MOOCs are the new startups
The title is from Rich DeMillo. I do not know whether the analogy is correct, but it is enlightening, and I like the skunkworks metaphors. In another post, Tony Bates lists some of the funding going into Ed Tech companies this year:
According to the National Venture Capital Association, a staggering $463 million has already been invested this year by venture capitalists into educational technology companies in the USA.
This year some of the online start-ups that have received venture capital funding are:
- Udacity: $15 million this week; total: $21 million
- Coursera: $16 million in April
- 2U (formerly 2tor): $26 million in April
- Codeacademy: $10 million in June.
Whatever the merits of investing, I think there are several things going on here. First, the standard model of higher education is weaker than many in the public sector like to admit. The temptation for those with degree awarding powers has been to print money (degrees). We have intellectual inflation, and just as in any period of high economic inflation, this means we are unable to be confident about our currency. We are uncertain what we are worth, or what our currency will purchase in a different world.
Second, higher education is an endeavour / business / enterprise that bundles many different activities together, with considerable cross subsidy. The need for this bundling is —for many— an article of faith (a medical school that does no research and with no wet labs!). Universities are status driven rather than outcome driven**. My guess is that ever diminishing government support for higher education means that this bundling is going to be tested. I think this will be a good thing. A long long time ago Henry Miller argued that medical schools belonged with the polytechnics. Lots has changed since then, but he might be right, if not for the right reason.
** Paul Romer”s words are: “What we have right now is a reputational model for universities rather than an outcome model,” Romer says. “The presidents at the elite institutions know that if the competition were to be based on some credible measure of output or value added, they would lose.”