The Business of Borderless Education

Executive summary

The 1997 study New Media and Borderless Education surveyed alternative forms of higher education provision around the world, with particular attention to the activities of media companies. From that study a taxonomy of new providers was developed, and various scenarios were put forward for the future development of the sector. The rise of corporate universities and proprietary institutions of higher education was noted as a major feature of the changing environment, particularly in the United States. In this study, the research team was tasked with a brief to examine the activities of corporate, virtual and for-profit institutions offering educational and training programs that could be seen to impact on the traditional non-profit university sector, and to consider the implications this could have for Australian universities.

Unlike the earlier study, this research does not focus in detail on all the new forms of higher education, which have continued to evolve since 1997. There has been, for example, continued growth in commercial companies supporting the on-line infrastructure of universities, as well as announcements from some publishing companies of intentions to establish their own universities. Some education ventures have failed, or have been forced to re-brand and re-position themselves in a volatile market; others represent offshoots of the general environment of speculative investment surrounding the Internet. Most of these enterprises are relatively recent and most have yet to establish themselves as viable. Such activities have been noted but do not represent our main interest.

Top

Findings

Findings The factors driving the growth of the alternative education market in the US, and which are likely to be relevant to Australia, are as follows:

• the globalised economy, with a growing demand for standardised products, services and technical infrastructure, and sophisticated communication systems;
• The emergence of a post-industrial information age and the explosive growth and distributed nature of new knowledge;
• credit versus non-credit professional development education and training; and
• "just-in-case" education versus "just-in-time" training.
  

Notwithstanding the rapid growth of online delivery among the traditional and new providers of higher education, there is as yet little evidence of successful, established virtual institutions, either as Internet-based educational providers or as "hollow" organisations which broker the programs of other educational operations. Most education providers indicate an intention to employ combinations of delivery mechanisms in the future, for example mixing face-to-face contact with online availability of programs.

While many of the factors driving the emergence of alternative higher education providers in the US also affect Australia, there are some systemic differences between Australia and the US which are likely to influence the potential for new providers to operate here. These differences include:

• demographic scale and economic size and diversity;
• the existence of widespread employer-sponsored tuition subsidies in the US;
• Australian higher education is more regulated than in the US in matters such as the use of the "university" label, and US higher education quality assurance and accreditation systems are diverse and poorly coordinated in comparison to those in Australia;
• the industry-orientation and competency basis of the Australian vocational education and training system, which contrasts with the more autonomous and general education oriented community college system in the US; and
• greater levels of experience in Australia with distance education and part-time higher education students.
  

There is as yet no evidence of an imminent large-scale influx of any of new higher education providers into Australia. Even Australia"s international market is unlikely to be affected in the near term; both new providers and not-for-profit institutions are in the early stages of seeking international markets and are aware of the many practical obstacles involved. Further consideration of this area would benefit from research into the actual student demand for new forms of higher education, to complement the widespread airing of assertions and predictions made by education and training suppliers.

In the US, the for-profits do not seek to cater for lower-income students, who are instead left to the public system. Post-bachelor degree higher education in the US and Australia is moving to a full-fee basis, which has potentially serious consequences for the future development of lifelong learning, as lower-income groups and those without financial support from employers face access barriers to fee-paying programs.

Top

Note: A full copy of the report is available in PDF format.