“Rich Lyons, dean of UC-Berkeley’s Haas School of Business, has publicly predicted that as many as half the business schools in the U.S. could shutter in as little as five years or as many as 10. How disruptive do you think this is going to be?”
— Fortune, “Colleges will survive the online education revolution”
In the past ten years, Venture Capital and Private Equity firms have gradually grow interest in internet educational companies and invested in thousands of educational startups in a global wide. As a major part of internet educational firms, online education companies make people have chance to receive education as long as they have access to Internet. Besides, online education startups not only focus on early childhood education, K12 education system, college education, also involve continuing education and vocational training.
Traditional education enterprises have been influenced by emergence of considerable online educational firms, especially for those educational institutions with the form of Massive Open Online Courses (MOOC), such as MIT Open Courseware, Khan Academy, Coursera and Udemy. The most obvious benefit of mass online courses is to expand access to quality education and help students have flexibility to acquire knowledge. With more and more students using online education platform, some people began to worried if online education will substitute traditional education. Since Coursera announced the first MOOC-based MBA degree with the University of Illinois College of Business and also offered four core MBA courses from the University of Pennsylvania’s Wharton Business School, the dean of Haas School of Business, UC-Berkeley even predicted half the business schools of United States would shut down in a decade.
However, Rick Levin, the former president of Yale, the current Chief Executive Officer of Coursera claimed that online education is a way to improve access to education, a way to utilize educational resources more effectively, but not a substitute of traditional education. He suggested that they are still at the stage rather than substituting for educational offerings. Three-quarters of Coursera’s learners are over the age of 22 and beyond secondary and college years, which means most of them are working and using it primarily for career advancement or personal enrichment in equal proportions. Thus in conclusion, there is not a huge disruptive thing at this point. “We can transmit the content really effectively, and in some circumstances more effectively, but we can’t offer the full educational package online.”
Online education platforms indeed provide abundant curriculum, flexible time schedule, comfortable and convenient learning environment with low investment rate. Students at schools can find various courses and programs to enrich their knowledge, working staff can obtain professional skills for career development or even make preparation for switching jobs. Based on all these advantages, online education platforms have developed rapidly in the past ten years.
According to Education Week, although the amount of venture capital flowing into K-12 education technology companies reached $642 million in 2014, jumping 32 percent over the previous year. Market research firm Global Industry Analysts projects it will reach $107 Billion in 2015, several severe difficulties in online education at the present also putting a brake on its successful development.
During the Global Mobile Internet Conference Beijing 2015, an investor expressed his concern about the future of online education. Lack of strategies to gain profit, long-term payback return, loss of customers means that both investors and education entrepreneurs need to take very high risks. What’s more, only a “small percentage of those who register to take a free online course actually complete it. The research shows it can be under 5%”.
The absence of interaction with professors and peers as well as loss of networking resources are two major disadvantages of online education. In the traditional classroom, students and teachers can interact and communicate face to face, however, online education cannot provide first-hand human interaction. Furthermore, many students choose to go to university for “the university experience” more than anything else; the life skills it teaches can’t be taught online. In addition, “the degree-granting authority of a university has long been a key asset of higher education’s business model”, which are essential for people looking for jobs in capital market. The level of acceptance of online education certificate degrees by potential employers remains unknown. Therefore, traditional education is the mainstream education method so far.
John A. Byrne, Fortune, 2015. Coursera CEO: Colleges will survive the online education revolution. From: http://fortune.com/2015/05/07/coursera-ceo-colleges-will-survive-the-online-education-revolution/
Oxford Royale Academy, 2014. Studying Online: A Threat to Traditional Learning? From: https://www.oxford-royale.co.uk/articles/online-courses.html
Education Week, 2014. Venture Capital Investment in K-12 Tech Firms Jumps, and Evolves, in 2014. From: http://blogs.edweek.org/edweek/marketplacek12/2014/12/venture_capital_investment_in_k-12_jumps_and_evolves_in_2014.html
Gina Merlino, College Startup, 2013. Coursera: Changing the Face of Education. From: http://www.collegestartup.org/2013/08/21/coursera-changing-the-face-of-education/