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Business, Government Contracts Drive Online Revolution In Executive Training

Executive education growth areas are government contracts and emerging economies. Online learning has widened the market but also the pool of competition.

The online learning revolution was given a jolt of energy on a winter evening in the UK capital’s Regent’s Park two years ago.

London Business School had just signed a contract with the Kuwait Petroleum Company, a subsidiary of the Arab state’s sovereign wealth fund.  The $38 million windfall would see Britain’s highest-ranked school deliver leadership training to Kuwait’s top oil executives.  

The deal heralded two big growth areas for executive education: government contracts and emerging markets. In past few years, business schools have netted contracts with state-owned companies and state departments. These include ESCP Europe’s deal to train Indian Railways, the Indian government-owned trains business, and HEC Paris’ contracts with the Ivory Coast’s state departments to lead programs for hundreds of public and private sector executives.

The public sector has been a bright spot for business schools, which have been squeezed by flat demand in the west and a fall in executive education business around the global financial crisis.

“Government-related contracts are indeed in demand. This includes government-related companies which are in competitive markets such as transportation or energy,” says Thomas Jeanjean, dean for executive education at ESSEC Business School.

Innovation in digital technology has strengthened executive education providers — from schools to the disruptive online companies which are pioneering Moocs, or massive open online courses. These providers have landed corporate clients including AT&T, Accenture and Microsoft.

Nancy Moss, director of communications at edX, a non-profit Mooc platform founded by Harvard and MIT Universities, says edX is moving into new areas of business: “Many of our learners who enrolled in a verified certificate are employed or [are] looking for new employment.”

Mike Feerick, founder and chief executive officer of Mooc provider Alison, says that Alison’s focus is on “skills for the workplace — the market simply has to go this way”.

Telecoms company AT&T recently signed a $3 million contract with Udacity, another Mooc platform, to develop a series of custom courses. Udacity has previously collaborated with the IMF, French Ministry of Higher Education and Saudi Arabia’s Ministry of Labor.

Dr David Butcher, director of executive development programs at Cranfield School of Management, says demand is coming not just from developing regions like the Gulf states but from advanced economies too.

FutureLearn, a Mooc platform funded by distance learning specialist the Open University, has developed courses in contract management and commercial relationships with the UK government’s Cabinet Office, and Civil Service Learning which provides courses to UK civil servants.

The UK government has also announced plans to launch a new project leadership program at Cranfield, to run alongside an existing leadership academy based at Oxford University’s Saïd Business School.

Susan Cates, president of executive development at UNC Kenan-Flagler Business School, says UNC works with a number of government agencies in the US, its base.

But she adds that working in the federal sector can be a challenge for business schools: “There are specific processes and policies for all government contracts, and requirements for all government programs.”

Most schools say growth markets are in China, Africa and southeast Asia. “We see an increasing number of international clients request our services in executive teaching,” says Daphné Schalbetter, director of executive education at Germany’s Mannheim Business School.

California’s Haas School of Business last year landed a contract to teach Chinese leaders at an executive leadership centre in Shanghai.

ESSEC’s Thomas says that technology has paved the way to a more efficient learning experience. But he adds that the role of tech is to enhance the learning experience of face-to-face courses.

Technology has powered Henley Business School, which last year won a contract to train the Financial Conduct Authority, the UK’s financial regulator, with a course that will be taught partly online.

Corporate contracts have come in thick and fast for online providers. The business school INSEAD recently launched an online learning solution that has already signed up both Accenture and Microsoft as clients.

EdX ran a pilot course on big data that enrolled 3,500 people from more than 2,000 organizations including Microsoft, which grossed around $1.7 million.

Online provider Udemy launched a business service and has since grown to have more than 350 partners including technology group Oracle. Coursera, another Mooc maker, struck a deal with internet business Yahoo in which Yahoo will cover the cost of its employees’ certificates.

While there is growth in the sector Kai Peters, chief executive at Ashridge Business School, a UK executive education specialist, warns of increasing competition.

“Consultants, HR professional service firms, publishers and others are all vying for a foothold in the executive education space,” he says. Each will have specific skills or knowledge but more importantly, corporate relationships. “How this will developed is very exciting at the moment,” he says.

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