Prof. Kyriakos M. Kontopoulos
Chair, Ad Hoc Committee on Virtual TempleThis is the time for all of us to think as one, as Temple. "Virtual Temple," I submit, can be the vehicle with which we may turn threats into opportunities, adversity into innovation, and help make Temple one of the 50 or so "global universities" which will shape education in the new millennium.
As the process of globalization continues at an accelerating pace, Universities too are entering into the tunnel of turbulence brought about by the computer and telecommunications revolution, especially the Internet, and are feeling all the assorted pressures for radical structural adjustments already exerted on the for-profit corporations and the non-profit health systems. We are in the early phase of this cyclone and the future does not seem very promising for the Traditional University, unless it embraces innovation; this is in spite of the projected growth of the college-age cohorts reflecting the "baby boom echo." Here are the emerging forces that define our current educational "ecology" (if you dislike "marketplace"), forces which pose serious threats to our passing, erstwhile sacrosanct, academic tradition.
1. The growth of "For-Profit" Universities
The University of Phoenix is upon us, with the expected opening of its Philadelphia campus in the Route 202 corridor. Phoenix is growing by leaps and bounds: It just reported annual student growth rates of 22% over Fall 1998. Jones International University, already accredited by the North Central Association as a pure Distance Education entity, is set to expand globally as well. DeVry is just behind it with a renewed interest in regional accreditations. The newest and more formidable player is destined to be UNEXT.COM, powered by Milken’s massive capitalization. Its for-profit subsidiary, Cardean University, has just offered the first online course of its virtual MBA program. UNEXT.COM has contracted with the business schools of Columbia, Stanford, Chicago, Carnegie-Mellon, and London School of Economics for advice and curriculum planning for its virtual MBA. Senior faculty from these institutions have been individually contracted as consultants and contributors to the courses, providing illustrations for concepts and references to case studies in 2-3 minute presentations. UNEXT.COM provides the technical expertise of cognitive scientists and advanced instructional technologists to help with course development. Courses are of short (4-5 weeks) duration and are based on special print material, CD-ROMs, and web facilitation and support. UNEXT.COM’s next targets are in Informational Technology and Engineering.
2. British Commonwealth Ventures
Besides Phoenix, the Philadelphia area is about to host the British Open University, whose American subsidiary, "U.S. Open University" has been incorporated in Delaware and has applied for accreditation to the Middle States Association. With 215,000 students worldwide, 172 undergraduate and 124 graduate well-constructed courses on its roster, and 870 full-time and 90 part-time faculty, plus 7,600 tutors, the Open University has emerged as a serious challenge to the traditional British Universities, and now perhaps to American higher education. But it is not only the Open University that grew fast as an alternative collegial model. Who has heard of Athabasca University until now, a Western Canadian institution highly praised recently by IBM’s CEO? Athabasca has emerged as the largest university in the number of the Business degrees it has granted and as the first distance learning institution to offer a thriving Master’s degree in Instructional Technology. And what of Heriot-Watt, an obscure and small Scottish university which has now grown to have the largest single MBA program in Britain and the United States? The for-profit market for Business degrees has grown from 1992 to 1997 by a whopping 180%, at a time when traditional Business Schools have registered declines. These institutions, as well as the for-profits mentioned above, target sequentially the best educational markets (Business, Computers and Information Technology, Engineering, then other Specialty degrees and certificates); in the process, little by little, they take away from the traditional universities their most important revenue streams leaving them with the more expensive programs.
3. Publishers’ Universities
Publishers, such as Harcourt Brace and Thompson, sensing the transition from books to electronic media, are preparing to enter the market of complete courseware production, distribution, licensing, and electronic delivery. Their most serious threat derives from the fact that 27-28 basic undergraduate courses, which will be the primary targets of courseware producing publishers, account for about 35% of the total credit generated in colleges and universities. Harcourt has already declared its intention to built its own Harcourt University as a public provider of courses and degrees. The model that will emerge from such an endeavor will not be much different from the one used by UNEXT.COM. On the publishers’ view, intellectual property contracts in the new environment will look like an extension of the book contract to the courseware form. Among other potentially big players, PricewaterhouseCoopers has entered this arena at the high end with its own Virtual University, while Elsevier seems still undecided. Could the Encyclopedia Britannica be far behind? These are well-capitalized corporate entities that can be strong players in a relatively deregulated (i.e., with easier accreditation) market.
