Transcript: Education and Innovation

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Higher Education: Managing to the Future

A panel discussion presented at the Copyright Clearance Center Publishers Advisory Group

Recorded November 14, 2013, Cambridge, Mass.

CHRIS KENNEALLY: Good morning again. Peter, thank you very much for that introduction and a great way to start this conversation. My name is Chris Kenneally. I’m director of business development at Copyright Clearance Center. On behalf of all my colleagues, I’m very pleased to continue this discussion.

We’re going to start with our panel here onstage, but we’re going to move forward to discuss this with you. So all of you I hope will get into the education frame of mind and begin to take some notes and think about the kinds of questions that you would like to pose to our panel later this morning.

I’m particularly happy to welcome all of our visiting guests from outside of Boston. I am a native Bostonian. It’s hahd to hide, but I try my best. And one of the things I think about whenever I have guests joining us here in the city is where to take them.

And it strikes me that here in Boston, something very special happens. Because apart from all those national monuments and all the historic buildings, it’s always part of the tour that we take people to college campuses. They come to Boston and Cambridge and they see Harvard Yard, or they drop by at MIT and the Media Lab, or they’re in downtown Boston and they visit Emerson College or Boston University or Northeastern University where Peter teaches. That’s a really important point I think to make about sort of the atmosphere of this city.

And at one point in my career, I spent some time working at a little TV station across the river and down the street called WGBH. And in that newsroom, we used to make a joke. We said that GBH stood for God Bless Harvard, because if we needed to have somebody on camera to talk about a certain issue, all we had to do was run out in traffic and wave our arms in the air, and somebody driving by was a Nobel Prize Laureate or a bestselling author.

And I feel as if that’s kind of what we’ve done with this panel here. We’ve stopped traffic and we’ve found terrific people to continue this discussion. And I want to introduce all of them to you right now.

You’ve already met Peter Stokes. To my right here is Scott Virkler. Scott, welcome. Scott is senior vice president product, programs, and portfolios for McGraw-Hill Education. He joined McGraw-Hill in 2013, July, 2013, to lead the creation of this centralized digital portfolio team. His previous experience ranges from creating a virtual online library for the oil and gas industry at PetroSkills, to leading product management at Elsevier, to the successful B2B start-up, GlobalSpec. Mr. Virkler had a 22-year career as a logistics officer in the Air National Guard and he’s a decorated veteran of Operation Desert Storm.

Beside Scott, Kyle Courtney here in the center of our stage. Kyle, welcome. Kyle is an attorney presenting working at Harvard Law School as the manager of faculty research and scholarship. His work at Harvard also includes a role as the copyright and information policy advisor for HarvardX, part of the edX MOOC platform created in 2012 by Harvard University and the Massachusetts Institute of Technology, which of course Peter has mentioned.

Kyle founded the first Harvard copyright working group, an outgrowth of the Harvard Library lab grant. He runs a copyright law consulting practice for libraries, higher education, nonprofits, and specialized archives. He also has a dual appointment at Northeastern, so a colleague of sorts with Peter Stokes, teaching cyber law, privacy, ethics, and digital rights. And he’s a faculty scholar for the program there on human rights and the global economy at the School of Law. And he is also a recent winner of a national bowtie contest. So congratulations to Kyle.

And then finally to Kyle’s right is John Marcus. John, welcome. John is higher education reporter for the Hechinger Report, a nonprofit news organization focused on producing in-depth education journalism. It’s an independently funded unit of Teachers College Columbia University.

John has written about higher ed for The Washington Post, USA Today, Miami Herald, Boston Globe, and many others. He’s also North America higher education correspondent for The Times in the U.K., their higher education magazine. His coverage has won national awards from the Education Writers Association and he was a finalist for an award for beat reporting from the New York chapter of the Society of Professional Journalists. He’s the former editor of Boston Magazine and he teaches journalism at Boston College and Boston University.

And John, I’d like to start with you because you – I didn’t take journalism as a course. But I understand a few things happen in journalism classes. For example, the first day, the first assignment is, your mother says she loves you. Check it out. You send students out to check that one out.

But then the other point I think with journalism is, first exaggerate, then simplify. And when we discussed this panel in advance, you were telling me that there’s a lot of hype out there about MOOCs. And your recent reporting has done a lot to kind of put things in perspective. For the audience here, can you exaggerate first? Tell us, what was the promise that was reported on? And then where do we stand today?

JOHN MARCUS: Well, I wasn’t here for the earlier conversation about MOOCs. My apologies for that. Sorry. I hope I’m not repeating anything you’ve heard already. But MOOCs have only been around for 18 months. And we’ve already decided that they’re going to save higher education – or destroy it. (laughter)

The people who run MOOCs themselves are a little bit alarmed at this. And the hype is, they’re fault largely of journalists, other than myself, (laughter) and legislators who find that MOOCs are an easy way to suggest that they can save money on – spending on for public universities, something that legislators no longer want to do.

So the idea that MOOCs can replace conventional university courses, which legislators in places like California have actually introduced as bills, since withdrawn, is something that’s a little bit scary. And I think that relates to the hype.

Even the MOOCs people have tried to smother that enthusiasm and suggest that, like we’re really in a fact-finding stage. And if you actually look at the results of online learning so far, not MOOCs specifically but what very, very limited research has been done, the outcomes are very poor so far. So that’s some of the hype and the reality.

KENNEALLY: We’ll talk about the outcomes in just a minute. But I understand you’re taking a MOOC course yourself right now. For people who haven’t had a chance to really look at this, what’s that experience like? How different is it from being in the classroom?

MARCUS: Well, that’s a great question because it’s not. The innovation with MOOCs is about scale, not delivery. The delivery is exactly the same. It’s someone speaking to you. They happen to be speaking to you from a little window in your laptop.

KENNEALLY: So we’re looking at a video essentially of a classroom?

MARCUS: Of a very charismatic lecturer – I’m taking a MOOC about philosophy from MIT, which struck me just as a strange combination. So I had to see what that was. But there’s no interaction.

This is a 500-year-old model of delivery, or a 500 year-old model of the delivery of the academic component of the course. The way that it is transmitted into people’s houses or their smartphones on the bus home at night from work is new. That’s the innovation.

KENNEALLY: Right. It nevertheless is advertised as being important because of the technology. And I wonder if you could discuss the role that technology is playing in higher education right now, and some of the ways that it’s being used effectively, and some of the ways that you’ve seen it being less successful.

MARCUS: People are using MOOCs now as giant laboratories. If you talk to the people at edX and Coursera, they do intend at some point to make money on it, Coursera in particular, which is backed by venture capital, and edX, which is based by $60 million out of MIT and Harvard. So they are looking for ways of monetizing this experiment.

But it is just an experiment. And what they’re talking about is using MOOCs to investigate what technology is effective in a conventional classroom, very different than I think the public understands the purpose of a MOOC to be.

So I think what people are looking for right now – the pressure on higher education to reduce costs is enormous. It’s taken higher education a little bit of time to actually respond to that. Things don’t change quickly in higher ed.

