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Time for Change: MOOCs and Learning Technology

During the past year we’ve all seen the explosive growth of massive open online courses, or MOOCs, produced by organizations such as EdX and Coursera. These new businesses started developing expert-led courses that cover typical university or college-level topics like introduction to computer science, psychology, history and many more.

The demand for MOOCs stems from an enormous appetite for branded, high-quality education among students around the world who cannot afford expensive private education. These courses are now used by professionals and more senior people to learn new topics as well.

The MOOC industry began with a strong focus on excellent content and the delivery of a complete and integrated learning environment. You can take an online course at one of the aforementioned websites and interact with peers, submit exercises, find supplemental material and interact with experts at your own pace.

We’ve seen this before. Around the year 2000, investors plowed more than $800 million into educational startups. This year the investment has gone to more than $1.2 billion.
In the first wave, we saw companies that tried to sell wine-tasting courses online; I worked for a highly successful one, DigitalThink. Companies such as Blackboard, CBT Systems — now Skillsoft — Saba and Docent were born.

What’s different now? Today’s educational startups serve both video-based content with ease and have the benefit of nearly 10 years of learning in collaboration software, online assessment software and high bandwidth access behind them. Best of all, the educational startups that develop MOOCs can take advantage of the market for mobile technology, which puts educational access into the hands of students of all ages around the world.

It’s inevitable that this investment will change the world of corporate training. Our learning environments are pretty far behind. We’re still using LMS platforms developed 10 years ago, e-learning courses that look more like cartoons or audio-enabled flash cards, and we still don’t have enough mobile learning environments. Yes, there are many exciting new programs out there, but most corporate learning systems aren’t nearly as compelling as YouTube.

The explosion of MOOCs and new tools for education will have three big effects on corporate learning.

1. MOOC platforms and other educational tools will move and be sold in the corporate market.
It’s inevitable that vendors that develop free, fee or accredited programs will look for opportunities there. Already, EdX, Coursera and Audacity have corporate development teams and are looking at content relationships with large companies.

As we’ve talked with clients about these programs, more of them are asking, “Why can’t we use these courses for our own online corporate training?” And the answer is that they can.

2. New investments in the educational market will inspire similar investments in the corporate market. Once we get comfortable with Udacity, Khan Academy and YouTube, it’s natural that we, and the vendors that serve us, will copy those innovative ideas. Already content companies such as Skillsoft and others are focused on video and mobile content, driven largely by the consumerization of online learning and demand for a next-generation learning experience.

3. The corporate learning market will use MOOC-based education as a form of accredited learning. Today many large companies spend millions of dollars to build or buy all types of training in the core skills category. These courses — basic management, office productivity, math, Excel and other core business skills — cost companies $100 to $500 per employee, per year, according to Bersin’s 2013 “Corporate Learning Factbook.” Why wouldn’t we accept an employee who is certified or has completed curricula taught by a Stanford, Massachusetts Institute of Technology or Michigan professor, delivered at no cost through a MOOC?

According to the Gates Foundation, in 2012 more than 170 startups in this area were funded for a total capital investment of more than $1.2 billion. We in the $130 billion corporate learning market are going to see great benefits from all these new ideas, so stay tuned.