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Massive Open Online Courses:disruptive innovations or disturbinginventions?Frank de Langena & Herman van den Boscha

a Management Sciences, Open University of the Netherlands,Heerlen, The NetherlandsPublished online: 10 Mar 2014.

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Massive Open Online Courses: disruptive innovations ordisturbing inventions?

Frank de Langen* and Herman van den Bosch

Management Sciences, Open University of the Netherlands, Heerlen, The Netherlands

According to Christensen and Horn, Massive Open Online Courses (MOOCs)are serving non-consumers. Although they are limited in the services theyprovide compared with traditional colleges, they offer free and accessible educa-tion to a broader audience, who cannot afford the traditional provision. However,this is a characteristic of online distance learning in its broadest sense, as can beread in the reports of UNESCO. For MOOCs to be disruptive, they have to:open up markets by competing with the existing firms using low-cost businessmodels; improve beyond the level of the original competitors, taking price differ-ences into account; and improve quality and replace the established firms. In thisarticle, we are going to look at whether MOOCs are really disruptive innova-tions, or educational innovations that disturb the present state without drivingout old educational business models. Based on the three characteristics of Chris-tensen and Horn, our conclusion will be that the latter is the case. This does notmean that traditional education can ignore MOOCs, open educational resourcesand other forms of online distance learning, but that it will not be a directcompetitor for degree-searching students.

Keywords: open educational resources; open business models; management ofeducational organisations

That’s a lot of disruption. Enough to lead a person to the conclusion that it’s become anall-purpose technology industry buzzword, drained of meaning. (Matthew Yglesias1)

Introduction

A litany of recent complaints shows that something is wrong with higher education:costs are rising at 10% every year (United States), content has lost track with theexplosive development of new knowledge, alumni’s competences do not match withthe requirements of the labour market, teachers deliver lectures in the same way astheir predecessors did for centuries, and revenues for society are unclear. Forty percent of all students are dropping out without a grade. Universities are inward look-ing, fixed at ratings, complacent and self-confident, and consequently do not con-sider any reason for change. This article discovers the role of distance education asan alternative for the existent ‘brick and mortar universities’. In particular, the roleof Massive Open Online Courses (MOOCs) will be scrutinised.

From 2000 until 2010, the number of students has increased from 100 million to150 million worldwide. The estimated number of students in 2025 is 262 million.At the beginning of the twentieth century, the total amount of students was half a

*Corresponding author. Email: frank.delangen@ou.nl

© 2014 The Open University

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million (Guri-Rosenblit, Ebková, & Teichler, 2007) There is a huge potential for fur-ther growth. In the United States about 50% of the age cohorts between 20 and30 years attend higher education, against 5% in Africa. The world average is 20%.In both wealthy and emerging countries, governments are unable to invest in highereducation accordingly. This puts a pressure on quality and a shift from education asa public to a private good, resulting in a fast increase of private higher education(now already 30% worldwide). Bonnie Stewart (2012) writes about the supposedlydisruptive character of (x)MOOCS, pointing to the many publications using thisterm. She sees a shift in the power relations, however, preserving and consolidatingthe power relations of the traditional universities. xMOOCs are, in her view, just anopening of new markets based on the reputation and brand of the elite universities.Rolin Moe (2012) in Reviewing Christensen’s Disruptive Technologies in MOOCTerms gives an historical interpretation of Christensen’s original definition of disrup-tive innovation, using it to analyse xMOOCs. Disruptive innovations are defined byChristensen as: ‘a process by which a product or service takes root initially in simpleapplications at the bottom of a market and then relentlessly moves up market, even-tually displacing established competitors’.2 According to Christensen, Horn, Caldera,and Soares (2011), universities are on the eve of a disruptive innovation.

In the first stage of disruption, ‘brick and mortar’ universities will lose adultlearners as clients. Students most welcome an alternative for attending lectures andsocialising with other students does not take much priority. In other places in theworld, emerging countries in particular, the growing appeal to distance educationresults from the hitherto unknown growing demand in higher education and the con-sequent challenge of massification, allowing new business models and, conse-quently, lower fees (Altbach, Reisberg, & Rumbley, 2009; Sainio & Puumalainen,2007). Christensen and Horn (2013) pointed towards MOOCs as the disruptive force(also see Christensen et al., 2011). For MOOCs to be disruptive, they have to:

(1) open up markets by competing with the existing firms using low-cost busi-ness models;

(2) improve beyond the level of the original competitors, taking price differ-ences into account; and

(3) improve quality and replace the established firms.