A chancellor once told me a joke. He said, how many faculty does it take to change a light bulb? And the answer is, what do you mean change? (laughter)

And so the idea of using technology to lower costs is really at the forefront of what universities are trying to do. And as Peter pointed out, it’s nothing new. It’s been tried and tried and tried. And really, what’s happened historically, meaning in the last 20 or 30 years, is that when people do try to incorporate technology, it adds cost and quickly becomes obsolete. So it becomes a much more expensive delivery mechanism not a cheaper one.

KENNEALLY: Right. And it’s interesting to think about some other businesses that have had to wrestle with technology: one you’re particularly familiar with, which is the newspaper business. And there may be some parallel lessons here regarding how effective it is, what it does to reduce cost or to add cost, and ultimately what the experience is for the user.

And so, I wonder if you could talk about that at all. And I suppose a place to start would be to give people an idea of the financial situation right now across the country as far as higher education is concerned. We’re here at Harvard, a tremendously popular school, well endowed. In this area though, there are many smaller, medium-sized schools that are struggling financially. And that’s true across the country.

MARCUS: You see sticker prices at universities and colleges increasing at faster than the rate of inflation. But because they’re paying more out in financial aid, they’re actually losing ground. They are not keeping up. Their revenues are not keeping up with the rate of inflation. This is a giant dangerous secret, especially for small private college that can’t justify what they charge. So if you don’t have a brand, you’re not going to make it. And some colleges and universities already have closed. More will close that can’t justify what they’re charging.

What’s more surprising to me as a higher education writer than what’s happening now in higher education is that we used to send our kids to college no matter what it cost. Cost was not an issue. When all of us went to college and maybe when some of us sent our kids to college, we would do or our parents would do anything it took to get that kid to the college and university that he or she chose for whatever reason. Cost was not a reason. Now it is.

Parents, families are voting with their feet. And they’re actually spending less money on higher education. As much as there’s all kinds of hysteria about the increase in cost, the revenues that universities collectively are collecting are lower than they have been in the past. And that’s a big, big problem.

KENNEALLY: So do they see technology as a savior for their financial skin?

MARCUS: They’re trying everything. They’re throwing everything they can at the wall.

Well, they’re not trying everything. They’re not reducing payroll for the most part. They’re not doing some of the strategic things that are actually really interesting that are happening in places like Northeastern. Universities and colleges really haven’t caught up to that yet. They are not reducing payrolls.

In fact, we did an investigative story here in Massachusetts that found that the number of administrators – won’t surprise you – at universities and colleges in Massachusetts increased three times faster than the number of students in the last 25 years. And at one small private college outside Boston, the number of administrators increased 156% at a time when the number of students actually declined. So there are a lot of people that work for universities, colleges. We’re not seeing changes there.

We’ve looked at financial documents at colleges and universities that are clearly in financial trouble. And year after year, they’re posting multi-million dollar deficits and hiring more people.

So universities and colleges haven’t historically run themselves the way that corporations have. I’m not sure that that speaks to your question about technology, but it’s one thing they’re trying to do. What they’re trying to do so far is not universally applied to reducing costs across the board.

KENNEALLY: Well, it’s great background, though, for this audience, because when they’re looking at this particular part of the marketplace, I think they should understand as well as you do the financial issues that are in play right now. And when one hears about something like MOOCs or any of these other solutions as kind of white knights to the rescue, we have to put it in context.

So I guess one other thing, and you’ve now thoroughly depressed the room about all of this. What about MOOCs? How successful have they been?

MARCUS: It’s my job as a journalist to thoroughly depress the room. (laughter)

KENNEALLY: That’s exactly right. That’s why I put you on the spot.

MARCUS: Universities and colleges are scared to death of MOOCs. And ironically, that’s why they’re all jumping on the bandwagon to join in, to edX and Coursera. You’ll talk to university presidents that say MOOCs are a terrible way to learn. And the next day, you’ll get a news release that their college is involved in edX. So that’s –

COURTNEY: We made them an offer they couldn’t refuse.

MARCUS: So that’s what’s going on out there. If you look at the history of higher education in America, as I actually once did to write a chapter of a book about it, innovation largely comes because – it comes from the outside. So if you look at the moral act that created land grant universities, that came from the government. If you look at Sputnik, if you look at the GI Bill, if you look at the advent of community colleges, all of those things are imposed from the outside. And now the biggest threat – and Peter alluded to this – is the loss of the monopoly over the credential. And that is what is compelling universities and colleges to begin to look for new ways of delivery because they don’t want to give up that monopoly.

And what’s really interesting is they so far haven’t given up that monopoly. Only five edX courses are accredited by the American Council on Education, for to be eligible for credit at accredited universities. It’s still up to the university or college whether or not to accept credits. Universities and colleges won’t even accept each other’s credits because of the egos of faculty. Well, I didn’t really say that out loud. But they won’t even accept each other’s credits, never mind credits from nonconventional credentials.

And that is the threat that is finally compelling them, finally, after years – I mean, some of the stories that I’ve written are mind-boggling. The amount of building on universities and college campuses was at historical record highs after the economic downturn. They were still building more new buildings than at any point in the history of this country.

I go to college and university campuses and I talk to people and wonder if they’re living in the same world I’m living in. And the answer is, unfortunately not often. Now that there are threats from the outside, once again, that begins to compel some change on the inside.

KENNEALLY: Right. Well, Kyle Courtney, thanks for joining us from planet Harvard. What about that point? And I want to continue the discussion around MOOCs, but to the larger issue that John has just said about life on campus these days for faculty and for students, refresh us all. It’s been awhile since I was a student.

COURTNEY: Sure. It hasn’t changed so significantly that we’ve given up our educational models. We still have dorms. We still have classrooms. We still (overlapping dialogue; inaudible) –

KENNEALLY: Students still go to class. I saw them walking across the Yard this morning.

COURTNEY: Students still go to class. You know? They don’t hit record. They don’t tape it. There is obviously more ability to get lectures taped, to share stuff online than there was previously.

However, I think that some of the concern about, is this flipped classroom a new thing? Is this an old thing?

The flipped classroom was founded, as far as I’m concerned, in 1870 the moment Christopher Columbus Langdell walked into a law school classroom and said, Mr. Jones, can you tell me the facts of this case? Because he had previously assigned it the night before. And this is not a new model. The flipped classroom exists.

KENNEALLY: I’m sorry. Yeah, the flipped classroom is an expression we’re all learning. But let’s be sure everybody knows what you mean.

COURTNEY: Sure, absolutely. So you’re given your work and you go home and you do it yourself. You do the reading. You’re not hearing a traditional lecture about the readings. You’re going home. You’re doing the reading so that when you come into class, you’re prepared to discuss what you had read previously.

This is not a new concept. This is very, very old. The entire Socratic method in law school is based on this.

