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.
2
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

Trends in Higher Education 2013
Macro View
Financial/
Economic
Technological
DemographicPolitical
“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

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

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

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/

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
psabosik@elmcityconsulting.com

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

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

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:

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
psabosik@elmcityconsulting.com

NFAIS 2013 conference keynote trends he rev

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