"There is very little evidence to suggest that European universities are having any success in marketing, or are even trying to market, online or distance learning in the U.S. "

Richard Garrett

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Richard Garrett

Online Higher Education: Should the U.S. Brace For A European Invasion?

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PEOPLE WITH IMPACT INTERVIEW - Richard Garret is a Program Director and Senior Research Analyst with Eduventures, the leading collaborative research and consulting company in the education industry, discusses the role of the Online Higher Education Collaborative and various trends witnessed over the course of his research. He shares these insights and more with EDUInsight.com in the following interview.

Q: What is the Online Higher Education Learning Collaborative hoping to achieve and what challenges is it facing in the pursuit of that goal?
Richard Garrett: The aim of the Online Higher Education Learning Collaborative is to help schools that are either very invested in the delivery of online education or those that are very interested in it. Our flavor of “online higher education” is degrees and certificates over 80%+ online, and less on online or blended courses offered to otherwise campus-based students. We help institutions of all sizes to grow efficiently—from those with tens of thousands of online students who want to grow rapidly from that high base, to schools that seek to grow from a few hundred online students into the thousands. The Online Higher Education Learning Collaborative has a very diverse membership for everyone from publicly traded companies running for profit universities right down to small liberal arts colleges, research universities, and state systems. Each member has a different view of themselves in relation to the online market, but they share the common goal of utilizing online learning to fit with their mission. The Online Higher Education Learning Collaborative has a strong market-driven emphasis in trying to understand the online higher education industry and the evolving market dynamic—in this immature market—and how schools can best play in that environment. The Online Higher Education Learning Collaborative learning collaborative has done a lot of research around the demand for particular credentials and fields of study online, as well as evolving good practice around online operations. The area of operations will likely become more relevant in the coming years, as simply offering an online program becomes the norm, and schools turn to various aspects of infrastructure, staffing, marketing spend and technique, student services, pedagogy, and the like to differentiate. Again, in an immature field like online higher education, there is a lot of experimentation going on and less established good practice. Basically, the Online Higher Education Learning Collaborative learning collaborative brings together schools that are invested or interested in this space, observes, gathers data from members, and works to analyze and benchmark progress and processes.

Q: What challenges does the Online Higher Education Learning Collaborative face in pursuit of this goal?
Richard Garrett: The major challenges pertain to executing the right balances between the collaborative elements of membership, schools sharing data and providing advice to each other, while on the other hand recognizing members’ proprietary instincts. Many schools see revenue generation as a key motivation for offering online programs, and online operations are often centered on the more entrepreneurial parts of the business, such as continuing education divisions or business schools. We have developed a strong custom research element allowing institutions to engage us one-on-one to conduct research on their behalf that speaks to their particular needs.

Q: Have you found the marketability of European Distance education degrees in the United States has increased??
Richard Garrett: There is very little evidence to suggest that European universities are having any success in marketing, or are even trying to market, online or distance learning in the U.S. This is mainly because the U.S. is perceived as a very competitive market with a great diversity of institutions, many of which are very entrepreneurial, especially in terms of online components. There don’t seem to be significant gaps in the U.S. market—capacity gaps, quality gaps—that foreign institutions might fill. There are certainly isolated cases of U.S. schools partnering with European schools to offer niche provision online, but this practice is typically not very market-facing. There are certain language communities, for example there are certain consortia of the Spanish speaking world, often led by institutions from Spain, that have had a lot of success in Latin America and see the Hispanic community in the U.S. as an addressable market. As you may know, there have been some spectacular “failures” in European pursuit of the American online education market. For example, some years ago the United Kingdom’s Open University set up with a U.S. arm and found all kinds of troubles relating to branding and regulation that it hadn’t anticipated and decided to pull out of the initiative. This is an unfortunate precedence that cautions any European school considering expanding into the U.S market.

Q: So any European invasion into the market is probably not imminent??
Richard Garrett: I’d say it is far from imminent. I think in general, phrases like “European invasion” are exaggerated. I’ve worked on both sides of the Atlantic, and in Europe you hear about the American Invasion and in the U.S. you sometimes hear worries about a European Invasion into the online higher education space. These concepts are not based on much data, rather, they are anecdotal or a wild assertion by a random individual. There are large publicly traded commercial schools in the U.S., that don’t really exist yet in Europe, and have the financial, marketing and operational clout to set up in other countries and market themselves internationally. Given the larger capacity and diversity problems in the European higher education space, the fear of a U.S. educational invasion is Europe is arguably more legitimate. But of note, the University of Phoenix and their for-profit peers have discussed international expansion online for many years, and as of yet, most have done very little or had very little success. All kinds of cultural, operational and regulatory barriers are in place that make any kind of invasion very slow and incremental, making the process not very invasion-like at all.

Q: How “commercial” is online higher education??
Richard Garrett: Online higher education at program level was to a significant extent grown by certain for-profit universities and colleges. The University of Phoenix offered online delivery as early as 1989, and there is certainly a strong resonance between online higher education at program level and the for-profit higher education model, which emphasizes convenience and flexibility for the adult student, and career-oriented programming for the working student. For-profit schools were often the most eager to embrace online delivery because it offered them potential cost efficiencies and ways to approach this market which seemed to fit with the needs of the prospective student. At the same time there have certainly been a number of nonprofit schools that have been pioneers in this space, and while they’re technically nonprofit, many of them are on the more entrepreneurial end of their institution. They stem from continuing education or extension divisions that are often self-funding even if not formally profit-making. And as you may know, there are certainly some nonprofits, like Drexel University, that have set up a formally for-profit subsidiary to run their online operations. E-Cornell is another great example, run out of Cornell University. Both are for-profit subsidiaries of a nonprofit institution, so there is definitely for a stronger-than-average commercial, or at least revenue-generating, motivation that accompanies the offering of many wholly online degrees and certificates. But, given the bulk of U.S. higher education is nonprofit (95% or so of students in the U.S. attend nonprofit schools), the maturing of online learning means that more and more non-profit schools will continue to get into online delivery, and many will use it to serve very local or niche markets which may require less commercial-style operations compared to a nationally-focused online effort.

Richard Garrett, Program Director and Senior Research Analyst

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