So the idea that MOOCs are flipping the classrooms everywhere – maybe it’s new for K through 12. Maybe it’s new for some traditional modes of higher education and the humanities and such.

But I don’t think it’s so out there that it’s necessarily revolutionizing the way we’re teaching, so. There is that element, though, that you want to be able to get your message across to as many people as possible. So with this flipped classroom and the taping of these MOOCs – and I’m sorry that your philosophy class is very boring.

But the HarvardX, we’re trying to integrate different varieties of learning. So some of the ones that I’ve seen that are coming out now, this Fall, we’re launching 13 classes from about now forward are like watching mini documentaries where they have traveled to China and interviewed scholars over there. We have gone into the museums in 3D CGI graphic’ed relics of Chinese history.

And we’re looking at them. We’re studying them. We’re getting graduate students come in and talk about them. We’re getting tons and tons of different varieties, people. It’s not just that one rock star professor. You’re getting a class that 40 people may show up that are experts in the various fields that you cover. And they are from all over.

So we try to get outside the classroom as much as possible. These are the experiences that are added on, that you cannot get unless, a), you live geographically near a location where you can get to university, or b), you travel abroad and study. So that’s where I think the gain or the advantage is coming in.

KENNEALLY: Right. And to give people a sense of the scale right now, how many students have you had enrolled in the edX courses? And edX began in 2012, a $30 million investment each by Harvard and by MIT.

COURTNEY: Yeah. That bill’s coming due soon. It’s supposed to be a million already. But it’s over that supposedly.

KENNEALLY: But relatively speaking, and we’ll talk about the amount of money that’s flowing into all this later on, but relatively speaking, for the benefit, the potential benefit, $60 million is a drop in the bucket.

COURTNEY: It depends on who you’re talking to about that obviously. Different community college, smaller state colleges, they’ll view that as a major investment. However, when we put the money behind that, it was with the intent of developing all of these courses that have this worldwide viewpoint without necessarily charging.

EdX is the only nonprofit up there on that list between Coursera and Udacity. And that’s an important thing. The mission, even though, yes, we’re trying to weaponize and monetize it eventually, right now, it’s nonprofit with the intent of spreading this kind of educational narrative around the world.

We’ve had people from China, Mongolia, Iran, Australia, Hawaii, all over taking these courses. And that’s creating the discussion groups of people outside the norm that you would engage in conversation with about the same classes, something that would reveal there.

But getting back to your question, so we have a million students that signed up. Did they all complete the course? No. They did not.

KENNEALLY: What are the completion rates?

COURTNEY: They’re very low, I mean, 5%, 10%. So we have thought that the model may have to change where we make smaller groups available.

So instead of 23,000 students signing up for a particular class, CopyrightX, which was offered by professor Terry Fisher, out of the Law School, was limited to 500. We had people apply for this from around the world. And they were taking the class at the same time as the 150 students in his real world class, in the classroom. And they mixed those groups together. And it was a phenomenal outcome.

And that’s called a SPOC, which I can’t remember what it – it’s S-P-O-C. And it stands for specific or smaller private online course. I think that’s what it is.

And so we’re experimenting within the models. We don’t have to always have MOOC. We can have it be something smaller. And that helps assessment also.

KENNEALLY: In what way?

COURTNEY: In what way? Twenty-three thousand students, try grading their midterm papers. You know? I teach cyber law online at Northeastern and I have trouble with 25 online students sending me their papers at once.

So the idea that there’s no traditional modes of assessment like midterm papers, that can’t happen. Scalability, 23,000. You can’t have that. However, you can have that kind of Q&A, question, self-assessment that edX has been experimenting with, short answer questions or multiple choice questions.

KENNEALLY: Right. And one of the other key differences though between your class at Harvard or at Northeastern and the MOOCs classes is, these aren’t Harvard students. These aren’t Northeastern students.

COURTNEY: Yes. Yes.

KENNEALLY: They’re people, as you say, from around the world. And they’re coming to the class with as many different expectations and needs as you could imagine. How does that affect the teaching? And what are you going to learn from having those kind of students enrolled in these courses that you could perhaps bring back to Harvard Law School?

COURTNEY: Sure. And that’s the intent when we invest in edX, that we could bring the lessons from edX back and maybe improve quality of campus education as well. It’s difficult.

If you can imagine for yourself, not being a Harvard student, not having that ID, not being able to go to the library and research more on your own, not being able to have access to the tens of thousands of databases that we pay for access to. So what type of learning are they doing?

Well, I don’t know if content is king or anything that we have left over there yet. In this case with the MOOCs, the actual learning has to come from, a), the materials that the professor either provides you somehow, or his actual teaching. Because there’s nothing else. There’s no other qualitative research that you can do outside of that in the traditional student sense.

Students, I tell my classes all the time, they have access to Westlaw, Lexus, and all these major databases. I was, like, you have about $200,000 worth of access at your fingertips that you’re not necessarily realizing. The MOOC students realize that better than anyone else. Sometimes they’re, like, we found this on Wikipedia. We found this site to this. Their research methodologies are different.

So the expectations they have maybe at first are, I’m going to take a Harvard course. And I’m going to have the same level of access of education. But it may be a little different.

KENNEALLY: Well, in fact one of the other differences is the students in the MOOCs courses are paying nothing at all.

COURTNEY: Yeah.

KENNEALLY: And at Harvard Law School, I went and looked it up, tuition and fees, including some health insurance, some books and supplies, a travel allowance is $78,700.

COURTNEY: Sounds about right.

KENNEALLY: So you’re not going to be giving away any of those degrees any time soon.

COURTNEY: No, I don’t believe we’ll be giving away those degrees any time soon. I mean, there’s different modes of MOOC students. There’s the adult learners that are taking a class because they’re interested. I guess you would fall in that category. Yes? Then you have some people, they’re using a MOOC as an ability to get grounded before they enter an academic institution. A lot of people took the MITX software course or circuits course in order to –

KENNEALLY: That was the predecessor event.

COURTNEY: The predecessor, yes, in order to be, like, oh, this is something I want to do. OK, now I’m going to go into a real classroom environment, get credits. And I will be that much better of a student because I’ve already taken a MOOC. So we’re hoping that – I don’t know – we quantify that somehow.

KENNEALLY: Well, it doesn’t seem to me that there could be a problem with having too much education.

COURTNEY: Right.

KENNEALLY: I hope not, at least. And certainly what’s interesting about it is the way people are using their education with MOOCs. They’re putting it on their resumes as a demonstration that they’re committed to a particular field or that they’re interested in growing and so forth.

COURTNEY: Right. And I took this course with such-and-such professor. Now something we haven’t discussed, that I would just want to mention real fast is, introducing modes of gamification into MOOCs, meaning badges, patches, etc. I never was into this and then Jet Blue told me that the other day they were going to start handing out badges for the number of points. And suddenly I wanted these badges.

So gamification – I mean, like why do I – they mean nothing. They don’t help me or anything. I just have them on my profile.

