A race to the bottom: MOOCs and higher education business models

Abstract

This is a critical examination of the claims that innovations such as massive open online courses (MOOCs) will disrupt the business models of the higher education sector. It describes what business models are, analyses the business model of free MOOCs offered by traditional universities and compares that model to that of paid online courses offered by distance teaching universities. The results of the analysis suggest that, in their present form, MOOCs are unlikely to address the challenge of reaching and assisting students from disadvantaged backgrounds and in developing countries. Nevertheless, MOOCs and the buzz surrounding them do signal a threat to the higher education sector, namely the widening gap between the skills of graduates of the educational system and the societal expectations from them.

Keywords:

• business model
• innovation
• MOOC
• massive open online course
• higher education

Acknowledgements

I wish to thank Dr Nira Hativa for her editorial assistance with a previous version of this manuscript in Hebrew. A precursor of this paper was first presented at The Open and Flexible Higher Education Conference at Paris, France; 25 October 2013.