Waking up to the economics of networked learning
Thursday, October 9th, 2008 
Via Stephen Downes, Judy Breck believes, and I agree, that the economic crunch will speed the advent of network learning.
Getting a college education in the US is absurdly expensive, but like property, or the stock market, the education bubble too will burst - the financial institutions simply no longer have the money to fund the madness.
Change is on the way. Consider how the Open Courseware movement is giving way to the idea that, in essence, a university education could become available (including Open Accreditation) free of charge. This is not, of course, a done deal, but economic necessity will force us to look more closely at these issues. And crucially, we can now consider such possibilities because of the network. The network doesn’t just change the way we learn from a pedagogical or behavioral perspective - it also changes the economics of the production, distribution, and consumption of educational products and services. The network has the potential to dis-intermediate the inefficiencies in the system and change it fundamentally. That is what will and should happen.
So, it is fair to ask about the value (in the economic sense) of a US university education. Given their origins, it is unsurprising that university cost/benefit may be out of sync with the broader economic reality. Schools are hard to manage from a cost perspective. I’ve sat on the board of a privately held language school since 1996 and I’ve seen that, without the strictest approach to cost-control, for example, the customer can end up paying for the institution’s inefficiencies. In a state-funded university with a closed system and little financial accountability, I can only imagine what goes on. (Even without seeing the books, we could probably guess, though.) And as we all know, there are many other reasons why our educational institutions can allow their fees to, er, bloat.
What I am not saying
Let me be clear on something. I am not proposing that the educational system be turned over to free market forces (though there may actually be a case for it). Nor am I saying that our universities suck and that educators are bad, etc. What I am saying is that the network is exposing the economics of the old system and it doesn’t look good in the context of the tough times ahead. It is the economics, too, that will determine the extent of the changes we are about to see to a far greater extent than will the ideas, the pedagogy, or even the technology.
The fact is that the network can replace large chunks of the old system at a fraction of the cost but it is the economics that will determine how it configures. Judy mentions textbooks, scaling up good teachers, etc, but there are endless other ways. And Judy is exactly right when she suggests the power of mobile learning in this scenario. But there are, in fact, entirely new conceptions of what a university education should be that go way beyond this. This is not news, but that conversation is going to get louder.
Our example
It was this economics of the network concept that brought Praxis together as a company. I spend my days trying to figure out the economic reality of schools, of networked learning, and of how to create more value for our learners-as-customers. I would argue that we are slowly but surely solving the puzzle - thanks, of course, to the network. A Praxis Pass, for example, offers full access to 4 languages for about 80 cents per day. Meanwhile, the more we scale it up, the cheaper it can get, to the point where we could offer access to dozens of languages (or other subjects) for a few cents per day. Nor is there any reason why we could not do that (assuming we reach reasonable scale) make money, and even give the service away free to entire regions where people were too poor to pay for it - parts of Africa, India, or China, for example. We are a small organization (58 people) but it is entirely possible that we could do those things. It may demonstrate the broader potential of the network in this context. We just have to think about this differently.
The point is that networked learning is in its infancy, and so are the economics of networked learning. There is an awesome power out there waiting to be unleashed if we are willing to reconfigure how we think about all of this. The coming economic collapse will provide the push. After that it will be time to be very open and very creative. This isn’t edupunk - this is real life. I doubt if any of us would have liked it this particular way, but hey, get ready for the era of networked learning.
Ken Carroll