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Australian universities in the information economy: electronic commerce and the business of distance education Anthony Francis Dean University of Wollongong
Dean, Anthony Francis, Australian universities in the information economy: electronic commerce and the business of distance education, PhD thesis, Faculty of Informatics, University of Wollongong, 2004. http://ro.uow.edu.au/theses/535
This paper is posted at Research Online. http://ro.uow.edu.au/theses/535
Australian Universities in the Information Economy: Electronic Commerce and the Business of Distance Education.
A thesis submitted in fulfilment of the requirements for the award of the degree
Doctor of Philosophy from University of Wollongong by Anthony Francis Dean, MLit, B Ed Faculty of Informatics
2004 Thesis Certification
CERTIFICATION
I, Anthony F. Dean, declare that this thesis, submitted in fulfilment of the requirements for the award of Doctor of
Philosophy, in the School of Information Technology and
Computer Science, University of Wollongong, is wholly my own work unless otherwise referenced or acknowledged. The document has not been submitted for qualifications at any other academic institution.
Anthony F. Dean
21 December 2004
Contents
PART I...... 1 1 Introduction to the research...... 1 1.1 Introduction...... 1
1.2 Definitions, Rationale and Context, Scope and Structure...... 3
1.3 Discussion...... 20
2 Methodology ...... 21 2.1 Introduction...... 21
2.2 Argument as a Research Approach and Strategy...... 23
2.3 Discussion...... 57
3 Distance education in Australian universities ...... 60 3.1 Introduction...... 60
3.2 Terminology...... 61
3.3 Distance education — a condensed history ...... 67
3.4 Distance education population in Australia ...... 74
3.5 International student population in distance education...... 75
3.6 Media in distance education...... 77
3.7 Institutions involved with aspects of open learning and distance education...... 87
3.8 Distance education theory...... 95
3.9 The business of borderless education...... 101
3.10 Discussion...... 104
4 Electronic Commerce...... 107 4.1 Introduction...... 107
4.2 Terminology...... 107
4.3 Electronic commerce and electronic business...... 108
4.4 Business role of the Internet and World Wide Web ...... 114
4.5 Electronic commerce...... 117
4.6 The web, Australia and e-readiness ...... 119
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4.7 Types and models of electronic commerce...... 122
4.8 Interpreting the framework ...... 128
4.9 Discussion...... 134
PART II Investigating the relationship between distance education and electronic commerce: Building the Case ...... 138 i. Prologue ...... 138
ii. Presenting the arguments with Toulmin diagrams...... 141
5 Distance education and trade in information and knowledge ...... 146 5.1 Introduction...... 146
5.2 Digitization and convergence...... 147
5.3 Information, information society, and information economy ...... 152
5.4 Definitions of information society and information economy...... 154
5.5 Information economy, distance education and electronic commerce ...... 170
5.6 Trade in information and/or knowledge services...... 174
5.7 GATS and higher education in Australia...... 181
5.8 Information economics and properties of information...... 187
5.9 Discussion...... 204
6 Distance education, electronic commerce and web technology...... 210 6.1 Introduction...... 210
6.2 Electronic commerce infrastructure ...... 212
6.3 E-readiness and electronic commerce infrastructure ...... 214
6.4 Innovation theory ...... 220
6.5 Introducing value chain analysis...... 225
6.6 Distance education value chain analyses ...... 227
6.7 Competitive advantage...... 233
6.8 The value chain and software availability to support processes ...... 240
6.9 Generic support activities and software development/availability ...... 241
6.10 Discussion...... 250
7 Business models for universities in borderless education ...... 254 Page ii
7.1 Introduction...... 254
7.2 Universities responding to pressures...... 257
7.3 Businesses responding to pressures ...... 258
7.4 Business models and terminology...... 259
7.5 Business models and electronic commerce...... 269
7.6 Universities and business models ...... 275
7.7 Learning from further afield ...... 296
7.8 Discussion...... 301
8 Universities and borderless education: a conclusion...... 308 8.1 Introduction...... 308
8.2 Overview of the study...... 311
8.3 Discussion – research questions...... 316
8.4 Importance of the study...... 327
8.5 Limitations ...... 331
8.6 Research agenda...... 333
Appendix 1 Australian Universities – 2004...... 336
Appendix 3 Economist Intelligence Unit 2004 E-Readiness rankings ...... 339
Appendix 4 Taxonomy of business models according to Michael Rappa ...... 342
Abbreviations...... 345
Bibliography ...... 346
Tables Table 2-1 Types of dialogue...... 34
Table 3-1 Students in Australian Universities and in Advanced Education Courses, 1971 -
1980...... 69
Table 3-2 Models of Distance Education - A Conceptual Framework...... 79
Table 4-1 Electronic commerce business models ...... 126
Table 5-1 Definitions and introduction to fourteen characteristics of information...... 200 Page iii
Table 6-1 Distance education activities of the UKOU (1991)...... 229
Table 6-2 Software and the value chain: support activities...... 242
Table 6-3 Software and the value chain: primary activities...... 244
Table 7-1 Summarized form of Rappa’s business model taxonomy ...... 270
Table 7-2 Business models proposed for university use...... 277
Figures
Figure 4-1 A framework for electronic commerce...... 127
Figure 4-2 Electronic commerce areas - I...... 133
Figure 4-3 Electronic commerce areas II...... 134
Figure 5-1 Toulmin diagram for the argument that distance education is a digital trade in
information products and services...... 147
Figure 5-2 Four-sector aggregation of the US labour force, 1860-1980. (Using median
estimates of information workers)...... 159
Figure 5-3 Australian labour force in paid employment, four-sector analysis, 1891-1994.
...... 160
Figure 5-4 A new Information Technology Map...... 166
Figure 6-1 Toulmin diagram for the argument that distance education is now
technologically feasible...... 212
Figure 6-2 Electronic commerce infrastructure ...... 213
Figure 6-3 Phases in the innovation cycle ...... 221
Figure 6-4 The S-curve of e-learning transition...... 222
Figure 6-5 The generic value chain of a firm...... 226
Figure 6-6 Online learning value chain...... 238
Figure 6-7 Online distance teaching value system and market map...... 239
Figure 7-1 Toulmin diagram for the argument that universities will seek new business
models in order to be effective competitors...... 256
Figure 7-2 The B-Web typology...... 273 Page iv
Style Notes
Multi disciplinary research uses terms which some readers may find unusual or out of context. To aid reading, specific terms will initially be italicized as a form of accent or stress. The use of double quotes within the text is used for directly quoting a passage or phrase developed by another cited author. Single quotes within the text are used for generically assumed terminology and/or may be used where emphasis is needed.
Notes re CSU_AuthorDate referencing system used in bibliography
The bibliography was created using the bibliographic management software ProCite in conjunction with the Charles Sturt University (CSU) approach to bibliographic generation and management. ProCite enables organization of bibliographic references to produce reference lists. References are entered into the database using one of the predefined ‘workforms’ and the bibliography is created directly from the database. This bibliography conforms to the CSU_AuthorDate style, which is based on the Harvard author date style and the specific formatting is in accordance with the parameters of this database.
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Prologue
The dissertation presented here is one part of a journey that has been going on now for nearly fifteen years. This prologue is intended to provide an insight into how the study originated and how it has come to focus on the areas involved.
In 1988 I had my first foray into university teaching. This happened at the University of New England, a well-established university in New South Wales in Australia, known for its distance education activities as well as its rural campus. I was employed as a contracted lecturer at the Coffs Harbour Campus. There I was teaching an introductory information technology subject to students on the, then, fledgling campus. In 1989, the Dean of the faculty asked me if I would convert the on-campus materials that I had been teaching into a distance education subject for delivery across Australia. This was my first attempt at actually preparing such materials, though I had already experienced distance education as a student in the Bachelor of Business degree from Charles Sturt University. I prepared the subject material as a text-based package, supported by software (which was delivered on floppy disk), complete with instructions for how to install and use the software and the learning materials.
The subject started with some sixty students located all around the country. The experience of that subject was profound. Many students would ring me on my home telephone, often well away from a computer screen, and they would ask me to help them work out the software problems they were experiencing on a range of different personal computers. What I found was I had to develop an encyclopedic knowledge of all of the screens in the software so that I could work them through their problems during the telephone conversation. This experience led me to think that it must be possible for me to be on a computer and to have my screen being displayed in their homes so that they could see what it was that I was talking about. If so, the screen display that I presented to them would then be reinforcement that they had in fact done the right things in installing and operating the software.
Around the same time the Australian federal government joined with the Telstra telecommunication organization to research the technology known as video conferencing. The University of New England, a university with four campuses spread out over quite a large area of New South Wales with centres in Armidale, Orange, Coffs Harbour and Lismore, was part of the trial with Telstra of the video conferencing technology. With few members of staff at the Coffs Harbour Campus, I became involved in the trial use of the technology. As the trial progressed and my knowledge increased, it became obvious that the technology might hold an answer to my question about how I could get my computer screen display into the homes of students across the country. As part of the trial we had ready access to a Telstra engineer with whom I discussed my ideas and insights. Together we were confident that the new technology could be useful in distance education.
I pursued my interests and went on to invent an amalgam of technologies that was trialed with the support of the University of New England, Telstra and the local television station. We managed to get a special out-of-hours broadcast license to trial this amalgam of technology and the result was a technical success. In short, we demonstrated that it was possible to get a low-quality, ‘no-frills’, form of instruction from a simple office set-up at the university campus in Coffs Harbour to people right through the viewing area of the television station on the north coast of New South Wales.
The video conference experiment married up video conferencing technology, television technology, broadcast transmission, computers, and telephones all at the same time. Page vi
Whilst the cost of the overall experiment was around six to eight hundred dollars, the fact was that it was possible through this mechanism, to get into the homes of over fifty thousand people in the viewing area for that amount of money. By escalating the experiment, and sending the signal to the national infrastructure of the Australian Broadcasting Corporation, it would have been possible for the same six to eight hundred dollars to get to every house, with a television, in Australia.
Armed with that experience, I enrolled in a masters degree through the University of New England where my research component investigated the use of television for adult education. Among the things I found was that there had been little organized research about the use of television for education of adults, although there had been an enormous amount done with children. At that stage, however, no one had solved the problem I had confronted in my first distance education experience. Bear in mind that this was 1991-2, and well before the advent of the World Wide Web in Australia.
My invention, together with my studies about the use of television, led me to apply for a position at the University of Wollongong. I was successful in that application and commenced my career as a full academic in 1992.
My interests were then further supported given the nature of the work that I did at the University of Wollongong, in the Information and Communication Technology Department. The work involved broad ranging rather than technologically specific subjects; for example, information policy; information economics; the storage, retrieval, and use of information; and information as an economic entity. Within my teaching I looked at the effect of the application of technology on people and work among other things.
By late 1992 I had completed my masters degree (again via distance education) and had found through the research regarding the use of television with adults, that there were still many unanswered questions in distance education. To my knowledge nobody had been able to solve the problem of supporting students using software (as a part of their education materials) by being able to get the academic’s computer screen display to be viewable in the student’s home or workplace. Consequently, I continued with this line of inquiry in my academic research work and then decided to enroll in a doctoral program at the University of Wollongong, with the intention of furthering my understanding of the practice of distance education.
In 1998, I left the University of Wollongong, to satisfy a desire to build my own home. During that construction period I was also working as a contract lecturer—this time with Southern Cross University, in Coffs Harbour.
In 2000, I returned to academic work at the Wagga Wagga campus of Charles Sturt University (my current employer) where I’ve been involved in teaching on campus and in distance education mode. Both modes have included teaching in the areas of strategic planning for information systems, electronic commerce, and technology in organizations. My academic teaching work and my research interests all seem to coalesce when distance education and electronic commerce are brought together as a focus of study, which is the case in my dissertation. The intention is to look at any relationships that might be developing between new business formats (electronic commerce and electronic business) in the commercial world, and distance education activities in Australian universities.
Of course the web has arrived since my journey started and has the potential to have a marked impact on university operations. Its use will also be a catalyst for the universities to rethink their strategies as the higher education arena becomes more competitive. It may also provide the answer to the question that I had originally set out to conquer, or at least Page vii
to understand more deeply. As the time has passed, the developments in technology, especially those of the web and more directly those relating to digital television, have effectively rendered my invention obsolete. So whilst my attention has moved away from the development of that invention, it has stayed firmly rooted on the issues about which this dissertation concerns itself.
This prologue is provided as a personal backdrop to the current study and, apart from providing some context, is also meant to provide an insight into how I came to generate the following questions to guide me in my collection of relevant documents for my dissertation. The questions have subsequently been condensed in the main body of the dissertation where they are expressed as the specific research questions that steer the research:
• Is there a relationship between distance education and electronic commerce? If so, what is its nature? • Is distance education in Australian universities becoming an exemplar of electronic commerce? • Is the information infrastructure in Australian universities going to be a conduit for new forms of higher education business? • Can electronic commerce be useful in theorising distance education in Australian universities?
The dissertation combines my teaching and research interests and seeks to answer, or shed light on, the questions above. Providing a better understanding of the complex mosaic of modern distance education is an important task and the dissertation is focussed on providing that outcome.
Acknowledgments
Many people have assisted my journey, either directly and in-person, or indirectly through the literature. Others have responded to email requests without hesitation. The following list, hopefully complete, is included as a token of gratitude for their assistance, guidance, advice, patience, and insight:
Associate Professor John Panter (UOW), Professor Ross Harvey (CSU), Dr Richard Caladine (UOW), Dr Merrelyn Emery (ex-ANU), Professor Donald Lamberton (ANU), Associate Professor Richard Joseph (Murdoch University), Professor Stephen Kemmis (CSU), Professor Tony Bates (UBC - for his encouragement in the early days of my research), and Rob Schaap (UC).
More recently I have become thankful to my current employer Charles Sturt University for the opportunity to use my sabbatical leave for furthering my research.
Associate Professor Yoni Ryan was for a brief period a co-supervisor of the work. I am grateful to her for answering my call for specialist assistance and for the long and fruitful discussions. Less directly, she was also important for showing me that there were people knowledgeable across the domains implicated in the thesis and for publishing work that, in a sense, opened a door for me to see another set of possibilities.
I am especially thankful to Professor Joan Cooper my enduring supervisor. Her patience and support though the highs and lows has been enormous, and I single her out for the special role that she has played in the journey, and for just being there.
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Jill Harris undertook the proofreading of a number of chapters and made suggestions for improving readability.
Outside the academic environment, my families have been shown enduring support for my endeavour, and have kept a vigil on my progress toward completion. I am eternally grateful to my parents for their selfless ambition to foster a respect for higher education among their children. They constantly pushed their own needs and desires into the background as they helped us all realize our potential.
My wife, Jenny Bell, is deserving of special mention. Not only has she encouraged me throughout the period of candidature, but she has also been a confidante and a sounding board for the myriad ideas that have arisen. More recently, she has been of enormous help in using her professional abilities to turn the hundreds of pages of transcript into a formatted document that conforms to the thesis requirements of the University of Wollongong. She has also laboured through countless hours to produce the bibliography that is, as a result, accurate, up to date, consistent and which also conforms to style requirements.
My children have been especially tolerant of my preoccupation and I owe them a debt that will take some time to repay. Perhaps the tenacity that I have had to demonstrate will be an object lesson for their futures.
Many hundreds of people through their publications have helped me to build the knowledge I now have. It is I alone, however, who must claim responsibility for and ownership of any factual errors or misinterpretations. I am indebted to these scholars, journalists, commentators, reviewers, and researchers for their contributions to the various fields. It is upon their shoulders that I am standing.
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PART I 1 Introduction to the research
“Globalisation, massification of higher education, a revolution in communications and the need for lifelong learning, leave Australian universities nowhere to hide from the winds of change.” (Nelson, 2003 p. 3)
1.1 Introduction
Two major research questions, condensed from the four previously presented in the Prologue, guide the current study. They are as follows:
1) Is there a relationship between distance education and electronic commerce?
This question is pivotal for the current study and requires that the nature of any such relationship be illuminated.
2) Can an electronic commerce framework be an effective lens though which to view distance education, its theory and practice in Australian universities?
The second question depends on a clear identification of a relationship in order for it to make sense and to have value.
This dissertation presents the case underpinning the author’s primary claim that there is a latent relationship between distance education in Australian public universities and electronic commerce. Discovering the nature and extent of any such relationship is the primary purpose of the dissertation. Based on an understanding of the relationship, the investigation is also undertaken so that an enhanced understanding of any possible implications, for the practice and theorising of distance education in Australian universities can be developed.
This dissertation is about Australian public universities in the latter years of the 20th century and the early years of the 21st century. This period has been turbulent for Australia’s public universities as they strive to come to terms with the many pressures and changes that have been thrust upon them from a variety of sources. Variously labelled the information society, the
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information economy, the knowledge-based economy, the post-modern, the new economy, and the post-industrial society, the period has witnessed the creation of new forms of business which, though still evolving, are enabled by information and communication technologies
(ICTs) and are heavily based on the manipulation of information. The commentators (see for example, Bell, 1973; Touraine, 1969; Castells, 1989; Boisot, 1998; Al-Hawamdeh & Hart,
2002) who use such terminology would claim that modern industrial countries now have knowledge-based economies where value is primarily produced through the capture, storage, processing, creation and distribution of information. Furthermore, the concomitant processes of globalization are encouraging a greater concentration on the primacy of markets, markets that have a decidedly international focus. Electronic commerce is one phenomenon that has arisen from the combination of global networks, a concentration of digital information forms, and the increasing centrality of markets in international politics and economics (Turban, 2003).
Universities are embroiled in these developments along with other, more overtly corporate, institutions and are being compelled to reconsider their roles and position amidst such change.
Higher education in Australia (and elsewhere) is becoming contested territory (Cunningham et al, 2000; Standing Stones Ltd, 2000; Rumble, 2000; Daniel, 1996) and distance education, as a component of that territory is the focus for the current study. The combined elements of ICTs, universities, distance education, electronic commerce, and global markets give rise to the notion of borderless education (Cunningham et al 1997, 2000; CVCP, 2000a, b).
The dissertation is organized into two major sections as follows:
• Part I introduces the core concepts of the study, provides definitions, discussion of
terminology, contextual information, an introduction to the methodology and philosophy
behind the concept of case building and argument, provides an introduction to distance
education in Australian universities, and provides an introduction to electronic commerce.
• Part II is presented as a case (one or more arguments), in support of the claim that there is a
relationship between electronic commerce and distance education. It sheds light on the use
of electronic commerce as a potential framework for the examination of distance education.
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The following sections provide key definitions, the rationale and context for the study, the scope and structure of the dissertation, and indicate why the research is warranted. An explanation of the methodology adopted for the dissertation is then provided in Chapter 2.
1.2 Definitions, Rationale and Context, Scope and Structure
1.2.1 Definitions
Distance education — The definition of distance education to be used within this study is that distilled by Keegan (1996, p. 50) as follows:
Distance education is a form of education characterised by: The quasi-permanent separation of teacher and learner throughout the length of the learning process (this distinguishes it from conventional face-to-face education); The influence of an educational organization both in the planning and preparation of learning materials and in the provision of student services (this distinguishes it from private study and teach-yourself programmes); The use of technical media — print, audio, video or computer — to unite teacher and learner and carry the content of the course; The provision of two-way communication so that the student may benefit from or even initiate dialogue (this distinguishes it from other uses of technology in education); and The quasi-permanent absence of the learning group throughout the length of the learning process so that people are usually taught as individuals rather than in groups, with the possibility of occasional meetings, for both didactic and socialization purposes.
Whilst more will be said about distance education terminology in Chapter 3 it is sufficient for the moment to highlight the fact that Keegan’s work was based on existing theoretical contributions and is inclusive of those that he thought were able to add key elements. Moore and Kearsley (1996, p. 206) suggest that Keegan’s definition had become the “most widely cited” in distance education literature. The later discussion will also explain why the term distance education is preferred to some other well-used terms.
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Electronic commerce — A fuller discussion of the terminology is provided in Chapter 4.
Electronic commerce is defined during that discussion as ‘an approach to commerce in which business is communicated and transacted over networks and through computer systems’. Both of the terms, web-based business and Internet business, will be subsumed by this definition and are treated in this study as being synonyms for electronic commerce. Electronic business seems to be the major rival to electronic commerce as a term, with many using the terms interchangeably. It does not yet have universal acceptance in its application, though some argue that it supercedes electronic commerce. Some claim that it is different from electronic commerce, arguing that electronic business has an inward focus to cater for inter-departmental communication and even exchange of value inside an organization. It is also suggested that an organization should review and change its internal structure as a necessary component of adopting electronic business. For the moment, the definition of electronic commerce, given above, will apply.
University —A university in Australia will refer to those institutions established under acts of parliament and subsequently authorized to accredit their own awards.
Higher education — For the purposes of this study higher education will refer to universities, despite the fact there are other organizations involved in the overall field. In particular,
Australia has a system of Technical and Further Education (TAFE), which comprises many colleges in the states and territories. TAFE colleges are more concerned with vocational education than are the universities. Universities are the focus of the current study.
Case — a case comprises one or more arguments. A case is the total set of evidence in support of a claim that leads to a conclusion. A single argument can constitute a case in some situations. Each argument in a case is required to bring evidence to bear in support of the proponent’s premise or claim (sometimes called a proposition or contention) so that a defensible
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position can be achieved in reaching a conclusion. Some authors insist that a case be mindful of contra-arguments and that it should present refutations in advance. Others believe that a proponent is only bound to pursue the presentation of evidence and argument in favour of their own stance. These various approaches are considered in the detailed discussion in Chapter 2.
1.2.2 Rationale and Context
1.2.2.1 Australian universities – contextual introduction
Within Australia, over the past decade, there has been considerable concern over higher education. Several investigations and reviews have been conducted (for example, the Higher
Education Management Review — the Hoare committee of 1995; the Review of Higher
Education Financing and Policy — the West review of 1997; Our Universities: Backing
Australia’s Future — the outcome of the reviews orchestrated by the federal Minister for
Education, in 2001-2003) and a number of influential papers have been produced (for example, the documents arising from the reviews just mentioned, together with others such as the AVCC
2001 discussion paper, Our Universities: Our Future.) 1
The Borderless Education Team, predominantly from the Queensland University of
Technology, also prepared two reports (Cunningham et al 1997, 2000) investigating the likelihood of competition in higher education. These reports indicate the degree of uncertainty, as well as interest, in higher education in Australia during the recent past.
Considerations in these studies have ranged across funding issues, staff workloads and morale, the role of higher education in Australia’s economy and society, intellectual property issues, the need to focus research to support the nation’s endeavours, and also competition in the higher education arena. In short, higher education has been high on the political agenda during the
1 See also Cunningham et al 1997 p. 27 for an extended range of papers published throughout the 1970s, 1980s and 1990s.
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1990s and into the twenty first century. It seems likely that higher education will remain to the fore due to the contentious issues mentioned above and also because the world wide web, as a new information and communication technology (ICT), has opened up the possibility for global competition in the provision of educational services and products.
The changing higher education arena has led some to refer to a “crisis” in Australian universities (Senate Employment, Workplace Relations, Small Business and Education
References Committee, 2001) and others have labeled it as “universities at the crossroads”.
(Nelson, 2002a; AVCC, September 2002). The Senate committee was charged with the task of investigating the concerns over higher education in Australia and published their report,
Universities in Crisis, in 2001. That crisis study examined:
The capacity of public universities to meet Australia’s higher education needs, with particular reference to: (a) the adequacy of current funding arrangements with respect to: (i) the capacity of universities to manage and serve increasing demand, (ii) institutional autonomy and flexibility, and (iii) the quality and diversity of teaching and research; (b) the effect of increasing reliance on private funding and market behaviour on the sector’s ability to meet Australia’s education, training and research needs, including its effect on: (i) the quality and diversity of education, (ii) the production of sufficient numbers of appropriately-qualified graduates to meet industry demand, (iii) the adequacy of campus infrastructure and resources, (iv) the maintenance and extension of Australia’s long-term capacity in both basic and applied research across the diversity of fields of knowledge, and (v) the operations and effects of universities’ commercialised research and development structures; (vi) the public liability consequences of private, commercial activities of universities; (vii) the equality of opportunity to participate in higher education, including (i) the levels of access among social groups under-represented in higher education;
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(ii) the effects of the introduction of differential Higher Education Contribution Schemes and other fees and charges and changes in funding provision on the affordability and accessibility of higher education, (iii) the adequacy of current student income support measures, and (iv) the growth rates in participation by level of course and field of study relative to comparable nations; (c) the factors affecting the ability of Australian public universities to attract and retain staff in the context of competitive local and global markets and the intellectual culture of universities; (d) the capacity of public universities to contribute to economic growth: (i) in communities and regions, (ii) as an export industry, and (iii) through research and development, both via the immediate economic contribution of universities and through sustaining national research capacity in the longer term; (e) the regulation of the higher education sector in the global environment, including: (i) accreditation regimes and quality assurance, (ii) external mechanisms to undertake ongoing review of the capacity of the sector to meet Australia’s education, research and training, social and economic needs, and (iii) university governance reporting requirements, structures and practices; and (f) the nature and sufficiency of independent advice to government on higher education matters, particularly having regard to the abolition of the National Board of Employment, Education and Training.
(Senate Employment, Workplace Relations, Small Business and Education References Committee, 2001, p. v-vi.)
This wide-ranging inquiry was stimulated by concerns over the situation in the universities since the Liberal government came to power in 1996. As the Committee itself reported, the inquiry
“was established in response to mounting concerns within the higher education sector about the damaging effects of changes to policy and financial settings over the past five years in particular.” (2001, p. 2). It is also worth noting that during the investigation the Senate
Committee received a leaked Cabinet document in which the then Minister for Education,
Training and Youth Affairs, Dr. David Kemp, acknowledged to his parliamentary colleagues
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that “universities are currently in a difficult financial position. While government funding is stable, they face rising costs in salaries and investment in new technology” (2001, p. 432). As will be seen later in this study, the implications of the funding problems have been manifested in the ways that universities have reacted to their perceived crises.
The Senate Committee also reported (2001, p. 2) that:
Many within and outside the sector are concerned that … universities have been transformed from institutions focused on the pursuit and dissemination of knowledge, and forming an important part of Australia’s framework of democratic institutions, into ‘enterprise’ organisations primarily concerned with meeting short-term market needs for vocational education and research and, above all, their own continued financial survival.
They noted “particular areas of concern” and included, among others, (2001, p. 3)
changes to universities’ governance and management practices, associated with the rise of the ‘enterprise university’, including a shift to corporate style of governance and management …
They reported (2001, p. 6) that “there was almost unanimous agreement that current levels of government funding are inadequate to sustain quality and diversity of core teaching and research functions”. Further, they reported that “there was also widespread concern from academics and students about the effect of the advent of the ‘entrepreneurial university’ and the development of the culture and ethos of managerialism” (2001, p. 6).
These aspects of the Senate Committee’s report are salient to the current study, pointing to some of the forces and pressures at work within the Australian higher education system that have led commentators to suggest the notion of ‘crisis’ in universities. Crisis or not, the academy is clearly in a state of flux.
The Crossroads documents fed into a later series of discussions, originated in 2001 by the federal Liberal Minister for Education, Science, and Training, Dr. Brendon Nelson. Following
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from the initial ministerial discussion paper in which he argued that it was necessary to undertake a wide-ranging and deep investigation of the state-of-play in Australian universities,
Nelson published six issues papers (June to August 2002) across a range of matters relating to the operation of the public universities in Australia. The discussions focused on the role and place of Australian universities in contributing to the nation’s future and were promulgated as a means to debate “the policy options that lie before us in relation to reform to the way we administer, fund and support Australian universities.” and to debate the “challenges facing
Australian universities” (Nelson, 2002a, p. v).
The reviews and documents investigating Australian higher education show that a range of forces and pressures are being brought to bear on Australian universities. Government policies, combined with increasing competition in higher education, have stimulated changes in university governance and management. Universities are increasingly being viewed and managed as corporations—where research and education are undergoing marketisation and where knowledge is being commodified (Marginson, 1997; Marginson and Considine 2000;
Gallagher in DEETYA conference Online Learning in a Borderless Market, 2001).
The universities have had to formulate responses so that their longevity is assured. Therefore, the field of higher education generally, and the domain of universities particularly, is now ripe for research. Added to this, digital technologies, increasingly applied to administration, management, and educational practices in universities, will also be seen to be critical to any investigation. Consequently, this study attempts to understand the way in which distance education, electronic commerce and information technology are inter-linked with the trends to corporatisation and managerialism in universities referred to previously. The increasing attention being given to so called, online learning (see, for example, the proceedings of the
DEETYA, conference at Griffith University in 2001—Online Learning in a Borderless Market) further implicates distance education modalities, even in the universities that don’t, or have yet to, offer education in this manner.
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It is true that distance education has been confined to a minority of Australian universities. The policies that seem to be leading to its increased presence and importance in other universities, however, will be shown to be a litmus test for the argument that the universities are being forced to reconsider their methods of operation. This is especially important in relation to the generation of revenue and/or the reduction of costs, but also because the marketplace is changing. Because the universities have faced significant reductions in their funding as a result of changes in government policy (Coaldrake & Stedman, 1999; AVCC, 2002), they have been forced to look to a limited number of alternatives for revenue raising (or cost cutting), and distance education will be shown to be one such avenue for exploitation. Given the sophistication of the ICT infrastructure throughout the national university system, it is also logical that ICT will be utilized in pursuing new endeavours, or in re-engineering the practices already in place. As electronic commerce and business process re-engineering are predicated on the use of ICT, it is also logical that they too will be found in any examination of the responses made by universities.
The change underway in universities has not been surreptitious. A number of individuals, companies, and indeed current universities have seen the upheaval as an ideal time to test the level of opportunity available in the education marketplace. Internationally, the emergence of private, for-profit universities, virtual universities, and an assortment of alliances, consortia and mergers to test the economic waters of higher education has been witnessed (Cunningham et al,
1997, 2000). These new rivals to the traditional university will be discussed in detail later in the dissertation. For the moment it is enough to indicate that they have arrived on the scene because they can do so now—together with wider pervasive economic changes, the changes in the higher education sector have enabled competition in an arena where such competition could not have taken place previously. As Michael Gallagher (then First Assistant Secretary, Higher
Education Division, of Australia’s federal education department —DETYA) said in 2001:
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The commodification and massification of knowledge, application and development of new pedagogies, the purpose and structure of a degree, entrance of non-traditional providers into the tertiary education marketplace as well as the impact of new technologies on academic culture are all matters of crucial import linked—directly or indirectly—to the growth of online learning. (Gallagher in DEETYA 2001 p. 1)
The online learning to which he refers is central to developments in this study and so too is the issue of the entrance of new providers. At first glance, these competitors to the established universities may appear to be somewhat peripheral to this study because their modes of operation, their motivations, and their funding sources are necessarily different from those of the public universities in Australia. However, as an emerging part of the overall higher education marketplace, their activities may have an impact on the conduct and policy of the public universities. Their very presence may also be testimony to the success of government policies to increase competition in the higher education sector. Furthermore, their business- oriented operation may offer an insight into alternative methods for universities to conduct distance education. Therefore, it is necessary to be mindful of them and of their practices.
So far, this introduction to the rationale for the current study has concentrated on pointing to the funding issues within the higher education sector, especially within the universities. Moving on it is also important to note other trends afoot within Australia and overseas. Cunningham et al
(1997, 2000) argued in their studies (about the use of ICT in universities and the potential for competition in higher education, largely ICT enabled) that there were significant developments emerging on an international scale, as follows:
reduced public funding for higher education in almost all Western national economies (crucially different from the increasing funding in many major Asian economies); changing demographics in student populations in developed countries, leading to an increase in part-time education and training as students increasingly become older, i.e. beyond the traditional school-leaver age of 18-24; rapid technological innovation, requiring constant updating of knowledge and skills for professionals in work (continuing, professional and corporate/lifelong learning);
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the potential of communication and information technologies (particularly satellite and cable television and the Internet) for mass distribution from a central source and for interactive communication between ‘receivers’; ‘techno-economic paradigms’ (Campion & Renner 1992) which increasingly dictate the replacement of fixed ongoing costs (labour) with (more) variable plant costs (technology); and introduction of the notion of ‘contestability’ and deregulation into public sector organisations, such as higher education, with consequences for competitive behaviour between universities, both domestic and international. (Cunningham et al, 1997, p. 19)
To this list might be added, the development of an increasingly sophisticated information infrastructure, based on Australia’s telecommunication system; an increasing awareness of the role of information (and knowledge) in business; and the increasing trend to see professional knowledge codified. Together these points illustrate the level and the degree of complexity of change that universities are facing.
Cunningham et al (1997, p. 25) were of the view that Australia was well-placed to take advantage of developments in distance education, both nationally and internationally, and claimed that:
It is difficult to think of a nation better prepared for exploitation of the opportunities offered by a global interest in distance education, flexible delivery and open learning than Australia.
They argued, however, that the potential might not be realized. After providing an historical recollection of Australian activity in distance education and a look across the globe at specific instances of media-based organizations’ interest in higher education, they concluded that the concept of a global market for higher education, aided by “converging technologies and the potential for global reach” (Cunningham et al, 1997, p. xv) was more rhetoric than reality.
They argued instead that there would be “a fragmentation of world markets and the development of numerous niche markets on an international and regional, rather than global
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scale” (Cunningham et al 1997, p. xv). Consequently, they concluded “that the education providers who identify their niche and meet the demands of the relevant stakeholders are those that will be best placed in a global marketplace” (Cunningham et al 1997, p. xv). This conclusion from their earlier study also reiterates the conviction of Sir John Daniel, former Vice
Chancellor of the United Kingdom Open University. His study of distance education mega- universities (Daniel, 1996) argued that the universities offering distance education would need to gain a very clear understanding of their peculiar area of competitive advantage (following the logic of his application of the work of Michael Porter from 1980 and 1985). Daniel claimed that such an advantage would emanate from cost-leadership or differentiation but would require an identification of niche markets for courses if the universities were to be successful.
The universities in Australia therefore need to focus their attention on the areas of strength that they have developed. As Marginson and Considine (2000) point out in their examination of the
Enterprise University, Australia’s universities are not always on the same footing. Responses to the forces and pressures mentioned to date are not likely to be homogeneous among the five tiers of Australia’s universities, as they start such change from different vantage points in terms of age, reputation, endowments, research budgets and research history, staff quality and capacity to attract students. Marginson and Considine argued that five tiers could be identified based in part on their period of formation as registered universities. The tiers are the sandstones—the oldest group, harking back to the earliest universities in Australia, and usually built as major public edifices from sandstone; the red bricks—formed after the sandstones, and often located in non-capital cities. They may have pretensions to joining the former grouping in terms of research output and general standing in the community; the gum trees—the group of universities created and often located in rural environments with spacious campuses populated with eucalypt trees; the unitechs—formed from prior institutes of technology (e.g., Royal Melbourne Institute of Technology – now simply RMIT) and finally, the new universities—created since the major reforms of the late 1980s. For each grouping, Marginson and Considine suggested there would be a need to respond differently in the higher education arena. Surprisingly little discussion was
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given to the use of distance education as a competitive strategy though they did mention that the gum tree group would be most likely to pursue this avenue in order to target larger numbers of students.
The practice of distance education in Australian universities has a history dating “back to 1911 when the University of Queensland became only the second university in the world (after
University College, London) to offer courses by correspondence to students who were unable, because of distance, to attend classes on the university campus” (Senate Employment,
Education and Training References Committee, 1994 Part 1, p. 11).
Print technology has been the mainstay of delivery techniques until the past decade during which time newer information and communication technologies (television, video conferencing, and computer networks) have surfaced to provide educators and students with alternatives
(Cunningham et al 1997). However, educators and students are not the only ones using the technological improvements. Administrators too have opportunities to make use of the new information and communication technologies. Universities have a vested interest in making full use of the wider information infrastructure that has been progressively built over the past decades, in Australia. The enabling characteristics of the information and communication technologies have provided university administrators and educators with the mechanism with which to administer and deliver highly mediated forms of education—forms that this study will show, suggest a relationship between electronic commerce and distance education.
1.2.2.2 Rationale for the study
Decisions to see distance education as a revenue raising activity within a competitive strategy, seeking either low-cost leadership or differentiation advantages, enabled by the use of ICT, therefore affects what education is offered, how it is offered, and how it is managed in the universities. What is still unclear are the impacts of policy decisions to enter the distance education market for economic and technological reasons and the manner in which the practice
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of distance education may be affected as a consequence of these decisions and the forces mentioned previously.
In seems germane therefore for the current study to investigate aspects of those changes, and to do so by examining the burgeoning and new form of technologically mediated business practice known as electronic commerce. The reasons for this avenue of inquiry become more evident when electronic commerce is discussed in greater depth in Chapter 4. In this introduction, suffice it say that it will be argued that models from both economics and business are influencing policy and decision making affecting universities (see Marginson, 1997; Marginson Comment [A F1]: Check pub and Considine, 2000). In keeping with corporate overtones, universities are increasingly details required to become more competitive and self-funding, accountable, performance-management oriented, and to institute transparent quality assurance practices. To do this they need to search Comment [A F2]: Page: 4 for alternative operational paradigms. Electronic commerce as one new business approach may Add chapter numbers as I progress) offer viable alternatives for universities. Electronic commerce is enabled by information and communication technology (ICT) and the literature is replete with discussion of the widespread opportunities made possible through the utilization of this technology. Similarly, distance education as offered in Australian universities is also increasingly enabled by these technologies and it is the purpose of this study to assess the relationship that is suggested, though latent and still largely uninvestigated. In doing so, the future functioning of Australian universities, especially those that undertake the provision of distance education may be informed and enlightened.
To discover and provide such enlightenment, the literature about electronic commerce will be examined to reveal the infrastructure, frameworks, and software requirements needed to pursue electronic approaches to commerce. Business models that hold relevance and promise for application to distance education will also be gathered, compared and analysed. These analyses will be discursive and theoretical in nature only and no attempt to field test any model will be made in this study. The identification of electronic commerce models that may be analytically
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applied to distance education seems full of promise. Seizing the opportunity to evaluate the potential of such an approach is a part of the purpose of this study. The current research therefore aspires to produce sufficient insight from the investigation of the relationship between distance education and electronic commerce to be able to inform and guide the management, practice, and modeling/theorizing of modern distance education in the future.
This study has stemmed from the realization that the relevant literature bases contain very little that combines the focal themes of distance education and electronic commerce in Australian universities. Yet such a study seems likely to be of value in view of the many forces at work in the higher education sector. Furthermore, if Australian universities are to play a lead role in international competition for higher education, distance education would seem a major institutional vehicle for competitive strategy. The rationale therefore is that the current study is topical, warranted in the void of other such studies, and of sufficient substance to merit consideration for a doctoral dissertation. In the absence of similar investigations, the study also has the potential to be an original and substantial contribution to the discipline as is expected of a doctoral thesis.
With the complex of features already mentioned in the work to this point it is necessary to be clear about what aspects will be central to the study and which areas will be outside the scope of the work. The following section moves to clarify those respective positions.
1.2.3 Scope
Australian public universities are social institutions and, by virtue of their activities and funding, they are political institutions. Historically, Australian public universities have been largely publicly funded and they contribute directly and indirectly to the economy—they are therefore elements of the economy. Understanding the environment within which universities operate is important to the current study because it is through such an understanding that sense can be brought to the various threads that are to be followed and interwoven in understanding the
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relationship between distance education and electronic commerce. It is therefore necessary to include a review of social, economic and political issues that are crucial to the overall discussion in order to portray the complexity of the higher education arena.
One result of analyzing the sizeable literature bases relating to this complexity will be the derivation of a set of arguments that will be proffered as defensible interpretations of the situation at hand in the universities within Australia. The set of arguments will form the case being argued in Part II of this dissertation, where the relationship between electronic commerce and distance education is portrayed. The chapters in Part II also seek to discover whether, or not, electronic commerce holds any potential as a framework through which to examine the practice and theorizing of distance education.
The dissertation does not undertake analysis of the research activities of universities though they are noted as avenues for commercialization and thereby, revenue raising. Intellectual property
(IP) is of interest in this dissertation only inasmuch as it applies to the discussion of course content and its ownership by academics, designers, and/or universities. IP is also relevant, and perhaps crucial, in the discussion of the economics of information and economics of education especially when the discussion turns to public goods, positional goods and the information market in Chapter 5. This study does not follow the IP arguments into the realm of university research or into its commercialization via close relationships with industry partners.
The research will be based on literature from the recent past, but is aimed at a current understanding of the state of flux in the university sector so that a possible future can be assessed. The dissertation is focused on the Australian national university system but draws extensively on literature, experiences, and research from around the globe to provide an international context for the changes proceeding apace in Australia.
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The dissertation does not investigate the internationalization of the universities other than in discussion of the markets for distance education and in particular the implications that the process of globalization may have for education markets.
The dissertation does not conduct an analysis of the marketing activities of the universities though it is an area in which research will be shown to be necessary. Similarly, no attempt will be made to ascertain specific costs or benefits that pertain to the work - it is not an exercise in educational economics that might elaborate on the relationship between economic growth and the role that higher education may play in such growth. Nevertheless, this relationship does underpin arguments about the place and role of universities in modern economies that was, arguably, the principal tenet of the Australian Labor party document An Agenda for the
Knowledge Nation (Jones & Evans, 2001). That document was the articulation of Labor’s policy toward higher education in the lead up to the federal election in 2000 and provided significant insight into their view of the role of universities.
The dissertation is not about the pedagogy of distance education per se though models and theories of distance education are component parts of the work. In other words, the actual learning and teaching issues involved in distance education are of secondary importance in the work though they are referenced and drawn upon in certain sections.
Finally, the dissertation examines the relevant literature and activities up to late 2004. It includes the major changes brought about in May 2003, when the Australian Liberal Party announced its higher education reform package—Our Universities: Backing Australia’s Future
(Nelson, 2003) —after an intensive review process. It also has also been attentive to the implications of those changes and the impact that they have had in Australia’s universities.
1.2.4 Structure
The dissertation is presented in two Parts, sub-divided as follows:
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• Part I. Chapter 1 introduces the core concepts of the study, provides definitions, discussion
of terminology, contextual information, and an introduction to the methodology and
philosophy behind the concept of case building and argument. Chapter 2 is a detailed
discussion of research methodology and research method. It provides a defense of, and
explanation for the use of, the argument-based methodology chosen for use in the study.
Chapter 3 provides a deeper discussion of distance education in Australian universities.
