of $10M/yr

Entry level courses

State funding

MIT $35M Hewlett, Mellon, MIT

Harvard $30M w/MIT for edX

Yale $3M Hewlett

Carnegie Mellon $5.6M Hewlett

UC Irvine $1.6M Hewlett, Boeing, UCI

Open Learning Initiative ~$20M Various foundations

Sources: CHE, “How 4 Colleges Support Online Courses, Oct 12, 2009; Harvard Magazine, “Online Evolution Accelerates” March-April 2013

What Do Faculty Think About Teaching MOOCs?

Chronicle Study


http://chronicle.com/article/The-Professors-Behind-the-MOOC/137905/?cid=at&utm_source=at&utm_medium=en#id=overview

Economic implications of MOOCs may be more far-reaching than changing content models

Services – Online Course Development

Institutions hiring publishers to build online courses & publishers partnering with software companies

Investment and scale

Pearson & Rutgers partnership building online courses on eCollege platform: virtual classrooms, curriculum, course materials*

John Wiley’s purchase of Deltak.edu, partners with colleges to build and run online courses

Cengage Course 360, a customizable online classroom

McGraw-Hill acquires Tegrity, lecture capture software that enables professors to embed lectures in courses


Sources: *http://chronicle.com/article/Dont-Call-Them-Textbooks/136835/, Elm City Consulting Data

http://chronicle.com/article/Dont-Call-Them-Textbooks/136835/







Services Beyond Courses: SaaS,

Program Design, Recruitment, Retention

Macmillan launches Digital Science division and partners with

companies to provide software tools and services to scientists

SureChem, BioData, Simplectic, Labtivia

Pearson’s acquisition of Embanet & Wiley’s acquisition of

Deltak.edu go beyond course development

Program and curriculum design, online course development,

recruitment, retention, hosting

Changes the relationship between publisher and institution

Shifts value proposition

Changes revenue and cost models for institutions, service

providers, and publishers


Workforce Readiness: College Majors with the Highest & Lowest Employment Rates


http://www.upworthy.com/do-you-know-which-college-majors-have-the-highest-and-lowest-employment-rates-2?c=ufb1

Highest in 2012-2013 Agricultural Sciences Pharmacology Educational Administration School Student Counseling Biological & Geophysical Engineering Astronomy & Astrophysics Teacher Education Agricultural Economics Medical Technologies Technicians Atmospheric Sciences & Meteorology Naval Architecture & Marine Engineering Environmental Engineering Nursing Public Policy Industrial Radiology Biological Technologies




























Alignment of Industry and Academy for

Workforce Readiness – Ivy Tech

Ivy Tech (Indiana) Corporate College, education & training partner.

Online training, workforce development, partnership with Disney

Institute for brand loyalty and leadership excellence


http://www.ivytech.edu/corporatecollege/

http://www.ivytech.edu/corporatecollege/

Summary


Institutions developing an online strategy

Technology and economics driving new educational

models

Adaptive learning models maturing

MOOCs driving innovation in instructional

materials

Publishers partnering with institutions for

services beyond textbooks

Content and business models

reforming as services

Learning as we know it is

undergoing immense change

Thank you

Pat Sabosik, President


[email protected]


Appendix & Update

In the five weeks since I made this presentation at a

National Federation of Advanced Information

Systems workshop, a number of events have

sharpened some of the trends and implications for

the education market.

Additional slides are highlights


Learning Outcomes in Online Courses


Source: Going the Distance: Online Education in the US 2011 http://www.babson.edu/Academics/centers/blank-center/global-research/Documents/going-the-distance.pdf

Learning outcomes are expected to improve for online courses as the models improve, social and peer coaching are introduced, and a new generation of learners comfortable in online environments enters higher education

Reducing the Cost of College Textbooks and the Cost

of a College Education are Drivers of Change


Textbooks US College Tuition

Source: Business Insider -- http://www.businessinsider.com/the-biggest-asset-bubbles-2013-4#textbooks-1

Among the Biggest Asset Bubbles in 2013 – Business Insider

http://www.businessinsider.com/the-biggest-asset-bubbles-2013-4













Another View: Growth in Cost of

Education vs Home Prices & CPI


http://www.huffingtonpost.com/2013/01/04/college-textbook-prices-increase_n_2409153.html








Online Courses Grow Out of Necessity

and Convenience

Penn State to Invest $20M to Grow World Campus


Enrollment in online education continues to grow, according to a Sloan Consortium (Sloan-C) survey, which found more than 6.7 million students — almost a third of higher education students — were taking at least one online course in 2011. Sloan-C is a professional society for e-learning practitioners.

http://news.psu.edu/story/275043/2013/04/29/academics/penn-state-invest-20-million-grow-world-campus-45000-students

http://sloanconsortium.org/publications/survey/changing_course_2012























Business Models Firm Up as Fees and

Course Credit Enter the Mix

American Council on Education’s College Credit

Recommendation Service recommends five Coursera

courses for college credit

Ten state university systems, including SUNY, join

Coursera to develop online and hybrid courses, using

MOOC technology to improve completion rates and

access to higher education


http://blog.coursera.org/post/42486198362/five-courses-receive-college-credit-recommendations

http://blog.coursera.org/post/51696469860/10-us-state-university-systems-and-public-institutions



























Publishers and Course Providers Partner, Some

Textbook Content Available for Free


http://www.infodocket.com/2013/05/08/new-partnership-sage-will-make-some-textbook-content-available-for-free-to-coursera-faculty-students/ http://www.marketwire.com/press-release/coursera-announces-pilot-program-with-publishers-supplement-online-courses-with-high-1788086.htm

Note: Elsevier has already provided free access to an engineering course textbook used in an edX class

As reported in Library Journal and Market Wire

Headline:

http://www.infodocket.com/2013/05/08/new-partnership-sage-will-make-some-textbook-content-available-for-free-to-coursera-faculty-students/





























http://www.marketwire.com/press-release/coursera-announces-pilot-program-with-publishers-supplement-online-courses-with-high-1788086.htm

























MOOC Platform Players Attract Venture

Funding

The adaptive platform players are generally earlier-stage

businesses, and many are actively pursuing partnership

opportunities with leading publishers, service providers, and

institutions. Simultaneously, established companies are tracking

the progress of these players, and this segment will likely see

considerable investment and M&A activity over the next 12-18

months.

Elm City Consulting is watching this space and MOOC platforms

to see how consolidation and relationships change over the next

two years


Comments?

Contact:

Pat Sabosik, President


[email protected]