Opening up education

According to Christensen and Horn (2013), MOOCs are serving non-consumers.Although they are limited in the services they provide compared with traditional col-leges, they offer free and accessible education to a broader audience, who cannotafford the traditional offering. However, this is a characteristic of ODL in its broad-est sense, as can be read in the reports of UNESCO. China, Russia, Brazil and Tur-key all offer some kind of open educational resources (OER) with the intention ofmaking education available in places where there are no institutes for higher educa-tion and for people who are not able to participate in the traditional higher educationinstitutions.

The greater family of online distance learning (ODL) has three kinds ofmembers. The first form of ODL is the education offered by the traditional openuniversities; for example, the Open University UK, the Dutch Open University,

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University of South Africa and Athabasca University. The distance education inthese institutes is characterised by open access in the sense that they do not requirea specific start qualification, but most of the open universities (or institutions ofhigher education with a distance department) ask for some kind of financial contri-bution.

A second form of ODL comprises OER, online learning and teaching resources.The term ‘Open Educational Resource(s)’ was defined in the 2002 UNESCO confer-ence as referring to educational resources that are freely available for use, reuse,adaptation, and sharing. The supply of open resources is more than a decade old. In1997 California State University developed a portal, called Multimedia EducationalResource for Learning and Online Teaching. In 2001 the Massachusetts Institute ofTechnology started Open Course Ware,3 which was partly financed by The Williamand Flora Hewlett Foundation.

The youngest branch of the ODL family is MOOCs. These originated in a course(Connectivism and Connective Knowledge 2008) organised by George Siemens andStephen Downes of the University of Manitoba in 2008. Twenty-five tuition-payingstudents on campus and about 2300 people who participated online followed thiscourse. In the fall of 2011 Stanford University launched three open online courses,each of which had an enrolment of about 100,000 students (Tuomi, 2013; Watters,2012). Stanford’s success caused the start-up of two of the several platforms ofMOOCs. Sebastian Thrun started Udacity, and Daphne Koller and Andrew Ngstarted Coursera, shortly after each other (Watters, 2012). The number of suppliersis rising fast.

Table 1 presents an overview of the differences between open education as pro-vided by open universities, OER providers and MOOCs.

MOOCs and the quality of (distance) education

Secondly, as Christensen and Horn (2013) state, disruptive innovations improve inquality over time to capture a larger part of the existing market. As they havebecome regular participants in the market, they will have to behave in a similar wayto the old firms. This is also given as a reason why MOOCs have become popularin recent months: they offer more possibilities to increase quality, an observationthat will not be shared by everyone commenting on MOOCs. Again citing Christen-sen and Horn (2013), in the future, courses might be offered based on employerdemand, not faculty research interests. MOOCs are already evolving in some waysaway from traditional educational constraints: Udacity’s courses, for example, have

Table 1. Open education, OER and MOOCs.

Open education (OpenUniversities)

Open EducationalResources

Massive OnlineOpen Courses

Definition ofopen

No start qualifications Free to (re-)use and (re-)distribute

No fees

Certificates/degree

Yes/yes No/no Yes/no

Focus group Students/learners Teachers StudentsMain objects Programmes Learning objects Courses

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shifted from a time-controlled to a more competency-based learning model that takesadvantage of the online medium.

Sometimes a differentiation is made between cMOOCs and xMOOCs. Theformer explicitly adapt a constructivist philosophy of education and follow the pathof the first MOOC by Siemens and Downs. These courses challenge students to lookfor their own sources, to write papers and to discuss these with other students. Mostcourses described as xMOOCs can be best described as well-performed lectures,using a broad array of supplementary presentation techniques.

Kolowich (2013) reports on the outcomes of a survey conducted by The Chronicle.The Chronicle states that they have ‘attempted to reach every professor who has taughta MOOC. The online questionnaire was sent to 184 professors in late February, and103 of them responded’ (Kolowich 2013). They added: ‘The findings are not scien-tific, and perhaps the most enthusiastic of the MOOC professors were the likeliest tocomplete the survey’. The median number of students per class was 33,000, of whom2600 (7,5%) finished the course. Most courses (75%) offered some kind of proof ofparticipation to the students that had completed the course. Table 2 presents anoverview of the content-related questions and the answers.

