Create a free account, or log in

Why MOOCs might point the way for profitable online business models

Research rarely pays for itself, even with government funding, and so at most universities it is subsidised by teaching. Salaries of academics working on grants are rarely paid for. The university that they work for makes an “in-kind” contribution towards the research. Some of this is recouped from extra funding from the government (in Australia […]
Engel Schmidl

Research rarely pays for itself, even with government funding, and so at most universities it is subsidised by teaching. Salaries of academics working on grants are rarely paid for. The university that they work for makes an “in-kind” contribution towards the research. Some of this is recouped from extra funding from the government (in Australia at least) but it never covers the full cost.

Academics go further, the research is normally published in journals who do not pay the academics for their work. Beyond making the work available in an officially recognised capacity, they do nothing to promote that work but they profit from it. Again, the universities have given away something for free. And finally, the research itself is normally contributed into the public domain where anyone can profit from it. Rarely does the university that donated it do so.

So why have universities engaged in a practice for hundreds of years that effectively contributes knowledge to the world using a business model that has consistently made a loss and, in most cases, gives away its products for free?

Because that is what universities are there for. They are there to create and contribute knowledge to society and to use that knowledge to enhance the teaching of students, not necessarily just those at their own institutions.

However, and in line with Chris Anderson’s arguments, the research that universities have done has had a side effect. It has been used to establish reputation, which in turn has influenced the choice of students wanting to come and study at those institutions.

This has been accentuated in recent years with the advent of university rankings such as the Shanghai Jiao Tong Academic Ranking of World Universities, which is based on the research performance of universities world-wide.

So universities enjoy a virtuous circle. They give away some things for free that encourages students to come and pay money to be educated that in turn provides money to do more research.

For the universities that are providing MOOCs, there is no question that it has been a huge benefit to their reputation on a scale that advertisers and their public affairs and marketing offices could only dream about.

MOOCs have reached an audience of millions of students, many of whom have now experienced something of the learning experience of the institutions that offer these courses. It has enhanced the brands of universities who are now seen as being progressive and altruistic, turning the universities and academics into household names.

Achieving this through traditional advertising campaigns would cost substantially more than the relatively trivial costs of putting on MOOCs.

David Glance is director of the Centre for Software Practice at the University of Western Australia. This article first appeared on The Conversation.