From: technews <technews@ou.edu>
To: "'it-fyi@listserv.ou.edu'" <it-fyi@lists.ou.edu>
Subject: it-fyi: "Universities Too Slow to Adapt to On-Line Era" (Chron of
Date: Wed, 1 Dec 1999 11:40:15 -0600
A President Says Universities Are Too Slow to Adapt to On-Line Era
By DAN CARNEVALE
In August, Gerald A. Heeger became president of the University of Maryland
University College, which enrolls more than 20,000 on-line students each
year. From 1991 until his move to Maryland, he was dean of the School of
Continuing and Professional Studies at New York University, where he led the
creation of NYUonline, a private subsidiary of N.Y.U. that provides on-line
education services to students and educators. Mr. Heeger has worked the
lecture circuit, telling academics not to be afraid to follow businesslike
practices when expanding on-line education programs.
Q. How is on-line education changing higher education?
A. As new markets occur, we in higher education all tried to say to
ourselves that we needed to be responsive to new markets. A lot of
institutions have come to learn that it's not just simply a question of
recognizing a new market. The institution itself has to change to be
responsive to that new market.
Q. What sort of changes do you mean?
A. The institution changes internally to adapt externally. Whether the new
market is adult students or whatever, you can't approach the market on the
same terms that you've always operated. In order to operate effectively on
line to address new markets, universities have to take a hard look at what
they do and their business practices and the way in which they manage
institutions. Then they need then to say, Should we change to do this?
One of the concerns I have is that institutions have often been reluctant to
truly ask themselves, How much do we have to change in order to take on this
new market and this new methodology?
Q. Are institutions too traditional?
A. Right. The fact that this new business model -- for profit -- is
associated with on line is partly just historical accident. The University
of Phoenix did not start as an on-line institution. It's predominantly not
an on-line institution now. It's mostly on site. Venture capitalists
realized that, in a society of life-long learning, providing learning
services might just be a good business. So you have the emergence of firms,
companies, and for-profit entities aimed at servicing that market whether
it's a corporate market or an adult market.
The on-line piece of it has expanded the possibilities so that the markets
became bigger, and the potentiality became bigger. But the risks became
bigger as well. You have to make bigger investments. Instead of being
concerned about a local market, you're now thinking national and
international. That drives up cost of infrastructure. It drives up cost of
marketing.
Q. What would a college gain by creating a private subsidiary?
A. Given the competition and given the goal of addressing a national and
international marketplace, you need capital. It's expensive to build the
infrastructure to support these kinds of institutions. It's expensive to pay
for the production of new kinds of courses. It's expensive to market these
kinds of courses. You can't always expect that a university, within the
range of its budget, can afford to take on some kind of new challenge.
We're also constantly looking at what is necessary -- what relationships,
what partnerships, what investments are necessary -- to help us meet the
students anywhere they want to meet with us. If that takes us into the
for-profit area by creating a for-profit subsidiary, we would do it. If it
takes us to partnerships with for-profit agencies, we'll consider doing that
as well.
Q. How would a private subsidiary benefit U.M.U.C.?
A. It would give us the ability to strengthen our marketing worldwide. Any
institution that wants to offer on-line courses worldwide has major
infrastructure challenges ahead of it -- in terms of making sure that the
information backbone that it has and that the curriculum-development process
that it has are quick and strong and agile -- and that costs money.
Attracting investment allies would help us with some of that.
Q. At NYUonline, you said you would sell stock to the public within several
years. Do you plan an initial public offering of stock in a U.M.U.C.
subsidiary?
A. I wouldn't do it if I didn't perceive that. If you're going to create a
capital-intensive goal like that, your goal has to be to ask, How can you
benefit the university? And obviously attracting capital is one way to do
that. Moving down the line -- and nobody has gotten this far -- moving to an
initial public offering raises the possibility of also expanding
significantly your endowment. So why not think about that?
Q. Will every university have to do all this to survive in on-line
education?
A. I don't think so. What we're going to see is different universities'
trying out different ways to address this market. My guess is many won't
work, some will, and that's how it will play out. And many universities will
adjust their goals to see where on-line education fits.
Q. What about all the critics who say higher education shouldn't mix with
the business world?
A. I think universities are never going to be as corporate as I.B.M. The
universities are just different kinds of entities. They respect different
kinds of values. They're about knowledge, and they're about education. Their
very mission makes them different. However, the fact that they have that
different mission doesn't mean they can't be better in business practice.
Corporations have done some terrific things in terms of taking care of their
employees. Is that a negative thing? I think we want universities to be
really terrific in terms of their human resources. We don't want them to be
inefficient in terms of treating their employees well. We don't want
universities to be inefficient in terms of managing the money they have
because we want to keep tuition costs low. I would hope that people are
cognizant of the advantages in being an efficient and effective
organization.
_________________________________________________________________
Copyright 1999 by The Chronicle of Higher Education