There seems to be a large difference between the influence of MOOCS at theirown institutions and their influence in general, both in costs and in credit granting.

Many MOOCs come from world-class universities. However, Daniel (2012) ispointing out that ‘university brand is a surrogate for teaching quality … The so-called elite universities that are rushing into xMOOCs gained their reputations inresearch’. He cites Tony Bates, who states that the pedagogy of xMOOCs is out-dated: ‘the teaching methods used by most of the Coursera courses so far are basedon a very old and outdated behaviourist pedagogy, relying primarily on informationtransmission, computer marked assignments and peer assessment’ (Bates, 2012).Daniel (2012) adds to this that course and degree completion are common qualitycriteria.

Considering that the average pass rate as reported by Kolowich (2013) was7.5%, this is very low even for distance learning institutions and open universities(33–67%, depending on the institution and specific course; Daniel, 2012; Clow,2013). Bates (2012) also criticises the idea that MOOCs will increase access tohigher education in developing countries. Not only has Africa several institutesbased on distance learning, but also the xMOOCs are seen as a form of intellectualneo-colonialism. In contrast, Amanda Ripley (2012; TIME Google Hangout, n.d.),based on her experiences in Pakistan, stated: ‘at this stage, most MOOCs work well

Table 2. Opinions of developers regarding MOOCs.

Yes No

Do you believe MOOCs could eventually reduce the costs of attaining a collegedegree at your institution?

24 35

Do you believe MOOCs could eventually reduce the costs of attaining a collegedegree in general?

45 19

Did teaching a MOOC cause you to divert time from other duties, like research,committee service, or traditional teaching?

55 19

Do you believe students who succeed in your MOOC deserve formal credit fromyour home institution?

28 72

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for students who are self-motivated and already fairly well educated. Worldwide, thepoorest students still don’t have the background (or the Internet bandwidth) toparticipate in a major way’.

MOOCs and their business model

For reasons of economy, most MOOCs run parallel to a regular course. The free ver-sion is offered online; tutoring is restricted to standardised reactions and automaticfeedback. In addition, peer discussions are encouraged and sometimes teachers offerthe possibility to chat with the participants. However, most MOOCs are only avail-able during specific periods of time (De Langen 2013). This characteristic limits theflexible use of MOOCs in any earning model (De Langen 2013). Daniel (2012) dis-tinguishes several different earning models:

� Certification (students pay for a badge or certificate, almost all MOOC plat-forms).

� Secure assessments (students pay to have their examinations invigilated[proctored], Coursera).

� Employee recruitment (companies pay for access to student performancerecords, Coursera, Udacity).

� Applicant screening (employers/universities pay for access to records to screenapplicants, Coursera, Udacity).

� Human tutoring or assignment marking (for which students pay, Coursera).� Selling the MOOC platform to enterprises to use in their own training courses(Coursera).

� Sponsorships (third-party sponsors of courses, Udacity).� Tuition fees (all MOOC platforms).

However, these earning models are not yet further expanded into full businessmodels in the sense that there is a balance between resources needed and incomeearned. Although the perspectives are optimistic, Rivard (2013) found it worthwhileto report on the fact that Coursera seemed to begin to earn money:

The Silicon Valley-based company brought in $220,000 in the first quarter after itstarted charging for verified completion certificates, its co-founders said. The companyalso receives revenue from an Amazon.com affiliates programme if users buy bookssuggested by professors. “It’s the beginning of revenue,” said a Coursera co-founder,Daphne Koller.

Still, the delivery models and the underlying business models are volatile. World-leading universities are very active in the market. An increasing number of universi-ties offer MOOCs for free and are searching for supporting business models at thesame time (Zhu, 2012). At this time the distance teaching universities appear to bethe laggards, with the exception of the Open University UK. The others do not showsignificant initiatives to be frontrunners in the production and distribution ofMOOCs. Only recently (2013) a consortium of partners from 11 countries organisedthe first pan-European ‘MOOCs’ initiative, with the support of the European Com-mission. The initiative is led by the European Association of Distance Teaching Uni-versities and mostly involves open universities.4

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Elsewhere we (Table 3; De Langen, 2011) described the business model of OER.In this model, the motives of different participants were described.

The main differences between MOOCs and OER are as follows:

(1) MOOCs are full courses; OERs are often learning objects.(2) OERs are available all the time; MOOCs are only available when the

supplying organisation decides so.