International experiences are also considered due to the nature of the global marketplace for
higher education. Chapter 4 delves into the origins, nature, and stage of development of
electronic commerce. A framework for electronic commerce is discussed and considered in
terms of its implications for distance education. The chapter therefore explores
contemporary university activity in Australia in an effort to relate the electronic commerce
models to actual events.
• Part II. This part of the dissertation expands on the foundational and contextual material
provided in Part I and is essentially the presentation of the arguments comprising the case
being built. Chapter 5 provides a detailed contextual analysis of the rise of electronic
commerce within the information economy. It introduces the topic of international trade in
higher education products and services and considers the possibility that higher education
can be envisaged as a trade in information and knowledge. Using this informational
approach it is able to commence building an understanding of the relationship with
electronic commerce which also has an informational, digitized base. Chapter 6 moves to
discuss the infrastructure requirements of electronic commerce and introduces innovation
theory and the concept of the value chain to better understand the activities of distance
education in universities. It then considers the essential software required for the conduct of
distance education in a value chain approach. Chapter 7 focuses on business models that
are used in electronic commerce and those that are used in distance education.
Chapters 5-7 therefore use the literature, and reasoning, to produce evidence in support of
the case. The arguments range across the spheres of economics, technology, politics,
business, management, and education. Widespread adoption of ICTs will be considered as
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one of the necessary preconditions to electronic commerce—in the hands of both provider
and consumer. Chapter 8 provides a summation of the case where implications for
Australian universities will then be synthesized. This concluding chapter also considers the
importance of the study and its contribution to the knowledge base of the discipline. It also
discusses the potential research agenda arising from the study.
1.3 Discussion
This chapter has introduced the main themes of the study and has introduced the case that is to be built and defended. It has provided a background to the changes occurring in the Australian higher education environment and has linked those changes to the wider process of globalization and to the continuing uptake of information and communication technologies for administration and education in the Australian universities, thereby providing a rationale for the current study. The scope of the study has been outlined and the structure has been revealed.
The next chapter provides a discussion of the chosen argument-based methodology together with an explanation of why it is seen to be a viable vehicle for the carriage of the study. The discussion in that Chapter 2 will also make clear why other methods and methodologies were deemed inadequate to the tasks at hand.
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2 Methodology
“When one begins to look at what researchers do, the walls between paradigms start to break down. In practice, researchers use a variety of imperfect approaches to enhance the credibility of their arguments that require complex trade-offs among precision, generalization and existential reality.” (Firestone, 1990, p. 123, emphasis added.)
“… with the help of argument, we can in time attain something like objectivity …” (Popper, 1971, emphasis added.)
“One of the strengths of using argument as a research method is that it is also a research strategy. … Reporting research as an argument provides the thesis with structure.” (Metcalfe, 1996, p. 48)
2.1 Introduction
The first purpose of the study—building an understanding of the relationship between electronic commerce and distance education activities in Australian universities— requires an inter-disciplinary inquiry. How does one do that? A review of the literature in regard to qualitative and quantitative research approaches has led to the conclusion that there is no single applicable methodology which could be used to achieve the purposes laid out in the discussion in Chapter 1. The second purpose within the study is largely dependent on the findings in the primary inquiry. It is to understand the potential that an electronic commerce framework might have for theorising distance education. Here again, no single overarching methodology was deemed to be appropriate, so a combination of approaches has been undertaken.
The search for a relationship between distance education and electronic commerce is presented as a case throughout Part II. Here, a case means a combination of arguments that are based on the presentation of evidence. The empiric base, the evidence in other words, is entirely from existing literature, taken to be the “speech acts” (Searle, 1969, 1979) of experts and informed commentators in the field. Deductive and inductive reasoning processes complement and
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supplement the evidence base in building each of the arguments, and the case overall. Once the case has been presented it will then be possible to move on to discuss the use of an electronic commerce framework as a means by which to theorize distance education.
The dissertation relies heavily on argument, built on deductive and inductive logic processes that are informed by extensive analysis of the relevant literature, which is then presented as evidence.
The purposive analysis of the literature provides the opportunity, and means, for the synthesis of logical arguments that are directly related to the central case. Once the philosophical and theoretical arguments are derived it will be possible to realize the ambitions of the dissertation to contribute to knowledge in an original and significant manner. Furthermore the chosen argumentative methodology is suited to explanatory and exploratory endeavours in a multi- disciplinary analysis. Action research, ethnographic study, and case-study approaches, as examples of interpretivist research methods, were deemed inappropriate because of the nature of the dissertation which in essence is an attempt to derive a meta-theoretical understanding of the relation between distance education and electronic commerce.
Whilst utilitarian outcomes may be a result of the research, that is not entirely its aim, nor the basis of its capacity to contribute to knowledge. However, any contribution to a meta-theory derived from the study may provide opportunities for a research agenda to be generated that could lead to functional benefit for Australian and overseas universities. Such a contribution cannot be taken lightly nor should it be undervalued, or undermined, because of adverse opinion of research that dares to move across disciplinary borders. Eminent academic, Ernest Boyer, supports the need for inter-disciplinary study and believes that there is a need to:
… replace the idea of “research” at the centre of HE [sic. higher education] with the idea of “scholarship” in its four forms: • the scholarship of discovery (fundamental research) which will be a central part of the mission of many but not all HEIs [sic. higher education institutions] and departments
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• the scholarship of integration, the development of interdisciplinary approaches drawing together what is already known - which in his view should have a much higher profile in more HEIs • the scholarship of application, applied R and D [sic. research and development], already central to the missions of certain HEIs and not to be downgraded by comparison with fundamental research • and, last but not least, the scholarship of teaching, which includes “reflection on practice” of the pedagogical process.
… For Boyer, scholarship in one or more of these senses is indeed of the essence of HE, and some indirect involvement with all of them might well likewise be of that essence. But scholarship in the first sense is not and cannot be directly applicable to all that claims the HE banner. (cited in SRHE International News, No. 44, November 2000, author unknown. Emphases and bolding in original. Note: the Sic comments are by the current author).
From Boyer’s viewpoint the current study is initially of the integration mould. However, it goes past the “drawing together of what is known” (explanatory research) to analyze the disparate literature of electronic commerce and distance education before synthesizing an understanding of the relationship between the two and its possible further use as a framework of analysis for distance education (exploratory research). At that stage it is arguably of Boyer’s first type of scholarship - that of discovery. At both levels it has the ability to make a contribution to knowledge using the approach, method and instruments to be employed here. To understand why the argument-based approach has been adopted, the discussion now moves to an explanation and defense of the stance taken.
2.2 Argument as a Research Approach and Strategy
The discussion in this chapter serves two purposes—first it provides a discussion of the use of
‘argument’ as a methodology for conducting research and in so doing it achieves its second purpose which is to show why such a methodology is relevant in the current research. The latter discussion positions argument, as a research methodology and strategy, within the wider context of the debate over the relative merits of positivist and interpretivist research paradigms and
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ultimately helps to explain why Firestone would be led to make the comments quoted at the start of the chapter. The chapter aims to establish the viability of argument as an acceptable and desirable mechanism through which the relevant literature can be analyzed and evaluated and finally brought to bear as a synthesis for theory building. In achieving its first objective, the chapter will also explain how the argumentative approach enables the researcher to openly declare any personal bias, predilection, or preference in order to allow the audience to be informed about assumptions, tacit or implicit, being made.
To begin the discussion it is necessary to present definitions of essential terms (bolded below) in order to clarify their usage in the chapter. Two groups are presented—the first is comprised of generic research terms and the second is concerned with terms specifically related to the approach taken in the current research.
The definitional discussion has three major purposes: the first is to provide a framework for applying the terms in the current investigation, the second is to enable the reader to be conversant with that application, and the third is to justify the use of argument as an approach to research, tying it directly to the first of the objectives stated above, for the chapter.
A related outcome of the examination of definitions is the realization that the nature of research is such that no single methodology can claim preeminence or supremacy. Indeed as the frontiers of knowledge in many disciplines are pushed back it is becoming increasingly obvious that the history and philosophy of science are not immutable and the methods employed in uncovering new knowledge are constantly changing, and are under review and subsequent development. Nowhere is this more apparent than in the discussion of the term paradigm and it is to that, as the first of the terms to be discussed, that we now turn.
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2.2.1 Research terminology
Paradigm - Neuman (1997, p. 62) states that a paradigm “means a basic orientation to theory and research. There are many definitions of paradigm. In general, a scientific paradigm is a whole system of thinking.” Caldwell (date unknown) claims that the term paradigm has undergone changes in usage over the millennia. The Greeks used it to refer to an original archetype or ideal, but later it became associated with a grammatical term. When introduced into the English language in the 15th century it meant “an example or pattern” (Caldwell, ibid.).
Whilst it still has this meaning in common language usage it has also taken on further meaning, predominantly in the area of science. Thomas Kuhn (1962, 1970) was to the forefront in raising awareness of paradigms and in leading the term to be used in the manner suggested by Neuman above. Masterman (1970, cited in Guba, 1990 p.17) claimed that Kuhn used the term in twenty- two different ways (also see Kuhn’s acknowledgement of her “sympathetic criticism” 1970, p.181). Kuhn’s application of the term is, at a minimum, ambiguous and in the second edition of his book where he deals with the dualism of the term he states (1970 p. 175) that:
on the one hand, it stands for the entire constellation of beliefs, values, techniques, and so on shared by the members of a given community. On the other, it denotes one sort of element in that constellation, the concrete puzzle-solutions which, employed as models or examples, can replace explicit rules as a basis for the solution of the remaining puzzles of normal science.
Kuhn (1970, p. 174 ff.) acknowledged the criticism of his 1962 publication and stated that the term paradigm had “taken on a life of its own” (1970, p. 187). In order to be more specific and proscribed about the use of the term he decided to turn to two alternatives to refer to the two main applications that he had in mind for the use of the term paradigm. He referred to the first usage as the “disciplinary matrix” and the second as “exemplars” (Kuhn, 1970 pp. 182 and
187). Neither has, however, gained much currency according to Dempster (date unknown) who also goes on to suggest that one reason for the enduring nature of the term is that the definitions are applied consistently but that “ambiguities arise because in the generic sense typically used,
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the term is a holarchical concept in the same way that system is … its application at different levels generates confusion.” Dempster is also of the view that the former of Kuhn’s definitions of usage is the most prominent current application of the term.
Modern resources dealing with research tend to distinguish between two or three different research paradigms—positivist and interpretivist are commonly included whilst a further entry, critical theory, is sometimes included by others (see, for example, Williamson 2000) who differentiate it from the prior categories. These paradigms represent the tradition, ideology, or philosophy underlying the researcher’s approach to investigation and to the discovery and construction of knowledge. This is an area of contested ground, however, and according to
Williamson (2000, p.25), the two major traditions of research are very different to the point of being “dichotomous”. She says that the debate is grounded in epistemological differences based on the answers to two questions: “what constitutes knowledge?” and “how is knowledge formed?” (2000, p26).
Williamson (2000, p. 25) states that in positivist research “researchers attempt to apply research methods used in the natural sciences to the social sciences” whilst in the interpretivist tradition
“researchers emphasise the meanings made by people as they interpret their world.”
Williamson (2000, p. 27) states that:
the central themes of positivism are: the claim that the natural sciences and the social sciences should be investigated in the same way. Like scientific research, positivist research seeks to link cause and effect. … and, the proposition that all scientific knowledge is based on experience (empirically observable impressions). Positivists consider that knowledge can only be based on what can be objectively observed and experienced (empiricism).
According to Williamson (2000, pp. 26-28), positivist research is associated with quantitative data collection, moves from the general statement of principle to specific instances of
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application, and is typified by the use of deductive styles of reasoning. Williamson (2000, p.
30) goes on to claim that interpretivist researchers:
favour naturalistic inquiry (where field work usually takes place in the ‘natural setting’) and are concerned with meaning. They believe that the social world is interpreted or constructed by people and is different from the world of nature. … The central tenet of interpretivism is that people are constantly involved in interpreting their ever-changing world. They develop meanings for their activities together, that is, they socially construct reality…
Importantly in the interpretivist approach researchers are often in contact with the people who are the subjects of their study. This raises questions about the objectivity in the research though
Sutton (1993, cited in Williamson 2000, p. 31) sees the personal involvement of the researcher and the fact that they have “a point of view as a strength, as a source of insight and understanding, as long as there is awareness of it.” Metcalfe (1996, p. 15) claims that:
[o]bjectivity is better thought of as a group objective rather than an individual one. Any researcher is expected to be biased, so the only way to stop his or her bias[ed] from becoming fact is to expose[d] it to the scientific community. They will argue about the researcher’s findings, maybe repeating the experiments. Provided a good audience is willing and able to discuss the researcher’s findings, objectivity is expected to result eventually.2
At issue here is the fact that the literature dealing with the so-called scientific method and researcher objectivity clearly conveys the point that the hegemony of the former and the desirability of, or capacity to achieve, the latter has been challenged. The interpretivist paradigm asserts that researchers are anything but objective and also that the methods and techniques used for studying the natural/physical sciences are often inappropriate for use in disciplines which study people. The discussion about the term paradigm itself indicates that
2 As Metcalfe (1996) is used heavily in this section, the point should be made that his book is a poor example of effective proofreading. In personal communication he has explained why this occurred—the point here being that the text is laden with typographic mistakes which are acknowledged in the current research by using strikethrough style as needed.
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group belief and practice is not immutable either and Kuhn’s use of the terms normal science
(evolution), revolutionary science (revolution) and anomaly seem to point to the belief that science and its paradigms of research are also subject to change. In short, there is no single best way to research and certainly none that is able to endure over time without change. The way
Latour (1998, cited in Gibbons, 1998. p. 38) views things seems to encapsulate the change afoot here:
In the past century and a half, scientific development has been breathtaking, but the understanding of this process has radically changed. It is characterised by the transition from a culture of “science” to the culture of “research”. Science is certainty; research is uncertainty. Science is supposed to be cold, straight, and detached; research is warm, involving and risky. Science puts an end to the vagaries of human disputes; research creates controversies. Science produces objectivity by escaping as much as possible from the shackles of ideologies, passions and emotions; research feeds on all those to render the objects of inquiry familiar.
As the discussion moves on to further examination and definition of key terms, it is important to keep in mind the point that argument is being proposed as an alternative research methodology and strategy capable of fulfilling the various needs of the doctoral dissertation and in keeping with Latour’s view, it is to be seen as ideological, passionate, and subjective. It is also controversial in the sense that an argumentative approach presumes there to be a conflict or contention between parties. That contention is initially articulated by means of a written argument in which one or more positions are taken and supported but which are then subject to the scrutiny of a knowledgeable audience who in turn have the right to respond. The public exposé also helps to ultimately bring about the objectivity to which Popper referred in one of the opening quotes in this chapter.
Williamson (2000, pp. 30-32) believes that interpretivist research commonly uses qualitative data collection processes, moves from the specific instance to a general statement of principles, and is usually associated with inductive forms of reasoning. She claims that interpretivist research design is “less linear and more iterative” than positivist research and that it doesn’t
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usually use hypothesis testing, though it “may develop working ‘propositions’ which are grounded in the perspectives of the participants.” Importantly she makes the point that generalization in interpretivist research, which she here conflates with ‘qualitative paradigm’,
“is not essential: in fact generalisations usually cannot be made” (2000, p. 32) and further on she claims that there are less demands on interpretivist research design to allow for replication than there are in positivist research design because the nature of the studies are recognized as being “confined in time and place, and that the particular styles of observation and explanation which may be relevant in one case may not be capable of repetition” (2000, p. 32).
This is not to say that interpretivist research can avoid the requirement to be rigorous and there are suggestions (see Guba, 1990; and Williamson, 2000) that triangulation be used to ensure that the features of validity and reliability are present. Williamson explains that there are two types of triangulation, namely, methods and source. In the former type the researcher is encouraged to corroborate the findings from use of one data-collection method by use of another and, in the latter type, the researcher is encouraged to look for consistency in the information that they have found “at different times and at different places” (2000, p. 36) because the
“conclusions are likely to be more reliable if data are collected by more than one method and from more than one source” (2000, p. 36). However, this may be a concession or compromise by the interpretivists to the positivist approach. As Blaike (1991, cited in Metcalfe 1996. p. 32) and others argue, the notion of triangulation works because it is based on measurement—a reference to its base in surveying—but measurement of interpersonal relations, for example, is bound to be infinitely more difficult if it were even deemed to be appropriate. Metcalfe (1996, p. 33) also cites the work of Yin (1994) who has argued that qualitative/interpretive research
“should be used for the how or why questions while quantitative research can be used for the
“what” questions particularly when the variables can be measured.” Thus, it would seem that even the use of triangulation is open to question in the research literature with the how or why questions being more difficult to answer with triangulation methods in support.
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Methodology, method and technique - Williamson (2000) uses the former as a synonym for philosophy or ideology and this is also the stand taken by White (2000, p.20) who says “[t]he approach a researcher uses to investigate a subject is termed the methodology. Methodology refers to the philosophical basis on which the research is founded.” For Leedy (1993, p. 121)
“[m]ethodology is merely an operational framework within which the facts are placed so that their meaning may be seen more clearly” (Italics in original).
Williamson (2000, p. 11) explains that
... a distinction should be made between ‘research methods’ and ‘research techniques’. This is because a research technique, such as the questionnaire, is used in a number of different methods. To describe what distinguishes a ‘research method’ from a ‘research technique’ is not always an easy task. … a research method provides a design for undertaking research, which is underpinned by theoretical explanation of its value and use. Techniques for data gathering (such as questionnaires and surveys) and sample selection are usually included as part of this design.
White (2000, p. 20) complicates the terminological discussion with the following comment:
“[t]he particular techniques used to collect data and information are termed methods.”
Therefore, where White conflates technique with method, Williamson is at pains to separate them, though both see them as related and both concur that methodology and method are not the same.
The discussion to date shows that in the literature of research, there are subtle and major differences in use of terminology; there is no single unanimously accepted approach to research; and, finally, existing methodologies are evolving. These situations are compounded in multi- disciplinary research where terminological inconstancy and a multiplicity of approaches applicable to one, but not each, of the disciplines involved may be available. Furthermore, as the discussion of the following terms will also show, there is a lack of standardization in what is meant by data, information, and empirics yet these are fundamental to research. In order to
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overcome these inconsistencies and to surmount the design implications for multi-disciplinary research discussed here, the concept of argument as an acceptable approach to research will be proposed, explained, and defended in the final stages of the chapter.
Data - Leedy (1993, p.111) equates data (the plural of datum) with facts and states that they
“are manifestations of the truth rather than the truth itself.” Leedy (1993, p. 115) builds on the etymology of the terms (both derived from Latin with dare being the root for data, meaning “to give” and facere being the root for fact, meaning “to make”) to deduce the synonymous nature he claims for them and concludes that “[f]acts are the lifeblood of research” (1993, p. 115).
Leedy distinguishes between primary and secondary data. Leedy’s explanation, however, comes amidst a parable about the researcher’s quest for the ultimate truth, a quest that can never be fulfilled due to the imperfect nature of the human senses. For Leedy the degrees of separation from, or proximity to, the truth of a situation form the basis for the distinction between the two types of data, with primary data being most closely positioned to the truth and secondary data being further removed. Zikmund (1994, p. 115) is more direct in his treatment and states that:
[t]he primary difference between data and information is that data are simply facts, or recorded measures of certain phenomena, while information refers to a body of facts in a format suitable for decision making or in a context that defines relationships between pieces of data.
For Zikmund (1994, p. 115):
[s]econdary data are data gathered and recorded by someone else prior to (and usually for purposes other than) the current needs of the researcher. Secondary data are usually historical, already assembled, and do not require access to respondents or subjects.
Presumably, primary data are those collected by the researcher for the purposes immediately to hand, as Zikmund does not elaborate on this term.
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Of value in this discussion is Leedy’s treatment of the forms that data can take. He argues
(1993, p. 122) that data is only of two types—”writings and observations”—though these types can be viewed through four main categories as follows:
1. Observations for whose transmission description is the best vehicle. These are observations that a researcher makes directly at the scene of the occurrence and then relays as facts (commonly called descriptive survey or normative survey data). 2. Written records and accounts of past happenings and events (commonly called historical data); literary productions (commonly known as literary or critical data). 3. Observations that are quantified and exist in the form of numerical concepts. … (… commonly known as analytical survey or statistical data). 4. Observation of certain differences and likenesses that arise from comparison or contrast of one set of observations with another set of similar observations. … (These data are usually referred to as experimental data.) (Italics in original)
Leedy goes on to claim that the four kinds of data “demand four discrete and different research approaches, or methodologies” (1993, p. 122) and as a result he argues that it is impossible “to apply a methodology to data that are inappropriate to the demands of that particular method.”
Leedy brackets the first two types as being qualitative in nature whilst types three and four are quantitative. Type two bears the greatest resemblance to the current research, though as will be shown in this chapter, what Leedy (1993, p. 123) refers to as the “historical method” is inadequate on its own to use throughout the research.
Evidence - According to Rieke and Sillars (2001, p. 134, original italicized) evidence “is the support for a claim that the arguer discovers from experience or outside authority: examples, statistics, and testimony.” Rieke and Sillars point out that “support (backing) is available in three forms: evidence, values and credibility. The arguer chooses which to use and emphasise”
(2001, p. 133). They indicate that the importance of the three forms of support can vary considerably with context and ‘sphere’, where “[s]pheres are collections of people in the process of interacting upon and making critical decisions.” (2001, p. 32). They further elaborate that:
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[s]pheres, then, consist of people functioning as a group who share a cluster of criteria for the production and appraisal of argumentation. People in spheres share language interpretation strategies, facts, presumptions, probabilities, and commonplaces. But remember that sharing is in the present, subject to ongoing change, and is never certain to yield a critical decision (2001, p. 33).
In this sense spheres represent the spectrum from personal, internal dialogue through to technical spheres populated by people with advanced education who share formal requirements and mechanisms for supporting arguments and then on to public spheres where, for example, politicians and public figures must be comprehensible to the public. In short, what may be acceptable as evidence for decision making (based on argument) at the level of the internal, personal, dialogue may not be appropriate in other arenas so the argument presented must adhere to certain levels of expectation of the target audience. Furthermore, depending on the sphere in question, evidence, values, and credibility will take a greater or lesser role in the argumentation. A scholarly community (‘technical sphere’) may require that its participants “… master specialized codes, procedures, knowledge, and language to limit what can count as reasonable argument…” (Willard, 1982, p. 22-77, cited in Rieke and Sillars, 2001, p.34). This view is consonant with the material presented before about changing paradigms and the degree of difficulty that a researcher can experience if their work is radical and a challenge to accepted wisdom in a sphere. It also points to the development of disciplines and of their subsequent preferred methods for investigation and argumentation.
Walton (2000, p. 717) claims “a body of evidence is a mass of small details making up a large picture.” Whilst Walton here was referring to his views about the use of evidence in relation to legal matters, he has been a prolific author in the field of argumentation in general and he notes
(2000, p. 719) that “the problem is to find the structure that holds the body of evidence together in a case, by connecting all the logical inferences together in some kind of coherent structure.”
In this and other published work (Walton, 1990a, b) he also discusses the purposes that might be behind an argument and concludes that people have many different reasons for entering
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argument. In this sense argument is always seen to have some “communicative purpose” (2000, p. 712) and this resonates strongly with the view held by van Eemeren and Grootendorst (1992) and van Eemeren (2001) whereby it is claimed that argument has at its roots a basis in dialogue using language as its medium. Dialogue can also have different purposes, see Table 2.1, such as being for: persuasion, negotiation, information seeking, deliberation, inquiry, or for being eristic
(controversial, quarrelsome) in nature (Walton, 2000, p. 712). Evidence in support of different types of argument therefore takes account of the dialogue purpose and is presented accordingly with the chain of reasoning being targeted to the ultimate goal associated with each type of dialogue, for example, inquiry dialogue may see a participant goal of finding and verifying evidence so that the dialogue goal “(dis)prove hypothesis” (2000, p. 712) can be achieved.
Table 2-1 Types of dialogue.
(Source: Walton, Argumentation and Theory of Evidence, 2000, pp. 712).
An important final point that Walton makes in this work is that the “… ‘evidence’ so-called is
represented not only by the presumed facts reported [by the police] … It is also represented by
the inferences that can be logically inferred from these presumed facts by plausible reasoning”
(2000, p. 724). In other words, deductive and inductive logical processes are necessarily
involved in constructing sound argument in addition to collecting and analyzing the evidence
available.
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Such evidence should be relevant, plausible and should have what Wigmore (1983, cited in
Walton 2000, p. 726) called “probative weight”, meaning:
something that contributes to making a proposition seem to be true. Probative weight gives a rational agent a reason to think or judge that the proposition is true, even though, once further factors are known, the proposition could turn out to be shown false. … the notion of probative weight cannot be fully and explicitly defined. Probative weight can be equated with plausibility, or what seems to be true.
Twining (1985, cited in Walton 2000, p. 727) believes that Wigmore based his notion of probative weight on Bentham’s probability, in an ancient usage, more akin to the modern conception of plausibility. Both, however, can be seen to have built their theories of evidence around the ideal of a “chain of plausible inference forming the body of evidence in a case”
(2000, p. 728). Walton, however, suggests that the idea of probative weight could go back much further in history to the philosopher John Locke and past him as far back as Cicero and the Greek philosophers.
In conclusion, the ideas of argument and evidence and of chains of reasoning have been in use for millennia. The studies, and use, of formal logic in the physical sciences in more recent times, partially based on Aristotle’s logic in the form of syllogistic reasoning, seem to have been more to the forefront than that of informal logic being propounded by the authors cited here, among many others around the world. As Perelman and Olbrechts-Tyteca (1969, p. 509) observe:
The effect of restricting logic to the examination of the proofs termed “analytical” by Aristotle, together with the reduction of dialectical proofs—when anyone felt they were worth analyzing—to analytical proofs, was to remove from the study of reasoning all references to argumentation.
To the work these authors have been doing and to the ideas they have been developing we now move, so that the core concept of argument can be discussed.
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Argument - Toulmin (1958, cited in Kuhn, D., 1991, p. 2) defines argument “as an assertion and its accompanying justification.” Deanna Kuhn also explains (1991, p. 2) that:
... a concept of thinking that has argument as its core has in fact existed for a very long time … The major early philosophers — Plato, Socrates, Aristotle — were all centrally concerned with thinking, and all regarded the construction of reasoned arguments as the heart of thinking.
Formal logic has gained the ascendancy in the conduct and reporting of scientific research as has been implied in much of the preceding discussion, however, as Kuhn (1991, p. 2) points out,
“in 1958 Toulmin published an important book claiming the limitations of [formal] logic as a model of thinking and the corresponding advantages of regarding thinking as argument.” Since then there has been a groundswell of support for the place and role of informal logic in research,
(for examples of such development, see Walton, 1990-2000; van Eemeren 2001; van Eemeren and Grootendorst, 1992; Kuhn (both Deanna, 1991; and Thomas, 1962, 1970); Rieke and Sillars
2001; Perelman and Olbrechts-Tyteca, 1969; and Metcalfe, 1996).
Billig (cited in Kuhn, D., 1991, p. 3) comments that:
thinking as argument is implicated in all of the beliefs people hold, the judgements they make, and the conclusions they come to. It arises every time a significant decision must be made. Hence, it is at the heart of what we should be interested in and concerned about in examining people’s thinking.
To that extent the current study assumes that the knowledgeable authors of the literature examined and used here are making their “speech acts” (Searle, 1969, 1979; Fogelin & Sinnott-
Armstrong, 1997) as declarations about their thought and beliefs. The assumption implies that these authors have come to their positions and, through the process of publication, have declared their own arguments supported with evidence that has led them to the conclusions they have drawn. These publications range across the fields of distance education, higher education,
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change in the university, electronic commerce, information economics, and globalization and are seen here to be the empirics of the current study. In conjunction with these literary data sets, it is necessary to bring to the analysis both deductive and inductive logical reasoning. The combination of the literature analysis and the reasoning processes is finally constitutive of the dissertation provided in defense of the thesis (case) being promoted. The thesis is, however, not a well-structured problem and a heavier reliance will be placed on inductive reasoning than on deductive reasoning. As Kuhn (1991, pp. 7-8) argues, in deductive reasoning one reasons from the general to the particular whilst
[i]n inductive reasoning one reasons from particular facts to a general answer. A deductive problem is therefore always a well-structured problem. It is a single, definitive solution. … Normally, however, inductive reasoning problems are ill- structured problems. One weighs the evidence and on the basis of it reaches a conclusion. This conclusion is never definitive, however, only more or less probable. There is always the possibility that new evidence could alter these probabilities.
In view of the terminology in use, for example in the previous citation, and throughout the present study, a brief digression is warranted at this point to clarify usage. It is enough to acknowledge the possibility that there is both theoretical and practical reasoning without going into the philosophical bases for either. Ullmann-Margalit (2000) and Harman (1999) go to great depth to tease out the subtleties in the terms but largely agree about their purpose. For Harman
“practical reasoning is concerned with what to intend, whereas theoretical reasoning in concerned with what to believe” (1999, p. 46) and for Ullmann-Margalit “[t]he theoretical component of reasoning deals with reasoned revisions of beliefs, and the practical component of reasoning deals with reasoned revisions of intentions” (2000, p. 5).
Part II of this dissertation deals with the relationship between distance education and electronic commerce and is concerned with theoretical reasoning and the arguments (beliefs) that relate to understanding the nature of the relationship. The latter portion of Part II, dealing with the implications for distance education practice and theory in the light of the discussion up to that
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point, is more concerned with what to do and hence is more aligned with practical reasoning.
One final note needs to be made in relation to the claims that Harman (1999) makes as he discusses his notions of logic and reason—he is of the view that there is no such thing as deductive reasoning though there is deductive logic. Rather, deductive logic leads to what he calls deductive implication. Furthermore, there is no such thing as inductive logic though there is inductive reasoning “perhaps better called theoretical reasoning” (Harman. 1999, p. 46).
Harman’s contention that “theoretical or inductive reasoning is an attempt to improve one’s overall view of the world by increasing its explanatory coherence” (1999, p. 46) will apply here and any deductive logic will lead to implications to be consistent with his application of the term. Where those applications are not implied, they will have been applied in a common, everyday, usage of the language.
Kuhn (1991, p. 12) provides further analysis of the definitions of argument and indicates the multiple facets to be found when she states that:
[a]n argument in its first, more restricted sense can be defined as an assertion with accompanying justification. The American Heritage Dictionary defines an argument in this restricted sense as a “course of reasoning aimed at demonstrating the truth or falsehood of something.” The more common definition of an argument entails juxtaposition of two opposing assertions. Most often, we think of an argument as a dialogue between two people who hold opposing views. Each offers justification for his or her own view; in addition (at least in a skilled argument), each rebuts the other’s views by means of counterargument. To distinguish between the two uses, in this book we refer to the first type as rhetorical argument and the second type as a dialogic argument.
Kuhn (1991, p. 12) then goes on to explain the italicized terms saying:
[i]n a dialogic argument, at a minimum one must recognize an opposition between two assertions — that, on surface appearance at least, both are not correct. Evidence must be related to each of the assertions, and, ideally, if the argument is to move toward resolution, this evidence needs to be weighed in an integrative evaluation of the relative merits of the opposing assertions.
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What about a rhetorical argument? Though an argument in this sense may appear less complex cognitively, the same skills are in fact entailed in more implicit form. An assertion with accompanying justification — a course of reasoning aimed at demonstrating its truth — is an empty, indeed superfluous, argument unless one can conceive of the possibility of the assertion being wrong — in other words, conceive of an opposing assertion. Once two opposing assertions are in place, cognitively speaking, the further challenge poses itself of relating available evidence to the two. Presumably, it is a weighing of positive and negative evidence that has led one to espouse one of the assertions over the other. Indeed, it is just such a weighing process that is implicit when we speak of a reasoned argument. When new evidence is introduced to the holder of a reasoned argument (as it would be in the case of a dialogic argument), he or she is able to integrate such evidence into this implicit weighting process. Each new piece of evidence does not dominate or destroy a reasoned argument. Any reasoned argument in support of an assertion thus implicitly contains a full, dialogic argument.
In view of these explanations it is now possible to propose that the current study takes the form of the dialogical argument. It is recognized that other possible interpretations of the literature will exist, but others will need to produce such interpretation. Here, the study is asserting that there is a relationship between distance education and electronic commerce though the nature of any such relationship is, as yet imperfectly understood.
Reasoning – Thomas Kuhn’s Structure of Scientific Revolutions (1962, 1970) was aimed primarily at the physical sciences. He tried to show that entrenched beliefs in scientific groups are difficult to overturn, especially where new knowledge threatens those beliefs sets and methods of operating supported within a discipline3. Caldwell argues that:
when anomalies or inconsistencies arise within a given paradigm and present problems that we are unable to solve within a given paradigm, our view of reality must change, as must the way we perceive, think, and value the world. We must take on new
3 In another field, that of organization science, Stuart Macdonald (1995) argues a similar case whereby senior managers are less than capable of dealing with what he termed ‘external information’. The base to his argument resonates with that of Kuhn – “external information does not always fit easily with the information already in use within the firm. ... integrating information that has been produced without any coordination with the firm presents an almost insuperable challenge” (Macdonald, 1995, p. 560). Stiglitz (1999a), when discussing the ‘transfer of technology’ to developing nations, comes to much the same conclusion as well, arguing that tacit aspects of knowledge and information inherent in the technology inhibit the transferral.
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assumptions and expectations that will transform our theories, traditions, rules, and standards of practice. We must create a new paradigm in which we are able to solve the insolvable problems of the old paradigm. (date unknown)
Where the traditional positivist approach to research may have been hegemonic in the natural sciences, its place in the social sciences has been contested with one result being an increase in the utilization of alternative approaches generally housed under the term interpretivist tradition or paradigm. This includes critical theory, constructivism, hermeneutic interpretation, case study, action research, and grounded theory among a plethora of methods. Key to the emergence of these research approaches has been the rejection of the assertion “that there are facts about the social world which we can gather - independent of variations due to interpretation. Objectivity is then defined in terms of researcher’s detachment from the social world, as well as the accuracy of their data collection instruments” (May, 2001, p. 11- emphasis in original). May goes on to argue that “[r]ealism shares with positivism the aim of explanation.
Beyond that similarity the parallel ends” (2001, p. 11) and then clarifies this by saying that:
[r]ealism argues that the knowledge people have of their social world affects their behaviour and, unlike the propositions of positivism and empiricism, the social world does not simply ‘exist’ independently of this knowledge. … The task of social research, therefore, is not simply to collect observations of the social world but to explain these within theoretical frameworks which examine the underlying mechanisms which inform people’s actions and prevent their choices from reaching fruition (2001, p.12).
Realism cannot use the methods of empiricism and, according to May (2001, p. 13), “must utilize a different definition of science to positivism”.
To some extent, the current research has elements of the realist tradition — it is concerned with understanding the way in which people have come to explain the world they interact within. In particular it is concerned with an evaluation of the documents that these people (usually scholars and researchers) have developed to describe and explain the world of distance education
(including online learning). It also has elements of what May refers to as “idealism” whereby
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“schools of thought emphasise our creation of the social world through the realm of ideas, rather than our simply being conditioned or created by it” (ibid., p. 14). Further on he says:
[t]here are those within this tradition who argue that researchers need to employ ‘hermeneutic principles’; hermeneutics referring to the theory and practice of interpretation. We are no longer proclaiming our ‘disengagement’ from our subject matter as a condition of science (positivism), but our ‘commitment’ and ‘engagement’ as a condition of understanding social life. Our sense of belonging to a society and the techniques which we use for understanding are not impediments to our studies (2001, p. 15).
The current research is not only multi-disciplinary but also draws on different research approaches. Whilst it is non-positivist in orientation its location in an alternative paradigm, or school within a paradigm, is difficult to identify. As Leedy (1993, p. 112, emphasis added here) points out, however, “[r]esearch cannot be monopolized as a departmental mode of investigation. Rather, research methodology must be ancillary to all but free from all. It has its own procedure, unique within itself, and in its eclecticism draws its data from whatever sources seem to offer productive evidence in resolving the research problem.” Following this line of thought Leedy goes on to suggest that research should perhaps be organized around “broad generic areas” such as “people, things, records, thoughts and ideas … “ rather than according to
“departmentalised knowledge”. He also argues (1993, p.113) that “the substratum of research principles is all-inclusive and, with slight modifications and varying emphases, applies to all disciplines.” Out of this comes the contention that the multi-disciplinary nature of the current research should be encouraged to find its data in the extant literature. The ‘productive evidence’ will be derived from a thorough analysis of the relevant literature and the application of inductive logic and reasoning which is the basis of the scientific method according to Leedy
(1993, p. 110).
The field of research influences selection of a methodology for research, as do the prevailing attitudes within a research discipline, the culture, the politics, and the nature of the research to
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be, or being, conducted. Choosing an appropriate method is guided, to some extent, by what others have done in the past. In all approaches, however, there is a need for the researcher to provide evidence in support of their claims. Regardless of the paradigm and method under which one works, this requirement holds firm and it is equally so for researchers who choose to rely on qualitative or quantitative data. Multi-disciplinary investigation poses a number of questions in making a choice of research methodology or paradigm because it crosses disciplinary boundaries which means that the prevailing ideology of a specific discipline may not hold across those boundaries. Prevailing attitudes and paradigms in the research community can come into play in affecting the choice of approach to research for reasons that are pragmatic
(e.g. adherence to practices which enhance the likelihood of passing the referee process for scholarly publication or which are seen as more acceptable in the competition for gaining grant funding) or theoretical (e.g. certain disciplinary problem types necessitate the use of established approaches).
The analysis derived though use of argument is inherently one of interpretation, open to contention and criticism. It acknowledges that the researcher has an inherited human trait that renders objectivity as elusive. As such it has some affinity with the hermeneutic school of research and is predominantly located in the interpretivist paradigm. Furthermore, the use of argument as a research methodology points to the fact that the resulting findings and conclusions may be only one such set of possible interpretations. Whether the findings or conclusions are able to be generalized will depend on the circumstances and the context of the research and the personnel involved in future attempts to replicate the analysis.
Generalizability of research findings is not considered an over-riding concern with research of the argumentative nature. Firestone (citing Lincoln in Guba, 1990, pp. 111 -113) dismisses the notion of generalizability. In arguing her case against positivistic research she promotes the notion of the social construction of knowledge and reality and emphasizes that multiple-realities rule. She insists that each research situation is unique and, for her, it follows that the capacity
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for other researchers or practitioners to use the results of research, or to draw guidance from it, is limited and cannot be assessed by the researchers involved at the end of their study. She instead proposes the concept of ‘transferability’ and adds that it is the reader and not the researcher who determines this. The mechanism to allow transferability to occur in research is a thorough and ‘thick description’ of the situation studied and all its features. It is a mechanism for contextualizing the research which, according to Firestone (1990, p. 116), means, “providing the reader with the background information needed to make an informed decision” about any further application of the findings of research.
Generalizability is, however, only one of the contentious issues debated by proponents of positivist and interpretivist research paradigms. According to Firestone (citing McGrath (1982), in Guba, 1990 p. 114) all research seeks to maximize three criteria: “generalisability of findings, precision and control in measurement, and existential realism of what is studied”. Firestone
(1990, p. 114) goes on to say that “the three cannot be satisfied simultaneously, placing the researcher in the midst of a three-horned dilemma. Any criterion can be maximized but only at the expense of the other two.” Firestone believes that compromise is necessary, to realize optimum results, with methods and techniques being melded as necessary in order to confront the dilemma, and to “increase confidence in the conclusions” (1990, p. 117).
Firestone (1990, pp. 123-124, emphasis added here), in the closing parts of his paradigm-praxis discussion, moves towards a position of “accommodation” of the two major competing paradigms and states that:
[i]n practice, researchers use a variety of imperfect approaches to enhance the credibility of their arguments that require complex trade-offs among precision, generalisability, and existential reality. … Moreover, these choices are made in a complex social world and are, therefore, shaped by a variety of political and cultural factors. … The major justification for the research enterprise is that we have the time and the skills to develop approximations of the truth that have a firmer warrant than common sense. … I am happy to settle for the generation of ideas that make sense out of the world even if they
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cannot be “proved” per se. … In a world where there is no certainty, debate among divergent viewpoints is particularly necessary. … it helps to clarify the issues and generates a necessary humility about what we can accomplish.
What Firestone proposes after his lengthy analysis is that researchers have to choose between competing paradigms and between techniques and methods. This represents a choice or compromise in their research. As, for Firestone (1990, p. 117), “the central value of positivism is the search for (unattainable) ‘truth’…”, the researchers have to settle for stronger or weaker evidence to support their arguments. The interpretivists acknowledge multiple truths and realities and seek to provide insight into these by using a range of techniques and methods to produce a variety of evidence in support of their analysis. In both paradigms there is a variance in the capacity of the research to satisfy the three criteria put forward by McGrath, and all research is ultimately a statement reflecting the constraints imposed on the research and the researchers. The emphasis added in the passages above highlights the final position derived by
Firestone and underscores the role of argument in the research endeavour.
One difference between the current research and the examples from the literature raised in this chapter is in the collection, or generation, of data. This dissertation is based on the use of argument as a research method. Its empirics are derived from the existing literature base where an assumption is made that the researchers in the field, the critical commentators, the consultants and the policists writing in the area, are all committed to the purposeful expansion of knowledge. Their ‘speech acts’ (Searle, 1969, 1979; and van Eemeren and Grootendorst
1992), as recorded in their publications, are taken to be serious, scholarly, expert, and intended to expand our understanding of the fields to which they pertain. Such an assumption does not, however, imply that their speech acts are the sole ‘truth’ or that they are unassailable as statements or interpretations. Indeed the collection of literature is analyzed in order that contentions are uncovered and so that the biases under which they are written may be teased out. Being aware of such ‘imperfections’ thereby enables the published material to be used in furthering the arguments presented in the current research.
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Theory - For Williamson (2000, p. 58) a “theory is a viewpoint or perspective which is explanatory.” For Babbie (1989, cited in Williamson, 2000, p. 58) theory in social science is “a systematic explanation for the observed facts and laws that relate to a specific aspect of life.”
Metcalfe (1996, p. 4) associates the term theory with speculation and later (1996, pp. 50-ff.) he shows that the term has many interpretations and definitions, several of which have a close relationship to the term argument. For example, “[a] theory is a complex argument (Messimer,
1986)” (1996, p. 54) and “… theories provide patterns in which data appear intelligible … A theory is not pieced together from observed phenomena; it is rather what makes possible to observe phenomena (Hanson, 1958)” (1996, p. 50). Metcalfe suggests dropping the use of the term theory in favour of the term argument, one reason being to help overcome confusion to be found in the use of the former term. Another reason put forward by Metcalfe is the view that one has to be committed in order to argue for (or against) something. It is this commitment, and its public nature, that is valuable in research when compared with those who prefer to suggest that they, as humans, are being independent and neutral (objective) in producing theories which are rooted in the scientific method.
