E-Learning for the BC Tech Industry (Second Edition) An opinionated monthly column exploring the current use, future potential, and commercial value of e-learning in BC’s high tech sector. E-Learning: May 26th 2000 By Paul Stacey “Education is now the main barometer of competitiveness among countries – more than capital, and more than technology. More than ever, learning is intimately linked with the wealth and well-being of nations…” Jean Monty, Chairman and CEO of BCE Inc. “Online continuing education is creating a new and distinct educational realm, and it is the future of education. There is a market here potentially worth hundreds of billions of dollars.” Peter Drucker, US writer, educator and management consultant You don’t think education is a sector of the economy? Think again. In 1999, Merrill Lynch estimated global expenditures on education and training at $US 2 trillion. While about one-third of this spending takes place in North America, about 15% is in developing countries, and about half in Europe and other developed market economies. International trade in education is showing marked increases in spending on products and services as well as a higher level of involvement by the private sector. I’m writing this months column “live” at the World Education Market (WEM) (http://www.wemex.com) which is happening right now, 23-27-May-2000, here in Vancouver, at the Trade and Convention Centre. Over 270 companies/ organizations from 31 countries are exhibiting, and approximately 4,000 participants from 46 countries are attending. All of them players in the international learning market. WEM is the first ever global professional market for education. It brings together key players from both the public and private sectors, and some of the international who’s who of education, training and lifelong learning. Reed + Midem the organizers selected Vancouver as the permanent host site for this yearly event. I went to the World Education Market with a great deal of curiosity. WEM is a market not a conference. What is happening on the international marketplace? Who are the buyers and sellers? What does the market look like? What are the trends? What’s for sale? How much do things cost? Is e-learning a global phenomenon? What’s the deal flow and how many partnerhsips are being formed?  Lots of questions and too much to report on in this column but let me focus in on themes I extracted from WEM and map out a high level view of the unfolding field of e-learning and its importance to BC’s high tech industry. The Internet The Internet is the fastest growing mass market in the history of the world. Its strengths are in content, communication and collaboration. These strengths are ideal for learning and education applications. E-learning leverages the networks and web infrastructures that have been created in the workplace, in the home, and on campus over the last few years. The emergence of the Internet as a distribution channel and the development of web-based business models in the education industry have created a new competitive landscape. Traditional bricks-and-mortar providers of education find themselves competing with new Internet providers outside their geographical region. Education entrepreneurs are seizing opportunities to develop a for-profit education business sector. This is a market opportunity ripe for BC media and technology industries, in partnership with educational institutions, to pursue. Investor interest in e-learning and the education business sector has grown dramatically, particular over the last year. For those interested in learning more about the investor side of e-learning I recommend you track Eduventures (http://www.eduventures.com). Eduventures is an education industry research and information firm that publishes the Education Economy, a free, weekly on-line newsletter covering every sector of the education industry. Eduventures is projecting the education business industry will attract an estimated $4 billion in private investment in 2000. If you are seeking capital for an e-learning venture here in Canada check out Canacord Capital (http://www.canacord.com). Canacord, Canada’s largest independent investment firm, published an e-learning special industry report for the World Education Market and is making it available from their web site.  The Heller Reports (http://www.hellerreports.com) also publishes weekly market and research reports on Internet Strategies for Education Markets and Educational Technology Markets. The Knowledge Based Economy According to the 1999 UNDP Human Development Report, “more than half of the GDP of the major OECD countries is now knowledge based.” The knowledge-based economy puts a premium on intellectual capital. To develop that capital, particularly in high tech, knowledge and skills must be continuously updated and enhanced. High tech workers know their marketability is based on the currency of their skills, and jump from one company to the next for a chance to work on challenging, leading edge projects. Increasingly potential hires are asking in the interview not just about leading edge work but how the company supports professional development. The heightened competition for skilled human resources is causing organizations to look closely at how recruitment and retention practises affect their intellectual capital and competitive position. In the midst of all this, e-learning is emerging as a key enabler. For companies, e-learning provides a means for aligning