But I’m talking with a Harvard senior who is very interested in MOOCs, that is thinking about working across all of Coursera and everything to make badges or symbols, not necessarily accreditation, traditional modes of credits, but saying, I’ve completed this course. I get this badge. I completed this, and somehow work with employers to realize what that actually means.

KENNEALLY: We will come back to you. I’m sorry, John. Please.

MARCUS: I hate to jump. I just want to add something while we’re talking about who the students are.

One of the problems with looking at MOOCs as a solution to what’s going on in higher education is that what’s going on in higher education demographically, more of the students that are arriving at universities and colleges today are underprepared. They come from low-income urban high schools. They’re first generation. And they are the least capable of sort of self-discipline, self-study that online education requires.

And that is why so far that what research has been done into online higher education shows that when you leave someone to their own devices, the very people that need a lot of real human guidance on an individual level, that doesn’t work. So that’s something that needs to be solved in order for MOOCs to solve that problem.

KENNEALLY: I think that’s a great point, John. And we’re beginning to see some of the complexities of all of this. And I want to return to Kyle in a minute to talk about where the course materials come from.

But before we do that, I want to have Scott join the conversation, Scott from McGraw-Hill education. And Scott, you have some other important distinctions that we didn’t mention in the introduction. You’re probably the only engineer sitting on the platform right now, which is a great distinction. And you’re probably the only person in this room who’s been to Antarctica more than once. There might be somebody who’s been once, but you’ve been back and forth multiple times. So you’ve really traveled the world and –

SCOTT VIRKLER: And that’s distance learning.

KENNEALLY: (laughter) Exactly. You learn you don’t turn off the engine on the plane. Right? You leave it running because you don’t want the oil to freeze up.

But for McGraw-Hill right now, looking at some of the questions that Peter posed at the beginning about, can incumbents become disruptors, that’s a question you’re asking yourself as you look at all the various trends in higher education, not only MOOCs. But MOOCs are, I’m sure, an important part of that. So what is McGraw-Hill doing to become internally disruptive and to change its own approach to publishing these materials?

VIRKLER: So most of you, probably many of you know, McGraw-Hill Education was spun off from the old McGraw-Hill, is now a privately held company, private equity based. They made that couple billion dollar bet, whatever it was, on exactly this premise, that we can take what was a traditional book publisher, flip it up onside its head, and become a digital learning company over the coming years.

We are at a point where we clearly have our legacy business. And we’re talking about the leading edge of the market here, right? So the bulk of the market is nowhere near this. So we still have that part of our business and it will be there for awhile.

But at the same time, we’re trying to take all the other parts of the business and completely turn it around. The whole idea of a book and a book publisher, in my group, that doesn’t exist at all. We’re not thinking about that at all. We’re thinking about content, everything from the authoring of the content coming in, their learning objects, personalized adaptive learning, all through to assessment. How do we deliver that? How do we provide the systems for our customers in higher education to facilitate all that?

KENNEALLY: And that’s really technology driven, because some of the adaptive learning, and I believe as well with the assessments, algorithms become involved here. And the way that content and the educational materials is pushed at the student is all based upon the data that’s suggested and what it shows them as to what direction they should go for the next class or the next course. Is that right?

VIRKLER: Yeah. It absolutely is. We hosted just last week at McGraw-Hill, at our office, we hosted the Boston Data Mining Group. We’re hiring a team of data scientists. And the results of that effort is not going to happen overnight, clearly. We’ve got a lot of pieces we need to put in place so we can facilitate the kinds of solutions we see, and we hear from Peter and customers like Peter that we need to be doing.

KENNEALLY: Right. And some of the things you were doing are also – at first glance, they sound cosmetic, but I think they’re really critical to the approach that you’re taking. So for example, your office is here in Boston in the innovation district. We’re talking about innovation and disruption here. And you’ve put yourself squarely – that’s your address right now. Right?

VIRKLER: It is. We wear jeans.

KENNEALLY: I see that. (laughter)

VIRKLER: We’ve got shorts in the office. We got –

I’ll tell a quick story. I have a 15, now he’s a 16 year-old son. And my wife and he were here visiting. And they came to see the office. The next day, they run around Boston and they went to go grab lunch. They’re going to go do shopping or something, in the afternoon. And he says, you know mom, I don’t want to do that. Why don’t I just go back to dad’s office and hang out? (laughter)

And so it’s a testament to Stephen Laster and those that have laid out our office. The office, it’s a cool place to be. And people in the rest of the company want to come see it. We’re attracting talent because of it. It makes a difference.

KENNEALLY: Well, for your colleagues here in publishing, what does it look like then? Tell us what the office looks like.

VIRKLER: So myself, the top executive, it’s a completely open office. There’s no offices in the room whatsoever. We have desks.

KENNEALLY: Open floor plan.

VIRKLER: It’s a completely open floor plan. We have phone booths. We have conference rooms that are team rooms, which are dedicated to teams. They can write on the walls, write on the floors, write wherever they want to write. They can leave the stuff up there. Those are soundproof to some degree, so at least we can have conference calls in there.

There’s the game room. There’s some open seating areas. It’s the high ceilings and the big warehouses down on Summer Street. So it’s really quite nice. Yeah.

KENNEALLY: I don’t want anybody to think though that really the only thing you have to do is open up an office in a cool part of town and suddenly you’re a disruptor rather than an incumbent. But there are things that McGraw-Hill Education is doing to really literally put its money where its mouth is.

So in the announcement just last month about the partnership with GSE that Peter mentioned, there was a figure reported, something like an investment – $130 million has been invested in a variety of partnerships and startups and technologies. Can you talk about some of the things that you’ve done?

VIRKLER: Yeah. We’re at a spot, much like our customers and schools, where we need to do experimentation and need to do essentially R&D. Right? And we clearly are not going to be doing that all ourselves. There’s a lot of really good people. I mean, you look at the Boston area; the ed tech market is here, right? It’s one of the main hubs for that. So we have to strike a balance.

So first thing is, we’ve been laying out, what is our strategic vision of where we want to go? What are the pieces we have in place? Because we have a lot of good pieces in place. We have a lot of good teams of people in place. But we’re missing a bunch also. And there’s always new things coming up.

So where do we want to partner? Where do we want to acquire? Where do we want to build? Where do we want to experiment? That needs to be done in a very thoughtful way.

I was looking through the list the other day and I think there were 90-some companies on our partnership inventory. That’s a lot. And so there’s a team just dedicated to keeping that track. My friends in the K-12 space, I think the phone rings every Tuesday, they’ve got three new ones they want to partner with.

KENNEALLY: Right. Well John Marcus, isn’t that also evidence that there’s a lot of money flowing into all this right now? What’s your assessment as to how careful some of that money is?

MARCUS: Well it’s like the beginning of any period of innovation in any field. There’ll be a shakeout. But really smart people are investing in this stuff. It’s hard to answer that question. It’s hard to predict. And that – it’s hard to predict.

KENNEALLY: And that’s the nature of VC, I suppose.