Williamson (2000, p. 59) states that “[t]heory is very important in research. It ‘informs’ the research process and helps to direct it.” Later she says that:
central to the idea of research is to find ways of seeing. The very word theory derives from the Greek, to see or behold … The great theoretical traditions of positivism and interpretivism are alternative ways of seeing. Researchers need to be self-aware of their theoretical positioning, and to make this explicit to all stakeholders in research (2000, p. 307).
According to Cooper and Emory (1995, p. 43):
a theory is a set of systematically interrelated concepts, definitions, and propositions that are advanced to explain and predict phenomena (facts). In this sense, we have many theories and use them continually to explain or predict what goes on around us. To the degree that our theories are sound, and fit the situation, we are successful in our
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explanations and predictions. … Theory serves us in many useful ways. First, as orientation, it narrows the range of facts we need to study. Any problem may be studied in a number of different ways, and theory suggests which ways are likely to yield the greatest meaning. Theory may also suggest a system for the researcher to impose on data in order to classify them in the most meaningful way. Theory also summarizes what is known about an object of study and states the uniformities that lie beyond the immediate observation; when it does so, theory can also be used to predict further facts that should be found.
It seems then that theory has a mainly explanatory, and sometimes predictive, role though it can also serve as an organizer for the process of research. It is theory as the way of seeing that holds interest for Metcalfe who maintains that this is tantamount to what is known as argument—”an assertion and its accompanying justification”, and it is this light that the term will be used in the current work. Theory building within the research, then, should be seen as the development of argument that supports a view of any relationship between distance education and electronic commerce. Subsequent to, and based on, the insight gained in that analysis, the implications that an electronic commerce framework might hold for theory building in relation to distance education can be discussed. The outcome of these efforts is then to produce explanations or predictions as a defensible set of interpretations for what is happening, or may happen, in the universities in Australia. As almost three decades have elapsed since the major theories of distance education were formulated, the current study is also an attempt to provide some insight into their current state of applicability. So many aspects of higher education in Australia have changed since the 1970s, including the move to a highly technological environment that the existing theories need to be reconsidered for relevance, currency and cogency. Being alert to the possibility that electronic commerce may hold potential for future theory building efforts in distance education suggests that the current study may also be able to contribute knowledge to the field at this level.
Neuman (1997, p. 39) believes that “[r]esearchers try to directly confront a theory with evidence” and that they should look at evidence that supports and opposes a theory in a
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disinterested way.” Whilst it seems that this disinterest raises the questionable element of objectivity yet again, Neuman goes on to say that the researcher does “not know for sure if the evidence will support a theory” but if the “evidence repeatedly fails to support a theory, it is changed or replaced” (1997, p. 39) which then seems to bring Neuman’s claims into line with those promulgated under the rubric of grounded theory (see, for example, Glaser and Strauss,
1967). Indeed Neuman cites Glaser and Corbin (1990, in Neuman, 1997, p. 334) much later in his book where they refer to grounded theory as “a qualitative research method that uses a systematic set of procedures to develop an inductively derived theory about a phenomena. The purpose of grounded theory is to build a theory that is faithful to the evidence. It is a method for discovering new theory.”
If argument replaces theory as a term used in research as Metcalfe suggests, then the ideal would be a method that allows a researcher to formulate an argument about the topic of inquiry which would then be successively refined using the data brought to bear on the situation. In the current study, the data—the empirics—are the existing literature and the thoughts, theories, viewpoints, observations and even predilections that other writers have seen fit to share with a knowledgeable audience of their peers. The documents exist and are thereby ‘historical’ in nature. Some will be seen to be ‘secondary sources’ because they have not been specifically produced for the purposes to which the current research will put them, and some will be seen to be primary sources, as they were written specifically for the purposes to do with the current research. By carefully analyzing the empirics they can be then brought to bear as evidence for the arguments presented in the current study. Whether the assertions proposed in the current research can be sustained and justified remains to be judged by the universal audience.
From the evidence presented will flow attempts: to understand and explain the relationship between distance education and electronic commerce, and to construct theory (argument) that assesses the potential for using an electronic commerce ‘lens’ as a framework to further refine the current understanding of distance education. The arguments thus formed by reasoning and
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application of evidence will be the outcomes of the research. As the argumentative method encourages the considering of alternate points of view (criticism and counter argument) attention will also, inherently, be given to these components. One reason for considering other possible views is the strengthening of one’s own position. This arises as a by-product of the iterative cycle of argument and requires that logical defense against criticism be provided in advance of such criticism. Where criticism is likely to be very difficult to guard against, it may require a rethinking of the assertions to be made and it is in that sense a self imposed litmus test and a healthy indicator of research maturity.
A discussion of how the current research is to be undertaken, how the use of argument will qualify as a research methodology and strategy, and how the universal audience can help to bring objectivity to the research is now in order. The following section provides a fuller explanation of these matters, and suggests why argument might be recognized as a formal and desirable approach to conduct research.
2.2.2 Argument as method for research
This section draws heavily on the work of Mike Metcalfe whose book Business Research through Argument, published in 1996, prepared the ground for the approach taken in the current dissertation.4 In addition to Metcalfe’s book, the works of others associated with the study of argumentation have informed the current research (see, for example, Walton (1990 - 2002); van
Eemeren (2001); van Eemeren and Grootendorst (1992); Deanna Kuhn (1992); Rieke and
Sillars, (2001); and Perelman and Olbrechts-Tyteca (1969)). This latter group of authors
4 Metcalfe, an Associate Professor at the University of South Australia, has been influenced by what has been called the 'soft-system' approach to the research of information systems and their adoption and application in organisations. The head of his disciplinary unit is Professor Trevor Wood-Harper, a well- known author of soft-system publications. Wood-Harper's work, and subsequently Metcalfe's, has arisen out of the need for information systems research that incorporates social as well as technological facets. Both have been involved in working toward research methods that better support and facilitate true research in the information systems arena. For further information and papers see www.unisa.edu.au/isdoc
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provides practical guidance about how to study other people’s arguments and, as well, they analyze what they consider the vital constituents of argument. Their works include a thorough analysis of evidence, reasoning, logic, and what are known as fallacies - errors in either the logic used in arguments or in the construction of arguments where, for example, there can be errors of logic between the premises and the conclusions. To a lesser degree the literature dealing with the analysis of documentary sources (see for example May, 2001 Ch. 8) has also been helpful.
2.2.3 Argument as research, research as argument
At the heart of Metcalfe’s book is the idea that research is argument. For Metcalfe, (1996, p.
39) “an argument means a one sentence conclusion of all the evidence (premises).” He declares that an argument must “be supported by the presentation of some evidence that will persuade a knowledgeable audience, but the argument and the evidence are two separate concepts.” (1996, p. 39).
Where Metcalfe claims that the purpose of argument is to “persuade a knowledgeable audience”, Perelman and Olbrechts-Tyteca (1969, p. 14) emphasize it differently claiming that
“all argumentation aims at gaining the adherence of minds” which means the “informed support of others” (Rieke and Sillars, 2001, p. 2). All authors in this field see argument as a process of communication facilitated by use of language. Whilst this suggests that two or more people are involved in an interactive exchange - a dialogue, dialectic or discourse - it can also be that an individual can conduct an argument alone by making use of internal dialogue.
Rieke and Sillars differ from Metcalfe in their interpretation of essential terms in this field.
They define an argument as “a single unit of argumentation comprising a claim and its support”
(2001, p. 4) thereby positing the term within a greater context of purpose. They see the outcome of argumentation (a set of arguments), not only as gaining “adherence of minds”, but also as an aid in assisting the audience in reaching, and making, decisions. For them:
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[a]rgumentation is the communicative process of advancing, supporting, criticizing, and modifying claims so that appropriate decision makers, defined by relevant spheres, may grant or deny adherence (2001, p. 2).
Furthermore, where they see argument as a subset of argumentation, they also see argumentation as a subset of a case:
When we talk about making an argumentative case, we are referring to preparing a plan, a strategy, a comprehensive series of arguments that combine to support a decision persuasively. In a sense, a case is a complete story that helps others to see that your proposed decision is the right and sensible thing to do (2001, p. 74).
In an attempt to position their work in the everyday world, Rieke and Sillars also add the following:
…[y]ou will be required to establish adherence to a series of specific claims that, when combined, will add up to support for your more encompassing claim, which we call a proposition (legislators call it a resolution or bill; lawyers call it a cause of action, claim, or motion; scholars call it a thesis, hypothesis, or theory;… (2001, p. 75).
Whilst Rieke and Sillars have made attempts to be pragmatic in their more recent publications, by targeting decision making and decision makers as the audience for argumentation, Perelman and Olbrechts-Tyteca define their audience as “the ensemble of those whom the speaker wishes to influence by his argumentation” (1969, p. 19, emphasis in original). In short, a person developing an argument needs to be mindful of the recipients, both for deciding which evidence to use to support assertions and also so as to be able to make assumptions about that group
(elsewhere discussed as a sphere) and its prevailing beliefs and characteristics.
The following brief definitions are drawn predominantly from the work of Rieke and Sillars
(2001) and, because they are broadly in keeping with those of other writers in the field of argumentation, they will be used in the current study.
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A sphere (p. 3) is a “collection of people in the process of interacting upon and making critical decisions.” Within a sphere, rules of interaction are developed over time, values are formulated, acceptable reasons are understood, and power hierarchies are in place with decision-makers known to the group.
“A claim is a statement that you want others to accept and act upon (to grant their adherence)”
(p. 3). A claim may be promoted alone or it may be “linked to a series of other claims that constitute a case” (p. 3).
To gain adherence an argument needs support. Support, also known as “backing” (p. 133), is usually found in three different forms namely, evidence, values and credibility. Whilst values and credibility can have importance, in certain spheres, they have less relevance to the current research (and its sphere) than the former and are only discussed in specific instances in the research. This is not to claim that values are not important as elements in some forms of argumentation or as specific features in distance education. Indeed the distance education literature is replete with discussions of the value-laden issues of equity and access and many would claim that they are the foundation principles upon which many universities have based their operations, at least initially. The published documents collected for use in the current research are written by people and will invariably contain value statements or positions and in some cases the beliefs and values will go unstated as discussed in Chapter 2. The thrust of the current research is to examine the relationship between distance education and electronic commerce and to do so it focuses on the increasingly commercial forms of higher education in
Australia and internationally. It is nevertheless recognized that commercialization of higher education has not been universal in its adoption and web-enabled distance education approaches may not show all the signs of becoming a commodity. Nor is it implied in the current study that values are insignificant issues. However, the predominant area of interest in the current work is not with a value analysis of the purposes of distance education but is, rather, with the potential
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to see distance education being used as a commercial revenue channel for universities. Further indication of the movement toward visualizing distance education as a commercial pursuit will be found in the discussion of demand, supported by analysis of distance education student numbers over decades, in Chapter 3. Whilst it is still possible to satisfy equity and access issues during periods of expansion, the onus may be changing for Australian universities.
Encouraging, and then meeting, demand from students outside of Australia for higher education suggests that Australian universities will have a revenue stream with which to help ensure their own longevity. A by-product of universities capitalizing on the intellectual property of their courses, by servicing international demand for distance education, will be a choice in making decisions about cross-subsidizing marginalized Australian students. Chapter 5 will also present discussion of the wider change apace in the world when the current study moves to examine the
World Trade Organization (WTO) initiated General Agreement on Trade in Services (GATS).
Chapter 5 also positions the current study within developments in the information economy and in doing so provides another lens through which to observe and understand the movement in policy (values) that Australian universities are demonstrating.
So while values can be important in some treatises, evidence as a form of support, on the other hand, is critical to this dissertation and is taken to mean “the support for a claim that the arguer discovers from experience or outside authority: examples, statistics, and testimony” (p. 134, emphasis in original). Throughout the current study, the supporting evidence will be drawn from the critical analysis of documentation from the relevant fields supplemented with analytical reasoning.
All argumentation takes place in a “context of uncertainty” (p. 7) and it is therefore open to ongoing criticism. “Argumentation involves criticism of claims with the open potential for modifying them. Dogmatic defense of positions is not argumentation, it is fanaticism. …
Stephen Toulmin says that the test of an argument is its ability to stand up to criticism.” (p. 5)
Criticism here does not refer to “excessive fault-finding or hurtful negative comments” (p. 6)
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but rather it relates to the purposeful exchange of ideas, which implies a cooperation between the audience and the person(s) promoting their case. It is a communicative act which requires a
“tolerance for uncertainty” (p. 7) and the application of reason.
The focal areas of the current research—distance education, electronic commerce, and the relationship between them—are open to interpretation. A review of the literature shows that very little prior analysis or research has been done where these two overlap or intersect and it is to be expected that the current research will be dealing within the context of uncertainty. As the study progresses it is expected that the various claims will be refined and reformulated as the researcher gains a better knowledge and understanding of the interplay of forces at hand. The study should also be seen to be a work-in-progress with the case open to further critical audience participation. Ideally, the adherence of the audience will have been gained because of the strength, plausibility, and defensibility of the argument. Whilst reaching that goal is among the aims of the current research the road to that achievement is beset by difficulty.
Researching across multiple disciplines is difficult at the best of times but doing so in exciting and rapidly changing times makes the work even more protracted and problematic. Government policy influences the work of universities and the past decade has been a period of turbulence, upheaval, and rapid change in Australia. Universities are being asked to be more accountable for their actions and their funding sources are unstable. Information and communication technologies (ICT) are being used in universities and applied to the business of higher education. The world wide web is being used for commerce and universities are also applying the web to teaching and learning though a full understanding and appreciation of the implications of such usage is yet to be gained. Trends to life long learning and changing demographics of the student population in the universities in Australian all contribute to flux in the environment of higher education in Australia. Studying the universities during this period necessitates a multi-faceted, eclectic, approach. This eclecticism brings benefits and disadvantages, not least in the decision-making about how to approach the research at hand.
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The field of distance education, seen through a wide lens, can encompass many features of the provision of higher education from marketing of the universities’ courses, to student support, to assessment policy, to studying the use of ICT in the provision of higher education amongst many other aspects. When the competitive world of business is coupled to the activities of universities, the factors to be considered in the field of study increases commensurately. No single research method has been identified to guide the research through the fields of interest indicated above. Furthermore, the goals and objectives of the current research require a disparate and broad-ranging collection and analysis of evidence that is eminently suited to the use of argument. According to Metcalfe:
explicitly thinking of research as an argument also has the benefit of encouraging eclectic methods. Being aware of the need to argue and of the limitations of any one piece of evidence encourages the researcher to seek more and more evidence. This can only be helpful in finding the truth. An argument is won by presenting a whole range of evidence, empirical and reasoning (1996, p. 48).5
For Metcalfe (1996, p. xi):
[t]he only real difference between a thesis undertaken using this perspective and any other is that the researcher is not required to hide his or her expectations of any results. The argument method assumes that quality research depends on debates between experts. This is how objectivity is achieved. Objectivity cannot be achieved by one individual. Research is assumed to require the presence of an advocate (the researcher) and a universal knowledgeable audience (examiners or journal readers). The researcher is required to use quality evidence, including reasoning and experiments, to try and convince a knowledgeable audience. This will need to include anticipating the counter arguments in much the same way [that] some editors insist that all papers contain alternative hypotheses. You will not convince someone unless you can alleviate their concerns about alternative explanations.
5 In personal correspondence Metcalfe indicated that he was in 'defensive mode' when he wrote the book and said that he would be less acquiescent if he were to rewrite it. An important point he made was that he uses the term 'empirical' in the manner of John Locke, the Scottish philosopher, to mean what we come to know via our senses, rather than having an orientation to measurement (and thereby a possible conflation with empiricism). In this way documents, as used in the current research, are seen to be 'empirics' as they allow the researcher to 'come to know' via the sense of sight and then, reflexively, via the use of logic and reasoning.
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The preceding quotation from Metcalfe expresses the major bases for the use of argument as a research method. He dismisses the notion that a researcher can be unbiased or objective and favours the view that the value of research should be a judgement made by a community rather than an individual. In this manner the conduct of the research and the results achieved are open to scrutiny and criticism by knowledgeable peers. Therefore, in order to be convincing, research needs:
• a clearly articulated statement of the argument
• clarity in the use of terminology
• to be compelling in its use of evidence
• to be robust in its reasoning, and
• to anticipate, and defend against, contra-viewpoints.
Using argument as a research method and strategy forms the fundamental framework for, and stylistic layout of, the current research whilst the theory of argumentation literature provides guidance about the methodology for constructing and analyzing arguments and for isolating fallacies within arguments. The existing literature forms the empirics of the current research; it is analyzed to provide evidence in support of the assertions made herein; reasoning plays a considerable role in that analysis and in understanding the nature, and extent of, the relationship between distance education and electronic commerce. To the extent that theory is argument under another name (Metcalfe, 1996), theory building will be one outcome of the research as the study moves from the examination of the relationship between distance education and electronic commerce to consider the use of an electronic commerce framework for theorizing distance education. This final assessment is connected with shedding light on the usefulness of existing theories of distance education. For example, if they were found to be affected by taking a corporatised view of the purpose of distance education, or if they were judged outmoded in their capacity to guide modern distance education due to changes in technology since their inception, then alternatives will need to be considered. Finding suitable alternatives would constitute theory building of a considerable dimension and is beyond the current study though it does
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strive to illuminate current practice by using the electronic commerce framework as a means of analysis. To understand how this is to be achieved it is necessary to finalize this chapter with a discussion of argumentation theory and the related topic of Toulmin diagrams.
Argumentation theory - According to Perelman (1963, p. 155), emphasis in original) “the theory of argumentation studies the discursive techniques which make it possible to evoke or further people’s assent to the thesis presented for their acceptance.” Perelman argues that
Aristotle made specific studies of argumentation, “which he termed dialectic” (Perelman, 1969, p. 152) along with his other studies into formal logic (which he termed “analytic proofs”,
Perelman, 1969, p. 152). Argumentation is now seen to be a study in informal logic (Walton,
2000; van Eemeren, 2001), whereas the sciences are focused on formal logic. Perelman argues that the analytic proofs are “demonstrative” whilst informal logic is “argumentative”. He explains this by saying that the “domain of argumentation is that of the likely, the plausible, the probable, to the extent that the latter escapes mathematical certitude” (Perelman, 1969, p. 134).
For Perelman, argumentation requires that there be an audience (from whose minds someone is trying to gain adherence) and that this is always based on a discourse (either in written or oral form)—in other words argument is based in language and requires at least two people.
For Perelman (1963, p. 166) “philosophical dialogue is, par excellence, dialectical; indeed it determines the very characteristics of a dialectical method”. He makes the point that when people are engaged in discourse about some contested issue, they must first move toward an understanding of what they actually agree about in reference to the evidence (premises) to be brought to bear in their discussion. After such agreement is reached Perelman (1963, p. 166-7) goes on to say that “the point of departure for a dialectical argumentation does not consist in necessary propositions effectively admitted in a given milieu; in a different setting, in a different historical and social context, these propositions may no longer meet with general approval.” In effect, the conditions under which the argumentation applies may change over time. Indeed this is the situation with all human studies and is one reason for the lack of insistence on
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generalizability in interpretive research. So too, with the current study. Though it endeavours to produce a compelling and defensible case in support of the claim, it is acknowledged that the argument may not endure over lengthy periods as newer evidence arises.
Part II of this study, uses the concept of argument as research in order to present the case that there is a relationship between distance education and electronic commerce. The case is made by bringing “clusters of arguments” (Ehninger, 1974, p. 15) together to examine (and use) evidence in such a manner that the discussion leads the audience to see why the adopted position is tenable, and plausible. Following that discussion, and subject to its findings, the implications for the use of an electronic commerce framework can be considered in regard to distance education theory and practice.
Toulmin diagrams - Stephen Toulmin, an English philosopher, produced a seminal study, The
Uses of Argument in 1958. His work was an attempt to provide a formal and analytical mechanism and model for reviewing arguments. In that work he made use of diagrams to depict the flow and structure of argument. His graphics became known as ‘Toulmin diagrams’ and they (argument diagrams) have been used, and modified, since that time (see Gasper, 2000;
Walton, 2000). These diagrams will be further considered in the prelude to Part II and are utilized in Chapters 5-7 to aid comprehension of the general form of the arguments in each chapter.
2.3 Discussion
This chapter has discussed terminology related to research —its content, methodology, and method. In so doing it has pointed to the contested nature of several areas in the conduct of research and has promoted the view that argument is to be recognized as both a research strategy and research methodology. Argument has been explained as a view of the world that needs to be justified by bringing evidence and logic to bear in order to convince a
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knowledgeable audience. In convincing the audience, the researcher understands that other viewpoints are possible and so it is one strategy to defend against such opposing stances. In this way, the research is forced to be reflexive, plausible, defensible, relevant, and thorough.
Key terms have been explained together with a synopsis of how they relate to the current study.
A cogent reason behind the exhaustive presentation in this chapter is the fact that thesis examiners in Australia are reported to be highly critical of dissertations that fail to identify and explain the methodology used in the research. Staving off that avenue of criticism also means that the researcher needs to be cognisant of the many choices that are available for undertaking the study. Hopefully these elements have been addressed as a by-product of the explanations and the synthesis of views presented in this chapter.
Establishing the existence of any relationship between distance education and electronic commerce is an exercise in synthesis. In effect, this means that a bridge needs to be built between these otherwise disparate literature bases. Therefore, the need for logical reasoning to supplement the evidence presented has also been explained.
The current research is from the interpretivist tradition having affinities with the hermeneutic school. The research crosses disciplinary boundaries and includes elements related to education, sociology, political economy, information society/economy, educational economics, human-capital, organization learning, and management. By drawing on this disparate literature, the study will show that the universities are responding to the impact of a range of forces, and one response is to conjoin distance education and electronic commerce even if this is being done unwittingly.
To understand the implications of change for universities, the study will present a case, based on evidence (premises) from existing documentation, supported by reasoning, in justification of the major assertion (claim/proposition) that that there is a growing relationship between distance
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education in Australian universities and electronic commerce. In the light of that case, the study will consider the implications that use of an electronic commerce framework may have for further theorizing distance education in Australian universities.
Before the study can move to the critical task of building the case it is necessary for both distance education and electronic commerce to be more fully discussed. Chapter 3 provides the discussion of distance education and Chapter 4 moves to examine electronic commerce. Once that is done the study progresses to the chapters in Part II where the relationship between distance education and electronic commerce is examined and presented as a case.
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3 Distance education in Australian universities
“A ‘borderless education’ is ‘distance education’”. (Cunningham et al, 1997 p. 24).
3.1 Introduction
This chapter provides background information about distance education in Australian universities. A condensed history of distance education provision is included to show the development of distance education and its relationship to the use of technology, to mediate the interaction between the university and the student. That temporal, technological relationship is usefully characterized as having gone through eras of development. In these eras, distance education delivery has moved from a total reliance on print media through increasing technological sophistication to take advantage of improvements in information and communication technology (ICT) capabilities and national and international telecommunication infrastructure developments. These developments have climaxed with the invention and prolific growth of the world wide web (WWW or web), which has heralded significant changes in the conduct of distance education. Distance education in Australian universities will be further examined in order to develop an understanding of the extent of its spread and the size of its contribution to the higher education arena. Technology is not the only contributor to the flux witnessed in higher education over the recent past, however, and this foundational discussion will also indicate some of the other forces and pressures bearing on the sector.
The discussion in this chapter essentially provides a basis for presenting the premises upon which much of the case to be built in Part II will rest. The premises (grounds or evidence) are revealed here in order that disputation in regard to matters of fundamentals is overcome and does not impede the development of the arguments in subsequent chapters. The evidentiary material in this chapter can therefore be viewed as the building blocks, or foundations, upon which the case depends. Linking the evidence to the claim (or proposition) that distance
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education and electronic commerce are related, that is providing the warrant, also requires that electronic commerce be similarly discussed. That treatment occurs in Chapter 4. After the formative discussions in Chapters 3 and 4, the dissertation moves, in Part II, to the task of connecting the evidence and to examining the principal proposition.
3.2 Terminology
As was suggested in the Introduction to the present study, it is necessary to make clear the use of terminology before proceeding to the fuller discussion of distance education in Australia.
In his historical study of Australian distance education, White (1982) makes it clear that the term distance education had, by that time, become commonly used in the literature replacing both correspondence education and external studies. The latter term had been used to refer to
“correspondence-based teaching programmes at the higher education level” (1982, p. 255) that were “designed to fit the needs of students who [were] physically separated from their teachers in universities and colleges” (1982, pp. 255-256). White reported that correspondence education was usually applied to “levels of primary, secondary and technical education” (1982, p. 255).
Keegan (1980; 1996, Ch. 3), an Irishman with employment experience within the Australian higher education system, has been concerned with the study of distance education over the years. His work provides an exhaustive discussion of the nomenclature used in the literature relating to distance education. After analysing the historic developments of universities' external/correspondence studies, Keegan showed how the field has moved toward the use of newer terms after which he drew on several definitions of distance education promoted by recognized authors in the field. Keegan then arrived at a distilled definition with the following characteristics:
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Distance education is a form of education characterised by: • The quasi-permanent separation of teacher and learner throughout the length of the learning process (this distinguishes it from conventional face-to-face education); • The influence of an educational organization both in the planning and preparation of learning materials and in the provision of student services (this distinguishes it from private study and teach-yourself programmes); • The use of technical media — print, audio, video or computer — to unite teacher and learner and carry the content of the course; • The provision of two-way communication so that the student may benefit from or even initiate dialogue (this distinguishes it from other uses of technology in education); and • The quasi-permanent absence of the learning group throughout the length of the learning process so that people are usually taught as individuals rather than in groups, with the possibility of occasional meetings, for both didactic and socialization purposes. (Keegan, 1996, p. 50)
Moore and Kearsley (1996, p. 206) suggested that Keegan's 1980 definition (replicated in his
1996 work) had become the “most widely cited” in the distance education literature. However, and notwithstanding Keegan's work, many authors continue to use a range of terms such as distance learning, distance teaching, flexible delivery, and open learning. Melton (2002, p. 3) makes comment about the confusion of such terminology and, to the list above, adds open and distance learning, open and distance education, open distance and flexible learning, open distance education and lifelong learning to emphasize his point. This study will utilize
Keegan's definition and, for the sake of simplicity, it will be implied that this definition incorporates the other terms as well. It is clear, however, that distance learning and distance teaching are integral halves of distance education activities at the pedagogical level.
Furthermore, distance education requires that student support systems, administration systems, and systems to support planning for the teaching and learning, need also to be seen as essential component parts. So neither of these terms captures the totality of the undertaking whereas distance education, as a term, does.
Open learning, a more recent term, is also to be subsumed here by the encompassing term distance education. This is not to say that they are identical in all usage in the literature.
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Rather, as Johnson argues (1990, p. 4), open learning is “an approach rather than a system or technique” aimed at placing the student at the centre of educational activities, with control given to them over when, where and how they learn. Johnson (1990, p. 4) acknowledges that open learning may also utilize “delivery methods of distance education” and that there may well be student attendance on campus, or in study centres. It is true however, that several universities around the world have included the 'open' aspect in their titles (see Daniel, 1996) but it is arguable whether any one of them manages to deliver on the fullness of the intention of the term
(Rumble, 1990 pp. 50-51; Scriven, 1991 pp. 299-300). Nevertheless, one aspect of openness, the issue of equity of access to higher education, has been a major political consideration in
Australia as well as in the United Kingdom (hence the Open University), and open learning can be seen as a philosophical commitment to achieving more equitable access. However, proponents of distance education would argue the same case in this regard.
Ongoing debates regarding the digital divide, where the socio-economically disadvantaged gain less access to, and benefit from, higher education have also kept equity issues in view. On the other hand, open learning systems often use distance education delivery methods so that they can attempt to realize economies of scale (Melton, 2002 p. 6; Johnson, 1990; Daniel 1996;
Senate Employment, Education and Training References Committee, 1994 p. 19) thereby attempting to ensure that higher education is financially accessible.
It is worth noting here that the Senate Committee chose to use Johnson's 1990 Open Learning report to derive its “guiding principles” (Senate Employment, Education and Training
References Committee, 1994 p. 7). With that in mind, however, they made the point, that “…
'open learning' encapsulates an ideal situation not yet achieved in our institutional practices”
(1994, p. 7) but were adamant that the terms open learning and distance education were not synonymous. They were of the view that open learning “implies a flexibility that is still more an ideal than a reality” and went on to suggest that the Open Learning Agency of Australia
(OLA) could be a viable answer to increased flexibility. In 2004 however, the OLA, whilst still
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in existence, was not a major player in the higher education arena. Its Annual Report (OLA,
2002 p. 9) states that 541 “students have completed a qualification through the Company since the introduction of full degree pathways in 1997.” Earlier in the report, the CEO (Jim Beck) said, “the active body of learners now exceeds 14,300 students of which two-thirds are registered in university programs…” (OLA, 2002 p. 5). However, the company seems to be protective of its enrolment figures and it is difficult to establish the current, full student load from the report. Nevertheless, according to the report, those registered in university programs approximate 10,000 with many making exits to take on full-time study with the partner universities. At A$430 per undergraduate unit of study, and with 41.5% making use of the
Open Learning Deferred Payment Scheme (OLDPS) the OLA provides access to higher education, though it is not free (OLA, 2002 p. 8-9). Thus it provides one avenue for access, an avenue that may be reconciled with a desire for openness, but in terms of the overall higher education cohort it still represents a small percentage.
In another detailed analysis of terminology, Keegan (2000, pp. 34-44) argues that flexible learning centres are replacing open learning centres in Australia. He also argues against the use of the term open learning because it is not countable (2000, p. 42) and highlights some tensions when he states that “[o]pinions differ on what is 'open' and the same structure can be considered open by some and closed by others” (2000, p. 42). He goes on to unravel the conflated term open distance learning and shows how it was a mis-translation from Dutch into English that has not been taken up by non-European authors in the field. Its use here would also compound the original error. The similar term open and distance learning is, in Keegans's view (2000, p. 43),
“used extensively in European Commission documentation” but that it “is an unfortunate mixture which groups programmes and systems with disparate goals and leads to vagueness and confusion…” (2000, p. 43). Its use here would likely add to such criticism.
As Rumble has commented (1990 p. 50) “distance education is a means, open education is an end,” suggesting that open learning is a socio-political goal whilst distance education is one
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mechanism (perhaps among many) to help attain that outcome. Finally, in Australia it is debatable that open learning has attained anything like the prominence of distance education in universities. For these reasons therefore, the present study chooses to acknowledge the philosophy and intention of openness in the debates over terminology and the use of the term in the literature, in journal titles, and university names but is of the view that the distance education term can adequately refer to the activities that have been covered under the rubric of both sets of terms, even if the ideology is not identical. Finally, as the following section and the dissertation overall will show, developments in ICTs have been so profound and widely adopted that the desire to place students at the heart of open learning may well be achieved within more tightly confined notions of distance education.
More recently in the literature, there has been a proliferation of nomenclature relating to the use of the world wide web (www or web) in higher education and in particular for activities resembling those already seen to be incorporated under the generic distance education term.
Terms such as e-learning, distributed learning, and web-based learning, to name a few representative samples, are now regularly found in the literature. Those terms too will be subsumed under the larger umbrella of 'distance education' for the current study. It will be argued that the activities posited to take place under the e-learning types of labels are congruent with those found under distance education and so for consistency of usage the single term distance education will be used throughout the study. Where the terminology in the literature is used in specific ways, and in a different manner from that suggested here, then the original terms will be used with an explanation as to why that is so. Flexible learning is one such term—it may imply the use of distance education approaches in certain contexts but the term is more often used to refer to a resource-based approach on campus. In this format universities are making the technologies of the web available as supplements or complements to the usual on- campus delivery. Australian universities that are moving to flexible approaches will have also taken a considerable step toward being able to enter distance education. The move to what is known as the integrated or mixed mode of distance education is really only a management
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decision away, once flexible learning has been embedded within a university. Working under the mixed-mode approach, academic staff are responsible for both on campus and distance education activities as a part of their normal duties. Once they have commenced down the pathway to supporting on campus students with an online and resource-based approach to education, then it is relatively easy to take the further steps into distance education using the same technology (and, presumably, prepared learning materials) though without the advantages of meeting students face-to-face, as would be the case in a flexible, on campus mode.
It is also true that many writers use the e-learning term to refer to in-house, corporate training schemes. In such usage the term is clearly outside the scope of the present study as such training schemes will not usually result in university-based qualifications, and they are not therefore a part of the higher education environment as understood here. The e-learning market, however, could hold some competitive threat for on-campus and distance education as will be seen in Part II of this study and so it is not to be dismissed at this stage. One reason for its retention is that e-learning, and virtual universities as a component of the corporate marketplace, may not need to compete on a bricks and mortar basis, but may move entirely online. In this sense their models of operation may be informative for the purposes of this study. Furthermore,
Keegan's (1980, 1996, 2000) definitional work was important in establishing that distance education is characterized by the role of an institution in providing the distance education system for a student to enter. The students' learning has to be supported in a variety of ways and so too does their engagement with the institution in terms of enrolment, paying of fees, graduation, record keeping and all the other aspects that one would expect of a large scale educational organization. E-learning and virtual universities may demonstrate other possibilities enabled by web technologies, to move away from a prior focus on real buildings, to a virtual presence.
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3.3 Distance education — a condensed history
Distance education (external studies as it was then called) has been offered in Australian universities since 1911 when the University of Queensland (UQ) first began its operations
(White, 1982; Northcott, 1984). The University of Western Australia commenced its distance education activities in 1921 and the University of New England (UNE) was the first non- metropolitan university to offer distance education when it started to do so in 1955 (Northcott,
1984 p. 41-42). Northcott (1984, p. 44) added that “Macquarie University, Sydney, Murdoch
University, Perth and Deakin University, Geelong founded in 1964, 1970 and 1977 respectively” were to become major providers of distance education to add to that of UNE and
UQ. The University of Western Australia scaled back its involvement after a series of government policy changes had seen colleges of advanced education (CAEs) assume growing responsibility for distance education after 1965. The CAEs were an outcome of the Martin
Report of 1964, whereby new institutes were created and former teachers and technical colleges were converted to CAEs in order to deal with increased demand for student places (Northcott,
1984).
Northcott also informs us that the Royal Melbourne Institute of Technology, then a part of the
Australian tertiary education sector, began its distance education activities in 1919 well before it became a university. Similarly, many CAEs have provided distance education during the second half of the twentieth century.
The authors who have traced the early periods of Australian distance education make a number of interesting points during their analyses. White (1982) makes it clear that there was more than one approach to the carriage of distance education in Australia. He, and others (see for example, Northcott 1984 & Eastcott and Small, 1984) wrote about the different models that were instituted in different universities including the New England model that arose at the UNE.
This model was based around academic staff integrating distance education teaching with their
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on campus teaching. Another model was that found at UQ whereby academic staff were hired to work specifically in an external studies unit/department, bringing their academic knowledge and subject matter expertise to the distance education activities alone. The UNE model (also called the Armidale Model) ultimately came to be known as the integrated or mixed-mode approach and has been most favoured in Australia, including the ultimate move to this model by
UQ (NBEET, 1992b p.2). These same authors (and Keegan 1980) also made the point that
Australia was seen to be a world leader in many facets of its distance education operations.
Many overseas institutions have sent representatives to Australia to study the distance education activities and the approaches assumed by Australian colleges and universities.
The so-called Dawkin Reforms of the late 1980s (Dawkins, 1988), named after the then Labor
Minister for Education, John Dawkins, saw the advanced colleges upgraded to have university status and to become a part of a single Unified National System of Australian universities. In some cases colleges, for example Mitchell and Riverina Colleges of Advanced Education, amalgamated to form a single university (in this case the combination became known as Charles
Sturt University), so the conversion from CAE to university was not always on a one-to-one ratio. Most of these newly formed institutions would be among the new university and unitech groups (Marginson and Considine, 2000; also see Appendix 1 in the current study) spoken about earlier in the present study. Many of them had prior responsibilities for the education of teachers, a group that had been heavily represented, as students, throughout Australia's distance education history (White, 1982). Offering distance education was seen as a necessity for survival for many for the newly formed universities (White, 1982; Northcott, 1984). Distance education was a means to ensure viability by meeting and maintaining student enrolment quotas.
Whilst the University of Western Australia had introduced and maintained a fee-free policy for higher education from its outset, institutions elsewhere were supplementing their government funding with fees from students. In 1972, the newly elected federal Labor government, with
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Gough Whitlam as Prime Minister, abolished higher education fees and “all funding became a
Commonwealth rather than a State government responsibility” (White, 1982 p. 272).
Table 3.1 presents the numbers of distance education student enrolments in the period 1971-
1981. The Colleges of Advanced Education and the universities' enrolment numbers reflected the liberalized higher education policy of the time, with major growth from 1972-1975. The recession hit hardest around 1978-1979 with total enrolment growth slowing appreciably.
Table 3-1 Students in Australian Universities and in Advanced Education Courses, 1971 - 1980.
(Source: Tertiary Education Commission, Report for the 1982-1984 Triennium, Canberra, AGPS, 1981 cited in White, 1982 p. 271; and figures for 1981 from the same original source cited in Northcott, 1984 p. 46).
Notes: (i) Figures for 1971 to 1973 include estimates for government teachers colleges that were not classified as colleges of advanced education in those years. Data prior to 1975 excludes advanced courses conducted by TAFE institutions. (ii) Increase on previous year calculated excluding students in advanced education courses conducted by TAFE institutions in 1975.
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A National Board of Employment, Education and Training review commented that the “activity
[of distance education] expanded dramatically in the 1970s, with the number of higher education providers rising from six to over thirty” (NBEET, 1992b p. 2). A related aspect can be derived from the figures — distance education students represented approximately 5.8% in
1971 to 11.7% in 1981 of the total higher education cohort in Australia (percentages based on
DETYA, 2001b Table 1). Another aspect is the increasing rate of participation in higher education in Australia—growing from 193,218 in 1971 to 327,554 in 1980—as well as the growth, as a relative percentage, of the numbers of external students. Macauley (1996) reported on this growth as follows:
By 1988, forty-two colleges and six universities in Australia offered external courses to almost 48,000 students (Crocker, 1991: 495). In 1994 nearly 69,000 students were studying via the distance mode from twenty-eight universities throughout Australia (Department of Employment, Education and Training, 1995: 22-23).
In summary, demand for distance education was strong and growing throughout this period.
Appendix 2 - Time Series 1949-2000, contains a more detailed set of figures plotting the increase in distance education as a percentage of all Australian higher education.
This egalitarian situation of the Whitlam regime was short-lived, however, as the recession of the 1970s led to concerns about government spending. Furthermore, the rampant growth in distance education led to concerns in federal and state agencies that the “many small size and relatively insignificant programmes” (White, 1982 p. 274) could undermine the reputation of distance education. As White went on to say, there was instituted a number of inquiries into
Australian distance education activities, especially with a view to “rationalisation” (1982, p.
274). Those inquiries (see for example, Hudson, 1986; and Johnson, 1983) could be seen to have come to a head when in 1989, as a part of the Dawkin Reforms, eight specialist Distance
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Education Centres (DECs) were created in universities around Australia. The DECs were as follows -
• University of Southern Queensland • University of South Australia, and • University of Central Queensland • Curtin University/Murdoch University • Deakin University and Edith Cowan University in Western • Monash University, Gippsland Australia—collectively, the Western • University of New England Australian Distance Education • Charles Sturt University Consortium (WADEC).
The DECs, which commenced in 1991, were seen to be one policy move to streamline distance education operations in Australia and “the main thrust of the policy was to enhance distance education by reducing duplication, fostering cooperation between institutions and improving the quality and efficiency of external courses” (NBEET, 1992b p. v). A special committee was formed to review and then advise the government about the DECs in line with specific criteria set down by the government. As that committee reported, the DEC system had significant problems:
In summary, the policy of the committee, which the government adopted, was to limit the provision of costly infrastructure but to ensure that it was accessible to other institutions in the Unified National System; to encourage cooperation between DECs, and between DECs and specialist providers, in the development of courses; to reduce duplication in course development without reducing the range of topics available to Australian students; and to concentrate rare expertise and enhance quality of courses. With the exception of the last objective, enhancement of quality, one might argue that these objectives were not achieved to any substantial extent.
It was not envisaged at that time that the educational principles and methods of distance education would have any substantial impact in face-to-face institutions; nor was the pace of technological change, and its reduction in cost, anticipated. (NBEET, 1992b p.5).
The committee's report to the government presaged the ultimate demise of the DEC experiment, which happened by the end of 1993 (Inglis, 1999 p. 21; Walker, 1998 p.29). One reason for the collapse was that the committee found, during its investigation, that “of the institutions which in
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1989 were offering some distance education courses in a small way, almost all remain active.
… To the extent that 'the DEC system' was intended to discourage minor players from the field, it has not been successful…” (NBEET, 1992b p. 6). The report also commented on cumbersome funding mechanisms; rivalry among DECs limiting collaboration; great duplication of course materials; limited capacity to make productive investments in technology due to differing platforms; and the prevalence of 'uneconomically small enrolments' as contributing to the poor outcomes in the DEC review (NBEET, 1992b p.6-7; Senate
Employment, Education and Training References Committee, 1994 p. 12-16). Inglis (1999, p.
20-23) also commented on less well-known outcomes that he argued were due to the DEC system and included severely diminished funding to non-DEC distance education providers; significant career development problems for distance education oriented staff who could no longer bring their skill and knowledge to bear in a non-DEC organization; and, downward spiralling inter-personal cooperation among former colleagues in the winner and loser categories of DEC and non-DEC universities.
Following the collapse of the DEC approach mid-way through its intended five-year term, the distance education field was reopened to all universities. In the years immediately following the withdrawal of government funding to the DEC system, Australia was also to witness the creation and then burgeoning growth of the world wide web. It was also throughout this period that the Internet first became accessible to the public and then subsequently commercialized. It was the speed of that commercialization and the ensuing spread of associated networks and computing facilities around the globe that has brought the technology of the web to the forefront in higher education, and especially in distance education.