workplace performance with business strategies, and for building communities of best practise and expert thinking. For high tech professionals, e-learning provides a new form of professional development that can provide up-to-date knowledge in small incremental units that fit around increasingly time-constrained lives. It’s a win-win scenario. Having worked for years myself as an education and training professional in high tech companies let me lay out the e-learning value proposition in simple terms. The traditional view of training and education inside companies is that it’s an overhead expense, a cost that comes off bottom line profitability. When times get tight training and education are the first things to be cut. The new thinking paradigm is that training and education are investments and potential revenue streams. Learning solutions developed for company employees have potential commercial value out in the education marketplace. In the simplest of terms the opportunity is there to convert corporate learning from a cost centre to a profit centre. I think Viviance (http://www.viviance.net/english/index.html), a Swiss based online education service provider (ESP), has the right idea. Viviance provides half the capital for companies, such as Volkswagen, to expand their educational courses into web-centric modules that can be sold outside the company. In return Viviance takes half the profits from module resale. This is a unique business model in the true spirit of e-learning. Hughes Cochard of Studi.com (http://www.studi.com) in France provided this model for splitting e-learning revenue among partners in an alliance: Sales 25% Marketing 15% Tutoring 15% Technical Administration 20% Content 25% Lifelong learning A knowledge based economy creates a need for lifelong learning. Some high tech companies note the knowledge to produce their existing product lines didn’t exist three years ago. Knowledge and skills are starting to be viewed as having a shelf life and associated expiry date. This creates a tremendous thirst for knowledge currency. Organizations and individuals want to know what is happening right now, not what happened months or years ago. As an example of commitment to lifelong learning the United Kingdom has created the University for Industry (UFI) (http://www.ufiltd.co.uk). UFI’s mandate is to enhance individual skills, improve the competitiveness of British industry (especially SME’s), support lifelong learning, and promote e-learning. I think the greatest untapped market potential for e-learning lies not in general lifelong learning skill enhancement but in providing absolutely up to the minute current knowledge. I believe future business models and market valuations of knowledge will charge a premium for rapid time to market knowledge currency. Partnerships Every provider at the World Education Market was talking partnerships. No one organization can realize the full potential of the e-learning opportunity without partners, especially in the global market. Ms. Svava Bjarnason Head of Research and Policy at the Association of Commonwealth Universities summarized a report they have recently completed looking at the various forms partnerships have taken at the university level. Here’s a quick snapshot. The Western Governors University (http://www.wgu.edu)  in the USA was created as a partnership between 40 universities who are all sharing resources. Scottish Knowledge (http://www.scottish-knowledge.com) is an alliance of universities and industry with Scottish Knowledge acting as a learning broker for the alliance locally and internationally. UNext (http://www.unext.com) is an alliance that includes five elite schools—Columbia, Stanford, Chicago, Carnegie Mellon and the London School of Economics; three Nobel laureates on the faculty; and investors such as Michael Milken and Oracle's Larry Ellison. Outspending every competitor—about $100 million even before it opens for business UNext is expected to start teaching this summer and projects a future student body of millions. Content for UNext offerings comes from the participating alliance members but is brokered and administered by the UNext separate entity. Rupert Murdoch’s mega media entity News Corporation (http://www.newscorp.com) is forming a joint venture company with a grouping of 18 leading universities, Universitas 21, to secure a substantial share of the global higher education market. The new venture will provide premium higher education programs throughout the world using new information technologies and learning methods. These programs will lead directly or indirectly to the award of degrees and diplomas. Universities are also partnering with other public sector organizations. Fathom (http://www.fathom.com)  is the best example of this. Fathom is a unique international consortium of leading universities and cultural institutions, dedicated to creating and disseminating knowledge. Fathom is comprised of Columbia University, London School of Economics and Political Science, Cambridge University Press, The British Library, Smithsonian Institution’s National Museum of Natural History, and The New York Public Library. Now that’s a consortium. Partnerships are not just happening at the university level. They are happening everywhere among all the players. There is both consolidation and merger activity among existing players and lots of new players entering the e-learning space. Broadcast media, television, radio, news and entertainment are all getting