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Technology Expands Business Education As Students Opt For Digital Route

The full-time MBA is seen as stale in some corners of the education market. But online programs, driven by student demand, have been an area of growth.

Tue Mar 10 2015

Digital technology is a buzzword in education – a platform from which innovators can deliver more efficient means of training to students and corporate workers.

Business education is no exception. From top business schools to big technology companies and start-ups, the race is on to find ways to use the power of the web through tech to improve the teaching of business and management.

Traditional degrees have lost some of their lustre, a result of the financial crisis and a new generation of students who have grown up learning through smart devices and laptops – “digital natives”.

The full-time MBA is seen as stale in some corners of the education market but online programs have been one area of growth. Over five years the number of business schools offering online MBA programs has ballooned by around 25%, according to AACBS International, the accreditation body.

This is still a small portion of the global business education pie – accounting for around 11% of the total – but the market for management and executive training has been radically altered.

“The global landscape for management education has shifted dramatically, requiring business schools to examine their roles in society,” says Linda Livingstone, chair of the AACSB board and dean of GWU School of Business.

The innovations in learning technology fall into several categories, ranging from Moocs – massive open online courses – to video seminars designed to enhance connectivity between students who are often hundreds of miles apart.

One of the more drastic changes to the MBA degree has been the incorporation of digital modules within on-campus courses – known as a “blended” approach.

They demonstrate the way digital learning can be used as a tool to improve traditional education, rather than a threat to the revenues and enrolment numbers of MBA and executive education programs.

Dr Julie Hodges, director of MBA programs at Durham University Business School, says: “What is important across our MBAs is the use of online technology to enhance the learning of our students.” Durham was one of the first UK schools to introduce distance learning and its Global MBA is ranked sixth in the world.

Durham illustrates the track that most top business schools are taking. While Moocs have been used to generate hype, and potentially candidates for paid-for masters courses, the technology is being widely used to improve existing MBA programs.

Chip Paucek, chief executive of 2U, the Nasdaq-listed education technology company, said recently: “The digital technology available today permits us to end the distinction between on-campus and online degrees.”

He added: “My prediction is that by 2020, this desegregation will be complete across the board. At every school, there will no longer be online or on-campus students. Just students.”

Another example of learning innovation is Moocs that offer paid-for certificates, as well as industry projects similar to traditional university internships.

Wharton School recently teamed up with Coursera – the Mooc platform which has amassed nearly 12 million users – and tech start-ups Snapdeal and Shazam to launch $595 online courses with certificates.

Geoffrey Garrett, dean of Wharton, says that Moocs afford the business school the opportunity to offer a sample of its education around the world and at scale.

The tie-up with Coursera is one of numerous partnerships struck by the tech group which are disrupting the traditional business education industry.

Rick Levin, chief executive of Coursera, says: “The Specialization [industry project] model works well for adults who have limited resources – whether that's time or money – allowing them to quickly gain the skills they need.”

The $70 billion corporate training market is another area that is beginning to feel the full force of tech. From Microsoft and Google to Yahoo and Accenture, there are hosts of big companies that have paid business schools for content delivered online.

Global business school INSEAD recently launched web and mobile-based solutions that deliver high-quality video lectures from the school’s experts to business clients.

INSEAD content is filmed specifically for each company with a studio audience drawn from the course’s target demographic. A trial with Microsoft last year saw approximately 1,000 sales staff tune in online.

Business schools are able to address just 5% of corporate training needs, says Peter Zemsky, dean for strategic initiatives and innovation at INSEAD.

But he adds: “Online allows us to greatly increase access. High-quality and customisation allow us to assure engagement.”

The challenge for the business schools is updating their content fast enough to maintain clients who pay for executive education – a lucrative field of learning that has historically been their biggest revenue stream.

The pace of change has caught some schools cold. Several MBA programs were shut down in 2014, with business schools pivoting to online-only delivery methods or flexible courses.

Ivan Bofarull, director of the global intelligence office at ESADE Business School, says the market will continue to see new players with lower cost structures tapping into the "ocean of opportunities that digitization has unleashed".

He adds: “Some of these new players will deliver appealing value propositions in the elite segment of business education, which will push traditional players to choose between reasserting their value propositions or go into troubled waters.”

There are a great many unknowns about the future of business education but business schools are increasingly relying on a mixture of digital technologies and campus learning to grow.

Bernard Garrette, associate dean of the HEC Paris MBA, says: “The real strategic issue business schools face is how to merge online resources with face-to-face teaching.”