PHILADELPHIA INQUIRER
| Thursday,
November 4, 1999 |
| Reprinted
with permission from The
Philadelphia Inquirer, November 4, 1999. |
FOR-PROFIT TEMPLE SPIN-OFF WILL OFFER ONLINE
COURSES
By James M. O'Neill,
INQUIRER STAFF WRITER
Temple University plans to create a
separate for-profit
corporation, called Virtual Temple, to generate revenue by marketing
Internet-based
distance learning courses regionally and internationally.
Many universities already provide
online courses aligned
with their traditional curriculums. But Temple would be among the
first to establish a
for-profit arm designed solely to produce online courses that would
help it break into new
markets.
The venture is one example of how
America's higher
education system is starting to be transformed by the Internet and
the competition it
generates, with traditionally slow-moving, nonprofit universities
being forced to act like
aggressive, agile corporations.
Martin Dorph, Temple's chief
financial officer, said the
university hopes to take advantage of its campus footholds in Asia
and the broad appeal
that American higher education has among Asian students.
In addition, the university could
use Virtual Temple as a
way to compete with the hundreds of inhouse corporate
"universities" that
companies have set up to train employees.
Virtual Temple would not be
accredited, and would be
unable to offer Temple degrees without obtaining approval from the
university board of
trustees. Instead, it would most likely offer certificate programs
aimed at adult learners
or those who want job-related training.
"We don't want to supplant or
replace our traditional
site-based university offerings," Dorph said. "We don't
want this to be a zero
sum game. We want to add to the pie."
Dorph said a business plan would be
developed soon, though
no start-up date had been set.
A year ago, New York University
became the first major
American university to establish a for-profit arm to sell online
courses. NYUonline
expects to have its first courses available in January.
Columbia University also has started
a for-profit arm.
Georgia Tech and the University of North Carolina are considering
for-profit online
spin-offs. Drexel University might take that route as
well.
Other schools have trod different
paths, linking up with
existing for-profits. The business schools at Columbia, Stanford,
the University of
Chicago and Carnegie-Mellon have contracted with UNEXT.com, a
Michael Milken-funded
company that plans to offer an online business master's degree. The
University of
Pennsylvania's Wharton School has joined with Caliber Learning to
provide live satellite
and Webcast courses for business managers.
Pennsylvania State University,
meanwhile, chose to keep
its online initiative, World Campus, within the nonprofit confines
of the university.
No matter the approach, universities
across the country
are scrambling to get into the online market and take advantage of a
potentially powerful
way to break the geographic confines of campuses.
"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," warned Temple sociology professor Kyriakos M.
Kontopoulos, who led an ad
hoc committee on Virtual Temple.
In a document outlining Virtual
Temple, university
officials note that "entry into this market is highly
competitive, uncertain and
risky." But Dorph says the move will protect the university
from any economic
failure, while giving the new project flexibility to make corporate
alliances and tap into
sources of investment capital.
He said the new entity would have
the power to make its
own contracts with Temple faculty - and anyone else - to produce
online courses. Virtual
Temple could also make agreements with technology-based or other
education companies to
produce new wares.
Robert Manuel, an NYUonline
consultant, says the company
contracts with NYU professors to compile the content for online
courses.
Dorph says the new spin-off would
not absorb the dozens of
online courses that Temple already offers and that are part of its
regular curriculum. But
Virtual Temple could conceivably contract with an entire department
within Temple to
produce online courses.
Temple's Kontopoulos argues that
traditional universities
find themselves in the same circumstances that such brick-and-mortar
companies as Sears
and Barnes & Noble faced with the sudden boom in online
purchasing.
Virtual Temple, he says, "can
be the vehicle with
which we 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."
Not all Temple faculty are
convinced. "There are a
lot of concerns we have about what all this means," says Arthur
Hochner, president of
Temple's faculty union.
Not only does the new venture raise
questions about
intellectual property rights and how professors would be
compensated, Hochner says, but it
also takes control of the curriculum away from faculty.
New courses now must receive
approval from a department
chair and a committee of professors within a particular college.
Hochner worries that
faculty collectively will have little control over what Virtual
Temple will offer.
Temple University is a nonprofit
institution that gets
about a third of its operating revenue from taxpayers. But Dorph
says it has sizable
assets obtained through other channels, including alumni gifts,
which it can invest in the
new venture.
Dorph says Temple's initial
investment in Virtual Temple
will be modest. However, creating online ventures isn't exactly
inexpensive. When Penn
State started its World Campus, the university received an initial
grant of $1.3 million
from the New York-based Alfred P. Sloan Foundation, followed by
another $1 million.
Dorph says Temple has yet to
incorporate Virtual Temple or
name a CEO. But he said the university expected to move quickly.
"If we've not
created some results, by producing a business plan and identifying
some joint ventures
within the next 6 to 12 months, we'll have blown a big opportunity.
The time is now to
move."
Copyright 1999
PHILADELPHIA NEWSPAPERS
INC.
May not be reprinted without permission.
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