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MOOCs, Massive Open Online Courses: Startups Seek Elusive Profits, Business and Industry Trends Analysis

It all started largely as experiments with the goal of enabling students anywhere in the world to attend lectures, as taught by some of the world’s leading authorities at Stanford University and MIT.  To participate in these experiments, students did not need to be enrolled in the universities, they were not required to pay any fees or tuition, and they didn’t have to be anywhere near the Stanford or MIT campuses.  Instead, courses were free and delivered online.
In the fall of 2011 at Stanford, three courses were made available as early versions of MOOCs (short for massive open online courses).  The first was an Introduction to Artificial Intelligence by Sebastian Thrun and Peter Norvig.  The professors were astonished to have 160,000 students enroll as news of the course went viral.  An online course conducted by Stanford professor Andrew Ng drew 94,000 enrollees.  Thrun quickly founded a MOOC startup called Udacity.  Andrew Ng launched a competing MOOC called Coursera, in conjunction with Daphne Koller.
For 10 years, professors at MIT had been posting videos of their lectures from 2,100 courses online for free public viewing, in an experiment of their own known as OpenCourseWare.  In March 2012, MIT launched a serious MOOC effort called MITx.
People who enroll in free MOOC courses tend to be from nations outside the U.S.  In many cases, they are in low income locales with limited access to higher education.  MOOC startups have popped up worldwide, including Futurelearn in the UK (sponsored by the well-known Open University), as well as MOOCs in Asia, Australia, France, Turkey and Latin America.
Although there are certainly academic and technical challenges in launching a MOOC, the biggest challenges lie in creating a revenue flow, and if desired, obtaining accreditation.  Another massive challenge lies in providing exams and certification to students who want to take MOOC courses for college credit or professional continuing education credits.
Many universities were anxious to participate in MOOCs.  Their strategy is multi-purposed, including the ability to enable students to engage in a wider variety of courses at little to no operating cost, as well as the potential to give their own professors wider reach through a global online audience.
While enthusiasm and participation by academic institutions was initially widespread, the results are less clear.  A 2013 study by the Graduate School of Education at the University of Pennsylvania attempted to determine the results of 1 million MOOC students.  It found that, on average, roughly one-half of the people who registered for a course actually attended an online lecture, while only about 4% completed a course.  This is consistent with anecdotal reports from professors and schools in general.  While initial sign-up rates are extremely high, even in the tens of thousands for many courses, levels of participation and course completion are low.  The fact that casual students have no financial investment in the courses, and may not be participating for class credit, leads to little incentive to perform well as an enrollee.  Many observers consider the MOOC model to be a failure, as they are too impersonal and too generalized to provide quality education.
There is still a great deal to learn about the best ways to reach high levels of achievement, satisfaction and completion for students.  Success in this regard could lead to reduced overall costs for colleges and universities, along with lower growth in tuition costs.
MOOC pioneer Sebastian Thrun has experimented with providing online mentors to encourage students to perform well.  In a noted experimental effort with California’s San Jose State University, however, the mentor model did not prevent less than satisfactory results from a pilot project that offered three introductory courses for credit via Udacity.  Participants were largely high school students seeking college credit.
Another type of MOOC strategy is sometimes called “connectivist.”  Here, one of the main goals of the MOOC is to create community and communication among the students in order to encourage higher achievement and overall interest in the course material.
Sebastian Thrun’s Udacity has changed strategy from providing university courses, in order to focus on training and certification that is job-related, particularly for those in technical careers.  Udacity now offers courses in computer programming and other technology skills.  It is tailored to meet the standards of the Open Education Alliance, a consortium of employers and educators aimed at utilizing online courses and other technologies to boost access to, and participation in, job-related training.  This approach has the potential to solve many of the challenges faced by MOOCs.  That is, 1) Students have a vested interest in completing courses, since the learning is career-related; 2) Certification can be earned; and 3) The MOOC can charge fees for facilitating the training and certification process, frequently funded at least in part by an employer.
A wide range of employers are keen to take advantage of the possibilities of online training.  Wal-Mart, one of the world’s largest employers by headcount and by revenues, sees great potential in this strategy.  In a partnership with for-profit American Public University, Wal-Mart employees are able to get highly discounted tuition rates for online training in 180 degrees and certificate programs.  Participants can earn degrees and get a wide range of job-related training that can enhance their career paths.
Digital-native students are well suited to studying on their laptops and mobile devices on their own schedules and in locations of their own convenience.  Online courses, including MOOCs, appear to be well suited to foster convenience for the students while cutting costs for the schools.  While a few universities have opted out of the MOOC trend over concerns about educational quality or threats to the existence of professorial careers, others have eagerly joined in.  Hybrid online/physical classroom models will no doubt evolve to the degree that they provide good quality along with cost savings.  At the same time, MOOCs will evolve to serve a massive global audience of students, both casual and degree- or certification-seeking, who need the freedom of access and little to no cost that only MOOCs can provide.
Advancing technologies will be a tremendous boost to MOOCs as well over the mid-term.  The potential to incorporate adaptive learning into MOOCs can have tremendous results by tailoring and timing each course to a student’s individual ability and learning speed.

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