EDTECH: Here's How Mooc Start-Ups Are Disrupting Online Business Education

Digital challenger Coursera signs up BNY Mellon, and BCG for new business offering

Coursera, the edtech start-up with 21 million users, has launched a platform for business — thrusting it into direct competition with business schools’ executive education.

And it’s already signed up BNY Mellon, Boston Consulting Group, L’Oreal, and Axis Bank.

Coursera is better known for Moocs, the free online courses curated by 145 universities including Stanford and Yale, but its new offering signals a further push into the market for professional education. In 2014, Coursera launched a series of paid-for courses called Specializations, which provide users with certificates to show to potential employers. Rick Levin, Coursera CEO, claimed “Coursera Certificates have become the second most-cited credential on LinkedIn”.

According to Rick, a large percentage of Coursera’s users are looking for courses that can help them advance their career. And many are signing into the site from corporate email addresses.

By reaching out to companies directly, Coursera will hope to gain a share of a corporate training market worth an estimated $70 billion, according to Deloitte.

This pits it against executive education — business schools’ biggest source of income.

Coursera joins a throng of edtech start-ups biting at the fringes of schools’ business models, including Udemy and edX. Udemy launched Udemy for Business in 2013, and its corporate clients include Lyft, Oracle, and Pepsi. EdX has run courses for Microsoft and Thomson Reuters.

Roger Delves, dean of qualifications for Ashridge Executive Education, said it's both a threat and an opportunity to strike new partnerships with the disruptors, which can provide both reach and scale. He added: “Executive education is becoming more digital. Corporate clients want content available in as many different formats as possible.”

Business schools have fought back. Last year, INSEAD launched a Customised Online Solution, which delivers high-quality video lectures from INSEAD experts to desktop and mobile devices. INSEAD’s clients include Accenture and Microsoft.

But James Henderson, head of innovation at IMD business school, warned: “Business schools that don’t continue to develop their digital offering can be supplanted by these new players.”

This shift to business education is critical to edtech companies’ broader ambition to disrupt higher education. By offering high-quality paid content and certificated credentials, they have been able to shake online learning’s image of being sub-par to campus courses.

“Employers were wary of ‘diploma mills’,” said Patrick Mullane, executive director of HBX, Harvard Business School’s digital learning initiative. “[But] the stigma that used to be attached to the quality of such a degree is fading,” he added.

Mooc platforms were created with the ultimate goal of bringing education to the masses. But for the venture capital-backed for-profit providers at least, and their university partners, generating revenue will become increasingly important.

“We are finding sustainable models,” said Michael Koenig, senior assistant dean for degree programs at Virginia’s Darden School of Business.  

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