Working as I do in the online media industry space, I was recently prompted to wonder about what’s happening in the Online Education Industry in Australia when I saw a television advertisement by Open University promoting their course offerings.
To my surprise I discovered, by Googling the sector, that what I thought might be a relatively small industry, struggling for its place in the education landscape against Australia’s high quality, established universities and higher education providers, is in fact nothing of the sort.
To the contrary, the industry is growing like wildfire and, to my even greater surprise, across Australia there are now 1,052 Online Education Providers employing just under 14,400 people.
What’s more, during the current 2014-15 financial year, revenue in the online education sector is estimated to grow 8.6%, to $4.9 billion, and in the five years to 2019-20, revenue growth will ramp up at a forecast rate of 8.6% annually to $7.4 billion.
Now, these statistics and predictions for the Online Education Industry come from respected research analysts’ IBISWorld and were published in the firm’s recent (last November) and comprehensive report on the sector.
And, when I interviewed IBIS Senior Industry Analyst, Lauren Magner, just this week she explained that, what I found to be a surprisingly large number of providers, is not really that surprising after all.
While the industry is dominated by one large, well established player – Open University, the company advertising on TV – there are many smaller, niche players in the market across all the states and territories. For instance, the offerings from many of those niche players might be English language courses which are in high demand, particularly from international students studying here in Australia. Each of the major cities, like Melbourne and Sydney, will have dozens of different providers offering English courses.
Nevertheless, as Lauren points out, the recent Ibis report on the online education sector shows just how much the sector really has grown, particularly over the last decade. While there are 1,052 providers now, back in 2005/06 there were just 257 providers, rising slightly to 327 in the 2006/07 financial year.
As we know, going to a university (of the ‘bricks and mortar variety’) is an important part of growing up for young people. A university is not just a place of learning about science and maths, technology, the humanities and philosophy, law and medicine – it’s where young people get an education in life.
So, how is the huge growth in Online Education affecting the established universities, and what about students? Do they still flock in increasing numbers to the university campuses to study, and what about the university administrations? How are they coping with what seems an encroachment on their market by the online industry, and is it putting a dent in their revenues?
According to Ibis, the “market-driven demand system in higher education” is expected to strip some growth from the online industry, as more universities offer additional undergraduate places. Ibis also says that the National Broadband Network (NBN) will enable the online providers to reach more communities in regional areas.
So, it seems there’s some balancing out of the market, with the established universities catering for more students who want the on-campus ‘experience’ by offering more places, and the online sector boosting its growth further with the advent of the NBN.
Interestingly, the established universities are not laying down and they are doing what they have to do to maintain their market and, of course, their revenues in the face of the rapid growth of online education.
The established universities are also helped by that underlying strong desire of most young people pursuing higher education to want to have that ‘life experience’ that comes from attending a university.
The other way of getting a foothold in the online education market for established universities has been their work, over the past year, – as pointed out by Ibis – to develop partnerships with successful massive open online course (MOOC) providers.
“While such ventures have yet to turn into income-generating investments for the participating institutions, universities are positioning themselves to capture potential benefits and revenue from these courses, says Ibis.
Ibis further comments: “For now, Australian universities are moving online to add to their prestige and expand their potential markets. Unlike traditional lectures, MOOCs are typically video modules that run for less than 10 minutes and are combined with mini-progression quizzes that are focused on a particular concept.”
And, that’s where there’s a big difference in the type of students attracted to Online Education, unlike the undergraduate students who attend a university or campus.
As Ibis reveals in its report, MOOCs have shown to be most popular among mature-age students who are looking for professional education.
“MOOCs rely on students to self-learn and, although undergraduate students are most comfortable with the technology, they are not large users of these courses. These students often prefer the interaction and student engagement that can only be achieved in a classroom setting.”
The trend for older workers to gravitate towards Online Education – to upskill – became particularly apparent during the global financial crisis, says IBIS.
“While Australia survived the economic downturn relatively unscathed, upskilling has established a permanent place in society. With more Australians working longer hours, the flexibility offered by online education has enabled more full-time workers to engage in further learning. Besides demand-side factors, higher education and further education providers have recognised the growing need for flexibility and have increased the breadth of courses offered through online platforms.”
So, when you look at what’s happening in the education market, both the established universities and the Online Education providers can coexist happily, catering for upskilling, mature-age workers on one hand, and on the other, offering more courses and an interesting campus life for eager, young undergraduates.
As Ibis also points out, the online education industry largely provides courses that are taken for work purposes, “either to help gain employment or to aid career progression” with many of the students enrolled in online education attracted to the format because of its flexibility compared with traditional education.
Accordingly, Ibis maintains that an increase in average hours worked will encourage higher demand for courses taken for work, and that the average weekly hours worked is expected to increase marginally in this 2014-15 financial year.
It’s clear that the online education industry is not only growing at a rapid rate, but it’s fulfilling an increasing desire by older, mature-age workers to gain a high education and a qualification that helps advance their career.
With that in mind, it won’t be too long before today’s undergraduate students at our established universities may well be tomorrow’s Online Education students as they, too, look to climb the career ladder by undertaking post-grad, vocational courses with one of the hundreds of online providers.
Finally, there is one note of caution for the Online Education providers from Ibis.
On the positive side for the industry, the analyst firm says that in periods of rising unemployment, enrolment in education and training typically increases and, therefore, “an increase in the unemployment rate can potentially lead to an increase in the demand for online education services, as more people return to study to upskill”.
The problem is that, as Ibis points out, the national unemployment rate is expected to decrease in 2014-15, “which may threaten industry growth”.
Time will tell, but my bet is that the Online Educators will continue to be in high demand from an ageing population and an increasing number of mature-age workers who like the idea of gaining a qualification, particularly one that helps them stay employed rather than going into retirement.
Even employers are increasingly recognising the benefits to their businesses of retaining the experience of these older workers…a little bit of upskilling through online education might just tip the scales their way!