The committee of review into the DEC system was also aware of the ICT implications in their report, when they commented that the “rapidity of technological development was not foreseen”
(NBEET, 1992b p.6-7). They went on to explain that due to such changes (and recall that this was still prior to the advent of the web in Australia) “any institution that wishes may commence
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some aspects of distance education teaching without heavy outlays” (NBEET, 1992b p. 7).
Whilst they had tele-conferencing, video-conferencing, computer mediated communication, and listservs in mind, it would seem from this period in Australian distance education that the portents for technologically enabled competition in higher education were already being noticed and put into place.
Walker's research (1998, pp. 29-30) also makes the important point, that in addition to the universities bestowed as DECs, the following universities could be recognized for the research they were doing in relation to distance education and open learning:
• Flinders University • University of New South Wales
• Griffith University • University of Queensland
• Macquarie University • University of Sydney
• Melbourne University • University of Tasmania
• Queensland University of Technology • University of Technology Sydney
• Southern Cross University • Wollongong University
The combined list therefore totals twenty universities in Australia, in the early 1990s, which had been involved in some form of activity related to distance education and open learning.
On the basis of student mode of attendance figures tabulated by the federal Education
Department (DEST, 1999, Table 26), it is possible to deduce that a further twelve had become involved to bring the total to thirty-two by 2000. Since that reporting period the department has commenced collecting statistics that differentiate among student enrolment types. Up till 2000 internal and external had been the only categories (with full and part-time breakdowns as well) but multi-modal has since been added to capture those students who enrol in at least one on campus and one off campus subject. This new form of enrolment totalled 30,962 (24,812 full and 6,150 part-time) students for the period ending in semester 1, 2003 (DEST, 2003, Table 25)
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which was 3.7% of the total higher education cohort. External (distance education) student enrolments for the same period were 120,176, or 14.5% of the total cohort. The multi-modal figures reflect the numbers of students who are now able to study in universities that are prepared to provide recognition and support for mediated forms of higher education. Allowing on campus and distance education modalities and encouraging students to 'mix and match' to meet their needs may be recognition of the move to open and flexible delivery in such institutions as well. In any case, these students are now able to be distinguished from the former internal and external categories and will provide further detailed input into mapping student enrolment preferences.
3.4 Distance education population in Australia
Appendix 2 is a time series table from 1949-2000, showing student enrolment by mode of attendance (DETYA, 2001b). The table shows that in 2000, external enrolments had reached an all-time high, being 13.7% or 95,361 (DETYA, 2001b, Table 2) of the total higher education cohort with aggregate enrolments of 695,485. Table 25 (DEST, 2003) shows that, for semester one, the total external enrolments had increased to yet another all-time high reaching 120,176 being 14.5% of the total cohort. That Table, however, includes enrolments in institutions other than public universities, and when those have been excluded, the enrolment figures for 2003 are
118,165. Multi-modal enrolments (i.e. students taking a mix of on campus and distance education studies) for the same period reached 30,962 (with the same non-public university exclusions). Even with the multi-modal enrolments omitted from the considerations in this study, these figures suggest that distance education is prospering as a mode of study in universities in Australia. In fact, the Australian Bureau of Statistics stated that between “1991 and 2001 … external enrolments have increased by 97% to 127,000” (ABS, 2004 online). Such a growth rate in distance education enrolments must be a reflection of increased capacity and willingness to educate students via this mode in Australian universities. The technologies now being used in distance education may well have played a major part in fostering this growth.
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3.5 International student population in distance education
According to IDP Education Australia (IDP online Higher Education Article 406, accessed Mar
2004) for the year 2002, “66% of international students [we]re studying onshore, 10.7% [we]re enrolled in distance programs and 23.6% [we]re studying at off-shore campuses of Australian universities.” By 2003 the total number of international students enrolled at Australian universities was 174,732, a “12.5% increase from the 155,275 enrolments in Semester 2, 2002.
… The total number of international students as a proportion of the total student population in
Australian universities was an estimated 21.5% in Semester 2, 2003 compared with 20.4% in
Semester 2, 2002” (IDP online Article406, accessed Mar 2004). IDP in the same online resource cites Australian Education International and DEST sources, to the effect that “almost half of the international students are enrolled in management and commerce courses”. IDP also claims that “global demand for international higher education is set to exceed 7 million students by 2025. This represents over 4 times the global demand in 2000”. Whilst these figures have to be treated with caution as forecasts, the indications are that distance education, as a proportion of enrolments is also set to escalate. To meet the current and forecast demand, universities will have to look to ICT as enabling technology, an aspect that will be revisited in later chapters.
IDP also makes clear that demand from our current Asian and sub-continental source countries is continuing to grow but, importantly, significant growth has also been noted coming from
“Germany (40.9%), India (34.2%), United Kingdom (33.8%), Canada (30.6%), and Bangladesh
(29.9%)” (IDP online Article406, accessed Mar 2004)—Brazil, Sweden and France were also noted as becoming more important.
International student enrolments contribute to the Australian export of higher education, to the extent that higher education now represents the eighth largest export industry in Australia, to the value of AUD$4.2 billion. The forecasts (presumably to 2025, as the specific range is not stated in this section) include an expectation that education exports will rise to over $38 billion, in
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2002 dollar terms (IDP Media briefing, 2002 pp. 1 & 4). This trade in services will be revisited in chapter 5 that explores Australian involvement in the General Agreement on Trade in
Services (GATS) round of negotiations so that the importance of international exports in the higher education field is better understood. IDP (National overview, 2003 p. 3) stated that “off- campus (distance) enrolments increased by 65.8% compared with Semester 2, 2002”.
Australian universities, and their marketing divisions, are well aware of the demand for places in their institutions and this feature of Australian higher education will also be revisited in later discussions as the main dissertation case is developed in Part II. For the moment it is topical, as a prelude to considering media in education in the next section, to contemplate the forecasts for
Australian higher education in the years ahead. According to IDP, Australia is set to reap a windfall from international higher education demand between 2000-2025. Global demand is tipped to grow from:
1.8 million international students in 2000 to 7.2 million international students in 2025. … Total demand for Australian [sic: higher] education is set to increase over 9-fold over the period … an increase in Australia's share of global demand from 3% in 2000 to 8% in 2025. … By 2025, it is forecast that the total demand for international higher education in Australia will exceed 996,000 students. …transnational or offshore (through offshore campuses and distance education) programs will account for 44% of this total demand. On this basis, by 2025, the demand for international onshore higher education in Australia will exceed 560,000 students (IDP Media briefing, 2002 p. 3).
Put another way, the forecast figures suggest that Australia will have to build a capacity greater than the totality of its current higher education system in the next eighteen years simply to meet external demand. Those figures do not include the Australian demand. The demand figures need to be taken with a dose of realism but it seems clear that, even if the numbers were halved, the economic benefits for Australia would be enormous. It would be logical therefore to conclude that meeting that demand would be in the economic interests of all concerned with higher education in Australia. It seems equally logical to conclude that capital works
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programmes are not going to be the mechanism through which the universities are able to meet the forecast demand. Similarly, staffing for the higher education system in Australia may well prove to be an issue. Given the statistics above, 436,000 students will wish to study via distance education or in offshore Australian programmes. Questions then need to be asked about how the higher education system might best be organized to meet the demand and to reap the benefits. To gain a better understanding of how local and international demand for higher education might be met it is necessary to consider the technologies that have been applied to the distance education operations in Australia. That discussion is the focus of the next section.
3.6 Media in distance education
By definition, distance education sees students as removed from the institution in time and/or space. In order to surmount the problems that such separation presents, various media have been utilized. Throughout the history of distance education in Australian universities, the medium of print has been the most important vehicle for delivery. Correspondence studies were of course so called because they were orchestrated around the use of the postal system to deliver print materials to students who in turn used the same services to submit assessment items. The academic staff then were able to respond, via the annotated assignments, supplying feedback as a form of correspondence.
Enormous numbers of publications have been produced recording the interest in the topic of media in education. This applies as much to distance education as it does to conventional formats and testifies to the interest and importance attributed in the field of distance education to the delivery mechanism and to the learning aspects of developing technologies. The Council of Australian University Librarians (CAUL), and the Council of Australian University Directors of Information Technology (CAUDIT) and the Australian Universities Teaching Committee
(AUTC) are three bodies established to organize, direct, promulgate, focus or study the use of technology (and matters interrelated) in higher education in Australia. Related to these groups,
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by potential impact, are the Higher Education Bandwidth Advisory Committee (a commonwealth initiative), the Australian Research and Education Network Advisory
Committee, and the Higher Education Infrastructure Advisory Committee. These bodies have been created to provide advice to government on matters relating to the telecommunications and computing networks in Australia (Tate, 2003 submission to National Research Infrastructure
Taskforce, online), especially in relation to the carriage of research and education in universities. As CAUDIT's Chair, Nick Tate indicates (Tate 2003, p. 1) “CAUDIT is a national body comprising the Directors of Information Technology of the Australian universities together with associate membership by the IT Directors of the universities of New Zealand,
Papua New Guinea and Fiji.” Tate also states (Tate 2003, p. 1) that CAUDIT's mission is to:
promote and advance the use and support of information technology in teaching and learning, research and administration in the universities through the competent management of IT services and the education of their clients. In this context, information technology includes both computing (in all its flavours) and communications, particularly as these relate to teaching and learning.
The infrastructure to support the universities and their missions as well as the needs of their students has a significant relationship with espoused government views about the role of, and demand for, higher education in the future of the Australian economy. Indeed the recent policy directions from both major Australian political parties (Labor and Liberal) are to see human- capital development as being of the utmost importance in a knowledge-based society (Nelson,
2003; Jones and Evans 2001). It is important to acknowledge the role that the advisory groups named above play in furthering the national and international efforts of Australia's higher education institutions. Their existence suggests an agenda that encompasses a wider purview than the universities working together or alone can claim or hope to achieve.
Since 1911 there has been steady adoption of viable, alternate technology to serve the distance education needs in Australia, with radio, television, video conferencing, audio conferencing,
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facsimile, computer based training, and more recently the Internet being applied to educational purposes. Over time researchers have attempted to place the use of technology into categories or eras with 'generations' of distance education being derived in accordance with the features of the predominant technology being used (Taylor 2001). Taylor's work, Table 3.2, is one such example, and will be used here to draw on his ideas of the models of distance education and their associated delivery technologies.
Table 3-2 Models of Distance Education - A Conceptual Framework
(Source: Taylor, J. C., 2001 Fifth generation distance education, Table 1 p. 3)
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Some comments on Taylor's table are warranted here. At the time of writing no (published) attempt has been made to correlate Australian universities with the table and its generations so it is not easy to generalize across the Australian national system to say which universities are now in, or close to entering, the fifth generation. Taylor believes that some universities (such as his employer, University of Southern Queensland) are already using technology in the manner suggested as being necessary to be seen as fifth generation. In his view, “the fifth generation of distance education is essentially a derivation of the fourth generation, which aims to capitalize on the features of the Internet and the web” (Taylor, 2001 p. 2).
Taylor is mindful of the requirement for universities to be responsive to change and to increased competition in higher education and of the need for universities to react quickly to the developments in web media. He is of the view that universities with significant commitment to distance education “have always been, and always will be, in the vanguard of innovation and change” (Taylor, 2001 p. 2). This suggests that many Australian universities will be well placed to take advantage of the web and its many attributes for improving their positions in higher education both within Australia and overseas. That discussion, however, is implied in the presentation of the case in Part II of the current study and will be left to that stage.
The rightmost column in Table 3.2 is based on work done in 1993 by Taylor and his colleagues,
Kemp and Burgess. It is his position that “prior to the advent of online delivery, variable costs tended to increase or decrease directly (often linearly) with fluctuations in the volume of activity. … In contrast, fifth generation distance education has the potential to decrease significantly the costs associated with providing access to institutional processes and online tuition” (Taylor, 2001 p. 2). Taken together with the distance education student enrolment numbers provided earlier in this chapter, it would seem that the potential for universities to generate sufficient enrolments to warrant the development costs associated with fifth generation is likely to be high.
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It is worth pointing out, however, that the matter is contentious with some claiming that distance education can be cheaper to organize, run and maintain than conventional higher education based on a campus. Several scholars (see Rumble's work for the UK (1997); Carr's work for the
USA (2001); and Bates' 2001 and his generic 1995 study) have studied the cost of distance education and argue that size is important as gaining economies of scale in distance education requires large numbers of students—Daniel (1996) reported that the threshold for the UK Open
University was 20,000 students.
Keegan's (2000, p. 28) interpretation of Rumble's work was that he “showed that unless the investment in media was excessive, or the variable cost per student was higher than conventional systems, or the distance system could not attract sufficient students to warrant its investment in materials, the distance system would always be cheaper.” The distance education
'mega-universities' (Daniel, 1996) are so called because of their size (for Daniel it meant a minimum of 100,000 students) and Daniel argues that they do have the scale to generate significant savings “between 39 per cent and 47 per cent of the other universities' costs for ordinary degrees; between 55 per cent and 80 per cent for honours degrees” (Daniel, 1996 p.
39). Here he was referring to the UK Open University, of which he was former Vice
Chancellor, in which print media are the mainstays of the distance education delivery. This reliance on print media also applies to the other mega-universities (Daniel, 1996; Cunningham et al 1997, p. 132) though there is some uptake of web-based technology in those institutions.
Their capacity to achieve economies of scale is based on the combination of the population numbers they serve and the choice of technology they use. As Bates and Poole (2003, p. 94-95; see also Bates, 1995 & 2000) argue:
Cost is generally a good discriminator in media and technology selection and use. Costs vary a
great deal between different media in particular. Audio is relatively cheap to produce and
distribute; video is relatively expensive. Good quality educational print material is relatively
expensive to produce but cheap to distribute. Online courses are relatively cost-effective for
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class enrollments of between twenty to a hundred if enough suitable additional contract
instructors can be found. However, online courses become expensive compared to face-to-face
teaching if numbers drop below twenty students per course offering, and expensive compared to
print-based distance education if numbers exceed a hundred per course.
It is not as clear-cut that conventional universities can turn distance education into an operation with significant cost benefits. Mason (2003, p. 8) reports that:
ICT has been seen as the way out of the dilemma caused by the demand to reduce costs and increase access and student numbers. … While corporate trainers have been able to show cost savings in moving to ICT-based training, most universities find that ICT adds to their costs. The more emphasis they place on maintaining or improving quality, the more costly online learning is. The infrastructure, equipment and maintenance costs are only the beginning: new staff, new training and greater workloads add substantially, if a full costing study is carried out. One of the problems is the legacy systems that most universities have in place already and that make incorporating online learning an additional cost. Virtual universities starting from scratch may find cost savings easier to make. … So the challenge is to do more with less resource, and many universities are seriously engaged with how to do this.
Mason’s comments also point to the desire in universities to improve access to higher education as well as the quality of the educational experience and so it is necessary to be mindful in choosing and using the ICT that student experiences (eg, improved communication with staff and other students) are enhanced. This is achieved, in part, by focussing on the opportunities for, and quality of, the interaction that takes place in the learning experience. As Mason (and
Bates and Poole, 2003) points out, the costs for getting teaching staff trained to be able to effectively use and optimise modern ICT must be factored into the overall costing exercise (see also Cunningham et al, 1997, pp. 131 ff. for a discussion re costing issues). Similarly, the degree of dependency on ICT in a course of study may also have implications for students whose skills and knowledge in relation to ICT will vary considerably and any movement to total reliance on ICT, for example, in wholly online and web-based higher education, may come at the cost of disenfranchising some of the potential student base. Economies of scale emerge for
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the mega-universities and for universities using distance education approaches in their use of mass-produced print-based packages. Economies of scope on the other hand emerge when web- based approaches are used to reduce costs for the design, development and delivery of courses.
This is particularly the case where smaller numbers of students are likely to be the target of such developments and for whom print-based media would prove too costly an alternative (see Bates,
1995, and 2005 in press; and Elloumi, 2004).
Bates and Poole (2003; see also Salmon, 2000b, Cunningham et al, 1997) also point out that enhanced online interaction, enabled by use of web-based approaches to distance education, is a major attraction for both teachers and students. There are, however, costs associated with this in terms of staff workloads and it is not clear that the costing exercises to date have a full and valid economic analysis to offer in this regard (see Cunningham et a, 1997, Chp. 4; Rumble 1997;
Carr, 2001; and Bates 1995, 2001, 2003 for further discussion).
How the universities are responding to these issues and to the take up of ICT is taken up in the discussion about business models in Chapter 7.
One thing that Taylor's table (Table 3.2) does not make clear is that print media are likely to be used in all the generations though to a lesser degree than before. Fully online public universities using nothing but digital communication, to the exclusion of print, are few and far between and none with these characteristics exist in Australia. The postal system is still useful in distance education in Australia and, for example, Charles Sturt University (CSU) which has claimed that over 65 per cent of its 35,567 students are studying via distance education, still routinely dispatches study materials in 'hard-copy' even though it also claims to have a great majority of its subjects available online (CSU, 2000, 2003). CSU could well be placed in Taylor's fourth generation category though there would be some question about whether it offers 'interactive multi-media online'—the point is that even though it certainly fulfils some of the requirements of that category (and indeed the fifth generation as well) it still has a very high dependence on
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print media. As the study will later highlight, the choice of media will have a direct bearing on costs involved in distance education, and will consequently also affect the university's capacity to optimize investments in ICT.
Now, whilst print media is still an important, though perhaps declining, component of
Australian distance education delivery, the universities (and previously, colleges) have not always been content to rely on those media. Universities involved in distance education have always experimented with new technology in pursuit of an enhanced capacity to serve their student base.
In the prior discussion about the establishment of the DEC system and the subsequent decision for it to be dismantled, the thrust of the government's interests in opening up access to higher education was not totally abandoned. As the end of the DEC system was being heralded, the federal government funded an Australian Open Learning Initiative (OLI) in 1992 to the sum of
A$52 million (Walker, 1998). Walker also reported that, “in 1993 a consortium of universities, led by Monash University won the bid to implement the OLI, leading to the formation of Open
Learning Australia (OLA)” (Walker, 1998 p. 29). The OLA formed close links with the
Australian Broadcasting Corporation in order that television could be used as an integral component of the new venture into open learning. OLA acts as a broker to a group of
Australian universities whose course materials are available to the OLA. OLA takes administrative responsibilities for enrolling students but does not have degree granting powers of its own. OLA was also expected to be fully self-funding after the initial period of its operations (Senate Employment, Education and Training References Committee, 1994 p. 28).
The whole exercise emphasizes the government's desire to make greater use of technologies in higher education as well as to pursue the philosophical goals of open access into Australian higher education, even if, as a by-product, that also realizes cost-savings.
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The PAGE (Professional and Graduate Education) consortium, headed by University of
Wollongong, was another of the federal government funded attempts to seek higher education benefits by making use of the public television infrastructure—this consortium was in collaboration with the Special Broadcasting Service (SBS). PAGE has since abandoned involvement and has merged with OLA, which now offers postgraduate services previously outside its remit (OLA, 2002 p. 11).
These university experiments with the use of television have been pioneering and path-breaking, but have not been able to maintain their initial interest and momentum. On the other hand the university usage of telecommunication networks and computing facilities have continued to grow and have become fundamental to their operations. Australian universities have made intensive use of the Internet over the past two decades and especially since the advent of the world wide web in the mid-1990s. Prior to the creation of the web, the Internet in Australia had been the province of the universities, research bodies (e.g., CSIRO) and the military. The web's arrival, with Mosaic as its initial graphic user interface, heralded the commercialization of the
Internet in Australia. Here, as elsewhere, the commercial adoption and usage of the web has led to enormous change in the conduct of business. In the universities, the web has also signalled a range of new opportunities in relation to distance education as well as to the business operations of the universities.
Today, with pressures being placed on governments to expand access to higher education
(Taylor et al 1996, pp. 3-13) print media and others such as audio and video conferencing may not be adequate to the task. As Taylor et al (1996, p. 10) argue, “to fail to utilise CIT [sic, equal to ICT] resources as a means to assure increased access represents, in terms of a nation's human- capital development, an opportunity loss.” They go on to argue from their interpretation of the literature that what arises:
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is a strong sense of the convergence of the social agendas of access and equity and of mass higher education, the national treasury agenda of fiscally responsible affordability and the use of technologically-based flexible modes of delivery. Thus, rather than the 'technological imperative' suggested by Holt and Thompson (1995), there appears to be a sense of 'technological inevitability' associated with the need to support mass higher education. (Taylor et a,l 1996, p. 11)
In the eight years since their report was researched there have been myriad developments in the higher education arena, not least of them being a change in federal governments in Australia, rapid developments in the technologies of the web such as portals and Java language, increased participation in higher education by Australians and international students, and ongoing reductions in federal funding with an increase in the emphasis on quality assurance and performance management in universities. Paralleling these changes have been significant developments in the commercial sector for their use of ICT for business. In view of the breadth of the changes in higher education in Australia and of the increasing importance being placed on successful application of technology in education it seems that educational media will continue to play a prominent role in distance education. This role will partially be for the educative component that ICTs can play, but it will also be because of the concurrent political and administrative functions to which ICT can be put. In addition, it looms as one mechanism through which Australian higher education institutions can hope to meet the forecast demands for higher education reported earlier in this study (IDP, Media briefing). Part II of the current study also takes up those features in more detail as they are seen to be important to the overall case being constructed. Similarly, the use of the Internet and the web in particular are core aspects of the study and will be presented in greater depth in Part II.
Whilst distance education has been progressing in terms of the number of universities in
Australia that have decided to enter this field, and whilst it has been involved throughout its history in making use of the latest in technology, another aspect that has been developing is the professionalization of the sector. To understand the extent of distance education activities in
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Australia it is helpful to consider the number and range of associations, journals, government instruments and committees that have been established with direct relationships to distance education. To that end, a brief discussion follows that is intended to highlight the vigour and depth of activity going on in Australian distance education.
3.7 Institutions involved with aspects of open learning and distance education
Diversity Down Under, edited by Kevin Smith and published in 1984 is a good place to start because that tome was the first to attempt to trace the development of the professional association of the distance education community in Australia. As Smith indicates (1984, p. 4), the Australian and South Pacific External Studies Association (ASPESA) was formed in 1973, a year after it was mooted at a forum on external studies at the University of New England. Prior to the creation of ASPESA there had been no single body organized to provide a focus for sharing and developing professional activities relating to 'external studies' in Australia.
ASPESA was, according to Smith (1984 p. 6), created with the following objectives:
a. To promote understanding and co-operation among those concerned with the improvement of external studies in Australia, New Zealand, the South Pacific and other neighbouring countries. b. To foster a high standard in the practice and study of external studies at post-secondary level. c. To hold forums on various aspects of external studies. d. To disseminate information about research and practice in external studies.
These objectives were later expanded so that ASPESA in 1978 started to organize practical workshops, formed a Special Interest Group (Inglis, 1999 p. 16) and then added publication of a journal, Distance Education, from 1980. This journal has remained the flagship publication of distance education in Australia ever since, and provides one avenue for recognized national and international scholarship in the field. ASPESA also joined the peak international body then called the ICCE (International Council for Correspondence Education) and managed to have that body formally change its name to the International Council for Distance Education (ICDE)
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to better reflect its “area of interest” (Smith, 1984 p. 13). ASPESA itself underwent a name change to become the Open and Distance Learning Association of Australia (ODLAA) in 1993.
Inglis argues that ODLAA has been active in promoting the “value of distance education and in advancing its theory, research and practice” (1999, p. 25) but goes on to say that the organization has since faced a number of external challenges in the self-selected areas of its focus. He argues that due to the impact of the application of ICTs (he used Marc Eisenstadt's term 'knowledge media'), the “boundaries between distance education and other modes of delivery [were] rapidly breaking down… As a result, other professional associations are staking a claim to part of the 'territory' that ODLAA previously saw as its own “ (1999, p. 25). Inglis then pointed out that the following associations were involved:
i. The Higher Education Research and Development Society of Australia (HERDSA), was staking a claim to the domain of staff development, ii. The Australian Society for Computers in Learning in Tertiary Education (ASCILITE) and the Australian Society for Educational Technology (ASET), were staking claims to the domain of digital materials development, and iii. International Society for Performance Improvement (ISPI), was staking a claim to the domains of instructional design and evaluation (Inglis, 1999, p. 25).
In addition to the associations mentioned above can be added RIDE (Research in Distance
Education). RIDE is a research conference organized from Deakin University especially focussed on matters relating to distance education.
This range of activities and the competition for territory, highlights the fact that higher education has become another marketplace and distance education has, in this sense, moved from the periphery to the centre, at least inasmuch as the use of ICT in higher education is concerned. This suggests at least two scenarios—firstly, that associations, and possibly universities, will see merit in collaborating to bring about mutual benefits by accumulating more
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of the territory for themselves and their chosen partner(s) and secondly, that the competition for market space will actually work against collaboration between these associations and the universities with which they have affiliation. Chapter 7 of the study will assess business models from an electronic commerce perspective that may also shed further light on these scenarios.
The capacity of telecommunication and computer networks to distribute materials to students is not, of course, something that is restricted to the Australian environment. It should not be surprising therefore that non-traditional players have been watching the developments in higher education in Australia and elsewhere with growing interest. The same ICTs are available to corporations the world over and, as will be seen in Part II of the current study, the traditional territory of the universities is now also being besieged by groups that can see potential for profit-making. The role of media in higher education and particularly in distance education seems to have changed since the web has been introduced—now the arena is open to many more competitive interests, and students will be eagerly sought to join up as customers in a life-long journey to greater levels of knowledge and credentials (see also Mason, in D’Antoni, 2003 for further discussion). Whether the traditional university models will be adequate to the challenge is therefore a fundamental question and the current study will further examine alternative models in Chapter 7. There is good reason, therefore, to consider the economic ramifications for higher education of the promulgation of sophisticated technologies around the globe.
Alongside that, it seems important to consider the possibility that higher education is becoming commercialized through these enabling technologies and, together with the necessary management decisions, beginning to appear like an electronic commerce application.
In addition to the professional associations above, the Australian government has obviously had a vested interest in the conduct of university operations. By controlling the finances of the universities, at least to the extent of block and recurrent funding, the government can stimulate actions in universities to become more self-funding, competitive, community conscious, quality oriented and instruments of government policy. In order to see how ICTs can assist in
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achieving such national policy options in these matters, the government has been active in financing and producing reports on the use of technology in Australian universities (see Taylor et al 1996; Moran 1995; Bell et al 2002; Fraser and Deane 1998; Taylor and Richardson 2001;
NBEET 1995; Tinkler et al 1996; Ling et al 2001; Cunningham et al 1997 & 2000; Ryan 2002; and Ryan and Stedman 2002). Not only have these reports been crucial in helping to formulate subsequent government policy but they have also led to the promulgation of a variety of state and national committees and regulatory bodies aimed at guiding development in the application of ICT in higher education. Cognisance of such groups and reports helps to increase understanding of the scope and scale of distance education activities in the Australian higher education arena. They too are briefly discussed in the section following which draws on
Walker's report to the Commonwealth of Learning (1998, pp. 30-35).
3.7.1 Open Learning Australia (OLA)
As mentioned previously, the OLA was a pioneering education project that Walker records was
“established in late 1992 with initial Commonwealth Government funding. OLA, a company representing a consortium of Australian universities, acts as an educational broker for the higher education sector in Australia, offering people, regardless of age, location or educational qualification, the opportunity to study university and TAFE units leading to diplomas, degrees and other qualifications.”
OLA has since been formed into a company and continues its activities as a broker for
Australian higher education institutions. It claimed (OLA, 2002 p. 8) that it “works with over
24 Australian universities and providers of vocational education.”
3.7.2 Australasian Council on Open, Distance and E- Learning (ACODE)
Originally formulated as the National Council for Distance Education in 1993, ACODE has since gone through three name changes before arriving at the inclusive name it now has had
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since December 2003. According to its website information, ACODE (online www.acode.edu.au/default.htm) is “the peak Australasian organization for universities engaged or interested in open, distance, flexible and e-learning.” That site page also says that ACODE's mission is “to enhance policy and practice in open, distance, flexible and e-learning in
Australasian higher education” and explains that it will seek to achieve its mission by trying to influence policy and practice at institutional, national and international levels through:
1. disseminating and sharing knowledge and expertise; 2. supporting professional development and providing networking opportunities; 3. investigating, developing and evaluating new approaches; 4. advising and influencing key bodies in higher education; and 5. promoting best practice. (online www.acode.edu.au/default.htm)
Membership of ACODE is only open to Australian universities (one nominee each) and precludes other organizations or individuals though these may gain affiliate status on application. ACODE is a not-for-profit organization that appears to be self-funding with universities being levied an annual membership fee (ibid, p. 2). It is likely that many of the member universities have retained, or created, their own research centres to pursue their activities in distance education and open/flexible learning (Walker, 1998).
3.7.3 Government Agencies
3.7.3.1 Education.au
Education.au was originally established as the Open Learning Technology Corporation Ltd.
(OLTC) in 1993, as a private company of Australia’s Ministers of Education and Training, but was reformulated in 1997. According to information from its web site ('About Us' see www.educationau.edu.au/about/index.html ) it:
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is a national ICT agency for education and training, owned by the Commonwealth and State and Territory education and training Ministers. … Our business is to develop and manage online services that are of benefit to the education and training sector and are national in scope … with the aim of building knowledge networks and a collective approach to meeting the challenges and opportunities presented by the Internet and information economy.
In its original guise it developed, and now manages, EdNA - the Education Network Australia project, which is “an Australian national cross-sectoral education project which supports, promotes and facilitates the use of Information and Communication Technologies (ICT) for learning, education, training, research and scholarship” (ibid). Among the many activities with which EdNA is involved is the ongoing development of national standards to reutilize learning objects—a critical part of the government plan to make education more efficient. To that extent, EdNA and education.au involve themselves with international negotiations dealing with reusability of digital resources in education. Such activities are still in relatively infant stages but are likely, on a global level, to have a significant import for higher education in the years ahead as cost reduction and revenue raising require increased attention in universities. Distance education activities would also seem to be reasonable avenues for the use, and reuse, of such educational products.
Education.au also oversees and manages a national portal at www.education.gov.au/ on behalf of the Commonwealth government. This portal is set up with a view to making government policy accessible but it also has other purposes such as providing links to related facilities and resources.
In a further demonstration of the drive for a seemingly inter-connected, government-led set of electronic resources, education.au also makes it clear that it is affiliated with a number of other
Australian groups. As not all of them are relevant here only the following ones are included with the information being drawn from the education.au web pages.
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3.7.3.2 Australian Information and Communications Technology in Education Committee (AICTEC)
AICTEC is a cross-sectoral, national committee responsible for providing advice to all
Australian Ministers of Education and Training on the economic and effective utilization of online technologies in Australian education and training. The Committee, known as the
Education Network Australia Reference Committee (ERC) before 2001, has been endorsed by the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) as the national forum for advice on issues relating to the educational use of information and communications technology. AICTEC is also accepted as a national forum by the
Commonwealth Government’s Ministerial Council for the Information Economy.
3.7.3.3 Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA)
The areas of responsibility covered by the Council are pre-primary education, primary and secondary education, vocational education and training, higher education, employment and linkages between employment/labour market programs and education and training, adult and community education, youth policy programs and cross-sectoral matters. This work is taking place in close interaction with the Ministerial Council on the Australian National Training
Authority (ANTA MINCO) which has a statutory responsibility in relation to certain aspects of vocational education and training.
3.7.3.4 Flexible Learning Advisory Group (FLAG)
FLAG is a strategically-focused group of senior VET personnel advising the CEOs of the
Australian National Training Authority (ANTA), the ANTA Board, the Department of
Education, Science and Training (DEST), the education.au Board, and AICTEC on national issues related to the directions and priorities for flexible learning in VET, with particular reference to online technologies.
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Even though FLAG is not directly related to the university part of the higher education sector, it is included because of the cross-linking that is evident at the national level, with the committees and groupings having some objectives related to higher education in general and distance education in particular. The point of including the preceding groups at all in this work is to make clear that the universities are a part of a national system. Though they are autonomous institutions, with significant financial burdens to carry in austere fiscal times, there are still other bodies involved in researching, co-ordinating and assisting them in their efforts, though it be largely at taxpayer expense. These bodies do seem to canvass the literature, international policy developments, and are aware of the opportunities and perils provided by new ICT. They are cross-sectoral and have a collective brief to make more uniform, Australia's approach to adoption, use and optimization of ICT.
Whether the public purse will ultimately be put to good use so that the country sees dividends from application of web-based technologies by universities remains to be seen. However, the tendency to see universities approach higher education as a competitive market and for the institutions themselves to be increasingly corporatized may lead to tension when education has historically been seen as a public good (see also Chapter 5). The privatization of other formerly publicly owned and funded instruments in Australia such as Telstra (a partially privatized telecommunication company with a former monopoly in the industry till 1997) and Australia
Post may yet provide insight into universities in a privatized scenario.
Should the Australian universities push down the pathway to corporate organizations then the answers to the questions raised will need to be researched and offered to the Australian public.
If distance education is the thin edge of the wedge in a movement to commercialized higher education in Australia then establishing its relationship with electronic forms of business would seem to be timely. Before moving on to develop a deeper understanding of that relationship, two other related aspects need to be visited. The first of those is the state of the field of distance
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education in terms of its theories and the second is the recent investigations into what has become known as the 'business of borderless education'.
3.8 Distance education theory
The earlier, brief history of Australian distance education indicates an experience that is close to one hundred years long. One might expect that academics, otherwise driven by understanding and research, would have developed a range of explanatory theories to account for the practices that their universities have been involved with in the pursuit of external studies and distance education. That is not the case, however, as no Australian has formulated an over-arching theory of distance education, especially one that includes technologies other than, and in addition to, print media. On the other hand, large amounts of theorising can be found within the distance education literature to account for modern pedagogical use of technology, for student support systems and for accommodating constructivist approaches to education that have been favoured in the recent past (see Distance Education, the flagship Australian journal, and
Holmberg, 2000). Renee Erdos was a long standing luminary in Australian distance education and her books have been proffered as the closest thing to such an Australian theory. Those books (Erdos, 1992, 1967) were about correspondence education and were not systematic attempts to incorporate more recent and advanced technology. In addition, her work with
UNESCO took her away from Australia for long periods into developing nations that had to rely on the print media and the postal system. Consequently her writings about her experiences do not constitute distance education theory for the current study.
There is little question that Australian authors have been prolific in their contributions to the literature about distance education—in just about every area except distance education theory.
Just why that is so is unclear in the literature. The Australian cadre has written extensively on matters dealing with Australian and international distance education, on ICT in higher education, and on all aspects of the practices undertaken in universities, but none has arrived at
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a culminating theory of distance education to explain Australian distance education, much less global activities. The current study is not aimed at overcoming this deficit though contributing to the distance education theoretical literature looms as a likely agenda for ongoing research.
More immediately, this study seeks to make a contribution to the progress in Australian distance education by examining distance education in Australian universities from the perspective of electronic commerce. The major existing theories have been created by white, western, males each of whom has gone on to become successful in the field of distance education. The field of distance education has been well-served by their contributions and even in Australia their theoretical work has been useful in provoking thought about the very nature of the activities that are undertaken in our universities. Given the advance in technology over the past decades, however, there is good reason to question these theories in terms of their ongoing relevance and capacity to guide modern practice.
It is somewhat surprising that an academic enterprise of nearly a century's duration can have escaped the interrogation of the practitioners who are its proponents. Such is the case in
Australia. To illuminate the guiding principles espoused in the theories developed overseas, the following passages try to recount in brief the major aspects promulgated by their creators. This is done so that when the current study turns to examine electronic commerce from a variety of perspectives, the existing theories and the positions they espouse will have already been announced, thereby allowing for some critical reflection and commentary in the discussion.
Finally, any study of distance education needs to be mindful of the range of research already available in the field. What is ultimately at question in the theoretical discussions, and bearing in mind the recent profound developments with the web, is whether or not the theories are still current, applicable and able to fulfil the roles intended of dominant theories in a field of inquiry.
3.8.1 Börje Holmberg, Sweden.
Holmberg's theory of distance education emanated from his work in Sweden though he has had much experience in Germany as well. Given his Swedish background and the history of
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distance education up to the 1970s when his theory was first published, it is not surprising that he was adamant that the teacher had to provide a capacity for the student to be actively engaged.
He referred to this provision as a “guided didactic conversation”, a conversation between the student and the teacher akin to that which might be found in a conventional university setting on campus. His theory is based on “an empathy approach and the use of teacher-learner conversations” (Holmberg, 2000 p. 3). Holmberg is of the view that few theories of distance education have been developed that “are capable of generating testable hypotheses” (Holmberg,
2000 p. 3) and while he includes his own theories among those that have done so, he leaves out the work of Moore and Peters, whose contributions are considered in the following pages. Their work, however, is carefully considered by others (see especially Keegan, 1996) who seem to have little doubt about the authenticity of their studies as theories.
Notwithstanding his own contributions over four decades, Holmberg is still of the view that in terms of theorising distance education an “adequate state” has been reached but states “that much remains to be done … This concerns on the one hand theory building, on the other hand student learning even though there are well-known contributions relevant to these concerns”
(Holmberg, 2000 p. 3).
One criticism that can be levelled at Holmberg's theory is that it is predicated on a relationship between the teacher and the student. Whilst it was perhaps reasonable for that to be assumed in the 1970s, Holmberg does not seem to have shifted his position during the intervening period as his 2000 paper attests. In systems in which the teacher (a term Holmberg intended to refer to the author of the teaching materials) does not actually do the teaching the relationship must be seen to questionable. Arguably, Holmberg would decry such a system, but it is increasingly likely in large distance education systems to be the rule, rather than the exception. That is not to say that an empathetic approach isn't valuable, rather that the teacher (Holmberg seems to conflate teacher with tutor on occasion, yet they seem to be qualitatively different) may not be able to provide such empathy in massified distance education systems, such as in the 'mega-
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universities' (Daniel, 1996) each of which has over 100,000 students. Whether or not distance education, as a form of electronic commerce, with ever increasing enrolments in a competitive marketplace, can hope to achieve or maintain an empathetic approach using the web as a mainstay of delivery will be among the issues to be considered in Part II.
3.8.2 Michael Moore, America.
Moore generated his theory in the 1970s and was influenced by the ideas of a stalwart of
American distance education, John Dewey (Moore, 1992 p. 1). From Dewey he first obtained the concept of the 'transaction' in education. As explained in the same source, the transaction
“connotes the interplay among the environment, the individuals and the patterns of behaviours in a situation”. Moore argued that in distance education (though he used the term 'independent study' in his earlier writings), time and/or space separated the teaching and learning behaviours.
He then further developed the concept to that of transactional distance, where the distance referred to the degree of psychological separation between the learner and teacher behaviours rather than to physical distance, and went on to explain that:
the extent of transactional distance in an educational program is a function of these three sets of variables. These are not technological or communications variable, but variables in teaching and learning, and in the interaction of teaching and learning. These clusters of variables are named Dialogue, Structure and Learner Autonomy (Moore, 1992 p. 2).
He has developed a holistic theoretical position that has been cited heavily ever since. Moore has since held senior administrative and academic positions in the USA and has been a long- term editor of their flagship publication, the American Journal of Distance Education. More recently, Moore has collaborated with Greg Kearsley who has been advocating that the study of distance education would benefit from taking a systems approach. Their most recent work,
Distance education: A systems view was published in 1996 (to be republished in 2005). That work argues the case that universities involved in distance education need to take an
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overarching view of the whole set of processes, procedures and services if their distance education is to be successful in terms of cost and quality.
Farhad Saba (1994, 1995, 2001), an expatriate Iranian based at the University of San Diego in
California, is another of those who espouse a systems view, though his viewpoints seem to have had less impact than those of the well-known Moore and his colleague Kearsley.
As with Holmberg's work, the current study will be mindful of the work of Moore, Kearsley and
Saba in Part II.
3.8.3 Otto Peters, Germany
Otto Peters is a German who was the founding Rector of the Fernuniversitat—the purpose built
German distance education university in Hagen (Keegan, 1996). Peters had had a long history of involvement with distance education and had tried, unsuccessfully, to find a theory based in educational literature to explain the practices that he had witnessed and undertaken. Finding nothing adequate he turned to the literature of industrial production and began arguing that distance education was an exemplar of industrialized processes (Keegan 1996; Peters, 1994,
2001).
He argued that distance education relied on concepts familiar to industry, for example, assembly lines and division of labour (Keegan's study, 1996, p. 80-81, also adds ten other elements such as rationalization and standardization), and consequently universities involved in the practice of distance education could be studied using that framework. His work has been criticized since its publication but that criticism has not always made clear whether it was based on a stance reviled by the notions Peters suggested or on other more solid grounds, though some (e.g.
Baath, 1981) claimed Peters' characterizations were not applicable to smaller distance education institutions that did not have the excessive size/scale with which to contend. Keegan (1996, p.
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85) also adds that Ehmann criticized Peters work because it had not made any impact on the
Fernuniversitat, of which Peters was Rector.
Over time, as distance education has been introduced in many new places around the globe, many models of distance education have been applied and several of these would have little resemblance to the processes that Peters believed were inherent. His theory does seem, however, to hold especial significance in the current study due to the appropriation of commercial and industrial ideas in modern Australian universities. Already, in the present study, the move to managerialism has been mooted and to this can be added increased attention to quality assurance, performance management (including key performance indicators—KPIs), strategic planning, corporatization, transparency, and accountability, each of which can be seen to have had their origins in the more usual sector of commerce and industry. Peters' work will be kept in mind as the chapters in Part II move into various facets of electronic commerce.
Electronic commerce as a new form of business looks likely to have some overlap with the work of Peters.
With the previous thumbnail sketches of distance education theory in mind, an issue to clarify is that though distance education obviously includes teaching and learning, the current study is not attempting to derive a new pedagogical theory of distance education. Rather, the totality of the activities involved in distance education in a university is to be examined from the perspective of electronic commerce. The cognitive and neural processes of students occurring during their periods of enrolment are therefore outside the scope of this work though the generic issue of learning is considered. It should also be clear from the discussion in the current study to this point, that there has been a movement away from simply seeing distance education as a means to meet social access and equity goals of government. In the altered arena of Australian (and international) higher education, universities are being faced with making ends meet with dwindling resources (see Mason 1998, 2003 for discussion of similar UK oriented issues). As the focus of the current study is the commercial aspects of distance education in Australian
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universities it is now timely to move to consider the wider ramifications of commercializing higher education, the indicators that such activity might be underway, and the potential implications that such a movement may hold for the stakeholders in Australia. The following section takes up that challenge.