4. Corporate Universities
Now exceeding 600, corporate universities offer opportunities but also pose a threat to traditional universities. More specifically, Microsoft University, IBM University, and the like, can become very strong challengers to the traditional mode of knowledge-presentation and delivery. These mega-corporations, building alliances with telecommunications giants, such as AT&T, can transform the educational terrain in a short span of time, to wit, as MEGA-UNEXT.COMs, starting with MBA, IT, MED, and ED programs. That the threat is real is supported by the actions of the American Medical Association to form its own dot-com, by Johns Hopkins’ and U Maryland/Baltimore’s strong entry into the Medical Professional Certification market, by the College Board’s action to enter the for-profit world, etc. Formerly ‘aristocratic’ institutions appear to scramble to become capitalist entrepreneurs!
5. Consortia, State-led entities, Consolidators
Top tier universities feel the pressure to enter the arena. Harvard hires a consultant to provide a blueprint for action in regard to distance education. The Columbias and Stanfords partner with the Milkens, Caliber, eCollege, and the like, not to be left out of the game. Michigan joins foreign commonwealth universities to get into the international educational world by way of a common for-profit subsidiary. The University of Washington leads a consortium of 14 top "Research I" universities to create a ‘portal’ for their distance learning web-based initiatives. Consolidators and aggregators, such as the National Technological University and Regents College, appear on the scene warehousing or accrediting courses offered by any other college. Efforts are made – not very successfully so far – to create university aggregations at the state or interstate level [Western Governors, Southern, California Virtual, the Illinois Governor’s University]. In short, everyone is acting with the perception that the traditional way of providing education is weakening and, perhaps, is withering away.
6. "For-Profit" University Subsidiaries
Alea jacta est! Traditional Universities find themselves in the same situation that Sears, CompUSA, and Barnes & Noble find themselves in as "brick-and-mortar" companies. Some of these companies reluctantly moved to become "click-and-mortar" (extending their stores with an integrated Internet presence), some opted for a "dot-org" strategy (building separate Internet divisions but under the same hierarchy), and some dared move to a "dot-com" strategy (building independent for-profit subsidiaries under separate management structures, even competing with the parent company; for example, Bank One’s Wingspan Bank). Performance to this day shows that the last strategy is a clear winner given the external competitive environment dominated by pure Internet plays (such as Amazon.com, eToys, Ameritrade, and the like). Responding to these new realities New York University became the first institution to form a "for-profit" subsidiary for the production and delivery of electronic courseware. Following NYU’s lead, Columbia also established the "for-profit" subsidiary "Morningside Ventures" dedicated, among other, to the multimedia production and delivery of educational products. Georgia Tech’s "for-profit" unit is in the making. North Carolina is presently considering a similar venture. And that’s the beginning.
In view of these converging developments, and with an eye not so much to the increasingly more competitive regional and national markets but to the rapidly growing international demand for an advanced American-style education, what is Temple to do to maintain its strength and take a deserving share of the global educational market? The traditional 18-24 student population is expected to grow from 13.7 million in 1999 to about 16.0 million in 2015, a net increase of 2.3 million students available to traditional and nontraditional institutions. By comparison, while approximately 75 million homes have computers and most are linked to the Internet at present, it is projected that in 2004 about 1 billion people will be connected to the Internet! E-commerce in the U.S., of which distance education is a part, has skyrocketed 127% from the first quarter of 1998 to the first quarter of 1999, according to the recent U. of Texas study. Its economic impact is projected to increase from $104 billion in 1998 to $507 billion in 1999. E-business will grow to $1.3 trillion by 2003, according to the estimate made by the Forrester Group! And as the Texas study also suggests: "It should be evident that a large part of the growth in the emerging Internet economy will come at the expense of the physical economy through a substitution effect." Now think: If this ‘substitution effect’ becomes equally pronounced in the educational field, as expected, what will happen to Temple as we know it?
This is the time for all of us to think as one, as Temple. "Virtual Temple," I submit, can be the vehicle with which we may turn threats into opportunities, adversity into innovation, and help make Temple one of the 50 or so "global universities" which will shape education in the new millennium.
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