MARCUS: Well, when you look at Coursera which has all this venture capital money coming into it, that’s odd, because there’s no revenue model. I mean, there are conversations about charging for assessments, so that you go to a test facility. edX has a partnership now where you go to a testing facility and take a test, and they charge you for that, and edX gets a piece of that. But does that make up for $60 million? That’s going to take awhile.

So it’s a great question. I think the answer to your question is, there’s not an answer to your question.

KENNEALLY: But back to Scott here, because it seems to me that the investment is perhaps, certainly down the road there’s going to be a return on it. But the kinds of things that you say, you’re learning. The experimentation that you’re doing, that will yield results that won’t be immediately monetize-able, but will play a role in the future development of the company.

VIRKLER: Look at Twitter. Right? Yeah. You can look at a lot of these things. So there are some things where there’s a first mover advantage. I would argue, for a lot of these things, particularly in the education market, I’m not sure how sustainable that advantage is over a long period of time.

So being a fast follower is not necessarily a bad strategy. Right? And there’s a mix. We don’t need to do all this experimentation ourselves. Neither do others.

But across the market, you’ll see it. And I also believe that in the education market, one of the reasons you see all this experimentation is, there’s a lot of passion. Right? We all have family members. We all have – have our own kids or have nieces or nephews, brother, sister, know someone who’s had trouble in the traditional learning environment. It’s very easy to get a lot of passion around that; I want to solve that particular problem for that particular kind of student. But then you think about, how does that scale out?

KENNEALLY: That’s a great point though. Because as I did my research for the panel, I found out, there’s a whole range of choices in approaching education today that I was unaware of. And some of these terms that we’re talking about here, that I’m sure people in the audience don’t know or aren’t very familiar with. We’ve mentioned adaptive learning. We talk about artificially intelligent assessment.

Can you tell us, particular example of ALEKS, which was a company that McGraw-Hill Education acquired just recently? They are using adaptive learning to determine what a student knows and doesn’t know in a course. It sounds almost magical in a way.

VIRKLER: And LearnSmart does a little bit of this too, but ALEKS, in particular, in the math space, ALEKS is an online tool that can be used to supplement in a traditional classroom. It’s used by a lot of home schoolers, as well as in traditional school environments. I actually had my kids go in.

So algebra II, I’ll just make up an example. My son, made him do algebra II. There’s a 30-minute baseline and establishes what their knowledge is from there. And then it gives them options of here are some things you’re ready to go learn.

So it gives them the sense of, they’re in control. Here’s the next thing I want to go learn. And then the system does it again. But it doesn’t let them go until they’ve mastered that next piece.

It’s almost like an expanding circle that they’re learning in. When you look at the diagrams that the data folks at ALEKS, how they describe it, that’s basically how they describe these pieces as they expand out.

And it’s interesting. ALEKS has been around for awhile. That’s not a brand-new thing. And it proves it can work.

Now it works well in science or in math. They’re building out into chemistry. How you do this in languages is a little different. So that’s where these algorithms and the data scientists are absolutely critical.

And as we look at partnerships and potential acquisitions in these spaces, the real trick is, show us your algorithm and then we’re going to understand it. And that’s where the dance really begins.

KENNEALLY: When you say, show us your algorithm, I was thinking, you were saying you’ve got an algebra II class, and assessing the student. If I had to take that today, I would be starting way back, I’m sure.

Peter Stokes, the importance of data in all of this is really critical. And you’ve got some examples of the ways that instructors and course providers have been using data to improve the delivery of their work. For example, they can see right away what students are getting right and what they’re not getting right. And that really makes a big difference, doesn’t it?

PETER STOKES: It can. If you ask any university administrator, do you have enough data on campus, they’ll say they’ve got plenty. One of the key questions is making it actionable. And so what these tools often do is, in a very guided way, they make it actionable for the end user. So that can be the student. But they can also make it actionable for the instructor, to the extent that an instructor is present.

So, for example, if we look at the way Arizona State University has implemented the Knewton adaptive learning platform in its sort of entry level math course, students can move through that course at their own rate. It’s a 15-week traditional semester course. But if you progress through the adaptive learning material, which is delivered through computer online, you can finish the course in seven weeks, eight weeks, whatever you’re able to do.

What that enables for the teachers to see where each student is week-by-week, making progress through the curriculum. So let’s say it’s the fifth week of the course. You’ve got your class together. This table over here on average is actually at week nine. So I’ve got them actually working on a different set of problems. And these guys over here are a little slow. They’re week two. We need to triage them. I don’t know what it is about this table, but they need a little extra care. And so you get them working on a different set of problems. Then you get sort of the vast middle working on the week five material.

So it enables you. That’s really I think the power of the flipped classroom. It gets the students doing some of the spade work outside the classroom so that the classroom time itself can actually be used triaging in a much more personalized way, in a much more tailored way how to get that particular student or that particular segment of students moving to the next rung on the ladder. And it’s the data that makes that possible.

KENNEALLY: Yeah, go ahead.

VIRKLER: Just one – and I would add, in the next phase of what you’re seeing, starting to come out in the market where these things are predictive. So before that group gets in trouble, we can tell, based on their behaviors, from what we’ve learned from others in the past, they’re going to have a problem two weeks from now. And the predictive piece is the next thing you’re going to see start evolving and coming out with some of the tools in the next couple years.

KENNEALLY: It’s fascinating. And it strikes me, Peter, as you were describing that, that one of the old models – and we’re talking about old models being disruptive and new ones coming into their place. The old model of one textbook fits all just simply is out the window. Scott, you’re nodding. But I want to ask Peter first, what does this mean in terms of content development, curriculum development if there are so many types of learners in a single classroom that we can identify really specifically?

STOKES: Well, it gets back to some of the themes we’ve been talking about already. So this in part has to do with the atomization – I’ll use that word again – of the content, and learning objects is how Scott characterized it. You get to a point where the algorithm can essentially enable multiple pathways through the learning content.

So there are different kinds of adaptive learning, some pretty crude and actually quite linear. If you don’t pass this test, you don’t move forward, so you’re stuck here. Just go back, read more stuff, come back, now try to move forward.

There are other more complex algorithms that actually allow students to move through sort of a space, a curriculum space according to their own natural talents, and then again, generate, in a personalized fashion, an immediate curriculum that they need at that moment to master the next concept.

So there are opportunities for multiple pathways through the content. But in order to do that, you have to have pretty finely grained units or modules or objects for the students to master.

And one of the reasons why all of this stuff is complicated and painful is that it forces us to reflect on stuff we do automatically like talk without thinking like I’m doing right now. And we actually have to go back and start taking those sentences apart and figuring out what information are we trying to convey with them? How do we situate that in the sequence of the course material so that you understand what adaptive learning means before I start talking about it, and so on and so forth.

So it creates pain in that we now need to start ordering the information that we want to deliver. But then these algorithms make it possible for students to move through those modules, those components, those atoms in more personalized fashion.

