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Wednesday
May022012

The X Factor

Today, Harvard University jumped on the accelerating online education train. The creation of edX in partnership with MIT marks the latest development in what’s shaping up to be a fascinating contest between the nation’s leading research universities and its most ambitious private-sector entrepreneurs for domination of virtual higher education.

Things began heating up last December. Throughout the fall 2011 semester, a group of well-known Stanford professors had been running an unorthodox experiment by letting over 100,000 students around the world take their courses, online, for free. Those who did well got a certificate from the professor saying so. Then MIT announced the creation of MITx, a new nonprofit organization, branded by the university, which would also offer so-called Massively Open Online Courses, or “MOOCs,” and would also offer certificates to those who earned them–a new kind of academic currency. In January, some of the Stanford professors broke off from the university and formed a new for-profit company called Udacity, designed to offer the same MOOCs, sans Stanford. In March, some of the other Stanford professors formed another company, Coursera, which will offer courses from Princeton, Stanford, Michigan, and Penn, also online, also for free.

Throughout, Harvard was conspicuous by its absence. While MIT started its Open Courseware project a decade ago and Yale launched OpenYale in 2007, those were first-generation open initiatives that consisted mainly of free course materials and lecture videos–not actual online courses. But with the developments of the last five months, America’s most prestigious institution of higher learning was increasingly looking like the odd university out, a place that had won the 20th century but was ill-positioned for the 21st. Harvardx and the larger edX initiative changes that, and sends an unambiguous signal to the rest of higher education about what industry-leading institutions now value and believe.

The East Coast / West Coast cultural differences are easy to see. As Ken Auletta’s recent New Yorker profile described, Stanford is steeped in a Silicon Valley entrepreneurial culture where the boundaries between non-profit university and for-profit start-up are often blurry at best. Thus, Udacity and Coursera. East Coast institutions are more, well, institutional, keeping tighter control over process and brand. Thus, edX.

I suspect Harvard’s announcement will make every other elite university feel as if they have no choice but to follow suit, somehow. Columbia will have to ignore lingering scars from the failed Fathom initiative, for example. These places are hard to change in many ways but they feel intense competition with one another and hate the idea of being behind the times or out of fashion. Next, a platform fight will break out, with different entities competing to control the enormously profitable central ground on which various providers and consumers of higher education meet. On side will be the Silicon Valley start-up types who are really good at platform construction–see Facebook, Amazon, eBay. On the other will be more traditional organizations with phenomenally valuable brand names and super-strong relationships with government, finance, and the media. Whoever best leverages all of those strengths simultaneously will win.

This might seem to cut against traditional organizational behavior, in which established companies are bad at creating new innovations designed to disrupt the existing profitable business model. But it doesn’t really apply here, because the elite university business model isn’t what’s being disrupted. Harvardx won’t compete with Harvard University in the business of running admissions tournaments for aspiring members of the ruling class or assembling great minds in a single place to conduct world-class scholarship and reseach. Harvardx will be competing with everyone who isn’t Harvard Universityor its general equivalent. Expensive, newly-arrived, brand-deficient for-profit online colleges probably have the most to fear, followed by over-priced private non-profits and then lower-quality non-selective public institutions. It’s going to be interesting to watch.

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