3.9 The business of borderless education
The Australian government funded two major reports (Cunningham et al 1997, 2000) into distance education to investigate the possibilities that Australian universities could be involved in a growing competition for higher education. The competition was believed to be likely to emanate from media based companies, some of which were multi-nationals, and from virtual universities. Yoni Ryan (1997, 2000a, 2001, 2002) and Suellen Tapsell (2001) were members of the research teams and both have gone on to publish material related to those investigations.
Tapsell informs us (2001, p. 45) that the term 'borderless education' was first used by the team in 1996 and “… 'borderless' connoted geographical divisions breaking down in a globalised economy”. She goes on to say that:
in 2001, the real breach of borders is occurring between corporations and universities, between training and education, between universities and training organizations, between on-campus and off-campus students. The term has become all-encompassing, irrespective of semantics, incorporating educational models alternatively labelled 'flexible delivery', 'distance education', 'open learning' and so on. (Tapsell, 2001 p. 45)
The phrase business of borderless education has also entered the literature and now often appears as the acronym BBE and will be retained in the current study as well. Tapsell explains in her article that the first of the two reviews was essentially a “world-wide mapping exercise”
(2001, p. 38) to review the “growth of global media networks and consider the nature and extent of convergence with higher education provision” (Tapsell, 2001 p. 38). She says that the second review was not a mapping exercise but:
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an in-depth examination of public and private organisations … which were recognised as exemplary in their delivery of education and training to working adults and the corporate sector. These organisations were in the business of education, or were successfully integrating business and education, to deliver learning that worked—for the student, employers, and the providers themselves (Tapsell, 2001 p. 38).
Tapsell makes it clear that the reviews found no real evidence of serious contenders for university business at that stage, but was sure that the rhetoric was focussing attention on the notions of “globalised markets and cyber-solutions” (Tapsell, 2001 p. 39). Indeed, the BBE work has had a major impact on the current study as it reinforced the concept that electronic commerce may well have something to offer the study of distance education. Their reviews, and the publications from many of the team members since, have continued their role as a stimulus for the belief behind the core propositions in the current study. Their work is raised here as a preliminary revelation that the Australian government has taken seriously, the threat of international competition for students in universities and indeed for the trade in higher education services outlined earlier in this chapter.
The British were also taking these matters seriously when they set up a parallel BBE study, commissioned jointly by the Higher Education Funding Council for England (HEFCE) and the
Committee of Vice Chancellors and Principals (CVCP). The Preface to the published report
(CVCP, 2000 p. 4) by Professor Newby makes the following comments:
The aim of the study was to alert CVCP members to the potential risks and rewards of the new 'borderless' environment that they all face. The report, which is the most substantial work of its kind, provides valuable practical guidance about how higher education institutions might respond to these challenges and opportunities.
Professor Newby goes on to say that:
borderless education has potentially much deeper long-term implications for the future shape and structure of British higher education … more intense competition raises issues
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about the number and size of British universities and the extent to which greater collaboration could help us face the global challenge (CVCP, 2002 p. 4).
That collaboration has already been informed by the report, and the then new e-University in the
UK benefited from the insights provided in the study, according to the Chief executive of the
HEFCE Sir Brian Fender (CVCP, 2000 p. 5)6.
The introduction to the report is also worth noting (CVCP 2000 p. 11):
There are two main purposes for this report: first, to raise awareness and provide information about new developments in higher education arising from a combination of external pressures including new technologies, globalisation, and the growth of the knowledge economy. The second purpose is to provide advice to members of the Committee of Vice-Chancellors and Principals (CVCP) about the strategies they may wish to consider in the light of new developments.
These citations and the comments from Tapsell earlier indicate the intensity of the belief that something was happening in higher education at the turn of this century. The reports in
Australia and in the UK were both investigating scenarios for the future of higher education in those countries and both reported on the impact of the world wide web in higher education.
They also discussed the possibility of competition from entities outside of the usual higher education arena and made quite clear that the forces of globalization would have to be dealt with if the universities were to remain in good health. What neither really entered into in their discussions was the possibility that higher education could be viewed, as in modern business, as a form of electronic commerce—as a new form of business, enabled by ICT and especially the web. They did not pretend that universities could maintain the status quo, without significant peril or cost.
6 The UKeU is revisited in Chapter 7. The decision to close it came after Chapter 3 had been written.
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The current study will draw on these reports again as a part of the case building exercise in Part
II. The dire warnings flagged in the reports are a further stimulus to see if an electronic commerce framework could be helpful in assisting universities to meet an uncertain future in distance education, in virtual competition, and in providing high quality services and products to net-savvy, earning and learning students.
The BBE reports and investigations are introduced here to show that governments are taking seriously, the future of higher education. The universities of course have also to respond to the initiatives recommended in the reports and by the authorities in the respective countries. Higher education is changing in subtle and overt ways and the present study seems a timely contribution to understanding the implications of those changes. Distance education is arguably less marginalized now than at any stage in its history, but as it moves towards gaining wider respectability distance education practitioners will need to address some of the theoretical issues that Holmberg, among others, has written about. The theoretical basis for understanding distance education and its practices may need to be brought up to date to be reconciled with the technological changes, political decisions, and importation of business parlance into higher education. The framework of electronic commerce may hold some potential to inform an exercise to update distance education theory and Part II of this study will provide further details along that line of thought. 3.10 Discussion
This chapter has provided an introduction to the field of distance education in Australian universities and has plotted a brief history from the days when it was referred to as external studies or correspondence study to more recent times where it has been strongly influenced by use of the web. Other terminology has been discussed, both as it appears to rival distance education as a term and more recently as it has been invoked to describe practices enabled via the web.
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Associations and government instruments involved in higher education and distance education in Australia have been introduced to demonstrate that this field of endeavour is no longer a peripheral activity. Student population numbers have been mapped over the past half-century and figures to show the increasing importance of international student enrolments have also been produced. Both sets of figures support the view that distance education has an important role to play in Australian higher education.
Theories of distance education have been briefly discussed to provide some initial insight into the state of development of the academic aspects of the field.
Media used in distance education in Australia have been introduced, in part to exemplify the major implications that the adoption and application of the web in higher education have had.
Furthermore, the web has been commercialized and corporations have been quick to investigate the potentials for generating revenue via its usage. Not surprisingly then, the arena of higher education has been targeted by some organizations as a site of potential profit making and they have subsequently commenced their forays into the education industry enabled by the web and its reach. Whether there is a clear overlap between the commercial interest in the field of higher education and those of the more historic and staid traditional universities remains to be seen. It is the intention of the next chapter, on electronic commerce, to begin to make possible an investigation of that sort. Electronic commerce and 'virtual' universities share the same technological platform, the web. But sharing a software platform may not be adequate or sufficient bases for establishing that corporations interested in higher education actually have an insight into the industry that has eluded the universities. As the BBE reports mentioned above seem to indicate, however, universities and governments are taking the potential threat from profit seeking organizations seriously.
Distance education in Australian universities does have considerable history; it has a professionalized approach supported by affiliations of academics deeply committed to providing
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a quality education in this mode. It has yet to have a completely documented theoretical basis, especially in light of modern ICTs revolving around use of the web, and it still remains a major avenue for attracting students to the group of universities bundled together, by Marginson and
Considine (2000), as new universities. Those universities will face stiff competition from other
Australian universities, from global entrants to the field of higher education, and from international institutions with a long history of distance education themselves. Whether the universities resort to seeing distance education as an avenue to raise revenue or as a means to achieving some of the more quintessential objectives of providing distance education remains to be seen. One thing is clear, however; the universities in Australia will need to take seriously the implications of the shift to globalized markets, including agreements about trade in services.
How they respond is, in part, to be considered in the chapters that remain in the current study.
Chapter 4 presents an introduction to electronic commerce so that the relationship between electronic commerce and distance education can be explored.
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4 Electronic Commerce
4.1 Introduction
This chapter introduces and defines the key terms electronic commerce and electronic business, shows how electronic commerce operates in a technical sense, and provides a brief discussion of the Australian government's support for electronic commerce. Types and models of electronic commerce are introduced and discussed in order to demonstrate how they have changed over time as business organizations have experimented with them and as they have been affected by continuous developments in ICT.
As with Chapter 3, this chapter is intended to provide a basis for the discussions that follow when the current study moves on to consider the existence of any relationship between electronic commerce and distance education. The chapter therefore aims to provide an understanding of electronic commerce fundamentals so that the case to be built can proceed fluently.
4.2 Terminology
According to Schneider (2002, p. 6) “[c]ommerce, or doing business, is a negotiated exchange of valuable objects or services between at least two parties and includes all activities that each of the parties undertakes, to complete the transaction.”
Throughout business history, technology has been used to help facilitate the activities and transactions of the market place — cuneiform writing was believed to have been created to support the accounting aspects of commerce in ancient Sumeria (Encyclopaedia Britannia, 1962
6-866); postal systems date back as far as 3800 B.C. (Frederick, 1993 p. 22); quipu was a form of writing based on knotted string, used by the Incan empire to record correspondence, poetry and business transactions (Frederick, 1993 p. 21); and Reuters newsagency used homing
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pigeons in order to gain competitive advantages over their rivals up to the time when the telegraph arrived (Fredericks, 1993 p. 38). This trend to utilize technology has continued to the present day with organizations now making use of the Internet and the World Wide Web
(WWW or web). Use of this range of information and communication technologies has allowed organizations to move toward electronically mediated forms of business activity.
Defining the terms electronic commerce and electronic business is problematic with a lack of uniformity in their usage and a lack of agreement about what each might entail. In an emerging field of study this is not altogether surprising, as the usage continues to change with developments in the ICT that enables their existence, as well as with the ICT-based innovation with which organizations are involved in the business world. There does, however, appear to be some consistency between commentators that electronic commerce and electronic business are related, if not identical terms. Further compounding the problem is the increasing use of other terms to apply to specific uses of technology in areas generally covered by the former terms.
For example, Internet business, m-commerce, web-based business, and l-commerce have all made their way into the literature. In order to be clear about such terms, and their application in this study, it is necessary to look more closely at them and the following section takes on that task.
4.3 Electronic commerce and electronic business
Electronic commerce is rather difficult to define precisely with various authors positing claims that it can be all-encompassing, including any form of business enacted with the assistance of an electronic medium e.g. telephone, whilst others have tried to restrict its usage to specific forms of use and application. Mitchell (2000, p 6), reporting after his detailed study of electronic commerce in Australia, states that:
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The definitions of e-commerce have shifted over the past few years in two respects: • Initially e-commerce was defined as financial transactions over electronic communication, but the trend now is to define e-commerce as any business communication such as the exchange of information by electronic communication • Initially e-commerce was defined as the technical event of electronic communication, but now the trend is to see e-commerce as an approach to business, with the technology as the enabler.
Mitchell was accurate in his depiction of the trends up to the point of his publication and it was possible to see that electronic commerce, centered on the burgeoning use of the WWW, had more than one definition. Early researchers in the field, such as Kalakota and Whinston (1997) argued that the definition of electronic commerce depended on the lens through which one observed the activities. They claimed (1997 p. 3) that electronic commerce could be seen from four perspectives as follows:
From a communications perspective, electronic commerce is the delivery of information, products/services, or payments via telephone lines, computer networks, or any other means.
From a business process perspective, electronic commerce is the application of technology toward the automation of business transactions and workflows.
From a service perspective, electronic commerce is a tool that addresses the desire of firms, consumers, and management to cut service costs while improving the quality of goods and increasing the speed of service delivery.
From an online perspective, electronic commerce provides the capability of buying and selling products and information on the Internet and other online services.
Electronic commerce under this approach is at once, a delivery mechanism; an avenue for process automation; a tool; and a conduit for commercial activity and explains, in part, why there is a lack of consensus in the literature about what the term refers to or means. It is, however, interesting to see these authors (and others) recognize that information is being separated from the products and services with which it is associated to the extent that
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information has become an economic entity in its own right. The information is seemingly being extracted from the carrier in these situations and is forming the basis for an entirely new set of commercial objects. Evans and Wurster (2000) refer to this as “information unbundling” and it is an important issue, in the present study, which will resurface in Chapter 5.
Lawrence et al (2000 p. 3) draw on Kalakota and Whinston's work and they produce an amalgamated definition of electronic commerce as “the buying and selling of information, products and services via computer networks today and in the future, using any one of the myriad of networks that make up the Internet.” These authors also see electronic commerce and
Internet commerce as being interchangeable. Their definition suggests that an exchange of value is fundamental, so those activities within a firm that do not accrue or realize an exchange of value would not be considered electronic commerce. Other authors are less compelled to see it as such, suggesting that an adequate definition also needs to be mindful of the fact that firms, seen as a collection of departments or functions, or organized by business processes, can have internal customers with whom they interact. They suggest that electronic commerce in this situation does not always require an exchange of value but rather that communication and sharing of information is constituent of electronic commerce.
Ward and Peppard (2002 p. 5) take a somewhat minimalist approach by defining electronic commerce as “the conduct of commerce or business electronically—essentially using Internet technologies.” They do, however, go on to say that electronic commerce is different from electronic business, which they define as “the automation of an organization's internal business processes using Internet and browser technologies.” This suggests that the focus of electronic commerce is outward from the organization whilst that of electronic business is inward—using economic parlance, ‘exogenous’ and ‘endogenous’ would be the appropriate respective terminology. Turban et al (2002 p. 168) argue that electronic commerce:
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is viewed by some as being fairly narrow, referring to transactions conducted in an electronic marketplace. Thus, many instead use the term e-business (or e-biz) to refer to a broader definition of EC that involves not just buying and selling, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organisation.
Whilst it is possible to see areas of real or potential overlap in these approaches to defining the key terms, such variance in terminology is critical in the current study where any relationship between distance education and electronic commerce will hinge on a clear definitional understanding. Working from Ward and Peppard's viewpoint, for example, any business transacted by a university using Internet technology would constitute electronic commerce. On the other hand, any use of the Internet and/or the WWW aimed at improving a university's processes could constitute electronic business. To take this a step further, the adoption of email within a university, to enhance internal communication and information sharing, would be seen to be an electronic business application because the emphasis would be on automating internal aspects of the university. The very same email system used to facilitate communication with entities external to the university (in particular, students, government agencies, or research partners), would arguably be seen to be electronic commerce because the emphasis would be on an exchange value. Such value might, for example, be perceived in terms of improved service to students as customers, expediting legal reporting responsibilities to government, negotiation of commercial research contracts or reporting to industry partners in regard to such work in progress and so on.
Jackson and Eckersley, (2003 p. 4-5) citing Harris (2002) observe that:
there are numerous definitions of e-Commerce and e-Business, with many people treating them somewhat synonymously. For most, though, e-Commerce has a more restrictive meaning and is concerned with the buying and selling of goods online. This may also extend to 'back-end' processes where supply chains are managed through electronic stock ordering systems (which, Harris points out, pre-date the Internet in the form of EDI, or Electronic Data Interchange). e-Business is therefore a broader concept
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and describes arrangements where organizations have redesigned their business structures, processes and services to take advantage of Internet capabilities. The essential features of e-Business are that it:
• Makes greater use of electronic devices in the processing and communicating of data. • Allows increased integration of databases and hardware devices (thanks largely to 'open protocols' that govern the transfer of data between systems). • Enables users to engage 'interactively' with systems and services—for instance, to purchase goods, check on orders or collaborate in virtual teams and communities.
Realizing the full benefits of the Internet, as well as the e-Commerce functions it supports, is not easily done using traditional systems of work and organization. It is therefore an e-Business orthodoxy that organizations need to 'reinvent' their business processes or entire business models if they are to see the full dividends from their Internet investments.
As this study is investigating the possibility that Australian universities might be adopting emergent corporate practices closely related to the development and commercialization of the
WWW, the emphasis with the terminology needs to be predominantly on the externally oriented notion of an exchange of value. In other words, the emphasis is on the relationships with outside clients with whom transactions are conducted. Universities will also, however, want to optimize their significant ICT investments, so realizing benefits from improvements that are internally focused will not be discordant with such an external orientation. It would seem therefore, that both electronic commerce and electronic business components will be in play and it is the intention within the remainder of this study to take a broader and more encompassing view of the terminology so that electronic commerce is defined to incorporate internal and external aspects. For the purposes of this study then, an amalgam of the definitions and trends found in the literature (see Clarke 1999; NOIE 1999b p. 60; Ward and Peppard 2002; Turban et al 2002; and Mitchell 2000 p. 6), has been derived and will be used as follows—e-commerce is an approach in which business is communicated and transacted over networks and through computer systems. The intention hereby is to conflate both terms so that external and internal foci are incorporated in the ongoing treatment. The possibility that an organization may
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therefore need to reorganize itself to take advantage of the possibilities afforded by use of ICT is not therefore ruled out. Furthermore, given the focus in this study on distance education, the networks and computer systems referred to, will predominantly relate to the Internet and the
WWW as well as to intranets and extranets established by organizations to facilitate information sharing and transactions with customers and suppliers. An intranet here refers to an organization's private computer systems which follow the dominant Internet and web protocols
(e.g., hypertext transfer protocol - HTTP, and transmission control protocol/internet protocol -
TCP/IP) and extranets will refer to those aspects of an organization's computer systems which allow external, though limited, access to customers, partners, and suppliers using Internet and/or web technologies. Both the terms web-based business and Internet business will be subsumed by the definition just provided and are treated in this study as being synonymous with electronic commerce.
The emerging terms, m-commerce, and l-commerce are in need of a short discussion so that the work can progress past the terminological matters. Mobile commerce (m-commerce) is a term gaining in usage and refers to the “conduct of electronic commerce via wireless devices”
(Turban et al, 2002 p. 204). The rapid take-up of mobile telephones, personal digital assistants
(PDAs), and laptop computers as particular associated technologies, in Australia and elsewhere, has sparked demand for access to the WWW via these small and location independent devices.
However, at this point in time, their ubiquity has yet to reach that of the telephone and personal computer, the main technologies used in the home or workplace to access the WWW (and thereby, distance education) and this study does not therefore examine them in any depth. In passing, however, it should be noted that m-commerce may hold potential for some types of distance education in future and the technologies of m-commerce are likely to continue being improved. For the purposes of this study, m-commerce will also be subsumed by the encompassing use of electronic commerce as defined earlier. According to Turban et al (2002 p. 205), location-based commerce (l-commerce) “delivers information about goods and services based on where you (and your mobile device) are located. … Knowing where the user is
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physically located at any particular moment is key to offering relevant services.” This term is clearly affiliated with m-commerce and refers to a very specific type of business service.
Distance education providers might well be able to make good use of such technological capability, however, the deliberate rollout of such a technologically sophisticated plan to provide distance education globally, or even across Australia, from Australian universities has yet to happen. L-commerce will therefore be treated in a manner similar to m-commerce—its existence will be noted and its potential recognized. Its place and role in the current study will therefore also be secondary to that of electronic commerce, with which it has close ties.
4.4 Business role of the Internet and World Wide Web
Electronic commerce has in its broadest sense existed for quite some time with collaborating companies often installing private networks to facilitate exchange of business documents, following agreed formats and protocols for the transfer and processing of the content.
Electronic data interchange (EDI), and electronic funds transfer (EFT) at point-of-sale
(EFTPOS), are forms of electronically mediated commerce often cited (e.g., Turban et al 2002, p. 168; Jackson & Eckersley 2003) as having existed since the 1970s and which thereby pre- date the emergence of web-based electronic commerce by two decades. However, the trend now is toward use of public networks such as the Internet (including the WWW), and away from the use of private networks or value-added networks (VANs) in which a third party is involved as an intermediary with responsibilities for enabling transfer of information or data between companies with dissimilar computing facilities (Turban et al 2002; Choi, Stahl &
Whinston, 2003).
Electronic commerce is very actively supported by western and other governments (e.g.
Singapore), and supra national institutions such as the International Monetary Fund and the
United Nations (Allen Consulting 2002, p. 19). As one example, in Australia, the incumbent
Liberal government created the National Office for the Information Economy (NOIE) in 1997
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because of their fundamental belief that electronic commerce was going to be good for the national economy. The government has participated by helping to provide an infrastructure
(legislative, policy and technical) through which Australian business could compete more effectively and productively, “resulting in significant growth as well as simultaneous increases in real wages and employment” (Allen Consulting Group, 2000 p. 3). In 2004, the Liberal government announced (Williams, 2004) that NOIE would be absorbed into the federal
Department of Communication, Information Technology and the Arts (DOCITA) where the effects sought above could continue to be pursued. Similarly in the USA, according to
Schneider (2002), formalized government support for ICT-enabled business goes back for more than a decade — to support the spread and uptake of EDI — and thereby precedes the electronic commerce concept. He says (2002, p. 5):
Businesses that engage in EDI with each other are called trading partners. The standard formats used in EDI contain the same information that businesses have always included in their standard paper invoices, purchase orders, and shipping documents. Firms such as General Electric and Wal-Mart have been pioneers in using EDI to improve their purchasing processes and their relationships with suppliers. … The U.S. government, which is one of the largest EDI trading partners in the world, also was instrumental in bringing businesses into EDI. For nine years, ending in 2001, the Defense Logistics Agency operated a number of Electronic Commerce Resource Centers (ECRCs) throughout the country. The ECRCs provided free assistance to many businesses, especially smaller businesses, so they could do EDI with the U.S. Defense Department and other federal agencies.
During that period the U.S. government was also instrumental in encouraging the spread and uptake of electronic commerce through its support of the National Information Infrastructure
(NII) with the Vice President, Al Gore, being a major advocate of the role of ICT in the economy (see, for example, The Gore Report on Reinventing Government 1993 and the NREN report Realising the Information Future, 1994). The European Union also actively encourages the development of electronic commerce through its pan-European activities.
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Over time government involvement with electronic commerce has become known as e- government. This appellation seems to stem more from governmental use of the technologies to improve communication, and information sharing, between themselves and a range of organizations across society than from their policy making and support for electronic commerce in the economy. As major purchasers and users of ICT, governments are also committed to improving their own performance through the effective and efficient utilization of technology.
Indeed it might be argued that it has been their increasing exposure to, and understanding of, the promise of ICT that they now turn around and expect similar lessons be learned by universities in Australia. Marginson and Considine (2000, pp. 21-22) refer to this idea—of doing unto others as has been done to you—as being an “imitation ritual”. They argue that it is strongly witnessed in the actions of senior executive staff in universities as they devolve tasks to their subordinates. This they claim, imitates the way that the federal Minister for Education, or the public service department that supports the ministry (the Department of Education Science and
Technology - DEST), has handed responsibilities to universities with limited support. Reading between the lines in recent reports for the federal government, one might draw the conclusion that the federal government has high expectations for the use of ICT in Australian universities.
This seems especially evident in the commissioning of the ‘borderless’ education reports
(Cunningham et al, 1997, 2000) which looked at the possibility of ICT being used as the basis for competition in higher education. Other reports such as the National Policy Frameworks to
Support the Integration of Information Technologies into University Teaching/Learning
(Moran, 1995); Flexibility, Technology and Academics' Practices: Tantalising Tales and Muddy
Maps (Taylor et al 1996); Education and Technology Convergence (Tinkler et al 1996); and,
The Effectiveness of Models of Flexible Provision of Higher Education (Ling et al, 2001) also specifically examined the use of ICT in higher education in Australia. Together these reports— their existence and their content—suggest that the Australian government had, and has, aspirations that ICT will assist in the effective and efficient delivery of higher education.
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Jackson and Eckersley (2003, p. 5) maintain that governments face the same imperative to remodel their functioning, in order to reap the rewards from Internet-based, electronic commerce oriented ICT investment, as do commercial organizations. They argue that such remodeling requires creative thinking, possibly leading to new models of operation, and that it must be a severance from past traditional approaches to government if the total rewards for their
ICT investments are to be realized:
… The same principles apply equally well to the public sector, of course. Indeed, many parts of government might be seen as archetypal bureaucracies that could benefit significantly from a rethinking and redesign. When talking about the public sector, though, it's common to discuss such 'e' developments under the banner of 'e- Government'. This of course does not disguise the fact that most e-Commerce and e- Business issues and theories are just as relevant to the public sector as they are to the private (Jackson and Eckersley, 2003, p. 5).
It is likely that the government will similarly expect the universities to commence their own
'rethinking and redesign' so that public moneys invested in the universities will be judiciously applied to their operations. If so, then a logical follow on will be an expectation that the universities also make appropriate strategic use of the ICT investments that have been publicly funded as well.
4.5 Electronic commerce
Having dealt with the definitional complications surrounding electronic commerce it is now necessary to introduce the enabling technologies that underpin the developments in question here. Electronic commerce, for the purposes of the current study, refers to the use of the WWW as a subset of the Internet. The WWW was developed in the 1990s following the work by Tim
Berners-Lee, whilst he was employed by CERN—the European Laboratory for Particle Physics
(Schneider, 2002 p. 31). Berners-Lee proposed and then developed a hypertext project to
“provide data-sharing functionality”. During the period 1990-91 he also developed the code for a server, based on hypertext, which he made available via the Internet. Such servers are now the
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basis for the web and much of the functionality that it provides and are built on a language known as hypertext markup language (HTML). HTML allows for tags to be associated with text, or images, within documents so that a person reading such a document can easily follow the tag, such as a hypertext link, to find other information related to the source document, but which may be located anywhere in the maze of computer networks that comprise the WWW.
The most common current way in which to achieve this linked navigation is by use of software known as a web browser. The most common browser software is Netscape Navigator (from
Netscape Communications, an AOL company) and Internet Explorer (from Microsoft Inc.), though other less popular browsers are available. More recently, developments with Virtual
Reality Markup Language (VRML) and extensible markup language (EML) have opened up further and improved inter-computer capabilities. Similarly, reusable objects have been the focus of much attention worldwide as organizations attempt to formulate agreed protocols for the storage and sharing of such objects on the web, especially in applications such as education
(see, for example, Dublin Core and SCORM initiatives on the web).
The WWW has attracted enormous numbers of users since it was first released about a decade ago and this momentum has led to the proliferation of software designed to deliver increasing functionality for users—individuals, governments and commercial firms among them.
A huge range of applications are now available on, or via, the web and they typically use the standard protocols such as hypertext transfer protocol (HTTP) and transmission control protocol/internet protocol (TCP/IP) to ensure compatibility with other computers and software.
These same protocols are also used by organizations of any size to enable the building of intranets and extranets which effectively mimic the web in the organizations' networks.
Extranets in particular have been an important step toward provision of secure communications between organizations and also for enabling wider, secure customer contact and transaction capabilities (Turban et al, 2004 p. 131). Closely aligned with developments in extranet technology has been development of corporate portals. Portals are in essence an avenue for
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gaining access, usually via a web browser, to critical business or organizational information.
That information may reside within or outside an organization and a user of a portal can often find that they are reading personalized information, depending on the extent of sophistication of the portal in the organization (Turban et al 2004, p. 136). Turban et al (2004, p. 137) identify seven different types of portals that they distinguish on the basis of the type of information provided. Three of these types of portals are of special interest in the current study where use of the web to facilitate distance education is examined. Turban et al (2004, p. 137) explain these as follows:
Personal portals target specific filtered information for individuals. They offer relatively narrow content but are typically much more personalized, effectively having an audience of one; Commercial portals offer content for diverse communities and are the most popular portals on the Internet. Although they offer customization of the user interface, they are still intended for broad audiences and offer fairly routine content, some in real time … Examples are yahoo.com, and msn.com; Corporate portals coordinate rich content within relatively narrow corporate and partners' communities. Kounadis (2000) defines a corporate portal as a personalized, single point of access through a Web browser to critical business information located inside and outside of an organization. They are known as enterprise portals or enterprise information portals.
For the moment it will suffice to indicate that these are an important part of the ongoing evolution of the web, aimed at enhancing the security and personalization of online communication, information sharing, and commercial transactions. Chapter 7 examines the models that are being developed by universities to facilitate distance education and will pursue further discussion of the use of portals as one component of those models.
4.6 The web, Australia and e-readiness
In Australia, the general public gained its first access to the Internet in the mid-1990s when the original web browser, Mosaic, was employed. Up to that point the Internet had been predominantly the preserve of the military, the universities and research institutions.
Internationally, total user population estimates vary considerably among observers, with
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researchers using a variety of means by which to try to convey the size and spread of the web.
Such metrics include counting the number of web sites—ranging from 32-500 million in 2001, depending on whose work is used—according to Schneider (2002, p. 33), and the number of web pages (numbering in the billions).
More recently there have been attempts to move away from static measurements of the numbers of users, or of web servers, to take a more holistic view of a nation's development in relation to the development and use of the web. The Economist Intelligence Unit (
, April 2003, and 2003), has produced a series of publications (from 2000) about national 'e- readiness' which provides a map of a country's state of preparation for utilising the web for business and for investment in web developments around the globe.
In the inaugural rankings by the EIU, for the year 2000, Australia was ranked second behind the
U.S. as being the premier e-ready countries with the U.K. and Canada being next in line (EIU,
May 2001 p. 1). Subsequently, the rankings have fluctuated with the Scandinavian countries making further progress up the EIU scale to follow the U.S. as leader but with Australia moving backward to sixth place in the 2001 ranking (EIU, 2002). By 2003 Australia had fallen to ninth place and the U.S. had lost its first place ranking to Sweden (EIU, 2003). It is interesting to note that the world's greatest exporters of higher education (U.S., Australia and the U.K.) are well represented in these rankings and, as far as Australia is concerned, it would seem to indicate that competition with these countries is to continue, and increasingly, that competition is likely to be via electronically enabled facilities. The rankings also confirm the importance of developments that have occurred in Australia over the past decade or so, often under the steerage of the federal government, in relation to building a robust electronic commerce infrastructure.
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The Economist Intelligence Unit has also recognized the importance for education of the use of the web and has consequently developed an 'e-learning readiness' report. The EIU rankings are based on 150 qualitative and quantitative indicators taken from four broad sections across the countries involved. Of the 60 countries ranked, Australia was placed 11th with a total score of
7.71 out of 10. This placed it 0.23 behind the 8th ranked U.K., 0.66 behind the 3rd placed USA, and 0.71 behind Sweden, the highest ranked country (EIU, 2003, p. 16). The EIU report was not targeted solely at higher education so some limits are imposed on what can be deduced for the current study. However, this report together with Australia's continuing high placement in the broader e-readiness rankings tend to indicate that Australia is well-placed to take advantage of the web and the potential that is associated with using it as a new format for business. So, even if Australians were uninterested in taking distance education approaches to higher education, the country is still in a position, technologically speaking, to seize the web-enabled opportunities to provide this avenue of education to people in other countries. But as was shown in Chapter 3, the demand for this approach to higher education in (and from) Australia has now reached approximately 15% of the total cohort. The current status, together with the forecast demand figures to 2020 given in Chapter 3, therefore suggest that the web will be a real focus for development of future educational offerings from Australian universities. More along these lines will be discussed in subsequent chapters when economic aspects of distance education will be considered. For the moment it is important to restate the distance education implications of external demand for Australian higher education. IDP reported that:
By 2025, it is forecast that the total demand for international higher education in Australia will exceed 996,000 students. …transnational or offshore (through offshore campuses and distance education) programs will account for 44% of this total demand. On this basis, by 2025, the demand for international onshore higher education in Australia will exceed 560,000 students (IDP, 2002 p. 3).
The 44% figure (438,240), though speculative, points to a significant expansion in demand from international students and is therefore of some significance in terms of demand for escalating
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the further use, and development, of the web for Australian higher education. Over the forecast period to 2025 the estimated demand is approximately equal to 20,000 students per year who will be seeking non-traditional approaches to Australian higher education.
The commercialization of the Internet has had a pronounced effect on the manner in which business and government in Australia have been conducted. Having a long established grounding in the use of the Internet, Australia's universities were well placed to continue their use of technology for administration and education when the web arrived. Their approach to utilizing the web has varied across institutions (see for example, the reports by Ling et al 2001;
Taylor et al 1996; and, Bell et al 2002) but all have a web presence and all seem to be making use of the web for administration, research and educational purposes. It is clear from discussion in Chapter 3 that not all universities are actively engaged in distance education. However, those that are not are making moves towards supporting the growth of resource-based learning and teaching and also to flexible learning (see for example, University of Queensland plans at http://www.uq.edu.au). These approaches require effective use of the web and of intranets and extranets for students to access the learning materials and teaching resources (including library resources) whilst they are on campus and also from their homes or work places. At least to some extent these students are involved in hybrids of distance education when it comes to use of the computing and telecommunications facilities provided by the universities with which they are enrolled.
4.7 Types and models of electronic commerce
The phrase 'models of electronic commerce' denotes different things to different commentators.
The electronic commerce literature typically includes taxonomies that separate electronic commerce activities (transactions) into categories or types. Turban et al (2002, p. 173; 2004, pp. 178-179) follow this trend, and provide the ensuing forms of electronic commerce:
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• Business to business (B2B) - here the participants, (buyers and sellers), are typically organisations involved in transacting commerce. To date, this form of electronic commerce trade is most valuable when measured in currency terms. • Collaborative commerce (c-commerce) – here business partners collaborate electronically, often the partners are involved in the same supply chain. • Business to consumer (B2C) - in this form of electronic commerce, buyers are invariably consumers interacting with selling organisations, which have made their goods and/or services available via the web. • Government to citizens (or others) (G2C) - in this form of electronic commerce, governments have established a web presence to provide services, often informational in nature, to individuals within their territory, to other governments (state, national or international) or to organisations. • Consumer to consumer (C2C) - this form of electronic commerce allows individuals to be able to conduct commerce (buying, selling or bartering) with other individuals. In many cases a third party provides the infrastructure for the C2C electronic commerce to occur. • Consumer to business (C2B) - in this form of electronic commerce, individuals make their wants and needs known to competing organizations which then vie for the business. • Business to employees (B2E) - a restricted form of electronic commerce in which organizations use the related technologies to try to improve their own performance. • Mobile commerce (m-commerce) – so called when electronic commerce is done in a mobile environment such as when cell phones are used to access the Internet.
Whilst this list is not exhaustive it does include the major variants and is representative of the electronic commerce literature in general, but in the current study it is important to see them as types of transactions or relationships rather than as electronic commerce models per se. A more restricted use of the latter term will be applied to the manner in which organizations rearrange, or reengineer, themselves to exploit the potential of electronic commerce. As such, the two uses of the term model are not synonymous. In the discussions in Part II of the current study, the focus will be on B2B, B2C, and, to a lesser extent, B2E types. The B2B type of transaction will merit inclusion as universities come to understand that they need to include an analysis of their value-chains if their strategic planning for effective use of their ICT is to be worthwhile. The
B2C type is important as it has its focus on the relationship between the student (customer) and
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the institution (provider). The B2E type is less related to the universities themselves than it is to the other organizational forms that could be seen to be competing with universities in higher education, on a global scale. The B2E type emphasizes the relationship between an employer and its employees. The trend for large organizations to provide their own corporate education
(e.g., Microsoft, Motorola, IBM and McDonalds) is representative of the B2E approach. Its importance lies in the fact that this approach, which can be global in its spread, has been seen as one form of competition for traditional universities (see Cunningham et al, 1997, 2000).
Australian universities may therefore view B2E types of electronic commerce as a threat or as an opportunity, depending on their mission, their strategies and goals.
Lawrence et al (2000, p. 24-30) explain that an organization can use the following models for establishing a commercial web presence:
• Poster/Billboard model - a low-cost approach, often facilitated by email with clickable hypertext addresses to allow readers to act on impulse. • Online Yellow Page model - modelled on the hard-copy Yellow Pages, this electronic approach provides information rich sources complete with searchable web capabilities. More expensive to establish than Billboard, but can be effective in producing a 'web presence' for businesses. • Cyber Brochure - emphasises the information content with less promotional focus. Slightly more sophisticated than Yellow Pages. • Virtual Storefront - highly sophisticated approach to provide searchable sites, selling capacity online, customer support, and marketing facilities. Requires more planning, development, money and time. • Subscription model - online version borrowed from publishing model. Subscribers dictate the type or information service they desire and the provider then sends it to them direct as a result of their search services. Often used by software (and newspaper) producers for online delivery. • Advertising model - this model is based on the benefit to be gained by having advertising (often personalized) show up on the screen of a user who is visiting a popular site elsewhere. The 'host' site sells advertising 'space' to the client who then hopes that the 'pop-up' or 'banner' advertisements lead to sales of their products or services. Lawrence et al claim it is most suitable for “service oriented, online businesses” (2000, p. 27).
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• 3.5.7 model - explained as needed when redesigning a current site or designing a new web site: three steps to a better focus; five strategies to evaluate the potential of a web presence; and, seven tactics to be used as a framework for building specific plans (2000, p. 27- 28). • Auction/Reverse Auction model - these approaches have become popular with individuals who can (often for a small fee, sometimes for free) advertise goods they may have for sale. eBay is a good example of such an approach, though there are fears that businesses may now be using such avenues as a way to move their own products and services (ABC radio national programme, 15 April 2004). Reverse auctions are an online phenomena - here people can indicate what it is that they are willing to buy, and how much they are prepared to pay, and then commercial organizations can decide if they are prepared to provide the product or service for that price. • Affiliation model - this approach requires businesses (or web site owners) join as associates to try to gain an overall benefit for the businesses. Amazon.com uses this approach to encourage book, music, and drug suppliers to place links from their own sites to Amazon so that users can then buy products online. “The merchant then pays the affiliate a small fee for playing the rainmaker” (Lawrence et al 2000, p. 29). • Portal model - portal approaches have been around for some 7-8 years and seem destined to be important avenues for customers to navigate an organization's site. The portal is essentially an information access point allowing customers to search and browse a site online. Related links (e.g., to useful resources) are often provided via the portal so that customers perceive the site as being worth re-visiting.
Turban et al (2004, p. 179) differ somewhat from the categories provided by Lawrence et al, and their view of business models that can be used to execute the types of electronic commerce transactions presented above, are captured in Table 4.1.
Turban et al make the point that an organization can make use of one or more of the models in order to achieve their goal of generating revenue. Universities are already experimenting with some of these models (for example the e-University project at the University of Southern
Queensland — see http://www.usq.edu.au and James Taylor's 2001 report about the developments being undertaken at that university. Overseas refer to the University of Warwick and its e-strategy documents— http://www.warwick.edu.ac.ik, and in the USA see the
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University of Illinois for their developments) and they will be brought to light in Chapter 7 of the current study.
Table 4-1 Electronic commerce business models
(Source: Turban et al 2004, p. 179)
These models of course fall into a wider environment of business usage that the universities may have to adopt, or adapt, for their own specific purposes. Doing so will also require that
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they fully understand the complexity of the electronic commerce environment, which the following discussion about one electronic commerce framework helps to illuminate.
4.7.1 An e-commerce framework
Kalakota and Winston (1996, 1997) have contributed to our understanding of electronic commerce through two books written soon after the web had begun to be widely adopted for commercial purposes in Australia. Figure 4.3 is adapted from their work by Turban et al (2001,
2002) and depicts their ongoing assessment of an electronic commerce framework. This framework has been chosen as it was among the first to underline the importance of seeing electronic commerce as being systemic in nature.
Figure 4-1 A framework for electronic commerce. (Source: adapted from Kalakota and Whinston (1997 p.12), cited in Turban et al, 2001 & 2002 p. 169)
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Kalakota and Whinston's original generic framework was not as encompassing, nor as visually informative, as that provided by Turban et al, but both emphasize the fact that one has to understand the wider environment to be able to comprehend electronic commerce in context.
The generic framework takes this into account and highlights the many facets that have to be in place before the myriad applications of electronic commerce can be made available. Even these facets are in a state of flux, causing Turban et al to make significant changes to their version of
Kalakota and Whinston's (1997) generic framework between the second (updated) and third editions of their book. For instance, in the third edition, Turban et al have replaced the right most pillar 'Organizations' with 'Supply Chain', with the sub-text being 'Logistics and business partners'. They have also included 'Marketing and Advertising' (Market research, promotions and web content) as a new pillar and to accommodate it they moved 'Technical Standards' to be included under Public Policy which has been edited to include additional sub-text of
'Regulations and Technical Standards'. In the 'Infrastructure' section they have edited number
(2) to include 'chat rooms' and number (4) to include 'access, cell phones'. All these changes occurred in the one-year time span between editions, and reflect the rapidity of change in the domain of electronic commerce with which the authors have had to contend. A subsequent, fourth, edition has also been released and it too makes amendments to the diagram. Rather than digress further here, the most recent diagram will be replicated and used later as a part of the case building discussions.
4.8 Interpreting the framework
The framework for electronic commerce in Figure 4.1 is presented as an architectural edifice and, by analogy, the applications shown at roof level cannot be attained if the structure below is missing or is incomplete. The underlying requirement is a management perspective that is committed to electronic commerce—without this, individuals and groups in an organization will operate piecemeal, acting as early adopters (Rogers, 1983; 1986 p. 118) in the innovation cycle but lacking in institutional support (whether that be in financial, technical or human resources,
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for example). Bates (2000) refers to individual academics experimenting with new technology as “lone rangers”. Alone, they are unlikely to see their efforts embraced across an institution and, perhaps more importantly, their work may not be compatible with university plans or software systems, thereby limiting the effectiveness of such development work. Even when there is a management commitment for electronic commerce in place, the foundations required are the technical and technological infrastructure.
The past years of work with the national/global information infrastructure initiatives in the US,
Australia and elsewhere have been aimed at establishing these foundations. Australia is now relatively well served in this regard to the extent that the five elements in the 'foundation concrete' are entrenched. The four pillars are increasingly evident in Australia though some work remains to be done in the area of information privacy/security, in legislation for electronic business (including taxation) and criminal prosecution. Given the extensive support (see the
NOIE site for federal government activities and for links to state government frameworks) for electronic commerce by state and federal governments in Australia these problems are being better understood as time passes.
Business models are not incorporated in the framework, as such, and are arguably an area of ongoing attention (especially in regard to universities) but there is much activity in the area of corporate higher education and vast amounts of money are at stake (Moe, 1999), so business models too are being developed and trialled (see for instance the Standing Stones report for
Alberta, 2000). The issue of business models will be revisited in Chapter 7 as a part of the case building discussion.
Applications already exist in large numbers in the world of commerce and industry with examples shown atop the diagram. To these can be added the complete range of software necessary to enable online higher education. Among these, presumably, will be applications and technologies such as video and audio streaming, email, content production and management
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software, enrolment and student administration systems, secure communication channels for student support, animation and presentation software, payment and billing systems, self-paced learning packages and archiving technologies, library and online information resource software among many others.