This means that for governments the national arguments (average level of knowl-edge, cost-effectiveness) will be stronger than sectoral arguments. Because presentMOOCs are offered by educational institutes (typical universities), individualmotives will be less important than some years ago when the supply of MOOCswas based on individual decisions.

Yet both commercial reasons (some professors take their own books as requiredor advised readings) and non-monetary or reputational gain seem motives to partici-pate. For organisations, the original motives are still valid. The public good motivewill draw additional income in the form of subsidies, whereas the marketing effectof MOOCs will draw students towards the brick-and-mortar university. The effi-ciency motive depends on the way the MOOC is used again in the students’ owneducation and the amount of additional efforts it took to develop the MOOC.

Taking these differences into account, we can expand the results of the researchof Helsdingen, Janssen, and Schuwer (2010) with respect to OER to apply to thebusiness models of MOOCs. Regarding OER towards MOOCs (Table 4), Helsdin-gen et al. (2010) use Osterwalder’s Business Canvas (Osterwalder, Pigneur, & Clark,2010) to describe the business models of different OER organisations. The right sideof the business canvas (Figure 1) consists of earning models, whereas the left sidedescribes the resources and activities necessary to realise the value offering.

Table 3. OER participants and motives (based on De Langen, 2011).

Participant Motives

Governments � Sectoral arguments� National arguments

Individuals � Altruistic reasons� Non-monetary gain� Commercial reasons� Arguments of usefulness or costs

Organisations � The ‘public good’ motive� The ‘efficiency’ motive� The ‘marketing’ motive

Users � Institutionalised user:� Educators/institutions, using the OER in their own teachings� Students and self-learners, who want to further their knowledge

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To describe the canvas, they had semi-structured interviews with key individualsin several organisations (MIT OpenCourseWare, Open Universities, Open UniversityUK, TU Delft, Wikiwijs, UCLA, Irvine, Open Highschool of Utah, Flatworldknowl-edge, European Association of Distance Teaching Universities, JISC, WikiEducatorand KU Leuven), while they used publicly available resources of other organisations(Open University of Catalonia, Connexions, Athabasca University, OER Africa andAnadolou University).

Table 4. The business canvas of OER organisations (Helsdingen et al., 2010).

Key partnerships

Volunteers

Customerrelationships

Interactive, contributorand users

Customersegments

Educators

Life long learners

Channels

Web 2.0 tools

Revenue streams

FundingThird party funding

Cost structure

Manhours for variable costs

Key resources

Volunteers

Experts

Core activities

Creating an active community

ValueProposition

Building blocks

Complete courses in making OER

Figure 1. Osterwalder’s Business Canvas.

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MOOCs: disruptive innovations or disturbing inventions?

To decide whether MOOCs are disruptive innovations, we have to evaluate the threestages as listed by Christensen and Horn (2013).

Conquering the lower end of the market

Clow (2013) cites George Siemens (2011), who said that the long-term value foruniversities is likely to lie in those things that cannot be cheaply duplicated througha MOOC, meaning degrees or most other formal qualifications. Institutions put in agreat deal of effort to bring their students up to the level required by the formalqualifications. MOOCs and OER do not provide an alternative for formal education.Open learning as provided for by the Open Universities is an alternative for tradi-tional education, at least in form and pedagogy, but as the courses are not free theyare not necessarily price competitors. Non-formal learning, workplace learning andother non-degree educational programmes will be influenced when the supply ofMOOCs is enlarged. The same goes for groups of people who cannot afford costlycollege fees or are geographically constrained to get a formal education. However,although this opens up a new segment of the educational market, it is uncertain thata sustainable business model will evolve from these groups.

Improving quality towards industry standards

As said, Tuomi (2013) defines MOOCs as part of the OER movement. In his view:

a major promise of OER is that the creation and refinement of both learning contentand the underlying pedagogical approaches can benefit from the distributed co-creationmodel enabled by open licences […] Personalised and networked learning environ-ments may thus look attractive and promise great improvements in learning productiv-ity […] OER re-organises the boundaries of social transparency and enables new formsof collaboration and production. (Tuomi, 2013, pp.70–72)

Yet it is not clear whether he sees only OER IV in his definition as a transforma-tional force or that MOOCs also are part of this development, or that MOOCs aretextbooks in cyberspace.

