The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism (17 page)

Colleges and universities strapped with ever-higher costs have increasingly turned to corporate sponsors for endowments and operating revenue. In return, the commercial sector has chipped away at the “independence” of these institutions of higher learning, requiring that more of their operations be privatized, from food services and resident and guest accommodations to general maintenance. Corporate advertising is rampant, with Fortune 500 logos adorning sports stadiums and lecture halls. University research facilities, especially in the natural sciences, are increasingly jointly managed, with companies leasing laboratories and contracting with academic departments to conduct proprietary research under various nondisclosure agreements.

Knowledge has been enclosed behind the walls of academic institutions whose price of admission excludes all but the wealthiest. That’s about to change. The Internet revolution, whose distributed, collaborative, peer-to-peer power has begun to knock down the walls of once seemingly invincible enclosures across the societal spectrum, has unleashed its full fury on the academic community. The thrust of the assault is coming from inside the academy itself and has been ignited by the same combustible that is tearing asunder realm after realm—the implacable logic of a multifaceted technological revolution that’s driving marginal cost to near zero everywhere there is vulnerability to exploit.

The revolution began when a Stanford University professor, Sebastian Thrun, offered a “free” course on artificial intelligence (AI) online in 2011, one similar to the course he taught at the university. Around 200 students normally enrolled in Thurn’s course, so he anticipated that only a few thousand would register. But by the time it commenced, 160,000 students from every country in the world—with the exception of North Korea—were sitting at their computers in the biggest classroom ever convened for a single course in all of history. “It absolutely blew my mind,” said Thrun. Twenty-three thousand of those students completed the course and graduated.
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Although thrilled that he was able to teach more students in one virtual course setting than he could reach in several lifetimes of teaching, Thrun
was struck by the irony. While Stanford students were paying $50,000 or more per year to attend world-class courses like the ones he taught, the cost of making the course available to every other potential student in the world was nearly nothing. Thrun went on to launch an online university called Udacity, with the goal of providing a top-quality education for every young person in the world, especially the poor in developing countries who otherwise would never have the opportunity to be exposed to learning at this level. And so began the stampede to online learning.

Two of Thrun’s computer-science colleagues, Andrew Ng and Daphne Koller, who participated with him in the online course experiment, set up a competing for-profit online university website called Coursera. While Udacity is developing its own courses, the Coursera founders have taken a different path—rounding up some of the leading academic institutions in a collaborative consortium to offer a full curriculum taught by some of the best college professors in the world.

Coursera’s founders brought on the University of Pennsylvania, Stanford, Princeton, and the University of Michigan for starters, giving Coursera the academic heft to build out their vision. Coursera was followed by edX, a nonprofit consortium put together by Harvard and MIT. Coursera now has 97 participating universities as of this writing. EdX has also expanded to more than 30 universities. This new education phenomenon is called MOOCs, which, as mentioned in chapter 1, stands for Massive Open Online Courses.

The Coursera model, which is similar to the others, is grounded in three foundations. First, the course is made up of five- to ten-minute video segments presented by the professor and accompanied by various visual and graphic effects and even short interviews and news items to bring the experience alive and make it more appealing and vital. Students can pause and replay the lectures, allowing them to review material and absorb the work at their own pace. Students are also provided with preparatory materials in advance of each virtual-classroom session and optional material for those who are interested in diving deeper into the subject matter.

The second foundation is practice and mastery. After each video segment, students are required to answer questions. The system automatically grades students’ answers on the quizzes, giving them immediate feedback on how they’re doing. The research shows that these pop quizzes are powerful incentives to keep students involved—turning the course into more of an intellectual game than a drudgery to be endured. There are homework assignments after each class and grades are given out weekly. Courses that require human eyes to do the grading are evaluated by fellow students in a peer-to-peer process, making the students responsible for each other’s performance.

The idea that students learn by judging the performance of their fellow classmates has gained traction within the online academic community. To assess the accuracy of peer-to-peer grading when compared with the grades the professor might give, Mitchell Duneier, a professor at Princeton
University who teaches Introduction to Sociology at Coursera Online University, ran a test. He and his teaching assistants graded thousands of midterm and final examinations, compared their scores with the peer-to-peer grading, and found a correlation of 0.88. The average peer score came in at 16.94 of 24 possible points while the professors’ score was 15.64—very close.
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The third and final foundation is the formation of virtual and real life study groups that are established across political boundaries and geographic terrains, transforming the learning process into a global classroom where students teach each other as much as they are being taught by a teacher. Universities that participate in edX augment their study groups by asking their own alumni to volunteer as online mentors and discussion group leaders. Harvard professor Gregory Nagy recruited ten of his former teaching fellows to help serve as online study group facilitators in the MOOC based on his popular course, Concepts of the Ancient Greek Hero.
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Upon graduating the Coursera and edX courses, the students receive a certificate of completion.