This framework emphasizes the fact that many technical components as well as legal, regulatory and procedural facets need to be in place if decisions to follow electronic adjuncts to other business activity are to be possible, much less successful. Universities that see their economic survival resting on innovation at a corporate level will need to do a thorough assessment of their activities before trying electronic commerce. Electronic commerce innovation by individuals or groups within a university is unlikely to be successful unless it happens in conjunction with attempts to innovate at the level of the institution. This can happen when visions of a new future are built on an encompassing strategic plan incorporating business and technology —
Ward and Peppard (2002) and Boar (2001) build their entire books around this premise of ICT alignment and integration with business goals and objectives. Turban et al (2004, p. 180) in their discussion of the five pillars end with the salutary comment that “[a]ll of these EC components require good management practices. This means that companies need to plan, organize, motivate, devize strategy, and reengineer processes as needed.” Organizations that take heed of this will be aware of the capacity of electronic commerce to impact on many areas of their value-chain. That of course could be seen to be an ambit claim, and it is necessary to add some further substance to the claim that electronic commerce can be beneficial for organizations in order for that claim to stand scrutiny.
A recent NOIE report, compiled by the Allen Consulting Group in conjunction with the Centre for Policy Studies at Monash University, studied the Australian information economy and found that (2002, p. i):
the increased involvement by Australian businesses in the Information Economy offers substantial economy wide benefits. These include:
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• Higher underlying growth — increasing GDP [sic: gross domestic product] by up to 2.6 percent over levels that we would otherwise obtain by 2004-05. • More jobs — employment would be higher than otherwise by around 1.2 percent, or around 110,000 jobs by 2004-05.
The report went on to say that “the findings confirm earlier work conducted for NOIE that the structural change brought about with the shift to electronic commerce has considerable economic significance” (2002, p. i). Importantly the report also noted some of the barriers to higher participation in the information economy, barriers which they argued would constrain the realization of the benefits available to Australian businesses, and to the overall economy. They listed (2002, p. i) affordable broadband internet access, a continuation of the information technology skills shortage and sustained privacy and security concerns as the major current inhibitors but went on to say that these issues were understood and that there “are already major policy initiatives in place to address each factor” (2002, p. i).
Another Allen Consulting Group report (prepared for the Cisco company in 2001) was cited in the work for NOIE, where it was claimed that “the Information economy accounts for a significant share of economic activity in Australia, with estimated revenues of approximately
$28 billion, which equates to 4.3 percent of Australia's gross domestic product (GDP). It also found that the Information Economy was growing at a rapid rate” (2002, p. 1). An important aspect to note here is that both these reports have been researched and prepared after the 'dot com' bubble had burst so Australia's performance in spite of that event and in spite of the Asian economic downturn has been strong and trending upward. Furthermore, the reported slowing of the Australian information technology sector does not seem to have been able to halt the progress reported by the Allen Consulting Group. Though the 4.3 percent attributed to the electronic commerce aspects of the Australian economy is a small part of the overall economy, the total amount and value of electronic commerce seems set to grow as the barriers are overcome. Indeed the Allen Consulting Group report reveals the expectation from firms surveyed in the study of “forecast revenue growth of about 25 percent per annum over the next
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three years” (2002, p. 2). Overcoming the barriers will require collaboration between government, the research community, and industry.
The reported findings presented here so far have been mainly aimed at business-to-business
(B2B) types of electronic commerce. However, the study also included a review of business-to- consumer (B2C) electronic commerce and found that the empirical evidence for understanding
“what difference Internet enabled B2C activity actually makes to the economy” (2000, p. 3), to date is limited. The Allen Consulting team drew on two other reports in this matter and stated that a 1999 Massachusetts Institute of Technology (MIT) study in the USA found “that the prices of many items purchased over the Internet are up to 16 percent lower than equivalent goods sold though traditional approaches” and also in 1999 “an OECD study reported savings on the various distribution costs from e-commerce compared to distribution via the traditional system with estimates ranging from 50 percent for life insurance purchases, 89 percent for banking services and up to 97 percent for software distribution (2002, p. 3).”
This latter revelation is important in the current study as the nature of the products referred to can be seen to be knowledge products that are easily converted to digital form. Similarly, universities are dealing in knowledge forms that can be easily stored and distributed in digital form as well. That is not to say, at this stage at least, that the products of higher education are simply digital entities awaiting digestion by a student-as-consumer. Rather, the possibility that university services and products might be converted to such a form for sale and distribution has inherent interest as will be seen in Part II of the work at hand. Furthermore, the fifth generation of technologies being applied to distance education presented in Chapter 3, also has immediate pertinence to the current discussion as they utilize the same infrastructure, protocols, legal and regulatory frameworks as those being used for electronic commerce. A deeper and more detailed analysis of these linkages will be provided when the role of information as an economic entity is introduced in Chapter 5 as a part of the case building exercise.
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The comprehensive framework for electronic commerce shown in Figure 4.1 contains many elements. The framework illustrates the complexity of the environment that surrounds the use of computers and telecommunications channels for the conduct of business, and serves to indicate how a business may need to change to accommodate participating in electronic commerce. It will also serve to indicate how organizations (and indeed countries) will need to be surrounded by an integrated infrastructure of telecommunications, computing technologies and protocols, and a legal and regulatory regime that enables electronic commerce.
Figure 4-2 Electronic commerce areas - I (Source: Choi, Stahl and Whinston 1997, 1-13)
As far as trends can be predicted, Choi, Stahl and Whinston (2003) suggest that electronic commerce will represent an increasing encroachment of fully digital products and services into the traditional world of commerce and industry.
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Figure 4-3 Electronic commerce areas II (Source: Choi, Stahl and Whinston 1997, 1-13)
Figure 4.2 and Figure 4.3 show this trend diagrammatically. Such a trend suggests that the changing reality that the universities face is one in which digital forms of business are likely to be increasingly prevalent.
Universities in Australia will need to be cognisant of such trends and prepare themselves, in accordance with their perceived role and mission, to deal with the uncertain future that global competition in higher education signifies.
4.9 Discussion
This chapter has introduced the terminology of electronic commerce and has pointed out the field is changing in its use of nomenclature as the technologies that enable it are further applied and developed. Types of electronic commerce transactions were introduced, as were models of electronic commerce. One framework has been utilized to demonstrate that electronic commerce requires more than mere technology for its existence. Indeed, many affiliated structures and systems must be present if an organization is to participate in electronic approaches to business. Furthermore, electronic commerce requires that organizations reconsider their own structures and processes if they wish to optimize their investments in ICT.
Universities wishing to enter electronic commerce approaches to their current business may
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need therefore to do as Ward and Peppard (2002) argue, namely to ensure that the organization's strategic planning activities fully embrace ICT planning as a part of the overall strategic initiatives being examined. Organizations may also need to undergo extensive restructuring, or re-engineering, if they are to maximize the benefits deemed to be available by adopting digitized business formats associated with electronic commerce.
Electronic commerce is a digital environment where the services that can be created, stored and distributed in wholly digital form will be best suited to this approach to business. Universities work extensively with products and services that are inherently suited to digital formats and it seems logical that these institutions will, at a minimum, have to consider the uptake of digital processes in the pursuit of their missions. The extent to which they may do so will be a function of a number of variables including management vision and commitment, current technological investment, the demographics of the student cohort (including those students studying at a distance from the university), and skill and knowledge of the academic and general staff among others.
Australian universities are well provided for in terms of ICT. That suggests that the technical and technological infrastructure in these organizations is wholly, or partially, in place for the universities to consider involvement in electronic commerce. Whether the management desire and belief exists is another thing altogether. The Australian governments have been active in supporting, in some instances leading, developments in electronic commerce and their policy and work has led to sophisticated legal and regulatory frameworks being put in place. The scene would appear to be ripe for considering the opportunities and threats that electronic commerce approaches may represent to the delivery of higher education in Australia.
Gerald Heeger, President of University of Maryland University College (UMUC) in the USA, claims that in his institution (established in 1947) “delivering courses in unconventional ways has been a specialty for more than fifty years” (2000 p. 9). Nevertheless, UMUC has come to
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realize that moving to new markets requires “greater investments of capital and staff resources”
(Heeger, 2000 p. 9) and, Heeger goes on:
UMUC … has systematically reengineered its business, management, and organizational practices to ensure continued quality delivery. At a cost of $17 million, one of the most advanced integrated software systems available is being employed to create a single, worldwide UMUC with one academic “face” (e.g., admissions requirements, hiring practices), administrative infrastructure, and a set of university policies. Still, we have to realize that this is not enough. To compete with well-heeled companies and other universities vying for market position, the university needs to effect even more fundamental change and adopt “best practices” from the business community. (Heeger, 2000 p. 9).
Heeger's commentary underlines, for Australian universities as well as those in the United
States, the need for strategic thinking in regard to the use of ICT in higher education. Whilst he stops short of conjoining distance education/learning with electronic commerce, he does point out the scale and scope of the change required by a university wanting to be an effective competitor in the newer markets for online higher education. He points out the scale of the investment required to be a serious competitor in the US higher education market, a market which is essentially becoming global in nature, and he emphasizes the need for recognizing the degree of change that is to be expected in universities entering this form of competition.
Whether or not Australian universities are financially ready to make the investment suggested by Heeger, whether they are prepared to embark on the change management processes required, whether they are equipped to take on board lessons from the business community, and whether they are really prepared for the sort of technologically enabled competition that has been discussed in Chapters 3 and 4 of the present study, remains to be seen.
Recent global trends in regard to trade in services (GATS) are likely to have increasing importance for Australian universities, and for their competition for students undertaking higher
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education across the planet. The GATS initiatives are, however, only one among several drivers of change in higher education and those drivers are one part of the discussions to take place in
Part II of the current study. The case building exercise to come in Part II, moves on from, and often rests, on the information provided in Chapters 3 and 4. This study now moves to the presentation of the case, the collection of arguments that seeks to investigate the relationship between electronic commerce and distance education.
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PART II Investigating the relationship between distance education and electronic commerce: Building the Case i. Prologue
So far the study has discussed the context within which Australian universities are currently to be found, has explained the major thesis behind the present investigation, has explained the methodology and the reasons for its choice, and has introduced distance education and electronic commerce. With that background in place, the study now moves on to the task of examining the relationship, if any, between distance education and electronic commerce.
Part II is comprised of four chapters whose purpose is the building and presentation of the case surrounding the investigation of that relationship. The case itself is an amalgam of arguments, each of which adds weight to the plausibility and defensibility of the overall claim or conclusion. The statement, located in the major thesis of the current study, that there is a latent relationship between distance education and electronic commerce is therefore to be seen as a claim, a claim whose truth and veracity has yet to be evaluated in detail in the literature. In keeping with the argumentation methodology adopted for the current study, a claim or conclusion must be supported by evidence (data) together with a warrant that links the evidence to the claim being made. The chapters in Part II are therefore concerned with the presentation of evidence, logical deduction, reasoning and inference, and warrants (where necessary) that, together will allow a judgement to be reached as to whether there is reason to believe that the pairing of distance education and electronic commerce is justified.
A further outcome is also sought, namely, to understand whether electronic commerce can be useful as a framework through which to examine distance education. Should the study find that
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the relationship is quite defined and plausible then such an outcome would likely be of use, in a practical sense, for the further theorising of distance education in universities in the modern world. This would especially be the situation if the adoption and application of ICT, especially web-based technology, has moved the practice of distance education far enough along a path of evolution for the extant theories to be losing value as they age. From a utilitarian point of view, the present study might also have the capacity to generate a significant research agenda as a by- product.
The case is constructed by taking a number of different approaches, each of which is to be seen as an argument in its own right. Collectively the arguments will allow the case to be judged in terms of plausibility and defensibility, and will also allow for the major claim to have been extensively examined, supported and justified.
The arguments commence, in Chapter 5, with an examination of the concepts of 'information society', and 'information economy'. Here, the literature will indicate that there has been a significant development of thought and theory to claim that modern economies have become information and/or knowledge-based and that information has become an economic entity in its own right. Both of these developments, it is argued, have immediate application to the current study whereby universities can be seen to be among the most information and knowledge- centric of organizations.
Electronic commerce which is enabled by digital technologies and which has a focus on information and knowledge products and services is also closely coupled with the developments in the knowledge economy. Similarly, distance education can be envisaged as a series of knowledge products and services, though that characterization does not comprise the whole of the higher education activity of universities in Australia. The argument to be discussed is based on the claim that higher education can be envisioned as such a provision of information and knowledge products and/or services. The argument also includes discussion of the notion of
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private and public goods and services and the affiliated issue of the commodification of knowledge. International trade in higher education is another aspect that is brought into the discussion in support of the argument being presented.
Chapter 6 presents the argument that the enabling technologies of the world wide web, and the applications development that has occurred since its inception, have reached such a stage of maturity that distance education conducted via them is technologically feasible, both administratively and educationally. Universities can consequently, seriously consider using these technologies to establish new forms of electronic business. Distance education, therefore looms as one likely avenue for such change to business practice in higher education in
Australian universities. This chapter also draws on statistical data to support the view that the demand for web-based higher education from Australian universities warrants commercial attention. Demand will be shown to be both domestic and international and to have the necessary volume to achieve economies of scale and return on investment needed to for those universities that decide to partake of this form of distance education. The international 'state of play' in distance education will be reviewed with reference to the 'business of borderless education' reports and related literature so that the implications for Australian universities of commercial forms of distance education can be understood.
Chapter 7 examines the organisational issues emanating from a university's decision to move into an electronic form of distance education provision. The argument here is that organisational changes, and new business models, will be necessary if a university is to be successful in a new, technologically enabled, approach to distance education. Those changes will involve the human and technological resources of the university and will require new approaches to business be developed to facilitate the amended 'world view' adopted by the university. Value-chain analysis will be introduced to complement the discussion about new models of business and to explain why the distance education activities can be viewed from such a perspective. Wholesale take-up of distance education enabled the web will not occur by
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chance in any Australian university. It will need to be carefully and strategically planned and the whole exercise will need to be orchestrated within the university for the efforts to be rewarded in the higher education marketplace. An allied argument in this chapter is that university strategic planning must move to take on a holistic view that incorporates ICT, and informational resources as a matter of course. Leadership at the senior executive levels will be essential for such planning and it will underpin any adoption of an electronic commerce approach to distance education.
Chapter 8 moves to consolidate the discussions in Part II, Chapters 5-7, and also presents the overall conclusion of the study by reaching a final position in relation to the major claim that there is a relationship between distance education and electronic commerce. The ancillary question as to whether, or not, electronic commerce can provide a framework through which to examine distance education is also discussed. The importance of the study is then considered with a research agenda emanating from the study being composed as the final outcome of the research
ii. Presenting the arguments with Toulmin diagrams
The chapters in Part II each comprise at least one argument. In Chapter 2 the structure of an argument was revealed and to reiterate, it was shown that a claim (conclusion) needed to be supported by evidence (data) linked to the claim by means of a warrant (often unexpressed).
Toulmin diagrams are used in the chapters of Part II in order to depict the logical relationship between these elements and to hint at the type of evidence that might be brought to bear in support of the claim. An explanation of those diagrams is therefore needed in order to expedite their later use. The following work draws heavily on examples provided by Toulmin in his important book of 1958. Toulmin started to use his diagrams in the chapter called the 'Layout of Arguments' and explained that:
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We may symbolise the relation between data and the claim in support of which they are produced by an arrow, and indicate the authority for taking the step from one to the other by writing the warrant immediately below the arrow:
Or, to give an example:
(Toulmin, 1958, p. 99).
In the diagram above, 'D' means data (evidence); 'C' means claim; and 'W' means warrant. As
Toulmin developed his explanation he also made clear the possibility that a person hearing an argument being put forward may require that the claim be qualified in some way. To deal with this eventuality the preceding diagram needs to be amended as follows (Toulmin, 1958, p.
101):
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Using Toulmin's original example (1958, pp. 101-102) to continue the development of this explanation, the result is as follows:
Toulmin (1958, p. 101) called the 'exception' shown here a 'qualifier' (Q) and the 'conditions of exception or rebuttal' (R). He also was at pains to emphasise that one should not confuse evidence, warrants and claims as they are each a separate entity and furthermore, that 'Q' and 'R' have meaning with reference to the claim 'C' rather than to the warrant 'W'—in other words, in the example above, they qualify the conclusion.
The import here is that a claim (conclusion) may need to be mindful of extenuating circumstances that have to be treated within the realm of the argument itself and in some instances the claim may need to be qualified on a specific basis before it can be seen to follow from the evidence and warrant. Toulmin also explained that, on occasion in an argument, an interrogator may ask for the party promoting a claim to make clear not only what the warrant is, for the evidence to be linked to the claim, but also what the basis for the warrant itself might be.
Toulmin referred to this specific support for the warrant as a 'backing' ('B') (1958, pp. 104-105).
Usually 'backing' statements can be substantiated with resort to known facts whilst the warrant may be more hypothetical, or in Toulmin's terms, 'bridge-like statements' (1958, p. 105).
Toulmin showed the impact of a requirement to include a backing (B) for a warrant on his example with the following amendments (1958, p. 105):
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Using Toulmin's original example (1958, p. 101-102) to continue the development of this explanation, the result is as follows:
The degree of complexity that can be handled by making this final adjustment will serve the purposes of the present study. The study will make use of Toulmin diagrams to clarify the arguments being made in this part of the work. They will follow the dictates as laid out by
Toulmin above, though it again needs to be stated that warrants are not always provided in argumentation discourse, much less in the literature from which the evidence is drawn for this, and ensuing, chapters. Now, as qualifiers and calls for backing would typically come from opponents in an argument, the current study can only hope to indicate on occasion the most likely places in which such calls might be made. As was explained in Chapter 2, the universal audience would normally be called on to ask for the display of such support for any argument presented here. So whilst one might need to be mindful of the need to be prepared for contra-
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arguments, the intention in the work presented in Part II is to defend one side of the argument only. This much was indicated from the outset of the study when the major claim was spelled out in favour of the view that distance education and electronic commerce have a latent relationship.
The study now moves to the first of the case-building arguments about that relationship.
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5 Distance education and trade in information and knowledge
Another disorienting piece of this mosaic of changes has been referred to as the commodification of knowledge, the valuing of information in economic terms rather than for its social and cultural significance. Where the book, the classroom, and the obligatory curriculum typify the old view of knowledge, there has now been a questioning of the underlying assumptions about the fixity and stability of the word, the linear text and the teacher as the authoritative repository of meaning. Globalization and the Internet are influencing the dominant function of knowledge towards a position of serving the socio-economic system i.e. that knowledge should be produced to serve the contemporary globalized system and to stay ahead in the competitive world markets. Academic research has become orientated to performance, to outcomes, and targets, rather than being motivated simply by the spirit of curiosity and free enquiry. The focus is on application rather than on contemplation. (Mason, in D’Antoni, 2003, p. 6)
5.1 Introduction
This chapter presents the argument in support of the claim that distance education delivered via the WWW, can be seen as a trade in products and services that are based in knowledge and information and which thereby represent one commercial aspect of the information economy.
The evidence brought to bear in this study will show how higher education, undertaken in distance education modalities, is eminently suited to digital formats for creation, storage, distribution, and student support. In examining this aspect of the overall case, the argument does not purport to show that higher education is simply a matter of distribution of courseware, where students ingest their fill of disciplinary 'brain food' before regurgitating it in some form of assessment tasks. Rather, it aims to show that higher education provided by Australian universities could be enabled by use of predominantly web-based technology, and distance education delivered using such technology could therefore be viewed as a trade in knowledge and information-based goods and services.
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The products and services provided by the universities lend themselves to digital forms and this feature can be viewed as one that has close ties to the goods and services offered under electronic commerce approaches to business. The examination of the literature and the logical deduction and inference associated with that examination provide the basis for the warrant that links the evidence to the claim.
This argument is graphically represented, according to the approach taken by Toulmin (1958, pp. 94-145), in Figure 5.1. Given space restrictions, the data/evidence box (top left in Figure
5.1) is meant to imply the type of evidence that will be brought to bear in support of the claim rather to than imply that the single statement is sufficient on its own to carry the weight of that task.
Figure 5-1 Toulmin diagram for the argument that distance education is a digital trade in information products and services.
5.2 Digitization and convergence
This chapter deals with issues and concepts that have arisen as a result of developments in ICTs that have largely occurred over the past two decades. Whilst commercial use of computing predates this period (back to the mid 1950s), the IBM personal computer (PC) was released in
Australia in 1982, local area networks arrived about the mid 1980s as PCs began to be inter- connected, and wide-area networks, metropolitan area networks, laptop computers and personal digital assistants (PDAs) have all been created since the IBM PC made its entrance.
Furthermore, the WWW was opened to public use in Australia in the early to mid-1990s.
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Accompanying these technological advances have been a host of other related developments affecting legal, economic, infrastructural, organizational, political, and social realms. These developments have been necessary in order that the technological advances could be financed, researched, regulated, and inter-connected for optimal outcomes. Such endeavours can be found across the breadth of the economy and society, with some examples as follows:
• the establishment of the National Office of Information Economy (NOIE) in Australia; • drafting of legislation to regulate and control aspects of use of the Internet and WWW; • formulation of collaborative and international agreements about technical protocols to be endorsed and promulgated in the information industries; • development of digital forms of money and the infrastructure to support its use; • spawning of a vast education and training industry dealing with Internet and WWW use and development; • further enhancement of the education offered in universities to accommodate demand for technologically capable employees; • a raft of management and organizational research focussed on trying to deal with the change brought about by the adoption of the new technology and affiliated activities; and • the introduction and continuing development of electronic commerce and the new forms of business which it has engendered including those that deal principally in informational goods and services.
Whilst the list is not exhaustive it attempts to convey something about the extent of the developments that have taken place in Australia, and internationally, in the recent past. These developments have not occurred as a process of natural selection, but are rather to be seen as human creativity at work and at least two processes need to be understood in order that the developments can be understood. One of those processes is 'digitization', which refers to the ability to represent information using the binary language on which computing is based.
Digitization has in turn enabled 'convergence', whereby the formerly distinct industries of telecommunications, broadcasting, computing, and publishing have become digitally based and, consequently, entwined. The convergence of these formerly separate and distinct industries has given rise to what are now known as the “information industries” (Houghton at al, 1996). The
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content that forms the core of these industries can now be created, stored, processed and distributed in digital forms. Furthermore, the digital forms enable hybrid activities to occur in a way that was not possible beforehand, and these hybrids are leading to changes in regulatory and political implications. Some examples of which will help to assist in understanding the issues at hand -
• newspapers are available online and the question arises as to which government departments and authorities should have responsibility and power to control their existence i.e. publishing, telecommunications, or computing? • video, radio and television can be transmitted via the Internet - should those capabilities fall under broadcasting, telecommunications or computing regimes?
Closer to the theme being studied here, some media organizations have started affiliates that are vying for a place in the higher education market. According, to Middlehurst (2002, p. 4-5):
A subsidiary of News Corporation, Worldwide Learning Ltd., has established a successful alliance with an educational broker in the UK, Scottish Knowledge. The latter is a consortium of 15 Scottish Universities and 20 commercial companies including General Accident, Shell UK, BP, Ernst and Young and the Bank of Scotland, set up in 1997 to market Scottish higher education programmes globally, particularly in North America, the Middle East, Malaysia and China. … Publishing businesses are also active in alliances with universities, colleges and other educational service providers. The global publishers, Pearsons and Thompson Learning are market leaders in their fields.
Such activity raises questions as to the applicable regulation and controls that might be applied to such companies and their operations, especially when their business activities are international in nature. As Middlehurst (2002, p. 9-13) goes on to point out, the ramifications of these types of alliance have significant implications for quality assurance especially when there has been a division of labour in the production of the integral higher education components.
Furthermore, the regulation and control issues are compounded when the alliances cross not only industry boundaries but also those of national borders. Among the list of borders included by Middlehurst (2002, p. 12) are those dealing with national legislation, higher education policies, visa and custom's regulations, telecommunications laws and costs, intellectual property
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rights, quality assurance regimes of different countries, agreed codes of practice, information sharing arrangements, legal and funding arrangements, organizational issues, technical standards, and arrangements for recognition of credentials among others. To this list, taxation implications could also be added. In short, the use of ICT in higher education in the information economy raises many questions that will take some time to answer in Australian and elsewhere, though actions have been commenced in many places.
The responses to the questions, on the regulatory side, have varied across countries and so too have the commercial responses from organizations seeing an opportunity that had not existed before the convergence took place. Media companies, for example, with an expertise in creation and distribution of content, were well suited and placed to enter the new digital fields.
In fact, the Australian government sponsored research into the extent of media companies' actual and potential capacity for involvement in higher education when Cunningham et al
(1997) produced the first of the 'business of borderless education reports'—New Media and
Borderless Education: A review of the Convergence between Global Media Networks and
Higher Education Provision. Much the same team produced another report (Cunningham et al,
2000) that investigated the rise of corporate universities and businesses dealing in education in the USA. In the U.K., a research team, chaired by Professor Roger King, was funded by the
Higher Education Funding Council and the Committee of Vice-Chancellors and Principals to mirror the initial Australian research (CVCP, 2000). Professor Middlehurst, cited above, was also a member of that reporting team.
The combination of telecommunications and computing has gradually spread, though unevenly, across the globe leading some commentators to refer to the globe as a 'digital network' and to countries as 'wired societies'. Notwithstanding the hype that invariably accompanies such technological advances, the world has witnessed a significant period of change stemming from the combination of the technologies and the industries mentioned above.
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Digitization of information, in its myriad formats, gave rise to what became known as
'commerce in content' (see for example, Cutler & Co., 1994; and Keating 1994a) and the
Australian government took a keen interest in pursuing economic advantages from the creation of informational products and services as the cited documents amplify. Since they were published, the world wide web has been further entrenched and developed in Australia to the extent that very little debate is now witnessed about content as such. More recently, the focus has moved on to the more encapsulating topics of trade in information and knowledge and to the operation of the information economy (also referred to as the knowledge-based economy).
When the National Office of Information Economy (NOIE) was established by the Liberal coalition government (in 1996) it was an indication of the rising importance given to information and knowledge-based goods and services and to the coordinating role the government deemed necessary for itself. NOIE was located within the ministry of communications, the office that had become the principal agency for dealing with the sustained research agenda into broadband telecommunications and digital infrastructure, commissioned by the prior Labor government in the years leading to the formation of NOIE (see for example the reports to the former Labor government Australia as an Information Society (House of
Representatives Standing Committee for Long Term Strategies ,1991), Networking Australia's
Future (Broadband Services Expert Group, 1994b), and Excellence in Content (Montgomery,
Walker & Maddock 1995)). NOIE was the major locus for matters dealing with the information economy and electronic commerce until early 2004 when its parent department subsumed it, though it still has the responsibilities given to it in earlier years.
Australian developments reflected international developments. In the USA, Al Gore was driving the creation of the Global Information Initiative (GII), itself an extension of the more
US centric National Information Initiative (NII), the British had their Information Society
Initiative (Mattelard, 2003 p. 118-119), and the Europeans established an Information Society
Office (see, http://europa.eu.int/information_society/index_en.htm ).
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5.3 Information, information society, and information economy
Building on the developments referred to above, this chapter examines the claim that higher education can be envisaged as a trade in information and knowledge. As a corollary, distance education mediated via the Internet and WWW, should therefore be a suitable candidate for inclusion in the digitized information economy and seen as an example of electronic commerce and of the broader informatization of society.
Indeed that relationship is implied in the following quote:
…while content is quickly becoming king, the landscape is becoming increasingly populated with distribution systems; content parading as knowledge or information is thus becoming as ubiquitous as disloyal subjects. This phenomenon is placing a premium on web portals, online enablers, marketing channels, and information- organizing schemes. In turn, these initiatives — demanded by the knowledge-based economy — have the capacity to transform higher education institutions into totally unrecognisable entities. Online enablers, the outsourcers who create virtual campuses within brick-and-mortar colleges, can provide potentially unlimited access to seemingly unlimited content sources. And through the marketing channels opened up by their e- commerce capacity, they can easily be expanded not only into educational shopping centers but into merchandise marts, focusing on a market of nearly 75 million potential users, 15 million of them college students who spend $90 billion annually on discretionary consumption (Moe, M., 1999 cited in Klor de Alva, 1999 pp. 37-38).
Written nearly five ago and before the dot.com crash of 2000, the quote is relevant to this work for a number of reasons. Firstly, it encapsulated in the American context, the scale of the changes that were afoot within the world's largest capitalist economy and its related higher education market. Secondly, Moe's report for Merrill Lynch was written as a guide for investment in America and made no concessions in seeing education as the most important market for investors. Thirdly, de Alva, a man who holds a doctorate in economic history from
Cambridge University and has an academic pedigree based on service with institutions such as
Princeton University, University of California at Berkeley and San Jose State University, in
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moving to take up the presidency of the University of Phoenix, had departed from his traditional academic past to try to make the University of Phoenix, a 'virtual university', a force to be reckoned with in the United States (see Shea 1998). The fourth point is that in the US five years ago trade in content was high on the agenda and the link to electronic commerce was becoming more apparent. The fifth point relates to the fact that university education has international dimensions, as the statistical data in Chapter 3 showed. Australia is not immune to competition from overseas institutions, especially now that distance education can be conducted via ICT. As a result students can be 'distant' in the local neighbourhood or half way around the globe. As
Ohmae (1990, p. xiii) says “people are global when as consumers they have access to information about goods and services from around the world”. In his discussions about the
“borderless world”, Ohmae also makes it clear that the boundaries between countries are being eroded and that “of all the forces eating them away, perhaps the most persistent is the flow of information … (1990, p. 18-19). Of course Ohmae was writing before the WWW became a public space and consequently reinforced the capacity of people to obtain information from around the world.
Australian universities need therefore to take notice of what is happening overseas as it will likely affect their own strategies. Finally, the quote points to many of the business-oriented terms and phrases that can be found in increasing number when researching the activities of the modern university. Appropriated from the disciplines of management, information systems and business, the terms are harbingers of the discussions that will follow in this study and they point to the impact that ICT developments, managerialism, competition, and economic rationalism are having on the governance of universities in Australia and internationally.
The University of Phoenix will be re-visited in later stages of this dissertation when competition in the higher education marketplace is discussed. For-profit universities, corporate universities and virtual universities are some of the portents of what higher education might be in the future if the changes apace in the USA and in Australia reach their projected potential. For the
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moment it is necessary to backtrack in time to see how the scenario spoken about by Michael
Moe might have been enabled. Twenty years ago, and perhaps more recently, visions such as those of Moe, would not have been taken too seriously anywhere in the world. If information and knowledge have become commodities to be traded, then there must have been some development toward them taking on the characteristics of commodities and of the market perceiving them as such, when they had not been seen in such a light beforehand. The next step therefore is to try to trace and unravel the nature and scope of the changes that have occurred, or which are continuing to occur, in the field of higher education that could be a prelude to the higher education marketplace suggested by Moe. To do this it is necessary to draw on a variety of sources—from within, and outside of, Australia as well as across disciplines.
This chapter therefore introduces and draws on the literature of the so-called information society, the related information economy, and the process referred to as informatization so that the economic and political context for modern commerce and the role being played by information is made evident (Dordick and Wang, 1993).
5.4 Definitions of information society and information economy
The House of Representatives Standing Committee for Long Term Strategies (1991, p. viii) defined information society as:
Society in which time use, family life, employment, education and social interaction are increasingly influenced by access to information technology, e.g. television, radios, videos, computers; sometimes the term is used as a synonym for 'information economy', but others deny that economy and society are identical.
The same report (1991, p. vii) defined information economy as an:
Economy marked by a marked shift away from employment in producing raw materials, manufactured goods and tangible economic services towards employment directly related to the collection, processing and dissemination of data/information/knowledge
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and associated with an exponential increase in the volume and availability of information.
'Information employment' was defined (1991, p. vii-viii) by them as:
Employment directly related to the collection, processing and disseminating of data/information/knowledge. Its common element is the processing of symbols (words, sounds, numbers, images, gestures) or symbolic objects (money, cheques, letters, photographs, books, keys, title deeds, tickets, shares, insurance certificates). Its products can generally be sent through the air or by wire. Information related employment includes teaching, research, communications, journalism, entertainment, music, photography, advertising, the arts, bureaucracy, accounting, law, banking, psychiatry, insurance, betting, real estate, office work, architecture, libraries and museums, printing, travel agencies, and most welfare work. Tools of trade include telephones, computers, typewriters, cameras and pens.
Writing thirteen years ago the authors of the report could not have been expected to foresee the advent of the WWW nor its impact. Nevertheless, their definitions were an accurate summary of the dominant contributions to the literature to that point in time and even with the inclusion of the WWW they provide an adequate description of the concepts in the current time.
University education seems to fit clearly in such definitions and the role of academics as researchers and teachers is directly nominated. Since 1991 many other definitions have been formulated for the terms shown above (see, for example in Europe, the Bangemann Report
(1994) or, for a Polish view, visit http://www.informatyzacja.government.pl/scripts/detail.asp?tmplid=129%id=232 ).
5.4.1 Studies of the information society
Serious study of the changing structure of economies and in particular of the role that information was seen to be playing, commenced during the 1960s in Japan according to Dordick and Wang, (1993 pp. 9-13). In Japan, formalized attempts were being made to measure the production and usage of information in various areas of industry. The JOHOKA (Japanese for information) and JIPDEC (Japan Information Processing and Development Centre) indices arose out of that work and were among the first efforts to measure the place and role of
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information in a society and in an economy. The JOHOKA index was “a systematic attempt to define an overall infrastructure index … to determine how far Japan had moved toward being informationalized and, further, to compare the informationalization of different societies over time” (Dordick and Wang, 1993 p. 33). The JIPDEC index was, according to Dordick and
Wang (1993, p. 34), an attempt by the Japanese “to relate the informatization process to economic factors more directly … to monitor the development of the information industry and information intensity, that is, the extent of information technology utilization in industry more generally.”
In America Fritz Machlup of Princeton University was responsible for the first systematic attempt in the USA to evaluate the generation and spread of knowledge. His book, The
Production and Distribution of Knowledge in the United States of America, was published in
1962 and discussed his attempt to measure government “expenditures on the production of knowledge and its importance to the nation's economy” (Dordick and Wang, 1993 p. 37).
Machlup found that “the knowledge industry in the United States would account for some 29% of the GNP and that slightly less than 31% of the work force would be engaged in knowledge- producing industries in 1959” (Dordick and Wang, 1993 p. 38). Machlup’s seminal work can be seen to be among the initial forays into establishing the “sub-division of economics which concerns itself with the ‘economics of information’ (Webster, 1995, pp. 10-11) and thereby
Machlup can be seen as a. ”founder of this specialism” (Webster, 1995, p. 11).
Machlup and the Japanese had recognized that there were substantial changes under way in their respective economies and their work was centred on the vital economic role increasingly being played by the core elements of information and knowledge. These changes were also being written about by a number of other authors such as Jacques Ellul (1964), Alain Touraine (1969),
Peter Drucker (1969), and Daniel Bell (1973, 1976), who started to argue that these economies
(and also their associated societies) were becoming “programmed”, “post-industrial”, “post- capitalist”, or “informatized”. Touraine writing in France argued that the country was becoming
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“informatized” and “programmed” and moving away from the industrial era that had dominated to that point. Touraine was interested in the social tensions in France and was trying to explain the emerging importance the technocratic and scientific changes that he was witnessing. Whilst he used the term “post-industrial” in one of his book titles he did not discuss it in detail preferring instead the notion of the “programmed society”. Daniel Bell (1973) did, however, draw attention to the post-industrial, a society in which he believed the axial principle of economic growth was the codification of theoretical knowledge and this, he claimed, constituted a major difference from prior stages of industrial development. Central to Bell's work was the changing role of information and of those who would generate it, manipulate it, apply it and distribute it. Indeed, for Bell, power lay in the control and ownership of knowledge (1973, pp.
18-20) and he argued that the occupations that would become most important were those that had the capacity to create information, or in which abstract analysis of information was required
— one corollary being that the 'working classes' would not lead the way. Robert Reich (1991),
President Clinton's initial Labor Secretary, would later emphasize the importance of 'symbolic analysis' in his treatment of change in the capitalist economy, again emphasizing the points Bell had made nearly two decades beforehand.
Peter Drucker, the prolific author of management and organization books, coined the term
“knowledge worker” (1969) —though he acknowledges Machlup as the person who, in his 1962 book, coined the term “'knowledge industries” (Drucker, 1969, p. 264)— and argued that these types of employees would become increasingly important as manipulators of information and knowledge in society. Drucker argued that knowledge was becoming an increasingly critical factor of production and that value would be created and added by people pursuing intellectual rather than physical activities. Drucker argued (1969, p. 263-264):
From an economy of goods, which America was as recently as World War II, we have changed into a knowledge economy. … Today the center is the knowledge worker, the man or woman who applies to productive work ideas, concepts, and information rather than manual skill or brawn. Our largest single occupation is teaching, that is, the systematic supply of knowledge and systematic training in applying it. … knowledge
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has become the central cost of the American economy. The productivity of knowledge has already become the key to productivity, competitive strength, and economic achievement. … But the statistics, impressive though they are, do not reveal the important thing. What matters is that knowledge has become the central “factor of production” in an advanced, developed economy. Economists still tend to classify the “knowledge industries” as “services”. … But knowledge has actually become the “primary” industry, the industry that supplies to the economy the essential and central resource of production.
Fundamental to their arguments were the ideas that the economic emphasis had moved away from manufacturing activities, typical of industrial societies, based on capital investment, to service activities based on information, knowledge and intellectual investment. Information was starting to be recognized as a factor of production.
Marc Porat produced The Information Economy as his Ph.D. dissertation at Stanford University in 1976. Porat then teamed up with Michael Rubin, subsequently built on Machlup's pioneering work and his own thesis, and published a 9-volume work The Information Economy (1977) under the auspices of the US Department of Commerce. Though taking a somewhat different approach, Porat and Rubin analysed the US workforce, occupation by occupation, to determine the level of knowledge work involved in each. Porat and Rubin also differed from Machlup in that their work recognized two sectors—the primary and secondary—in the information sector, which tried to account for the value of activities in the workplace that did not reach the public.
As such they moved away from Machlup's focus on selling price as the basis for measurement,
“believing that income generated by information activities, not limited to the selling price of a product as Machlup had measured it, is a better basis of measurement because it more accurately reflects the contribution of these activities to the nation's economy” (Dordick and
Wang, 1993 p. 41).
Porat and Rubin's work provided a foundation for measuring the national contribution of the information sector in the USA and Figure 5.2 shows the trends in the composition of the workforce that were distilled as a result of this investigation. They were able to conclude that
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the information sector employed approximately 48% of the US workforce in 1980, up from
14.8% in 1900 and the share of regular GNP for the information sector was 46% using Porat's method (Dordick and Wang, 1993, p. 48.)
Figure 5-2 Four-sector aggregation of the US labour force, 1860-1980. (Using median estimates of information workers). (Source: Porat, M. & Rubin, M., 1977, The Information Economy, Vol. 1, p. 121, in Jones, B., 1996, p.58. Note: this chart was prepared by estimating the figures from the chart in Jones. It is not therefore an exact replica.)
Mattelart (2003, p 61) reminds his audience that:
While Porat was still putting the final touches to his research report, it was already being used as the basis for an official document drafted in 1976 under the direction of Nelson Rockefeller, which laid down the outlines of a National Information Policy.
The importance of the research was therefore recognized immediately in the USA. The OECD also realized the significance of the work and the basis it provided to measure and compare the information sector across countries and subsequently published their comparative research of nine western industrial countries in their book called Information activities, electronics and telecommunication technologies (OECD, 1981).
The work of Machlup, and Porat and Rubin, has also stimulated studies elsewhere in the world
(see, for example, Jussawalla, Lamberton, and Karunaratne, (Eds.) The Cost of Thinking:
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Information Economies of Ten Pacific Countries (1988); and Katz, The Information Society: An
213
International Perspective (1988); for a study of the information economy in Queensland see,
Mandeville, T et al Technology, Employment and the Queensland Information Economy, 1983; for a study of the information sector in Queensland and possible impact on education see Bredt,
J, 1995).
In Australia, Barry Jones published Sleepers Wake in 1982, a tome that heralded his interest in the informatization of the country, and which was a precursor to his visionary call for a national information policy in Australia. Jones also pursued this interest in the information debate as chair of the House of Representatives Standing Committee for Long Term Strategies when they produced the important 1991 report, Australia as an Information Society: Grasping New
Paradigms. More recently, he was a major contributor (with Evans, 2001) to the Australian
Labor party policy document An Agenda for the Knowledge Nation that emphasized the role of information and knowledge in economic and social affairs, in the lead up to the federal election in 2000. He also published an updated version of his book “Sleeper's Wake” in 1996. In that book he too published an analysis of the composition of the workforce in Australia, over much the same time span as had Porat and Rubin. His results are found in Figure 5.3.
Figure 5-3 Australian labour force in paid employment, four-sector analysis, 1891-1994. (Source: Jones, B., 1996, p.58.)
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What is important to note is that the proportion of workers engaged in what Jones labeled the
“quaternary sector” and that Porat and Rubin had labeled the “information sector” has risen dramatically to a point where over 40% of the working population produce value for their employers by creating, storing, retrieving, manipulating or disseminating information. These people, variously labeled as information workers or knowledge workers, are important resources for an organization and their capacity to continue to add value is, to some extent, determined by their ability to maintain the currency of their professional knowledge. One outcome of this, often coupled with family and work pressures, is the desire of these people to be able to continue their education without relinquishing their employment so that they ensure their own career viability. Cunningham et al (2000) refer to these types of students as “earner – learners”, in contrast to “learner – earners” who are typically on campus students working part-time to support their university studies. The earner - learner group, as representative of the knowledge worker, may choose distance education study modes in order to meet their many responsibilities and to cope with a “half-life” of professional knowledge that is ever decreasing, requiring attention to concepts such as life-long learning (Cunningham et al, 2000, p. 19). Cunningham et al argue that the “huge educational demand which characterizes the turn of the century, and which is fuelling the growth of alternative education providers” (2000, p. 19) is being fuelled by a number of inter-related pressures and trends, including:
• the emergence of a post-industrial Information Age, which values production of knowledge via 'knowledge-based workers' or 'symbolic analysts' whose knowledge is rendered redundant every two years, or even 12 months (Meister 1998, p. 11); … • demands for greater access to tertiary education from adults who have not qualified under previous education regimes, or from those who recognise the need for ever-higher formal certification, the so-called 'credential creep'. Without doubt, one of the main drivers of the business of education has been the demand for post-secondary qualifications from an increasing number of professions and vocations (Carnevale, A. P. 1999); … (Cunningham et al 2000, p. 18-19)
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As was shown in Chapter 3, the percentage of higher education being taken in distance education modes has been increasing markedly over the past decade to reach an all-time high in
2003. The youngest cohort (18-24) are least likely to take distance education as a preference, partially because they value the period of university study as a socializing experience and partially because they typically don't have the requisite self-organization and self-study skills.