Several authors at the end of 2012 became very enthusiastic about MOOCs. Sodid Shirky (2012), writing in The Guardian:

Once you imagine educating a thousand people in a single class, it becomes clear thatopen courses, even in their nascent state, will be able to raise quality and improve cer-tification faster than traditional institutions can lower cost or increase enrolment.

And Zhu (2012) wrote in Forbes: ‘The adoption was so fast that many peoplestarted to predict that MOOCs would disrupt the higher education industry frombottom up, similar to what iTunes did to the music industry a few years ago’.MOOCs promise cost-effective, flexible and accessible courses, using Internet tech-nologies. Yet the developers interviewed by The Guardian see a potential influenceof MOOCs on ‘other ‘ organisations but doubt whether their own organisation willbe influenced.

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Replacing the existing organisations

If we combine the two conclusions above, MOOCs:

� do enlarge the amount of individuals who have access to educational materialsbut not to degree awarding institutions; and

� in their present form are replicas of traditional lectures without the possibilitiesfor active tutoring.

Therefore, it is not likely that MOOCs will replace traditional education. Thegeneral conclusion is that MOOCs are not a disruptive innovation in the sense thatChristensen (2002) described in several of his publications.

Still the fact that they are not disruptive does not mean that MOOCs can beignored by regular educational institutions or Open Universities. In some cases,MOOCs set a higher standard of quality. This should encourage teachers within pro-grammes to increase their efforts.

In general, we see three major influences of MOOCs (xMOOCs, cMOOCs orotherwise) on education and educational (degree) programmes:

(1) Flipping the classroom. MOOCs could be a way of introducing distance e-learning to traditional courses. Distance learning materials as MOOCs canbe used as instruments to put ‘drill-and-practice’ exercises online, creatingtime in the classroom for more active learning forms such as discussion andlearning conversations, between teachers and students or among students.

(2) Opening up education. MOOCs, OER and distance learning make coursesavailable in places where otherwise good education is scarce. Some of myolder colleagues from Egypt and Africa told me about their excitement whenwaiting for the next lectures to arrive by mail; finalising their education bymaking trips to the capitals of their countries and later to England to doexaminations and obtain their degree. Emerging countries will show a dis-tinct picture, due to the fast increase in the participation in higher education.Most developing countries will not be able to cater for the growing demandof higher education with new campus universities, although this will con-tinue to be their major objective. Instead, in the short term they will fill thegap with distance education, like the mega-universities that have beenerected in India. Emerging countries are a rather unlimited market forMOOCs, although it is doubtful whether national accreditation boards willbe very reticent when it comes to the allocation of credits to MOOCs. Thenational mega-universities will be considered better preservers of thenational culture and national educational standards as well. The large con-sortiums of MOOC producers might have the smartness to incorporate pres-tigious universities in emerging countries, in South Asia, South-East Asia,Africa and South America in particular. China will go its own way and con-tinue to create its new campus universities and a distance education systembased on broadcasting.

(3) Changes will appear in the field of adult education. Public finance of adulteducation will vanish, which will result in more pressure from students andemployers to increase visible relevance. At the same time, for financial rea-sons, employers will be more reticent to allow personnel to apply for degree

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courses in regular universities. Instead, shorter programmes of studies willbe preferred. At first glance, MOOCs seems to have unlimited opportunitiesin this target group. However, employers will want to go beyond the trans-mission of information and they will prioritise the development of skills,supervision and accreditation of the participants. Consequently, they mightprefer to do business with distance teaching universities, if these institutionsare willing to match their programmes with requirements from theprofessional practice.

So, in our view, MOOCs will not be the disruptive innovations that have been pre-dicted by some and hoped by others, but they will (among the greater ODL family)be facilitators of other developments that could change the educational sector.

Notes1. Retrieved April 4, 2013, from http://www.slate.com/articles/business/moneybox/2013/05/

disrupting_disruption_a_once_useful_concept_has_become_a_lame_catchphrase.html.2. Retrieved April 4, 2013, from http://www.claytonchristensen.com/key-concepts/.3. Retrieved April 4, 2013, from http://ocw.mit.edu/index.htm.4. Retrieved April 4, 2013, from http://www.openuped.eu/.

Notes on contributorsFrank de Langen is associated professor in Management Sciences at Open University in theNetherlands; chair strategy and innovation, interested in business models and open education.

Herman van den Bosch is a professor in Management Sciences at Open University in theNetherlands; interested in regional innovation and knowledge sharing of Higher educationalinstitutions.

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