involved. Media see their expertise in attracting and holding the attention of people and their ability to tell a good story as key components required for e-learning success. If you haven’t experienced it before you might want to catch the live and archived webcasts of WEM speakers and presentations available off the wemex site. Webcasts are provided by local BC company INSINC (http://www.insinc.ca) and Knowledge Network Interactive (http://www.ola.bc.ca/kninteractive). By television standards the webcast archive playback quality is still crude but if you couldn’t be there yourself it’s a great way to find out what happened and what was said. Locally, NewMedia BC (http://www.newmediabc.com) have formed an E-Learning Special Interest Group. A steering group for this SIG met May 16, 2000 and discussed ideas for sessions on everything from surveys of the e-learning field, to successful business models, to learning models and  how to use e-learning tools and technologies. E-learning Special Interest Group sessions are planned to start in Sept. Contact NewMedia BC for more information. Age of Experimentation E-learning represents a significant new endeavour. Simply porting lecture notes and classroom techniques to the web does not capitalize on the true value of on-line learning. E-learning institutions and organizations have been researching and experimenting with new learning models, building relationships and learning communities, defining best practises for on-line learning and exploring a wide range of business models over the last several years. This experimentation continues unabated. In my view Canada’s own Telelearning National Centres of Excellence (http://www.telelearn.ca) have exemplified this experimentation and research. The TeleLearning Network of Centres of Excellence (TeleLearning•NCE) is at the forefront of e-learning research and its application. An interdisciplinary research team of over 80 faculty from the areas of education, the social sciences, computer science, and engineering from 24 Canadian universities are working in seven theme areas, learning models, socio-economic models, systems models, K-12 education, post-secondary education, workplace and continuing education, and educating the educators. All of this experimentation creates a condition of flux in the marketplace where no one company or organization has yet emerged as the market leader. Speaking of emerging leaders, I have a biased opinion (because I work there) but I believe the Technical University of British Columbia (TechBC) (http://www.techbc.ca) is emerging as world-class leader in on-line learning. In fact its not just my opinion, TechBC’s Education Technology and Learning group just won the Bright and Shiny award for innovation in the high risk and ground-breaking use of educational technology (http://www.ctt.bc.ca/edtech/innovation.html). The award is for TechBC’s in-house course management system based on XML/RPC, a relatively untested network technology that first became available only 3 weeks before development began. Buyers, Sellers & E-Commerce One of the biggest changes in the education market is the blurring of lines between buyers and sellers. Traditional providers like universities are increasingly looking to buy learning and integrate it into their programs. Traditional buyers like companies are now getting in to the business of selling. Educational services are increasingly being debundled and fulfilled by niche players. It is exciting to see supply and demand get closer in touch with each other. With the field of e-learning in tremendous flux many are finding it hard to develop a conceptual map of what’s going on. Let me propose two strategies for thinking about the e-learning market. Buying and selling in the field of e-learning can be broken down into three broad segments – content, technology, and services. Content is one of the most fascinating areas as we see tremendous diversification. Content can be anything from a “course” to a 20 minute micro learning object. Technology has several components but is primarily seen as the platform(s) used to develop and deliver e-learning. Services are all of the surrounding pieces from hosting, to tutoring, to marketing, … An excellent diagram showing these e-learning market segments and the North American players in it can be found in “Corporate E-Learning: Exploring a New Frontier” from WRHambrecht +Co. (http://www.wrhambrecht.com/research/coverage/elearning/) I haven’t heard anyone talk about this yet but I certainly see a strong parallel between e-learning and e-commerce. You can really begin to differentiate between e-learning providers by thinking of them as being either b2c (business to consumer), targeting e-learning at individuals, or b2b (business to business), targeting e-learning solutions at organizations. As is the case in e-commerce some providers try to do both. Using these two strategies to think about the e-learning market will help you sort out who’s who and provide a context. Conclusion I came out of the World Education Market feeling e-learning is even bigger than I thought and most definitely global. In the new economy whoever has the smartest employees and customers wins.   Paul Stacey is the Director of Corporate Education and Training at the Technical University of British Columbia, a long time education professional in the high tech private sector, and an e-learner. Contact: Paul Stacey What Do You Think? 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