The statistics confirm the presence of older students taking distance education.
This demand for on-going education services may also be fuelling a capacity for alternative providers (virtual and for-profit universities) to exist in higher education. It comes as little surprise that they have been focussed on the provision of specific qualifications and degrees— those that are commercially viable, such as information technology and management—rather than the broad range of studies usually found in a traditional university (Cunningham et al,
2000). Catering for 'knowledge workers', the currency of whose professional knowledge base erodes quickly, and whose professions are based in manipulation of symbolic information is then one link between the information society and the universities. Providing the education to meet their needs is a market that non-traditional providers have discovered, moreso overseas than in Australia at present, but again it needs to be stressed that in a globalized economy what is happening offshore has implications within the higher education environment in Australia.
Global distance education provision using commercial online approaches enabled by the WWW may be one critical component in tying electronic commerce to higher education. This point will be raised again later in the study but for the moment it is necessary to return to the discussion about the information society and its terminology.
5.4.2 Information society and terminological contention
For the sake of clarity, and to draw out the major salient point that the role of information is not disputed among the protagonists, it is necessary to undertake this discussion so that contra- arguments can be forestalled and so the concept of trade in information and knowledge can be made more evident. Though the literature about the information society is now enormous there
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has been some contention as to the usefulness of terms like information society and information economy.
A number of scholars have provided critical examinations of the terms and the bases to claims that the changes implied by the terms are actually occurring. Dordick and Wang (1993),
Webster (1995), May (2002), and Mattelard (2003) have all contributed to the debate about the nature and extent of the change in national economies and whether, or not, those changes constitute a break from what has preceded them. These authors contest the claim “that the present era marks a turning point in social development” (Webster, 1995 p. 4) characterized by use of the terms “information society” and “information age” (and, to a lesser extent,
“information economy”). Webster in particular argues that these terms, as references to new forms of social and industrial organization and development, cannot be sustained as conceptual notions (see also May 2002 and Mattelart 2003 for penetrating insight into this debate).
Webster organizes his book into two camps according to the positions adopted by the theorists he is studying — in one camp he places those who proclaim that the use and role of information in modern society justifies the use of the term “information society” and who see the modern era as being a departure from what has preceded it. Their position is based on difference. In the other camp Webster places those theorists and commentators who see the modern era as a
“continuation of pre-established relations” (Webster, 1995 p. 5) and for whom the term
“informatisation” holds more credence. Indeed, Webster also leans to this term as he recognizes the increased importance of information in the modern world, though he stops well short of supporting the claims for the so-called information society. This latter point is important in the current study, for the body of theory, regardless of the position taken, argues that information has taken a much greater prominence than formerly had been the case. This, in part, arises as a result of the tremendous advances in ICT in the latter half of the twentieth century. As the current study is not an attempt to further the debate which Webster has argued so eloquently, it will suffice to indicate the 'camps' that he has derived and to progress here with the
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understanding that information is seen by all the protagonists as being of great significance.
According to Webster, when discussing the focal theorists in his book, and explaining why he divided them as he did:
Nonetheless, beyond and between these differences is a line that should not be ignored: the separation between those who endorse the idea of an 'information society' and those who regard 'informatisation' as the continuation of pre-established relations. Towards one wing we may position those who proclaim a new sort of society that has emerged from the old. Drawn to this side are theorists of: post-industrialism (Daniel Bell and a legion of followers); postmodernism (e.g. Jean Baudrillard, Mark Poster); flexible specialisation (e.g. Michael Piore and Charles Sabel, Larry Hirschhorn); the informational mode of development (Manuel Castells).
On the other side are writers who place emphasis on continuities. I would include here theorists of: Neo-Marxism (e.g. Herbert Schiller); Regulation Theory (e.g. Michel Aglietta, Alain Lipietz); flexible accumulation (David Harvey); the nation state and violence (Anthony Giddens); the public sphere (Jürgen Habermas, Nicholas Garnham).
None of the latter denies that information is of key importance to the modern world, but unlike the former they argue that its form and function are subordinate to long- established principles and practices (Webster, 1995 p. 5 with emphases in original).
The current study therefore is mindful of the contested ground and, in drawing on the work of authors such as those listed above, there is a need to be wary of the use of terminology and conceptual divide of which Webster speaks. The position favoured in the current study is akin to that taken by the latter camp, though there is still much of value to be found in the contribution of those in the former camp. It should also be pointed out that Webster himself was selective in his choice of theorists and a large body of work on information economics has been largely overlooked in the book. For now, it is sufficient having made the point that opinions are divided about the nature of the changes afoot, to push past those difficulties and to move onto a further analysis of the central ideas to be made in this chapter.
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Though opinion may be divided about use of the specific terms like information society, there is much greater agreement that information has taken on a central role in modern society and in industry as well. This recognition is important in the current work, as the role of information is the essential glue that binds distance education, as an information industry, to that of electronic commerce which, enabled by digital technology, is itself oriented to symbolic representations of information and knowledge. The inherent link therefore is informational in character. To establish the convergence of the link between distance education and electronic commerce remains the task for the rest of this chapter.
5.4.3 Placing information services and products in the information economy
Australian researchers (Houghton et al 1996) working with the intention of trying to bring about acceptance of “an integrated framework for analysing the information technology industries and their markets” (1996, p. xi), have derived a complex “IT map” in support of their analysis which is presented in Figure 5.4.
According to Houghton et al, the IT map has a focus “on information processing and communications. At its core are electronic networks — their network(able) equipment and software elements, the information products and services based on them and the industries that produce them” (1996, p. xi). They explained that the IT map is:
drawn with a vertical product-service dimension and a horizontal form-substance dimension. This two-dimensional space is divided in a two-stage process according to four possible characteristic combinations of attributes associated with these dimensions. Within this map the IT sector is divided into four main industries — communication services, information services, equipment manufacturing and content. Each is, in turn, is divided into four product or service categories (Houghton et al, 1996, p. xi).
Their map is reproduced in Figure 5.4 with the intention of showing that education was identified as a 'professional service' within the 'services' section dealing with 'substance/content'.
The diagram is also useful inasmuch as it reinforces the need for a holistic view of the
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environment that was stressed in the discussion of the electronic commerce framework provided by Turban et al shown in Chapter 4.
The work of Houghton et al in Australia, with its claimed capacity to allow data collection and analysis “between industries and market sectors” (1996, p. xii), arguably answers a need in
Australia for a better way in which to understand the growth and development of the information industries and their importance to the economy. By including the informational components of such an agglomerated information industry (professional services and content), not only have they seen the need for comprehending the technological but also the intellectual aspects of the modern economy.
Figure 5-4 A new Information Technology Map (Source: Houghton et al, 1996, p. xii)
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Houghton et al therefore have provided a way in which to understand the role of informational products and services in the Australian economy along with the infrastructure that enables their movement and the commercial activities that surround them.
It is perhaps self-evident but worth pointing out that the computing and telecommunications infrastructure must be in place in order that information and knowledge based products and services can be transmitted via use of the WWW. Prior to this, universities for example, would have had to rely on other media and technology such as print materials, compact disks (CD-
ROM) and audio and video conference facilities to deliver the same products and services.
With the pervasive influence of the WWW the same institutions can digitize their educational materials for storage and distribution and can use the same infrastructure for communication with students. Students located anywhere in the world, can also make payments and use online library facilities as a part of the information and knowledge services provided by universities.
5.4.4 Linking higher education to information economy
Jones (1996, p. 176) in part of his analysis that accompanied Figures 5.2 and 5.3 claims:
Australia is an information society in which more people are employed in collecting, storing, retrieving, amending, and disseminating data than are producing food, fibres and minerals, and manufacturing products. In the United States, almost half of the paid labour force is engaged in the information sector of the economy. The information society is marked by a shift away from employment in producing goods and services towards that of services and information and an unprecedentedly rapid increase in the volume of readily accessible knowledge.
He argues, as had Drucker (1969), that these information or knowledge workers are critical to the development of national wealth and their work is a driver of the information economy.
More recently Alan Greenspan (2000, p 1), Chair of the US Federal Reserve Board, commented that:
it is the coming together of technologies that we label IT [that] has allowed us to move beyond efficiency gains in routine manual tasks to achieve new levels of productivity in
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now-routine information processing tasks that previously depended upon people to compute, sort, and retrieve information for purposes of taking action. As a result, information technologies have begun to alter significantly how we do business and create economic value, often in ways that were not even foreseeable even a decade ago.
Greenspan goes on to discuss pressures in the US economy and the role of labour policy before saying “I see nothing to suggest that the trends toward a greater conceptual content of our nation's output, will end” (2000 p 3). In his speech he then moved to the implications for education and stated that “[w]orkers must be equipped not simply with technical know-how but also with the ability to create, analyze, and transform information and to interact effectively with others. Moreover, learning will, increasingly be a lifelong activity” (2000, p 3). He concludes (2000, p 6), that “[we] need to foster a flexible education system” before commenting that “the increasing availability of courses that can be 'taken at a distance' over the Internet” maybe a particularly valuable development.
What Jones, and Porat and Rubin in their respective analyses of the workforce in Australia and the USA, then later commentators such as Greenspan all point toward is the interconnection between the economy, higher education, global pressures and the role of ICT. This coalition of trends and pressures suggest that the changing face of higher education is not confined to
Australia—competitive markets are likely to be global in nature. Servicing the increasing global demands for higher education presents an opportunity for provider organizations including, but not restricted to, universities to carve out a niche in the market place and to establish, or build on prior, expertise in the delivery of distance education.
University research (knowledge creation) and teaching (knowledge dissemination) contribute to economic growth. With the trends shown in the Figures 5.2 & 5.3 it is apparent that the
'information/quaternary' sectors are increasing in importance. Furthermore, the authors emphasize the fact that information workers are to be found across all parts of the economy.
Coupled with the pervasive application of ICT in modern economies these workers, sometimes
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referred to as symbolic analysts (see Reich, 1991) or knowledge workers carry increasing weight in economic productivity and are arguably an important 'output' from the systems of higher education around the globe. The ongoing problem that these people face is that their value-adding capability is eroded by the ever-diminishing lifespan of their professional knowledge. Ruttenbur et al (2000, p.12) contend that “the amount of stored information doubles every 2.8 years”, the salient point is that the 'half-life' of knowledge is reportedly decreasing. Moe (1999, p. 15) also makes a similar point when he stresses that:
“knowledge workers form the cornerstones of successful businesses, emerging industries, and economic growth. However, in this new environment, the labor force is presented with an unprecedented challenge as it must now gain and continuously upgrade its skills.
This extrapolates into the pressure that modern economies face to constantly update the skill and knowledge bases of their workforces—and helps to explain why life-long learning has become a central concern over the recent past with major international organizations (for example, the OECD, the European Union, Canadian, Australian, and US governments) focussing research into the ramifications of such pressure.
An outcome of the changes in, and pressures on, economies has been the increased interest shown by for-profit bodies in entering higher education. The business of borderless education reports (Cunningham et al 1997, 2000) in Australia and the U.K. (CVCP, 2000a and 2000b) bear witness to this development. Investment reports and/or analyses such as those by Moe
(1999) and Ruttengur et al (2000) which look directly at the looming education market also add weight to the changing perception of higher education from a public good (perhaps more so in
Australia and the U.K. than in the US) to that of a very attractive private investment market.
Furthermore, the Observatory on Borderless Higher Education, established in the U.K. after the
CVCP report in 2000, now produces an index that is trying to keep track of the corporate entities entering higher education around the globe (see www.obhe.ac.uk for those reports).
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The preceding collection of intertwined points and discussion helps to provide a contextual backdrop to recent developments in so-called e-learning environments that are being researched, developed, and implemented in universities worldwide. Their use in the provision of distance education underscores yet another set of pressures being faced by universities and a discussion of those pressures and one possible scenario for future development is now in order.
5.5 Information economy, distance education and electronic commerce
This section of the chapter builds on the lengthy background work already presented. The developments of the information society and information economy herald significant departures from what has come before in the history of higher education in Australia and internationally.
The previous sections have pointed to many of those developments with the intention of establishing the context and a firm basis for what follows here. The spread of networked computers, especially the WWW, has had, and continues to have, far-reaching effects on higher education, economies and society in general. New policy has to be introduced to cope with the scale, scope, and pace of change that has been discussed in this study to date.
As this chapter has endeavoured to show, the changes afoot are new. The debate about the information society is essentially about whether, or not, the information and knowledge based changes represent a continuation of power and capitalistic relations from the industrial era or whether they should be seen as a break, a discontinuity. In either event, agreement is evident that both sides see the role of information and knowledge as having increased in importance to the point where they are now pivotal, or as Drucker (1969, p. xi) claimed “knowledge, during the last few decades, has become the central capital, the cost centre, and the crucial resource of the economy. This changes labor forces and work, teaching and learning, and the meaning of knowledge and its politics.” Now, some thirty-five years later, it is ostensibly the case that the world has caught up with his insight and is in the midst of dealing with the changes implied in his comments.
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As was shown in Chapter 3, electronic commerce has arisen as one commercial outcome of the application of new technology, in particular ICT. Its existence is one of the changes that has occurred in the period to which Drucker referred with the greatest rate of change happening after the WWW had been commercialized. Electronic commerce represents the innovative responses that organizations around the world have made to the opportunities enabled by the
ICT developments. Governments, particularly in western developed countries, have also sponsored those innovations and it is increasingly the case in the East and in developing nations.
Electronic commerce was also shown in Chapter 3 to exist in a number of fields and industries and to be of a variety of types and approaches. These are by no means the final configuration, and businesses, including the universities and their competitors, are engaged in evaluation of the possibilities on offer, which is sure to see newer permutations of electronic commerce approaches develop over time. The models that have been developed to date, and their logical extensions, will be further discussed in Chapter 7.
New business arises because of opportunity. Electronic commerce is fundamentally new business, even though the commercial value derived may be based on existing activity. As
Chapter 3 pointed out, some organizations are going through processes of extensive re- engineering in order that they are able to capitalize on the opportunity they see on offer via electronic commerce. Universities are caught up in the maelstrom of change, whether they initiate the change or not, because other non-traditional competitors have been able to enter the market for higher education. What is now in question is whether the universities and their new competitors are seeing higher education in general, and distance education in particular, as fields that require new thinking?
Traditional higher education has always been delivered at a cost—even in Australian under the
Whitlam government, the 'free of fees' university degree, was funded by the tax payers. With the changes outlined in Chapter 2, it would seem that the user-pays approach is going to be
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further applied to higher education in Australia and the most recent round of changes, those of the Nelson Review, have led to the universities being able to charge fees, at a level that they determine within limits set by the government. In this regard Marginson (2003, p. 23) offers the following interpretation—with HECS referring to the Australian system of partial student payments for their university education, the Higher Education Contribution Scheme:
The new policies led by the Minister for Education, Science and Training, Brendan Nelson [2003], to be introduced in 2005, make three main changes. First, though the HECS remains a payment from students to government, covering a part only of the cost of the student place with the balance paid by government, it has been moved closer to the forms of a market fee. Individual universities can now vary the level of HECS freely, at up to 25 per cent above current levels, or downwards to zero, fixing it at $0– 7,670 per annum in 2005. Prestigious universities, and perhaps some others, will opt for the maximum possible HECS. Second, public universities will be able to charge direct tuition fees at whatever level they like for up to 35 per cent of the places in each course. Third, fee-paying students in both the public universities and accredited private institutions will be eligible for income-contingent loans under the government-backed FEE-HELP. Repayments under both HECS-HELP and FEE-HELP will be income contingent, with no real interest rate, though students taking loans under FEE-HELP will be subject to an additional annual surcharge of $2,000.
Under these new arrangements a differentiated price-based undergraduate market is created, based on a voucher-like system of subsidised loans. With the cost gap between full fee places and HECS places reduced, many students will opt for fee-paying places in prestigious universities and courses rather than HECS places in less desired courses. The cost gap between HECS places in public universities and fee places in private institutions is also narrowed, making a large-scale private sector viable for the first time.
Since Marginson, focusing from a perspective of Hayekian, free-market, economics, wrote the material above, some Australian universities, e.g., University of Sydney, have decided to increase their fees to the full amount allowed under the new rules. His view that the Nelson
Reform changes have led the undergraduate fees closer to a 'market fee' is relevant and signals the extent of the view that higher education should be encouraged along free-market principles.
Marginson (2003, p. 24) also makes the point that the Nelson Review changes have led to the cost of higher education in Australia more closely approximating those of the USA thereby
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reducing one avenue of advantage for Australian universities. His analysis then deduces the implications for the universities in the “lower tiers” and concludes that there will be a “race to the bottom” for these institutions because they do not have the benefits afforded the older, more prestigious, universities. Those benefits relate to what Marginson has termed positional goods
(2003, pp. 3-6; 1997, 38-46) whereby “positional goods in education are places in education which provide students with relative advantage in the competition for jobs, income, social standing and prestige” (1997, p. 38) and “'positional goods' produced in higher education are scarce educational opportunities that are seen to confer on students potential or actual social advantages” (2003, p. 4). These goods therefore relate closely to the established pecking order in terms of prestige of universities in a national context. With the forces of globalization at work to open up trade in higher education, the value of positional goods in a national context may be undermined, as students studying via distance education can take-up study with prestigious institutions overseas or they can actually go to the other country for the period of study. In either case they can graduate with a testamur from the university with which they studied.
The situation in Australia is therefore one in which the students are called on to contribute an increasing portion of the cost of their education. This changes the status quo for the Australian higher education environment, in terms of the debate about public versus private benefits and who should pay for them, and has significant implications. Coupled with increasing international student demand and the increasing use of electronic technology to provide both on- campus and distance education the discussion must now turn to an examination of the social and economic nature of higher education in Australia. Here, the focus will be on two issues, the first of which is the trade in education (knowledge) services and the related notion of commodification of knowledge, and the second revolves around public versus private goods and the changing nature of higher education. These discussions then lead to the final outcome of the chapter, the inter-linking of electronic commerce and distance education revolving around the trade in information and knowledge.
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5.6 Trade in information and/or knowledge services
Accompanying the multitude of changes referred to above has been a reconsideration of the nature of the trade in services at an international level. The General Agreement on Trade in
Services (GATS), administered by the World Trade Organization (WTO) has caused a stir because it has brought the export of education to the fore at a global level. The GATS agreement came into effect in 1995 and was the first attempt to establish a global agreement dealing with trade in services with an express intention of reducing or eliminating trade barriers
(Knight, 2003, p. 5). Knight also informs us that one hundred and forty-five (145) countries are bound by the GATS agreement which details the requirements for liberalizing trade in services across twelve primary sectors— further sub-divided into 160 categories PSI/EI 2002, p. 5), of which education is one. Education is broken into five sub-sections— “primary, secondary, higher and adult education and training programs as well as various 'other' education services such as language testing” (Knight 2003, p. 17).
Whilst commentators in the area (see, for example, Knight 2002 & 2003; OECD 2000; Dryden
2001; Mallea 1998; Marginson, 2003; and PSI/EI 2002) agree that the “devil is in the detail” and will take some time to be clarified, the underlying imperative of GATS, is that the countries will have to liberalize their trade in services over time. Where they make specific restrictions, as they are allowed to do for services relating to governmental jurisdiction and control, they must still see that they will have to move toward total and complete liberalisation after the binding three-year period for each set of offers. Countries must abide by the principle of the most favoured nation (MFN), a principle directly based on the prior agreement for trade in goods—the General Agreement on Tariffs and Trade (GATT)—which maintains that:
all members of the WTO must treat the imports from a member country at least as favourably as they treat those from any other member country … That is, if services are imported under favourable conditions from one member country, all other member countries have the right to the same deal” (PSI/EI, 2002 pp. 4 & 8).
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Further to this:
each member must treat foreign service suppliers no less favourably than its own service suppliers. That is, a country is not allowed to discriminate between local and foreign suppliers. The critical point here, however, is that it applies only where commitments have been made. … once a commitment is made, it is very difficult to withdraw it. It requires due notice after 3 years of being in place.” (PSI/EI, 2002, p. 8 - emphasis in original).
This resource from PSI/EI, (2002 p. 8) and other commentators also make the following point clear— “members shall enter into rounds of negotiations aimed at achieving progressively higher levels of trade liberalisation.” GATS is here to stay at an international level and the trade in higher education, its products and services, will progressively be traded in a global marketplace though the extent of that trade in dollar values is still difficult to judge at the moment.
5.6.1 GATS, the WTO and modes of trade in services
John Dryden, Head of Information, Computer and Communications Policy (ICCP) at the OECD argues that “information and data about the level and extent of trade in educational services are scarce and difficult to evaluate” (2001, p. 1). Writing three years ago, he made the telling observation that the trade in educational services for which he sought more detail is poorly served in the official statistics—(Mallea, 1998 and Knight, 2003 also make this point). This was so because the OECD and the World Trade Organization (WTO) had not foreseen the need to collect figures that relate closely to the type of activity now being carried out by a range of countries. The WTO has established four different categories; each referred to as a mode, for recording international trade in services, including education. Those modes are (Dryden 2001;
PSI/EI, 2002, pp. 8-9; Knight, 2003):
Mode 1 - Cross-border supply - services supplied from one member country or territory to another. This mode is closest to the normal trade in goods. Examples include banking, data processing, telemedical services such as telepsychiatry and
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diagnostic services. “Virtual universities are providing university courses across national borders” according to Public Services International and Education International (2002 p. 8) labour unions in Europe, and are another example in this mode. PSI/EI also states that “the potential for growth here lies in the development of the Internet and telecommunications access” (2002, pp. 8-9). Knight (2003, p. 3) states that “examples in higher education include distance education and e-learning.”
Mode 2 - Consumption abroad - occurs when people go to another member country to consume services on offer and includes tourism and students travelling to pursue studies in another country. Recognised as the major revenue generator of the modes relating to education until recently and accounts for the bulk of the trade in educational services in Australian universities recounted in Chapter 3.
Mode 3 - Commercial presence - This mode refers to those situations in which a branch office or operation is established in another member country and includes hotel chains, foreign banks and insurance companies, as examples. Again according to PSI/EI (2002, p. 9) “in education, particularly in the higher education sector, universities are exporting their services by establishing university campuses in foreign countries. Degrees or diplomas are then granted from the country of origin of the university.” Monash, and Charles Sturt universities in Australia are among those that have taken this approach as has the U.K. Open University in their much-publicised foray into the USA. Knight (2003, p. 3) states “examples in higher education include branch campuses or franchising arrangements.”
Mode 4 - Presence of natural persons - sometimes called 'individual presence' - a foreign person entering another country, temporarily, to provide a service including those pertaining to education, “such as professors or researchers” (Knight, 2003, p. 3)
The OECD, however, has had only two classes for such trade which were, according to Dryden
(2001, p. 1)
(1) 242 Personal travel; Education-related expenditure; (2) 936 Miscellaneous business, professional, and technical services. Other.
The difficulty that arises from this lack of agreement in categories is that the two organizations are unable to synchronize the collection of official figures. The problem is compounded by the lack of reliable figures across the OECD membership and further exacerbated by rapid growth
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in activities that have not previously been counted. PSI/EI (2002, p. 3) claim that “trade liberalisation in services is part of the globalisation process” and this view helps, in part, to explain why the new forms of trade are only now beginning to be considered; that is, ICT enabled commerce has allowed over time, the development of cross-border business that has led to attention being given to the activities. Dryden (2001, pp. 3, 5) puts this as follows:
… the largest share of cross-border trade in educational services occurs through the travel of international students to study at foreign universities, and this indicator is therefore often used to estimate the overall level of trade in educational services. As we shall argue later in the note, this estimate becomes less and less accurate as other forms of trade in educational services (e.g. e-learning and corporate training) are growing rapidly. … The cross-border e-learning activities are most likely growing at a much higher rate than the number of students studying abroad. Increasingly, educational institutions, publishers, and ICT companies are teaming up to design and deliver e- learning courses on a variety of subjects. Large companies are also developing education and training courses to improve the skills of their employees and to keep them up to date. Again we have very little information on these activities and how much of them are cross-border. … Moreover, the number of public-private partnerships in post-secondary education and corporate training is rising rapidly to match growing markets in an increasingly global e-learning market.
In summing up his paper, Dryden (2001, p. 7) concludes:
As demonstrated in the note, there is very little information on the scale of the other forms of trade in educational services - mode 1 (cross-border supply), mode 3 (commercial presence), and mode 4 (presence of natural persons). There is some evidence that trade in educational services modes 1 and 3 are growing rapidly. In order to get a more complete picture on trade in educational services, there is thus a need to document trends in cross-border e-learning activities, the development of offshore education activities, and in general the trends towards public/private partnerships in the delivery of education and training.
The point being made by use of the quotes above is that these major international bodies (WTO and OECD) have not had to account for the types of education activities being enabled by the use of ICT (ie, modes 1 and 3)—they are new forms of what has occurred in the past and thereby present themselves as new forms of trade and economic activity. The organizations that
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offer higher education via Mode 1 are also involved in new forms of business—electronic commerce. It is important here to acknowledge the fact that not all of the activity of which
Dryden wrote either constitutes higher education, or is performed by universities. As Dryden pointed out, other types of educational providers are involved in the trade and the electronically enabled activities include those that fall into 'continuing education', 'life-long learning', and
'corporate training'. Nevertheless, the point is clear, that all of these are on the rise and all give non-traditional providers a foothold in higher education. The fact that the organizations may not be in Australia is not contested either and the point has been made before that the capability to offer education, via ICTs, is simply another expression of commerce in a globalising world.
In such a world, location of the provider is becoming more and more incidental. The basic message being made here again is that the universities in Australia need to see these developments—trade in information and knowledge-based education services—as a part of the overall economy of higher education. Their strategies should therefore be cognisant of these trade developments.
Mallea (1998) writing for the Centre for Educational Research and Innovation (CERI) at the
OECD, details the formation of a number of international and national bodies (such as GATE - the Global Alliance for Transnational Education and the Center for Quality Assurance in
International Education - CQAIE, a Washington based group founded in 1993) with a specific interest in international trade in professional and educational services. He also points to the number of existing bodies, such as those in the professions of law, engineering, accounting and also the OECD and the Association of South East Asian Nations (ASEAN) that are focussing attention on developments in the same areas by holding fora to encourage discussion and sharing of information. Mallea (1998, p. 11) also agrees with Dryden's concern over the paucity of figures dealing with international trade in education saying “examination of the nature, size and scope of the international market in education and training is still in its infancy. The sector lacks definition and statistical data are hard to come by. Few published figures, for example, contain data on corporate education and training activities.”
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Mallea (1998, pp. 20-22) concludes his examination of the implications for the professions
(ostensibly comprised of knowledge workers) with a number of observations, some of which are relevant here. Mallea claims that “multinational organizations like the Council of Europe and
UNESCO have made the issue of qualifications recognition a priority” but he is aware that progress is slow, as he says it also is with quality assurance methods development. Mallea claims that a lack of information sharing by “countries, professional bodies and institutions of higher education” (1998, p. 20) is partially to blame. He then states that:
A similar judgement can be applied to the international delivery of programmes at a distance. Anecdotal evidence attests to the existence growth in this sphere, evidenced by a profusion of newspaper advertisements. … Yet comprehensive statistical information on this most competitive of markets simply does not exist. (1998, p. 21, emphasis in original)
Mallea then proposes a ten-point research agenda to overcome the deficiencies that he has found in his research. He is of the view that studies of the economic factors leading to international competition in educational services are needed together with the “creation of coherent, well- integrated and co-ordinated policy on international trade” (1998, p. 21). His agenda (starting here at the seventh point), also calls for research that:
could evaluate the extent to which the internationalisation of demand and supply for education and training is transforming that product and service. … Eight, comparative research on the use of distance delivery mechanisms, their costs, benefits and effects is needed, as are studies of the present and future role of mass communication companies. (Mallea, 1998 p. 21)
Mallea's call has been answered to some extent, in Australia and the U.K. at least, by the borderless education reports discussed earlier in this study. His concerns, however, point again to the remarkable lack of prior history in trade in educational services, especially outside Mode
2. His study has seemingly also been supported by the plethora of publications over the past six years since he wrote. Those works deal with a vast range of concerns relating to ICT enabled
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distance education and the spate of publication can also be seen as a subtle form of support for the claim that there is a latent relationship developing between electronic commerce and distance education.
A lack of numbers to measure trade, however, does not provide the entirety of an argument and it is not the intention to insinuate that message. Alongside the deficit of statistics, and of policy and agreements, of which Mallea and Dryden wrote, there are other salient indicators that can be brought to bear in support of a claim that higher education is increasingly a trade in information and knowledge. Mallea, for example, points out (1998, p. 4) that “GATS, or the
General Agreement on Trade in Services (1995) constituted the first multilateral, legally enforceable agreement covering trade in services.” PSI/EI agree with Mallea in this regard adding that GATS “aims to liberalise trade in services” (2002, p. 5). However, they contend that GATS was created in April 1994 (2002, p. 5) and that the World Trade Organization
(WTO) came into being in 1995 to replace the long-standing General Agreement on Tariffs and
Trade (GATT) that had been created in 1948. PSI/EI explain that both GATT and then the
WTO “at first concentrated on trade in goods” (2002, p. 4) because goods “are simple … they are something that you can see and touch. … Another reason is that until very recently trade in services has been at far lower levels than the traditional trade in goods” (2002, p. 4). Another aspect that PSI/EI reveal is that the GATS agreement does not define what is meant by the key term in the matter, that is 'services' so it may be that the problems of measurement and statistics will continue to thwart researchers.
The following discussion is intended to help understand why the GATS agreement is important and why it is seen to have a bearing on the current discussion. It helps to show how the GATS agreement sends a further signal that the world is experiencing new activity (in form and volume) in the trade in higher education, especially that mediated by ICTs. GATS is also one aspect of the ongoing process called globalization in which the world is moving toward a single economic marketplace. An affiliated element of the trade in education is the process of
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commodification of knowledge. Together, these pieces help to bring the support for the claim in this chapter to a close.
5.7 GATS and higher education in Australia
As has been argued elsewhere (Dean, 2001a, 2001b, 2002), the combination of issues presented to this point allude to the complex intertwining of pressures being exerted on the modern university to deliver quality outcomes to the full range of its stakeholders. High in the ranking of influences is the continuing under-funding (Marginson, 1997, Marginson and Considine,
2000) of Australia's universities since the introduction of the Dawkin reforms, during a Labor party government, of the late 1980s, but more strikingly since 1996 under the current, Liberal party, government (Marginson, 2003). Whilst the Australian situation is the focus here it is worthwhile noting that similar funding crises are reported to be occurring in other countries such as New Zealand, England and Canada as well (see, for example, Roberts 1998, Peters and
Roberts, 1999; CVCP, 2000 and Sifton, 2001 respectively for more discussion). Consequently, their responses need to be monitored as they too are education exporters. Along with the USA, the U.K. and Canada are especially important in this group in relation to Australian activities.
Each of these countries has English as its major language, an asset as English has become the predominant language of commerce, and each has a well-established international reputation for higher education. The U.K., New Zealand and Australia also have a national system for accreditation and control of higher education unlike Canada and the USA. This is also arguably an asset for international students wanting to leverage qualifications gained from universities in those countries.
The desire of politicians from both major Australian parties to allow the free market to take a role in determining the mix of subjects and courses that will be offered by universities in a competitive market place has been responsible in part for the steady decline in funding.
Marginson (1997, 2003) details the idea of educational markets and makes the point that higher education credentials are moving away from being the positional goods that once they were.
Only the internationally renowned universities will be able to bestow credentials that have
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positional value and few, if any, Australian universities will be able to do likewise at an international level though their prestige base will remain intact within Australia and will remain important for domestic students (Marginson, 2003). This situation arrives, again in part, because of the massification of higher education and the increase in credentialism that is evident in the USA and elsewhere. Marginson and Considine (2000) also argue that the five-tiered system of Australian universities ('sandstones', 'red bricks', 'gumtrees', 'Unitechs', and 'New
Universities'—from oldest and most established/prestigious through to youngest and least established respectively) means that the responses that will be evident or are currently being implemented will vary. The 'New Universities' are likely to move most strongly to competition in alternative modes of delivery of their products and services. They argue that “[s]pecialisation in distance education enables New Universities to partly escape their history and often, their geography. It is an alternative strategy to building a strong research university and working the school-leaver market” (Marginson and Considine, 2000, p. 226). Whilst it is evident that the
'sandstones' are actively pursuing flexible delivery developments on campus they are not (as yet) as active in utilizing distance education (including online/telelearning) approaches to attract students domestically or internationally. Marginson does not analyse how universities deciding to exploit distance education are going to do so and neither of his recent books (1997, 2000- with Considine), nor his chapter in Douro's book (2003), provide thorough analyses of the distance education activities in universities in Australia. He does briefly allude to the likelihood of distance education being of interest to the younger institutions as a means for them to generate revenue. This suggests that the smaller and younger universities will have to cast their marketing nets widely, broadening their catchment vision from domestic to international areas, in an attempt to attract sufficient students for operational viability. Distance education may become their principal means of survival.
Marginson is correct in pointing to this line of activity as a potential revenue stream for the younger universities for a few reasons—they generally have less access to research based funding, they have less unburdened capital, they often have a heritage of being teaching oriented
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(sometimes with a track record in distance education activities) and, apart from internal cost- cutting exercises, the leveraging of their current content looms as the most attractive option to pursue. Having already made substantial investments in ICT, including infrastructure related to the Internet/WWW, it also seems that they are well placed to try to capitalize on their strengths.
It follows logically that they would see distance education domestically and internationally as viable, perhaps lucrative, markets. What they are essentially doing is following the dictates of the business-oriented analysis known as SWOT (strength, weakness, opportunities and threats) which suggests that they need to capitalize on opportunities and strengths and to defend against threats and weaknesses.
Leveraging their investments in ICT together with repackaging or 'repurposing' existing content seem to be among the options left to universities in the lower echelons (in terms of prestige) of the system. The development and adoption of online, e-learning, environments as an extension of distance education may therefore be more driven by political and economic imperatives than by pedagogical or altruistic concerns. These developments will question the preparedness of universities for entering competitive markets and conducting educational activities (producing educational products and services) that are clearly more commercial and more befitting of corporations than has previously been the case in their history. Clearly, there will be a need for innovation in the universities that attempt to compete in the distance education market place.
Whilst Australian distance education is replete with instances of innovation in terms of the adoption and utilization of technology it is another matter again to start to think in business terms where the products and services of higher education are concerned.
That is what is being supported under the GATS agreement, especially in Modes 1 and 3 as recent innovations in cross-border trade. Mode 2 has been established for a much longer period and does not represent the same difficulties in terms of coming to understand the 'traffic' in students, benefits, and finance. Mode 1 will be of most interest and concern for universities operating in distance education markets and the Internet will continue to rise in importance as
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universities around the world, together with their competitors, see ever increasing numbers of individuals and organizations get connected to the 'networks of networks'. This conjunction of
Internet usage, increased reliance on distance education and e-learning, increased international trade in services, increased need for education throughout a person's working career, together with a need for reductions in the costs of ongoing education of populations seems to strongly support an argument that ICT will play an important role. One step further along this chain of logic is that universities, and their competitors, will wish to trade in higher education products and services using the web across the range of activities involved. In business terms the entire
'value-chain' of activities in their distance education operations will be supported by software running on the web. Electronic commerce from there is but a decision away. Value-chains and the electronic commerce models that may be appropriate to enable such a scenario will be introduced in chapter 9.
5.7.1 Commerce in content – digital products
Universities are entering a new phase in their development, a phase which will require them to be innovative, perhaps inventive, in their quest for survival in competitive markets. It seems logical therefore to try to gain an understanding of the manner in which the universities might compete by looking to the business world. The domain of electronic commerce offers potential for three reasons; firstly, businesses around the globe are experimenting with this new form of activity (often as a complement to their standard practice), and much work has already been done in terms of assessing new electronic commerce business models; secondly, ICTs enable the activities of electronic commerce and universities have already made significant investments in ICT. Those investments may be able to be optimized if the infrastructure can be used in new ways; and finally, there is a natural synergy in the information economy between universities and electronic commerce, because the engine of electronic commerce is information and knowledge and the major stock-in-trade of a university is arguably the same. Whilst electronic commerce allows for buying tangible products, it is most suited for the buying, selling and exchange of information-based goods and services. The digital environment is weightless,
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dealing in a flow of intangible binary data where the industrial age was about manufacture and trade in physical goods.
Evans and Wurster (2000) refer to the latter situation as the change from commerce in atoms to commerce in bits. Their book, Blown to Bits: How the New Economics of Information
Transforms Strategy, was an attempt to operationalise the concept of “commerce in content” by showing the reader how informational aspects of business could open up opportunities for any business (but especially those that were service-oriented) that worked out how to unbundle the information of its products and services for sale as separate commodities. Universities are now faced with a similar dilemma though the use of ICT may offer one part of an answer, and distance education may constitute one aspect of new business. The unbundling also seems to be an important, though little studied, aspect of distance education. Taking the education to the student, largely devoid of the student-teacher interactions that have characterized higher education for centuries, means that to some extent at least, the materials have been stripped away from their usual context on a campus. In this way, the educational materials, often produced in teams, have been 'unbundled' from the prior delivery of higher education as a part of a social experience. Taking a mass-production or assembly line approach, allowed by the
“technology of industrialization” as argued by Otto Peters (cited in Keegan, 1996, p. 113), also has implications for a process now referred to as disintermediation in the business and electronic commerce literature (see, for example, Turban et al 2004, p. 217-218). The term refers to the ridding of intermediaries (middle persons) from the production of goods and/or services where they had previously performed a valuable role. Electronic commerce and distance education combined may allow universities to adopt such approaches, enabled by use of their ICT infrastructure. When coupled to the notion of information unbundling the potential for trade in information and knowledge products and services then becomes attractive for reducing the cost of business processes (Allen Consulting Group, 2002, p. 2) and for generating revenue raising activities. Further analysis of these issues will be undertaken in the chapters dealing with value chains and electronic commerce models.
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GATS as an enforceable framework for trade in services is therefore closely tied into the foregoing discussions. The imperatives are clear with the countries involved having to conform to the agreement and to make ongoing changes toward supporting more open trade in all four modes. Mode 2, with international students moving around the world, seems set to continue its rapid rise in size and value. Modes 1 and 3 are newer forms of activity and are ostensibly the least understood and mapped of the flows at present in Australia and internationally though attempts to map the e-learning readiness of countries may move to being a far more endorsed endeavour than has been the case to date. Mode 4, the temporary movement of researchers and educators to other countries, has existed for a long time as well and is less problematic than
Modes 1 and 3 to study.
Australian universities have long been charged with the responsibility for creating and disseminating information and knowledge across a broad range of disciplines. They have been funded to contribute to achieving a range of socio-cultural and economic goals (Dellit, 1999, p.
1). These roles are not unique to Australian universities as Salmi et al (2002, p. xix) make clear in their World Bank report when they argue that “tertiary education is necessary for the effective creation, dissemination, and application of knowledge and for building technical and professional capacity.” As competition sets in, however, the achievement of socio-cultural goals and objectives may be pushed to the background as institutions fight for survival. One possible outcome of this is the diminution of the breadth of subjects that can be sustained. If students are not prepared to pay for less career-oriented studies then small class sizes may result and such classes are usually less economically viable for the university. In the past such subjects were cross-subsidized by the larger enrolment areas, but that practice may be a casualty if economics and financial matters are the only considerations in the decision making processes.
This is especially the case in universities where devolved administrative arrangements are in place (Marginson and Considine, 2000) and where faculty heads no longer have a breadth of view that includes the whole of the institution—in short a silo effect can dominate where heads
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are responsible for looking after their own areas and issues of cross-subsidization for economically unviable subjects in other schools or departments may not be their concern. On the other hand, however, the informational nature of higher education teaching and its capability for digital distribution may be one way out of such dilemmas. Subjects that would otherwise be unviable due to small student numbers may become viable if they are offered via distance education to larger audiences than those found on any single campus. In this scenario distance education seems a perfect match for trade in digital products and services supported by well- developed ICT infrastructure.
The much-publicized decision by the Massachusetts Institute of Technology (MIT) to give free access to the information used in its subjects should be understood in its context—access to information is not the same as access to a higher education. People in general and students in particular can buy a book or download content from the web till they are satisfied but they will not have achieved a higher education. Certifying such an achievement is the responsibility, in
Australia at least, that remains in the hands of the universities. So access to, and consumption of, information can not equate to what is known as a higher education. This raises an interesting question as to the role of information in the whole process of higher education. Discussing that question requires that the nature of information and informational products is clarified and the following section takes on that task.
5.8 Information economics and properties of information.
It is a sobering thought that the first person to invest in a telephone essentially had a useless device—there was no one else with whom to share. The telephone therefore gains its enormous value and utility from being a device of mass popularity and consumption. Similarly the
Internet and WWW gain growing value and utility from having an ever-increasing number of people making use of them and the variety of software that has been created to use with them.
In this regard Daniel (1996, p. 117) comments that:
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The potential of the Internet is linked to two phenomena. First, Moore's Law (named after the founder of Intel), which says that computing power and capacity double every 18 months. Second, Metcalfe's Law (named after the inventor of the Ethernet standard), also known as the law of the telecosm (Haynes, 1994: 17), which says that the utility of a network to a population is roughly proportional to the number of users squared. … The Internet's immediate attraction for universities offering education at a distance is that it has the potential to help with the perennial problem of student access to libraries, museums, and other resources. In theory the student can use the World Wide Web to bring data and information from all over the world right into the home.
Since Daniel penned those thoughts the WWW has continued to expand and, in accord with the
'law of the telecosm', in Australia many people now enjoy the advantages of which he wrote, though the take-up of these technologies has not been even across the various socio-economic strata of society. On its own, this differential take-up, will not prevent the use of the technologies for higher education though governments will be keen to ensure that access and equity issues continue to be to the fore. As was discussed in Chapter 3, distance education in
Australia has, from the outset, had these social goals in mind. With movements towards user- pay mentalities in Australia, however, ensuring that everyone has equal access to the Internet and WWW will not be likely. It is likely that those with a capacity to pay will wish to make use of the technology to pursue their on-going education. Their use, however, does not mean that the resources and services provided by higher education institutions will similarly be consumed in the process. In this matter information, as a base for educational materials, is a very curious entity, and one that does not conform to major economic theory.