KENNEALLY: Right. And Scott, I know that at McGraw-Hill Education right now, the work that you’re doing is really separate from the content development itself. I have that right I believe. Right?

VIRKLER: It is, although I feel that pain. (laughter)

KENNEALLY: Tell us why.

VIRKLER: We have a couple different things. There’s that piece which is out front. But when we step back and we look at the overall strategy, we have to look from content origination all the way to the end. We can’t just look in the silos.

There are areas where we’re able to do some silo work today. And that’s kind of where you might see some experimentation. That one effort can’t get out too far in front of the rest of the organization. We could have a fantastic adaptive engine that does all this whizbang stuff, but if we don’t have the content going into it, it doesn’t mean anything.

KENNEALLY: Absolutely. And Kyle Courtney, I want to bring you back to the discussion about where the content comes from. And you’ve been wrestling with that, and wrestling with the copyright implications of that at edX and at Harvard Law School. Talk about some of those issues. So for an edX course, where is the content coming from?

COURTNEY: So traditionally the easiest way to get buy-in from faculty in the beginning was, hey, take this course and put it online, not –

KENNEALLY: An existing course, existing materials?

COURTNEY: – existing course, yeah. You already have this. You’ve been teaching it for X number of years. Let’s move it online.

Now obviously there’s a lot of change that comes with that. Online won’t have a bookstore in which you can go and buy the books. It won’t have recommended reading. The syllabus list maybe a bunch of materials that normally they’d be able to access through any large article database. But that pretty much goes away. So then it’s about meeting expectations early.

So we get a list of syllabus readings. This is what is going to be discussed, the core fundamentals of the class. In law school, it’s very case law-based. But we’re finding that law, like every other discipline, is more interdisciplinary.

So it’s not just law reading. We’re going to be going outside of our bounds now. All HarvardX classes are very interdisciplinary, even though – this is an art class. We’re drawing on a lot of sources.

So we try to devise a way in which we could still get some of these materials which the faculty felt were critical to the discussion. Now, this is the preeminent article in this area. Well, how do we distribute that to 23,000, 50,000 students at once without necessarily violating, say, copyright or any of other laws that exist in this country? And so we came up with different methodologies.

The first one is pretty basic. We just cite to it and allow the students to find it on their own. There – a possibility if there’s a textbook available for purchase, they can buy it on Amazon. There’s a possibility that it’s an article that they can find or buy through Elsevier or somewhere else, fine. Or they can use inter-library loan. The power of the public library still exists.

They may not know that word. They don’t know what inter-library loan means. But I say, just go down and ask.

KENNEALLY: And that’s an important point to make. So a Harvard student has access to all of the Harvard libraries, Lamont Library, Widener, everything. A MOOC student –

COURTNEY: – has access to whatever may be available (overlapping dialogue; inaudible) –

KENNEALLY: – by contrast, has whatever they can get through a public library card. And all I can tell you is –

COURTNEY: And sometimes they don’t.

KENNEALLY: – if you haven’t looked or checked it out, a public library card gets you a lot of access.

COURTNEY: It does. It does. It gets you a tremendous amount of access. They may have similar databases that Harvard has. They may have similar access there. They may have inter-library loan. However, there is a percentage of the students that are in HarvardX classes that are nowhere near a public library or might be afraid to go and visit it.

So then we move on to number two, which is obviously permission. I mean, this is sponsored by CCC. We understand permission-based is the easiest way. Right? Because everybody’s happy. The students are happy. They get access to the article, things like that. So we had a small permissions team work on saying, hey, can we get permission to have this article?

Now that went two ways – no, maybe three. One is non-response. Two is, what’s a MOOC? In these letters we had to describe, edX is a nonprofit, education, blah, blah, blah. And we’re asking for free permission in this case, because we do not have a budget for a syllabus, for a bookstore, for anything, and nor do the students really. The expectation from the students may be, I want everything for free. But that’s not grounded in reality. So we ask.

And sometimes we had some negotiations where I negotiated from zero to zero, explaining, we don’t – I’m not sending this to the copy center. I’m not capable.

Some people agreed; absolutely, sure, use this article. Some people did not. And that’s fine. We had to be prepared for the not. And when we prepare for the not, then that gives us an opportunity to delve into what’s available in institutional repositories, open access articles, what’s available on Google Books, what’s available in J stores pre-release, prior to 1923, all those journal articles. Even we draw on the wealth of public domain. But sometimes that didn’t work either.

Our next methodology was to kind of work together on something. Imagine that, publishers and educators working together on something.

But the idea is that, hey, we can – it’s the old carrot and the stick. We can give you 50,000 students instantly that see a direct market channel, advertising your book, your article, your journal, whatever it is, if you just give us one chapter or two chapters for free.

And this worked a few times actually. And sometimes it was more than just a chapter. In the MITX course, MIT University Press donated a full copy. We called it a technologically crippled version of their textbook with the intent of, if you logged onto the edX course and you were actually a registered member, you could do your readings. You couldn’t search. You couldn’t download. It wasn’t in PDF. It just was there on the screen. And at the end of the course, your access would go away. And they offered a link saying, if you want to buy this on your own, you can.

It worked tremendously for MIT Press. They sold every copy of this book in every warehouse in the United States. They had no idea that their sales would go up 200%, 300% on this book, because some people took this class were overseas, had no access to this book at all. So they could still do their readings. They could still stay in line with the course goals.

Other people that said I want a print copy of this – and this happens a lot at the Law School. The students, they love their printers. They are still printing everything out and making hand notes on it. Annotation software is not there yet, so the idea that a hard copy could be bought.

And then the last one was when we were looking ahead to classes in MOOC – and this happened in professor Greg Nagy’s HeroesX, Greek HeroesX course, very popular course. He’s been teaching it for 35 years at Harvard.

He made a deal with Harvard University Press, the first one ever where he gave up all his royalty rights to any hardcover sales in order to get an e-book HTML version of the book that he could post to his edX site and that his students could access for free. And he had the right to kind of update it and change it, and by foregoing those sales.

However, he still sold, or in this case, he didn’t sell it, Harvard University Press sold it, a tremendous number of these. This was built into the contract, so again, thinking ahead. And some other faculty have noted that and have worked with the publishers to at least have an open access or HTML agreement in their future offerings of their edX courses. So those are some of the methodologies that we’ve been using over time.

MARCUS: Well, there’s an interesting corollary to this, that it’s not my nature or profession to be reassuring. But I’ve come across this several times in reporting about OER.

KENNEALLY: OER is?

MARCUS: Open Education Resource, which a lot of people are pushing, a lot of foundations are pushing as a way of reducing textbook costs. Students want books.

COURTNEY: They do.

MARCUS: Eighty percent of students in a survey, although the survey was conducted by the National Association of College Stores, (laughter) but nonetheless, it was a huge number. Eighty percent of students prefer books.

And I actually was talking to my students about this last night in class. And they like books. They don’t like e-books. They like books over e-books. Only 14% of faculty assign OER in courses.