The crowdsourcing approach to learning online is designed to foster a distributed, collaborative, peer-to-peer learning experience on the
Commons—the kind that prepares students for the coming era. By February 2013, Coursera had approximately 2.7 million students from 196 countries enrolled in hundreds of courses.
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EdX’s first course, in 2012, had an enrollment of 155,000 students. Anant Agarwal, edX’s president and formerly the director of MIT’s artificial-intelligence laboratory, noted that enrollment in the first virtual course nearly equaled the total number of MIT alumni in the university’s 150 years of existence. Agarwal says he hopes to draw in a billion students in a decade.
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Like other academicians involved in the roll-out of MOOCs, Agarwal is convinced that this is merely the cusp of an education revolution that’s going to sweep the globe. He argues that

it’s the biggest innovation to happen to education for 200 years. . . . It’s going to reinvent education . . . transform universities [and] democratize education on a global scale.
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How does this virtual-learning experience compare to the intellectual fervor mustered in the traditional brick-and-mortar classroom? Carole Cadwalladr, a journalist for the
Guardian
, relates her own experience in preparing an article on MOOCs. Cadwalladr signed up for a Coursera course, Introduction to Genetics and Evolution, along with 36,000 other virtual classmates from every corner of the world. She says she wasn’t all that excited about the video lectures. It’s when she checked into the online class forum that she experienced her “being-blown-away moment.” She writes:

The traffic is astonishing. There are thousands of people asking—and answering—questions about dominant mutations and recombination.
And study groups had spontaneously grown up: a Colombian one, a Brazilian one, a Russian one. There’s one on Skype, and some even in real life too. And they’re so diligent!

Cadwalladr says, “If you are a vaguely disillusioned teacher, or know one, send them to Coursera: these are people who just want to learn.”
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While student enthusiasm for MOOCs is running high, educators find that the number of participants that actually complete the courses and pass the tests is often substantially less than students in brick-and-mortar classrooms. One recent study found that 32 percent of the students failed or withdrew from online courses compared to only 19 percent that took the course in a traditional classroom. Educators have pinpointed a number of causes for the lower completion rates. At the top of the list is the feeling of isolation. Being engaged with other students in the classroom creates a sense of community and is a motivating factor in keeping individuals up to speed with the group. Students help each other along, not just in tackling the subject matter, but also in encouraging each other to stay involved. Studies also find that most MOOC students watch online lectures between midnight and 2 a.m., when they are often tired and less able to focus their attention on the course. MOOC students learning at home are also easily distracted and more likely to walk away from the screen to grab a snack in the kitchen or pick up on a more entertaining diversion around the house.

Participating MOOC universities are beginning to address the sense of isolation by offering what they call “blended classes” in which students enroll online and also take part in classroom projects with other students and faculty. New studies have found that by customizing MOOCs with the addition of limited teaching sessions on campus, student academic performance significantly improves over students that did not have an online component.

Another reason for low motivation was that early on, the MOOCs only offered “a statement of accomplishment” and a grade, but in 2013, they began to offer course credits as well. Coursera has formed partnerships with ten of the country’s largest public university systems to deliver free online courses for credit, making online education available to more than 1.25 million students in public institutions. Some of the participating universities are requiring proctored exams on campus to secure the course credit. Faculty at the participating universities will also have the option of customizing the MOOCs with the addition of their own teaching sessions. The offer of credits for courses successfully completed has been a key factor in improving academic performance and completion of courses.

Stanford University courses cost approximately $10,000 to $15,000 to put online. Courses with video content can cost twice that amount. But the marginal cost of delivering the courses to students is simply the cost of bandwidth, which is nearly free. (The marginal cost is between three and seven dollars per person—about the same as a large cup of coffee and a cookie at Starbucks.)
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So how do the online universities pay for the fixed costs of MOOCs? The participating universities pay Coursera around $8 a student to use the Coursera platform and an additional $30 to $60 a student to take the course—all in all, nearly free.
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By contrast, the University of Maryland, a typical public institution of higher learning, charges about $870 per course for in-state students and about $3,000 for out-of-state students.
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Interestingly, educators find that if MOOC students are required to pay even a small token fee to verify both their participation in the course and that they passed the examination, they are far more likely to complete the course.
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The MOOCs university consortiums also plan to provide “premium services” for fees. There is even discussion about “charging corporate recruiters for access to the best students.”
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World-class universities are taking a gamble that the global reach and visibility that MOOCs give their “rock-star” faculties will draw the best and brightest students to their admissions offices. Like their counterparts in the commercial arena, they are hoping to grab hold of the long tail and profit by offering the courses free online to millions of students and corralling in a tiny percentage of those students to their campuses. Their rationale is that by giving their intellectual gifts away for free, they will be helping millions of online students who ordinarily couldn’t afford such an education, while capturing a sufficient number of the best students to maintain their own brick-and-mortar operations.

The problem is, when the best education in the world can be delivered at near zero marginal cost and made nearly free online, what’s to prevent any accredited university from accepting a MOOC’s certification for credits for a very small fee so that students can be accredited with a college education? While employers might be skittish early on about credits from MOOCs, as more colleges and universities come on board, their doubts are likely to recede. Indeed, employers might look more favorably on credits obtained by graduating from MOOCs taught by some of the world’s leading academics, rather than traditional credits earned by attending and passing courses taught by less renowned professors at undistinguished colleges.

Kevin Carey, policy director for the Education Sector, a think tank headquartered in Washington, D.C., got to the core of the dilemma facing colleges and universities in an essay in the
Chronicle of Higher Education.
He wrote:

All of this points toward a world where economies of higher education are broken down and restructured around marginal cost. The cost of serving the 100,000th student who enrolls in a MOOC is essentially zero, which is why the price is zero, too. Open-source textbooks and other free online resources will drive the prices of supporting materials toward the zero line as well.
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