Now faculty have a vested interest because they often are the authors of the books. And unlike very highly paid Harvard – marquee Harvard professors, they want the royalties.

But in this case, it’s not necessarily universities or even publishers that are pushing back on this new technology. It’s actually the students, the users, the end users.

KENNEALLY: Can we do a sort of informal data gathering then? So what did your students tell you last night? Why do they like books?

MARCUS: Why do they like books? I’m not sure we really got into it to that degree.

KENNEALLY: Is it this notion that they can write in them and –

MARCUS: It might be the same issue that Kyle mentions, which – to save some trees, I assign magazine stories. I teach magazine writing. And I let them pull those off of Blackboard so that they don’t have to print them out, and so that I don’t have to print them out. And they print them out anyway.

COURTNEY: Right, exactly.

MARCUS: They want to look at them on paper. And I don’t know what that is. Maybe it’s tactile. But they don’t like e-books. And there are universities that are now giving tablets to their students.

Lynn University, which I think is in Florida, this year began to give tablets to their students and assign all textbooks in electronic versions to save them money. And the students didn’t like it, which is kind of odd because the price of textbooks, I don’t have to tell you, has increased faster than the cost of higher education, 812% since 1978. And it’s the next area where I think you’re going to begin to hear a lot of pushback from students. But the solution that the students want, at least so far, is not necessarily an electronic version of the book.

KENNEALLY: Peter Stokes, in your oppositional view of the world, it’s either a beautiful new golden age or a catastrophe, as a meteor about to strike and wipe us all out. When it comes to print and digital, what have you learned about that?

And it’s interesting to hear John and Kyle speak to the fact that print isn’t about to go away anytime soon. Have you learned that as well?

STOKES: Well, I have some printed paper on me.

KENNEALLY: That’s right.

STOKES: I think that the either/or construction is one to avoid. And it’s really about what’s the right modality for that moment?

When I’m on an airplane, I’ll have the iPad. My kids will have the iPad. I don’t necessarily like to read books on an iPad, but I do. It’s a lot more mobile to carry around, a collection of books on an iPad than it is to drag a bunch of books onto an airplane. My daughter, who’s 12 year-old and probably weighs about a third more than her backpack that she takes to school, I worry about that.

I think that these are personal issues. I think that these are generational issues, cultural issues. And I think over time, as we become more comfortable with the tools and we start to become attracted to what these new tools make possible, we’re comfortable giving up what we had before.

If you just think about the migration from the BlackBerry, which most of us probably had eight years ago, to the iPhone, which most of us probably have now, the keyboard on the BlackBerry was superior. I don’t think there is that much debate about it. But the iPhone enables you to do many, many, many other things more effectively. And it’s a trade-off.

So for the time being, you mix modes as you need to. But I think eventually the winning platforms, the winning tools, the winning technologies will be those that create the most value.

Print has a form of value. It’s not going to go away. Its share of the market may get smaller and smaller. It may have a comeback. Vinyl records have made a comeback.

So it’s hard to predict. But it is this combination of, what kind of value it creates, your personal relationship with the texture of the technologies, and then the cultural association with those tools.

KENNEALLY: So I guess the point there is that, in disruption and in the change that innovation brings, it’s not an entirely rewritten world, a remade world. There are elements of the world that have evolved and found a new niche in this new place.

STOKES: Yeah. I mean, in some respects, it’s connected to the point John was making about online learning being expensive. And so, what happens in higher education or in many industries, as we add new capabilities, what do we do? We add them. They don’t actually replace a past capability.

KENNEALLY: Right, radio, then TV.

STOKES: Right, and print and e-book. I suspect students are often using both sources, maybe not equally, but I suspect it’s not just print when there’s the print connection.

COURTNEY: No, they have there – classrooms are bizarre. So they have their laptops out. And then they also have their book with their notes in it. And because they’re –

KENNEALLY: And they’re IMing on their laptop to their friends.

COURTNEY: Yeah, because it’s not quite there yet, the annotation capabilities that they have, their highlighters. Some people like green for notes and yellow for this. And that’s not reflective in the software yet. So they’re doing both, at least from what I see.

KENNEALLY: Scott Virkler, you have devoted yourself to the digital side of things. What do you hear as well about this continuing, the survival, if I could put it that way, of print? And how do you accommodate that as you begin to think about all these learning objects that are in this virtual space?

VIRKLER: I was at Elsevier from ’06 until a couple years ago. And I was on the strategies side and the digital side there. And we spent a lot of time, my group, putting the first medical journal apps on the iPad. We spent a lot of time trying to analyze print usage versus digital usage, whether it was in books or in journals or what it might be. Those first iPad apps we put out, was very interesting that the usage, it was basically, any given journal, the doctor would read, basically browse three or four articles.

Now they would always say they did more, but in reality, we knew they did – when you did the over the shoulder look, it was never five or six. It was only three or four. And then we started getting the hard data from the iPad apps where we could really tell how much they were – what they were looking at. And interesting enough, it was three or four articles. So the usage behavior, because it was fairly similar, was about the same.

I agree with Peter. There’s a generational issue here. I think we all would agree with that to some degree. But when my son’s 50, is he going to still want to take the paper to the beach? I don’t know. I don’t know if he is or isn’t. It’s an interesting question. I mean, jump on public transit and watch how many people are reading the papers and reading whatever on their iPhones, which I don’t like.

Now I do like reading snippets. So my use case is a little bit different. Right? I’m just reading the headlines. I’m looking at a picture. Done. I’m on to the next thing. Right? My attention span is about that long, just like my kids.

So who knows on the book side? Those are different cases. Right? Where I’m trying to study, I’m trying to learn. Or maybe if I’m learning about how to write magazine articles, I don’t need all this stuff. I just need the pieces. So it’ll be interesting to see.

COURTNEY: I think that’s the divide. So scholarly reading still lives a little bit more in the world of print. And the pop reading that we’re seeing on T all the time, downloading the latest novel, I think that’s completely living in the e-world.

KENNEALLY: We’ve been talking about the future of higher education, and there’s an imaginary bar there. Higher education, I suppose it stops when you’ve got your bachelor degree. It may be as far as a Ph.D. as some folks here on the stage have got. But higher education really means, like to me at least, education that continues throughout your life.

And Scott, your background includes working in corporate education, corporate learning. And there’s a potential for MOOCs in that space as well, I think.

VIRKLER: Yeah, it was interesting. As Kyle was talking, I was thinking about – so in my old – I, like – when I’m in McGraw-Hill, I love introducing myself, tell them I most recently came from the oil and gas industry. And the K-12 people just kind of, oh, my lord, what have we hired here?

But while I was there, what I was doing, is a company that was educating petroleum engineers and geologists. So they graduate from Texas A&M. They’re making $125,000, or whatever the number is. They can’t really do anything for six years. So there’s industry training that occurs.

And if you look at the BP accident from a couple years ago, the big question in that whole accident is, was the engineer who designed that platform and that drilling hole, was he qualified? And how do we know he was qualified?

And so this company that I was with, PetroSkills, does a lot of that training. They do classroom training. And so, the group that I was leading was trying to take that PDF content basically, or PowerPoint content, put it into a virtual library system, so when they went back to their offices and back to the job, they had a reference tool. And they could search. And the content was tagged based on, it was beginner, intermediate, or advanced. And it was to help facilitate that kind of learning.

And that usage, they all wanted a binder from the classroom. But then they wanted all this other material, so when they were in the field, whether it was an iPad or – so they could do a quick reference list.

And again, to Kyle’s point, there are two different use cases. There’s when I’m trying to study. And then there’s when I have a question.

KENNEALLY: Need to know.

VIRKLER: Need to know. And if you look at the medical, up-to-date in the medical space, that is all about, I’m with a patient. I’m a doctor. I’m with a patient. I really can’t remember this thing. I’ve got to step out in the hallway, look something up, come back and tell them, make it look like I knew the answer beforehand. And that’s what up-to-date does.

KENNEALLY: Right. John Marcus, any reporting to tell us that the corporate world is watching what’s going on in higher education around MOOCs and some of these other new technologies, and waiting and seeing where it goes and where it grows, and then getting ready to use it in the corporate environment?

MARCUS: Well, in a couple of ways, one, as we discussed in terms of investing in it. And I’m on a listserv of an organization called EdSurge that weekly talks about all the new –

KENNEALLY: EdSurge?

MARCUS: EdSurge, E-D-S-U-R-G-E, weekly comes out with a list of who’s just gotten funding.

But on the other end, to speak to what Scott was just talking about is, obviously, the biggest – there are two big issues right now in higher education on the policy level. One is completion, graduation rates, which are abysmal, and the other is matching up actual education to workforce needs.

And business has an expectation that students come out of universities and colleges ready to start work. And that leads to the debate about whether colleges are vocational or whether they should teach the humanities anymore, because that provides the communication skills and problem solving that you need. And that’s the big debate that’s going on there.

Among the many things that are the fault of higher education, that really isn’t higher education’s fault. Because if you actually look at it, what businesses are doing are saying, this on-the-job training that we used to provide, we’re not going to do it anymore because we don’t want to pay for it, and because employees – there’s so much turnover. Employees leave so quickly, hold so many different jobs. We want the universities and colleges to do it.

So in that respect, they’re looking for MOOCs for job training. They’re looking for new credentialing systems like certificate programs, which are the fastest growing thing in higher education and very profitable for universities, adult education or mid-career education at which community colleges are becoming very involved in, and trying to sort of prod universities and colleges to be more responsive to labor market needs, something that is not very easy because universities and colleges don’t move very fast.

So from that point of view – and MOOCs. There’s a lot of conversation going on about MOOCs as job training devices. So all of those things are ways that business is sort of interacting with what we’ve been talking about on the education side.

VIRKLER: One thing struck me as I was talking. So as I’m hiring – I’m going to wear a different hat here – one of the companies, small companies that we’ve acquired – and there’s others that do this too. When they’re hiring developers, what’s on the paper is important. But we actually give them a test. And there’s a problem for them to go solve.

So how they learned how to solve that problem, I don’t care. I just want to know that they can solve that problem.

Now they still have other pieces they need to get in place. But whether they learn that through a MOOC, learned it from going to Harvard, learned it from going to local community college, I could care less.

KENNEALLY: It reminds me. My colleagues at CCC know I like collecting quotes. And I just came across one from Deng Xiaoping that strikes me as really relevant to that. He said, it doesn’t matter if a cat is black or white, so long as it catches mice. And so you don’t really care how they learned it as long as they got it right. That’s great.

Peter Stokes, finally, before we turn to our audience for some questions and comments, what about that point, that the development in the academic space is going to lead to change in education and in practices in the corporate world?

STOKES: Well in a lot of respects, the corporate world leads higher education. Adaptive learning, for example, is much more common in the corporate training space. And that’s because you don’t have the same kind of faculty authority figure and the anxiety of being displaced. So that’s part of it.

At Northeastern, we have a corporate education division. So we have a business that goes around the world, whether it’s EMC or IBM, and we provide consistent, uniform training to their managers in various locations around the world.

And what’s interesting is, they don’t want us to hire in-country faculty to deliver those programs. They want faculty from Boston to fly to Shanghai or to fly to Hong Kong or fly to Kuala Lumpur, etc., and deliver that same training. They want consistency. They want the northeastern brand and feel and IP.

MOOCs make that possible in a much more scalable fashion. So that’s not to suggest that suddenly turning on your television or your laptop or your iPad is going to replace the value of a dialogue like this. But it can do a component of it. And it can change the cost structure. It can make it more affordable. It can reduce the time or the number of people that we have to fly to various parts of the world.

So corporate consumers of education and training I think are much more open to testing, to sandboxing, to rapid prototyping new sorts of solutions to longstanding problems.

And so one of the mysteries to me for many years has been the lack of interest that higher education shows in the corporate training market.

Just to give you some rough numbers, about $10 billion a year are spent in tuition assistance programs by employers, allowing their employees to go off and get some education. They can’t spend more than $5,000 per employee annually, because after that, that money gets taxed for the employee. So they’ll say, you can spend $5,000 a year going off and getting some education.

They spend about another $10 to $12 billion providing their own training in-house. That’s an opportunity for higher education. That’s an opportunity for publishing. It’s a market that publishing plays in.

But universities don’t like to go there because it requires being very market responsive. It requires customization. And those are the sort of cultural defaults of the corporate market. Those are not the defaults of the higher education market.

So in reality, as these new technologies emerge, often I would suspect that they take root in the corporate market for higher ed, and likewise, likely to take root there before in K-12.

STOKES: One of the things that Northeastern does that I think is really interesting is uses data to find a mismatch between demand and supply in certain fields. So for example, they now operate in Seattle –

COURTNEY: Seattle, right.

STOKES: – and Charlotte where they found in Seattle, not enough higher education supply for particular graduate programs that workers in the Seattle area wanted, and the same in Charlotte, and opened branches there. It’s brilliant.

COURTNEY: I’m flying out to Seattle in the spring to teach.

STOKES: And again, it’s a profit center for a university or college. Babson out here in Wellesley has a – I think they’re in Silicon – many universities have Silicon Valley branches.

They’re physical branches. They’re not necessarily MOOCs. But they use technology in this really interesting way to sort of look for opportunities. But that’s frankly not common enough in higher education.

KENNEALLY: Fascinating. Well, it’s been a great education for me to talk with the panel. And I mean that in the sense that Robert Frost said it. He said, education is the ability to listen to almost anything without losing your temper or your self-confidence.

I want to thank everybody for listening attentively. I want to thank our panel for joining us. Peter Stokes from Northeastern, John Marcus from the Hechinger Report, Kyle Courtney from Harvard Law School, and Scott Virkler from McGraw-Hill Education, thank you all indeed very much.

(applause)