Information economics is concerned with the study of the role of information in society and with its position as an economic resource in its own right. Information economics has been the basis to new approaches to the study of economic activity as discussed earlier in this chapter and it holds further potential for the current study as it can shed light on the issue of information Comment [A F3]: find a as an economic entity. In this guise it has relevance for both distance education and electronic reference - Sasson, Lamberton?
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commerce, as both can be enabled by use of the WWW with its digital base, and both are focussed on information though their uses of information may differ.
As the building block for knowledge, information is brought together to comprise the material of subjects and courses. Distance education over the past century has shown that many different types of technology from print media through to the WWW can aid the packaging of such courseware. None, however, can rival the WWW and the complex of capacities that are embodied in it to achieve the four extra features written about by Masuda in the passages to follow. Jones (1996, p. 185-186) recalls Masuda's commentary about the unusual facets of information, as follows:
First of all, information, unlike goods, has four inherent properties, that have made self- multiplication possible. Information is (1) inconsumable, (2) untransferable, (3) indivisible, (4) accumulative.
1. Inconsumable—Goods disappear through use. Information does not disappear but remains unchanged however much it is used.
2. Untransferable—When a good is transferred from A to B, it is moved completely from A to B, but when information is transferred from A to B, the original information remains at A.
3. Indivisible—Goods used as materials (electricity, water, etc.) can be divided and used, but information can only be used when it constitutes 'a set'.
4. Accumulative—The only way to accumulate goods is not to use them. Information, however, because it cannot be consumed or transferred, can be accumulated while it is to be used again and again. Information of a higher quality is produced by adding new information to the information that has been accumulated previously.
Although information has always had the property of self-multiplication, computer- communication technology has rapidly increased the speed and quality of self-
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multiplication because the technology itself has added four more properties to information: (1) concentration, (2) dispersion, (3) circulation, and (4) feedback.7
Information, packaged as courseware for use in traditional or distance education activities, can be consumed without diminishing the overall supply of it from the originating institution if it is supplied via the WWW. Of course the support for students at a distance can also be provided by means of the communicational aspects of the WWW. The economic implication of this is that once the initial costs of acquiring the necessary information have been made then the cost of replication and distribution, via existing infrastructure, should approach zero (Daniel, 1996;
Stiglitz, 1999a, c; Lamberton, 1971). Scale economies, based on the properties of information, might therefore be achievable for those universities that decide to make the WWW work for them in provision of higher education through distance education. Flexible learning, or mixed- mode approaches (or what the Americans are now calling 'blended learning' —see Zemsky and
Massy, 2004 p. 16; Mason, R in D’Antoni, 2003) on campus might also reinforce a university's ability to achieve economies of scale.
In possessing these unusual features, information has been a difficult element to incorporate into economic theory (Boulding, 1966, Stiglitz, 1999a, c) and in most cases it has been 'assumed away' under the notion that economists refer to as 'perfect information'. For example, the
Penguin Dictionary of Economics, which has no entries for either information or knowledge, offers the following in explanation of 'perfect competition' (Bannock et al, 1975, p. 314-315):
7 Masuda's “computer-communication” technology here equates to the generic use of ICT. This technology has affected information as follows — (1) concentration: e.g database developments allow enormous amounts of related data to be collected, combined, and analysed in ways which were impossible (e.g 'pattern matching') with books and printed material; (2) dispersion: ICT networks allow information to be distributed en masse around the globe. They also provide 'broadcast' capabilities for groups and sometimes individuals who would not have had such communicational avenues prior to the advent of networked computers and the WWW; (3) circulation: ICTs have enabled the rapid and timely distribution of information in ways which were unachievable prior to the advent of networked computers; (4) feedback: recipients of information can now contribute to the feedback cycle in ways which were unworkable prior to the introduction of ICTs such as listserv, email, 'groupware' etc. Authors can also incorporate the feedback much more efficiently into working documents via the use of word processing and desktop publishing types of software.
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A MARKET situation in which the following assumptions hold: … (e) There is perfect information, in the sense that all buyers and all sellers have complete information on the prices being asked and offered in all other parts of the market. …
The assumptions underlying perfect competition are obviously 'unrealistic' in that they are not an accurate description of most real world markets. Some markets conform to some assumptions, but few, if any, conform to them all. The Stock Exchange, for example, in general conforms to the assumptions of perfect information (or nearly so), and large numbers of buyers. …
Not only is 'perfect information' assumed to exist in order that economic theory can be more useful, but also information, as an entity of economic exchange or trade, cannot be treated as a typical good or service given the nature of its peculiarities. As an object of trade, information can be sold but is still retained by the seller and this phenomenon is unlike any instance of trade with tangible products. Whilst the information packaging may be transferred in some cases, such as when information is stored on a compact disc, the information or knowledge can be retained. Use of the WWW could mean that educational materials based in codified knowledge and information8, once produced and placed on a university's website can be consumed as commodities time after time without diminishing their value—in fact the utility of knowledge may actually increase with consumption. Skyrme (1999, p. 1) notes this feature and states that:
Another characteristic and one that throws out conventional economic logic is that the law of diminishing returns no longer applies. As knowledge is shared its value typically increases, since the owner still retains it. In fact, the act of sharing through dialogue usually adds value to the originator.
8 Joseph Stiglitz (1999c, p. 11), Chief Economist at the World Bank, draws on Michael Polanyi’s seminal work in regard to tacit and explicit dimensions of knowledge to explain that codified (or explicit) knowledge “is knowledge that can be spoken, written, and codified to be saved on a computer disk or transmitted over a telephone line. But we know more than we can say. ... ” meaning that tacit knowledge cannot be so easily converted for saving and transmission. Codified knowledge is also synonymous with ‘disembodied knowledge’ i.e. knowledge that has been removed from its former location inside a person’s brain and into another form. Whilst not a common subject of discussion in distance education literature it seems to the current author that this distinction between tacit and explicit knowledge could form a basis for the proclaimed differences between face to face and distance education approaches to higher education. Codified knowledge is at the core of distance education materials whilst tacit knowledge is largely the province of the teacher of that material and has to do with expertise and ways of knowing that are not easily transferred to students.
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It should be noted, however, that any humans services (administrative or academic) associated with the sale and support of the information or knowledge do consume time and energy and they are not to be confused with the actual trade in information as an entity.
5.8.1 Commodities and commodification
To argue in relation to commodities, it is necessary to clarify what the term commodity means.
The Penguin Dictionary of Economics (Bannock et al, 1975, p. 72) advises that a commodity is synonymous, in economics, with a 'good' and is an article of trade. The use of the word 'article' may be problematic because it conjures pictures of tactile objects rather than allowing for the intangible as well. The entry for 'services' in the same book (1975, p. 372) is intriguing as well and is as follows:
consumer or producer goods which are mainly intangible and often consumed at the same time as they are produced. The services of an orchestra, a telephone call or a teacher are intangible and are consumed as they are produced. However, financial services or the work of a computing bureau are partially tangible in form, e.g. a computer print-out sheet. Service industries are usually labour-intensive and the measurement of net output and productivity presents special difficulties. Adam Smith … and others before him, did not believe that service industries contributed to the creation of national wealth. Even today, because service industries make only an indirect contribution to visible exports or military capability, or for other real or imagined reasons, economic policy is usually biased in favour of manufacturing industry or agriculture in most developed countries.
Things have certainly changed in the past thirty or so years as the discussion of the information economy and society have demonstrated in the earlier parts of this chapter. The billions of dollars generated through higher education in Australia alone tend to repudiate the opinions of
Smith and the others before him. Trade in services is, however, a relatively recent area for agreements and regulation as the discussion of GATS has shown. Commodities on the other hand have been traded for over five hundred years.
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The Oxford English Dictionary (1989, p. 563) advises that the first incidence of 'commodity' was 1410 and its first commercial usage was 14369. With the information in the footnote in mind, for higher education to become a commodity it would need to be 'non-commercial' before becoming 'commercial'.
The previous discussions in this chapter would tend to suggest that the metamorphosis of higher education into a commodity has not only started, but is in full swing. One indication is that international organizations do not try to make enforceable trade agreements when there is no trade and, as Knight indicates (2003, p.5), “GATS is a worldwide agreement covering all 145 member countries of WTO.” Knight also states (2003, p. 4), in her update on the 2002 report she wrote, that “trade issues are closely related to the larger issues of commercialization and commodification of education”. Another indication is that the British have created the
Observatory on Borderless Higher Education (OBHE) whose brief it is to research and report on matters dealing with 'borderless' forms of higher education, especially those of distance education and commercial forms of e-learning. Richard Garrett is a research associate at the
OBHE and he claims (Knight and Garrett, 2002, p. 1) that “trade in higher education services is a billion dollar industry, including recruitment of international students, establishment of university campuses abroad, franchised provision and online learning”.
In another of the OBHE reports, Cooper (2002, p. 1) maintains that:
9 The literature used in preparation for this dissertation uses the two terms 'commodification' and ‘'commoditization' as though they are interchangeable. According to the Oxford English Dictionary (1989, p. 563) the former term is defined as “the action of turning something into, or treating something as, a (mere) commodity; commercialization of an activity, etc. that is not by nature commercial”. This term was first seen in 1975 according to the same source. The latter term cannot be found in a dictionary at all. Email to a variety of authors using both terms has failed to provide a deeper understanding of the authors' use of the terms. My view is that the latter term actually makes more sense ie to turn something from a 'commodity' would logically seem to be 'commoditization'. The Oxford English Dictionary, however, points to the rules for use of '-ification' in explaining the genesis of the form. In the current study, references (and maybe quotations) are made to both uses and this footnote is meant to be both explanatory and to indicate an awareness of the lack of due care when using the term commoditization. For accuracy's sake both terms will be replicated in their original contexts but both will be deemed to mean the same thing as has been conveyed by the Oxford Dictionary, unless otherwise noted.
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The traditional barriers and borders in the education system as a whole are becoming more fragile and practitioners are seeking ways of breaking them down and crossing into new territories to reach new markets and to gain real improvements in quality. Borderless education, the breaking down of social cultural, economic and geographical borders becomes even more important in a global economy.
Yet another indicator comes from the unions that service the university staff and students, and the reasoning here is that the unions would not be remonstrating about the commodification of knowledge if there were no basis to their claims (see PSI/EI, 2002; ESIB, 2003; Allport, 2000).
In other words, their role in representing their constituents is predicated on recognizing change in the field of higher education and understanding the implications of that change.
Together these commentators' views point to a radical change afoot in higher education around the world, change that seems to be based in a desire for market share, profit, and a re-definition of what higher education can and does mean for nations and their societies. Exporting higher education, especially in Mode 1 via the WWW, seems therefore to be a relatively new form of trade in higher education products and services. Where, previously, students were able to study
(for a fee) with foreign universities using printed packages to support their studies they are now able to do so via electronic ICT. The WWW is a new medium and one that has become so pervasive as to suggest that it will increasingly become a principal means of delivery for distant students.
Trow (2000, p. 5), an Emeritus Professor at the University of California, sees the Internet as one form of new ICT that is democratizing higher education in the USA. He remarks that the drive to reduce costs in higher education and the desire to open access to larger numbers of people have led to increased part-time teaching in universities but he also sees some issues with commodification of knowledge as a related use of those new technologies. He claims that:
The new technologies have a democratizing effect by transforming knowledge into a commodity to be bought from scientists and scholars and sold over the internet world-
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wide—the teaching itself, and not just the books that are instruments of teaching. ... the transformation of knowledge into a commodity reduces the authority of knowledge, of the great books and the wisdom in them, and of the academic profession itself under the steady pressure, from states and consumers alike, to justify ourselves against the pragmatic test: of what use are you and of what you teach. ... The deep penetration of market forces into the institutions of higher education implicates them even more deeply in the life of other institutions. And that makes it more difficult for universities to retain their own unique identity, their institution autonomy. A basic conception of institutional autonomy is the answer to the question: to what extent does the institution define its own ends, as compared with the extent to which it is a means to the ends of other institutions and answers to their needs. Universities have always balanced these conceptions; ICTs and the commercialization of research and teaching that [as] they accelerate shift the balance away from university autonomy toward their being a means ... to the achievement of ends and policies defined by the market and by government.
Trow’s analysis has some sympathy with that of Lyotard (1984, pp. 4-5) when he stated:
Knowledge is and will be produced in order to be sold, it is and will be consumed in order to be valorized in a new production: in both cases, the goal is exchange. Knowledge ceases to be an end itself, it loses its “use-value”. ... Knowledge in the form of an informational commodity indispensable to productive power is already, and will continue to be, a major—perhaps the major—stake in the worldwide competition for power.
Trow also points to the longer term implications for universities in the USA and what he sees as a need to understand the dualism at work with the democratizing of higher education via the use of ICT. Commodification of knowledge for him is a double-edged sword but for the current study the importance of his views is that they speak of the actual process of commodification that is claimed to be underway. Knowledge in higher education is taking on the characteristics of products and services in the market place. Governments denying funding to universities are essentially contributing to the increase in commodification of information and knowledge because the universities still have to seek funds to operate and the market for their educational products (and research of course) is one avenue to self-sustainability. Moves to the market place by higher education institutions may, however, lead to a diminution of the public good role that they performed in the past, as the production of knowledge under commercial
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arrangements may be protected and private. Similarly, the dissemination of knowledge may also become more private than public if the user-pays mentality limits access to higher education.
The market place is, however, still developing in regard to competition in higher education knowledge products and services and it is not difficult to understand why there is some concern about standards and quality in relation to higher education as a traded commodity (see, for one example, the OECD paper by Larsen, Morris and Martin, 2002 p. 12). The GATS agreement discussed earlier, as a case in point has not been specific in this manner and it will take time for the policists to come to an equitable understanding of the ramifications of this form of trade in intellectual products and services.
So, where governments have largely funded higher education it has been seen as a public good and its outcomes, including information and knowledge, have also been seen also as public goods. When these are only available to those with capacity to pay they move toward the private good end of the spectrum.
A further problem that is associated with a generic discussion of knowledge and its trade in higher education is that the type of knowledge is not usually specified. The OECD (2000) publication Knowledge Management in the Learning Society goes quite some way in making clear that knowledge may have different forms or types and the first chapter of that tome is especially cogent in clarifying these forms and making the point that knowledge can be either public or private. The chapter (no author given) draws on Lundvall and Johnson’s (1994) work that broke knowledge into four categories of know-what, know-why, know-how, and know-who
(OECD, 2000, p. 14). The author explains (2000, pp. 14-15) 10 that “know-what refers to knowledge about facts” and approximates the general notion of information; “know-why refers
10 See also Foray and Cowan (in Dumont and Dryden (Eds) 1997, pp. 31-34) for an extension of Lundvall.s’ ideas about the types of knowledge.
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to knowledge about principles and laws of motion in nature, the human mind and in society”;
“know-how refers to skills – i.e. the ability to do something ... [and it] plays a key role in all important economic activities ... [and is] a kind of knowledge developed and kept within the borders of the individual firm or the single research team ”; and, “know-who involves information about who knows what and who knows what to do. But is also involves the social ability to co-operate with different kinds of people and experts.”
Clearly not all of these types of knowledge are the subject of sale and transmission in a market place of higher education though some are better suited to this than others. Hence, commodification of knowledge will not apply to all the forms suggested by Lundvall and
Johnson. Furthermore, the different types of knowledge lead to differences in their public or private nature in both degree and form (OECD, 2000, p. 15). The author after delving into the implications of this realization states that:
... very little knowledge is “perfectly public”. ... On the other hand, little economically useful knowledge is completely private in the long run. (OECD, 2000 p. 17).
This view is also shared by Kaul, Grunberg and Stern (1999, pp. 3-4) who also clarify the meaning of public and private goods as follows:
To understand what a public good is, it is useful to examine its counterpart, a private good, and to discuss what it means to have a market for private goods. In a market transaction a buyer gains access to a good (or service) in exchange for money or, sometimes, in exchange for another good. Buyers and sellers meet through the price mechanism, and if everything works in a textbook-perfect way, the economy can reach a state of maximum efficiency in which resources are put to their most productive uses. A key condition for a market transaction, however, is that the ownership or use of the good can be transferred or denied conditional on the offsetting exchange—the payment of its price. Thus private goods tend to be excludable and rival in consumption. A piece of cake, once consumed, cannot be enjoyed by others. With public goods, matters are different. ... The ideal public good has two main qualities: its benefits are nonrivalrous in consumption and nonexcludable. ... Few goods are purely public or purely private.
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Nonrivalrous means that other people can use the good or service as freely as anybody else can and that their usage does not diminish the use that others receive, an example is the use of traffic lights. Stiglitz (1999a, p. 14; 1999b, p. 308; 1999c, p. 4) favours the following explanation, attributed to Thomas Jefferson, to clarify this aspect: “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.” Nonexcludable means that the good cannot be limited to certain users but rather is available equally to everyone—a public park may serve as an adequate example and should be equally accessible to all.
Moving back to the discussion of the types of knowledge, Skyrme (1999, p. 6) points out “the greater the degree of codification of knowledge the more easy it is to reproduce and disseminate” and the various types of knowledge can be codified at distinctively different levels.
This is relevant to the current discussion as the different forms of knowledge would seem therefore to be important in determining the likely capacity for trade that can be based upon them. For example, know-how would not seem to be among the tradable aspects and will require greater levels of personal contact to convey (perhaps by demonstration), whilst know- what and know-why seem to be likely contenders as they are readily codified. The highly developed alumni aspects of higher education in the USA would also suggest that know-who may be a component, or by-product, of study with a university though the extent to which the network contacts are important will be hard to measure and quantify.
Universities wishing to trade in knowledge-based products and services will need to be aware of the types of knowledge that are inherent in their teaching and learning materials. Furthermore, they will need to be mindful of the role of private and public knowledge and of the relationship that these have with public goods that have long been a major aspect of the work of universities.
A tension is likely to arise when universities try to find a balance between their public good role
(here they are filling the role of government in ensuring the provision of public goods) and their
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efforts to survive in a competitive marketplace (here they are acting as autonomous entities seeking survival and prosperity)11.
5.8.2 Further characteristics of information
Priest (1994) produced an interesting study of the characteristics of information for the US
Office of Technology Assessment, with a focus on their implications for intellectual property.
In that research, which he described as “a seminal work for the design of the National
Information Infrastructure” in the US (1994, frontispiece), he concluded that there were fourteen different attributes that help set information aside from “most economic commodities” (1994, p.
6). Priest commented that “in a society whose commerce is based increasingly on buying and selling information these characteristics will have increasing significance” (1994, p. 6). He goes on (1994, p. 7) to explain that the characteristics have been divided into three groups — those that are:
• market related – these are commodity characteristics that set information apart from other goods in market activities; • market-failure related – this category pertains to information as a commodity that cause markets to behave inefficiently (or not at all); and, • non-market related – these relate to characteristics of information in non-economic transactions—primarily those comprised of human relationships.
Priest’s attributes of information are tabulated in Table 5.1 following. Items numbered 1-12 that Priest raises are relevant to the current discussion of trade in higher education and to the idea that information can be treated as a commodity. As universities are involved in research there is an obvious relationship with Priest’s focus on intellectual property. As higher education institutions move toward increased competition in their teaching related activities it is arguable that there will also be a burgeoning relationship with intellectual property rights in their course materials. From that perspective Priest’s characteristics of information seem particularly
11 See also Kenneth Boulding’s brilliant paper The Economics of Knowledge and the Knowledge of Economics (1966) for further insight into the role of information and knowledge in global competitiveness.
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Table 5-1 Definitions and introduction to fourteen characteristics of information.
(Source: Priest, C, 1994, online resource)
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germane though the literature examined in the course of the current study is not replete with instances where these features have been applied to the study of the business of universities.
A discussion of a few of the characteristics is therefore in order to highlight the possible implications for the competition in higher education in Australia and elsewhere.
In regard to item 5, public good, Priest (and others, see for example, Stiglitz, 1999 a-c; Kaul et al, 1997) argues that:
If the producer of information cannot appropriate its full market value the producer will only produce information where he can recover costs and make a profit. ...Further, the types of information that are produced are distorted toward those types that can be subject to exclusion (Priest, 1994, p. 12).
Here the universities will arguably realize that as they now have less government funding to produce research and teaching outcomes they will have to move to commercialize aspects of their work that has hitherto been more of a public good in nature. This will of course have an impact on the types of subjects that they decide to offer because not all subjects are viable commercially even though they may have a major societal role to play.
Where students as consumers see education as being instrumental in achieving other goals then
Item 1 will be brought into play. Universities will need to be savvy in their reading of the capacity of their degrees to offer such utility as the students will be looking for value from the time, money and effort they expend in achieving a qualification. This suggests that universities will need to market their educational products with a mind to further progress for the students and make clear that the studies will lead to other possibilities. In this regard Borland et al
(2000, p. 1, 2 & 22) make it clear that the returns on investment in higher education in Australia and internationally provide benefits to both the students and to the wider society. In summarizing their work relating to undergraduate education, they point out that the returns reported over the past quarter of a century have fluctuated (often depending on the methodology used in the research) but that the benefits have always been positive. Based on the most recent
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research that they reviewed, and the research they actually undertook, private rates of return are currently lower than the social rates of return. Controlling for a variety of factors they concluded that full-time employed graduates receive “on average about 65 per cent more than an employed person without a degree. It is generally accepted that this mainly reflects the effect of higher education on their productivity and the standard assumption is that 80 per cent of the increment is due to the higher education received” (2000, p. 1). They went on to report that graduates stand to earn up to A$300,000 more, over their working life, than those without higher education. An important revelation based on data from the 1990s, was that graduates affected by the Higher Education Contribution Scheme (HECS) gained a lower private rate of return than that attributed to the wider social rate of return. This situation was the reverse of the findings for the 1970s. The authors also draw on international research and provide the following interesting insight that may have some implications for Australian universities:
Heckman (1999) argues that what matters most is competition between institutions which ensures that institutions deliver the type of education demanded by students, parents and employers. The higher returns to those educated in private institutions in the U.S. might therefore in large part be reflecting the responsiveness of these institutions to community needs. Presumably some of these benefits could be obtained through the alteration of institutional arrangements in the public sector. In the Australian context this suggests that giving greater autonomy to universities will increase life-time earnings of graduates. (Borland et al, 2000, p. 23)
It would seem from this research, and from interpreting Priest’s work, that Australian universities will need to be cognisant of the demands of their stakeholders and that they may need to be responsive to changing demand in a manner similar tot hat reported for the private institutions in the U.S. If distance education is the chosen mode of study, then the ramifications seem to be all the more important as students struggle to combine the variety of demands that they face in their lives.
Borland et al do not, unfortunately, differentiate between on campus and distance education modalities in gaining a higher education but it is likely that the rate of return to the individual
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would be different from the figures published in the report. One reason for making this claim is that the methodology used in the calculations includes loss of earning potential whilst the student is enrolled at university, yet that is patently not the situation for many of the distance education in Australia, and internationally. Having the capacity to continue to work whilst studying is therefore likely to produce significant benefits, financially, that are not factored into the published figures.
Item 2 - time constrained consumption, refers to the time needing to be dedicated by a student to achieving a qualification. This may mean that universities have to become more sensitized to needs of their customers including consideration of the periodicity of teaching sessions e.g., from semesters to trimesters. This will of course have industrial implications. In some
Australian universities trimesters are already in use, as are summer teaching periods. Distance education approaches may even combine traditional semesters and trimesters for dealing with the student demand for fast-tracking their studies.
With Item 6 – externalities, there will be a need for the public externalities to be well understood and publicized. The general public needs to be aware of the impact of government decisions to reduce funding to universities and to increase the proportion of fees that are payable by students. Such decisions may lead to higher education that is affordable only by the wealthier socio-economic bracket of the population, and if that occurs then the positive externalities may be reduced as students, once graduated, may not see their debt to the government as one that encourages social benefaction. Increased take-up of distance education enabled by the web will also see students from other countries vying for places in Australian higher education. Whilst this generates income it does not necessarily generate returns to the
Australian public in terms of the positive externalities suggested by Priest.
In Item 7 – Indivisibility, there is a link to forms of higher education that will be discussed in chapter 7 when business models are the focus. In summary, however, corporate education and
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training may become one target for increased competition in higher education. If information is indivisible then modularizing it into short courses may be one way that universities can make the material more specific to the needs of students as customers. Of course competitors to the traditional university can also do this and in fact this is exactly what is occurring in the corporate universities (see, for example, Cunningham et al, 1997, 2000).
Overall the characteristics of information as presented by Priest add to the mosaic being assembled in this chapter. Universities entering the competition in an effort to reduce costs and increase revenues will need to be aware of a great deal of what has been discussed here. That their activities revolve around the production and dissemination of information and knowledge is well established. So Priest’s research helps to point out those elements of information and knowledge based products and services that may be affected as the universities move to increased use of ICT to generate and distribute educational materials.
To summarize the discussions in this chapter and to draw out lessons from the literature reviewed and used in this analysis is the purpose of the concluding section.
5.9 Discussion
The World Bank publication (Salmi et al, 2002 p. xix) reported the following:
Although this report expands on many of the themes developed in the first World Bank policy paper on tertiary education, Higher Education: The Lessons of Experience (1994), it emphasizes the following new trends: • The emerging role of knowledge as a major driver of economic development • The appearance of new providers of tertiary education in a “borderless education” environment • The transformation of modes of delivery and organizational patterns in tertiary education as a result of the information and communication revolution • The rise of market forces in tertiary education and the emergence of a global market for advanced human capital • The increase in requests from World Bank client countries for financial support for tertiary education reform and development
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• The recognition of the need for a balanced and comprehensive view of education as a holistic system that includes not only the human capital contribution of tertiary education but also its critical humanistic and social capital building dimensions and its role as an important global public good.
This list of trends noted in the 2002 report reinforces and to some extent summarizes the discussions held in this chapter. The chapter has been important in the current study because it has provided the historical context of the literature of the information society and the affiliated information economy. These terms relate to a period of development and transition within which the essential elements of information and knowledge have become central to discussions of economic development and wealth generation.
The movement to the primacy of information and knowledge has heralded a change, significant enough for theorists to proclaim that the western developed countries have moved away from the industrial age and into the information age. Those claims, however, have not been uncontested but both sides of the debate recognize that information and knowledge have an increasingly important role to play in modern economies and societies. Information and knowledge are also core ingredients in higher education and electronic commerce. Increased demand for, and increased participation in, higher education have required that universities expand their delivery options so that people can, for example, access higher education without having to leave their employment.
The enabling role of the world wide web has been discussed as a basis both for electronic commerce and for distance education. The processes of digitization and convergence have underpinned the development of the information society and the knowledge economy where the trade is in intangible, often intellectual, goods and services. Information and communication technology enable the creation, storage, processing and dissemination of information and knowledge products and services and universities and business alike have sought to optimize their ICT investments by envisaging new approaches to fulfilling their roles. Therein
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similarities arise between distance education and electronic commerce as both are enabled and enhanced by use of the ICT and both are essentially trading in informational products.
The chapter has presented a spectrum of discussion ranging from the macro levels of international trade in higher education under the auspices of the relatively new agreements organized within the World Trade Organization through to the micro scale analysis of the characteristics of information. These discussions have an important part to play in the current study as it seeks to better understand the nature of the relationship between electronic commerce and distance education. The macro and the micro levels of discussion indicate the degree to which the arena of higher education has been affected by the advent of new technology and by the range of forces and pressures that are driving the institutions of higher education to respond to their changing environments.
At the international level, the forces of globalization mean that the market place for higher education is now open to competition and new competitors have arrived on the scene to contest the ground long held unchallenged by the universities. Trade agreements for the delivery and sale of services have, for the first time, been inaugurated and these bear witness to the changing environment in higher education. Whilst the agreements for trade in service are still in their formative years, the underlying intention of the World Trade Organization is very clear—it aims to liberalize the trade in services. Its members are bound by the agreements and higher education is very clearly among the territory that will be contested in the years ahead.
Developments in the information infrastructure around the world have led to the realization that distance education can be further enhanced and promulgated by Australian universities and their counterparts internationally. The nature of distance education is such that the core materials can be developed, stored and delivered via the information infrastructure and the student support services can be accommodated via the communicational aspects of the technology.
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The chapter has argued that the products and services of universities are increasingly being treated as commodities and a range of evidence to this effect was brought to the discussion. Not all universities will have the need or the desire to commoditize their educational products and services, but the fact remains that they can, if they wish, as the capacity to do so now exists.
This change typifies the extent and pervasiveness of the foment that is currently underway in higher education around the planet.
Australian universities should be particularly interested in the trends presented in the chapter and also of the underlying argument—that higher education is becoming more a trade in information and knowledge products and services. Universities are crucial to the nation’s export profile and the trade in educational products and services is a major contributor to that profile. However, as Johnston (in DETYA, 1999a, pp. 3-4) points out:
there are inevitable tensions in the university community in terms of accommodating the assumptions underpinning the emergence of a knowledge-based economy. The twin pillars of academic freedom and the public good, which are integral to the academic research enterprise, often appear to be in conflict with the apparent economic rationalism which informs much of the debate on the global knowledge economy.
It has been argued in this chapter that the tensions of which Johnston wrote are equally evident in the teaching activities and many academics will resist the push to a market place mentality in the universities. Johnston (in DETYA 1999a, pp. 51-52) also provides a fitting commentary of the processes that have been at the heart of the discussions in this chapter. He claimed that:
An increasingly common, and strong argument ... is that the character of the economy, national and international, is being transformed. One major component of this, along with the globalisation and electronic connectivity, is the increasing knowledge intensification of all economic activity, and the emergence of trade in knowledge as a commodity in its own right. The two defining characteristics of the global knowledge economy are the increased knowledge intensity of the processes of creation, production and distribution of goods and services, and the fact that economic processes are becoming increasingly integrated
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on a global basis. Neither of these two elements is new to the world economy, but both their rising intensity and their mutual interaction are of a new order. The new modes of production and distribution of knowledge have changed radically the role of knowledge in economic development. The industrial economy, based on goods and services, is being matched, and in some cases displaced, by the global knowledge economy, based on the production, distribution and use of knowledge.
Now, five years later, those changes continue to be embedded around the globe and universities are, it is argued here, enmeshed in those developments to the extent that their own roles are being recast. Similarly, the services and products that they provide are being renovated and brought into line with government thinking and policy that underlines the desire to see higher education in Australia become less of a burden on the taxpayer. The universities therefore have to reconsider and reconceptualize their methods of operating to meet the needs of the government which still continues to fund the largest, though diminished, proportion of the university budgets.
Electronic commerce has arrived and prospered in the period of transition from a focus on manufacturing to a focus on knowledge-based intellectual products and services. Enabled by the same information infrastructure that now increasingly underpins distance education in universities worldwide, electronic commerce is tailor made to support trade in electronic bits rather than atomic goods. University educational materials share the same capacity to be seen as a stream, or collection, of electronic bits that can represent just about anything that human communication requires. Pictures, video, x-rays, text, sound, television broadcasts can all now be digitally represented and transmitted and, once created, have near to zero costs for further production and distribution. These attributes are tailor made for use in universities and especially in their distance education activities. The characteristics of information (Priest, 1994) also have relevance for universities wishing to expand their distance education offerings and the digital nature of the information and knowledge resources must be understood before they can be harnessed and put to effective use by the universities in Australia.
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So long as students have access to the Internet and a computer the prospects and possibilities would seem to be endless. That euphoria, however, is still yet to be realized as the ensuing chapters help to point out. Universities need to become more aware of the importance of the digital revolution and the possibilities that are presented as a result of the developments in ICT and in the supporting infrastructure that has progressively been put in place in many countries around the globe.
The chapter has sought to present the developments over the past four decades as essential context for this and the remaining chapters. The developments that are the heart of the current study have taken decades to come to fruition and the ICT developments and the accompanying requisite development in regulatory and technical frameworks has also taken time for countries to enact. The outcomes of the changes afoot are still far from certain for universities but it is clear that the information and knowledge base to their educational products and services are well suited to the digital environment. This tends to suggest that more, rather than less, trade in higher education, and especially distance education, is going to occur. Modes 1 and 2, cross- border supply and consumption abroad respectively, of the WTO categories will remain high on the trade agenda of universities in Australia and internationally.
It is possible to envisage higher education as a trade in codified knowledge, with digitized study materials and computer mediated communication being standard fare for students studying at a distance. Services will increasingly be supplied digitally as well, and the Internet and the
WWW will remain to the forefront in the university plans to find sustainable means of generating revenue and in reducing costs.
To investigate how the information infrastructure, including the WWW, will play such a role for universities the study now moves to Chapter 6.
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6 Distance education, electronic commerce and web technology
As with all digital and/or content markets, business models and partnerships between the three (private, not-for-profit and public) sectors have to be enabled by both a commercial framework (of roles and legal and financial relationships between those roles) and commonly understood and adopted business processes and technical standards which allow the free flow of product information, product and management information. (Towell, Stewart, and Ghose, 2003, p. 2)
6.1 Introduction
Chapter 6 presents the argument that the enabling technology of the world wide web (WWW or web), and the software (applications) development that has occurred since its inception, have evolved to a stage of maturity that distance education conducted via them is technologically feasible, both administratively and educationally. By comparison, the technologies that have enabled electronic commerce will also be seen to have taken time to conceptualize, design, develop and implement but have reached such a stage of sophistication that they now support a wide range of business activities and do so in ways that differ from their non-electronic precursors. Universities can therefore seriously consider using these technologies to establish new forms of electronic business. Distance education therefore looms as one likely focus for such change to business practice in Australian universities.
As discussed in Chapter 3, distance education is a mediated form of education that Otto Peters characterized as being industrial and having a close relationship to the assembly line methods of Henry Ford. The division of labour that is a feature of industrial methods may provide one means to examine the range of activities that collectively make up the distance education assembly line. In this chapter the assembly line is replaced with the concept of the value chain in order to carry out the analysis mentioned above.
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Australian universities have typically sought to deliver their distance education in conjunction with on campus, face-to-face, education in a form known as the mixed or dual mode. In part,
Chapter 6 will draw on this aspect to show that the 'assembly line' has to cater to a wide range of needs that are affiliated directly with the educational processes and support of students, but which increasingly needs to cater for the administrative aspects of higher education. As a result, information systems are being created to support the administration of higher education and these systems, coupled with applications that support teaching and learning, are enabling universities to provide online payment facilities together with a host of student/customer related features. Collectively these programmes will be seen to be enabling an electronic commerce approach for any university, suitably equipped and wishing to take advantage of the opportunities that the technology provides. Arguably those that choose to do so will have moved into, or closer to, the “fifth generation” of distance education (Taylor, 2001) and will be capable of supplying the range of services implied in Taylor's discussion of those generations.
In order to observe the extent to which there has been a maturation of technology and software for use in universities it will be necessary to analyse the range of activities that are involved in providing the products and services available from universities especially those related to distance education. One reason for doing this is to examine the breadth of scope of the software applications that are now available for use in universities and, via this examination, to determine the extent of the value-chain that is now capable of being supported technologically.
Organizations have taken time to understand the new environment of electronic commerce and it should not be surprising to find that universities too will take time to accommodate new forms of business enabled by ICT. Just how far they have traveled in that journey of acclimatization and acceptance remains to be seen. The argument here will be focussed on supporting the view that the capability to offer higher education via DE, enabled by software and ICT already exists. Whether or not universities see the new marketplace as a space in
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which they wish to compete, will be circumstantial and idiosyncratic, with their decisions in this matter providing insight into their strategic planning and institutional goals.
The major argument of this chapter is graphically represented, according to the approach taken by Toulmin (1958, pp. 94-145), in Figure 6.1.
Figure 6-1 Toulmin diagram for the argument that distance education is now technologically feasible.
6.2 Electronic commerce infrastructure
Any attempt to investigate the relationship between distance education and electronic commerce should be required to establish that the underlying infrastructure to conduct either is in place. That would suggest broad-ranging discussions that take in technological, policy, legal, commercial and social elements. This chapter, whilst focussing on the software and technology needed, will also be mindful of the additional facets as it attempts to show that the capability is already current in both distance education and electronic commerce.
The electronic commerce infrastructure diagram presented in Chapter 4, was originally created by Kalakota and Whinston (1997) and subsequently adapted, modified and enhanced several times by Turban et al over the years from 2001-2003. The most recent version (Turban et al,
2004, p. 181) is replicated below, in Figure 6.2, in order to provide a springboard for discussion in this chapter. One point made in Chapter 4 is worth reiterating here—the diagram has passed through several permutations in order to capture the continual change that has been apparent in
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the areas depicted. It also points to an evolution in the software, the technology and the range of backing activities that are depicted—electronic commerce has been going through a life cycle of development.
Figure 6-2 Electronic commerce infrastructure (Source: Turban et al, 2004 p. 181).
The electronic commerce infrastructure diagram reinforces the fact that in order to achieve electronic commerce applications, which sit at the upper level of the building, there is a fundamental need to have a supporting super-structure in place. Turban et al suggest that the underlying structural support, shown as the five pillars and the foundations on which they sit, are all necessary components of an effective electronic commerce infrastructure. They also maintain the view that there has to be a level of management belief and support in the organization as well. They argue (2004, p. 180) that all of the electronic commerce elements require “good management practices” which in turn means that organizations “need to plan,
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organize, motivate, devise strategy, and reengineer processes as needed”. If that commitment is absent, in this case in a university, then developments within the organization to utilize online approaches to distance education are likely to be less effective than is desirable. One reason for this is that academic staff will be isolated in their experimentation with the ICT because their activities will not be focussed via a whole-of-organization approach that comes with management involvement and commitment.
The diagram also reflects developments that have actually occurred in the world, and the authors have responded by including or expanding features as they develop in the marketplace.
Australia continues with its endeavours to support and enhance electronic commerce developments as the prior discussions of the activities of state and federal governments have shown. Australia has also been adjudged to be well advanced in its e-readiness in a number of reports and so too in its preparedness to undertake e-learning. Those reports have been discussed elsewhere in the current study but they were not used from the point of view of their capacity to shed light on the state of Australia's electronic commerce infrastructure. Therefore a brief discussion of those aspects is useful in terms of adding to the usefulness of the infrastructure diagram in Figure 6.2.
6.3 E-readiness and electronic commerce infrastructure
Over the past five years the Economist Intelligence Unit (EIU) has reported on the world's top sixty economies and what the EIU refers to as the state of e-readiness of those economies. The following passage (EIU 2004, Preamble) indicates what is considered in producing their rankings, and why they see these rankings as being important:
a country's “e-readiness” is essentially a measure of its e-business environment, a collection of factors that indicate how amenable a market is to Internet-based opportunities. Our ranking allows governments to gauge the success of their technology initiatives against those of other countries. It also provides companies that
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wish to invest in online operations with an overview of the world's most promising investment locations.
It is clear from the report, which is based on the contribution of the EIU's “extensive network of country experts, and their assessments are reviewed by our top economists” (2004, p. 24) that the EIU is serious about their work. They also claim that “more than 500,000 customers in corporations, banks, universities and government” rely on their intelligence (2004,
Frontispiece). Considered alongside other similar country-based assessments (see, for example,
NOIE 2001, 2003a) where findings are comparable, it stands to reason that their means of analysis will be robust. From that presumption flows the relative usefulness of those works for the present study as the electronic commerce infrastructure diagram is discussed.
The EIU explains (2004, Preamble, and p. 24) that:
Nearly 100 quantitative and qualitative criteria, organised into six distinct categories, feed into the e-readiness rankings. These criteria assess countries' technology infrastructure, their general business environment, the degree to which e-business is being adopted by consumers and companies, social and cultural conditions that influence Internet usage, and the availability of services to support e-businesses.
They neglect, in the preceding passage, to include their fourth category “legal and policy environment” which is clearly important in their analysis. The EIU categories (2004, pp. 24-
25) are weighted as follows, to produce the overall score:
Connectivity and technology infrastructure 25% Business environment 20% Consumer and business adoption 20% Legal and policy environment 15% Social and cultural environment 15% Supporting e-services 05%
Given that these broad categories are sub-divided into a further one hundred category criteria it is logical to deduce that the degree of detail contained with the EIU report is significant (see
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Appendix 3 for the EIU categories, criteria, and rankings). From the detail provided in the reports it becomes obvious that the major supporting infrastructure depicted within Figure 6.2 - electronic commerce infrastructure - is being assessed by the EIU in its investigations.
Similarly, the Australian National Office of Information Economy (NOIE) reports (2001,
2003a) provide comparable degrees of detail though they focus on only twelve countries, compared to the EIU's data collection and analysis for 196 countries.
The reports are not, however, exact duplicates of the areas provided by Turban et al in Figure
6.2. Suffice it to say here, in summary form, that the extent of the reported investigations satisfy the needs of the present study to be able to claim that the supporting infrastructure, as depicted in Figure 6.2, is largely in place in Australia. This conclusion is supported by
Australia's on-going placement in the upper reaches of the most recent reports from the EIU and those from NOIE. Progress continues to be made across the broad sweep on categories contained in the reports though some elements are just emerging from their infancy.
Broadband transmission and connectivity loom as areas of concern within Australia as the country has been slower to move toward adoption of these technologies than some Asia-Pacific neighbours. The EIU report (2004, p. 13) points out that:
the fact that Australia has slipped from the top ten is due mainly to its very low broadband penetration—only 4% [of] Australians have broadband access … while the region's other leaders are rolling out broadband widely and quickly. There are indications of a turning point for broadband in Australia: national operator Telstra is committing to getting 1m subscribers hooked up by 2005.
According to the State of Play report (NOIE, 2003a, pp. 39-40), use of broadband in Australian homes has increased fourfold since early 2002. They make the interesting point that:
While the majority of growth in home broadband usage has come from persons previously not using the Internet, an increasing proportion of this growth can be attributed to pre-existing home Internet users transferring from narrowband to
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broadband services. The rapid increase in home broadband usage and, in particular, the growing shift from narrowband to broadband access, is a result of a number of factors acting in concert, including:
• Rollout of broadband infrastructure into areas not previously covered; • The growing affordability of broadband Internet access and delivery mediums; • Internet Service Providers (ISPs) offering package deals incorporating value-added services such as telephony, Internet access and pay TV; • Growing awareness of the opportunities offered by broadband Internet access; and • Medium to long-term Internet users finding narrowband services inadequate for the demands of their existing and/or increasingly intensive levels of Internet usage.
Use of broadband in Australian homes has been slow to get started but now seems to be heading for much quicker rates of growth. This would seem to hold potential to lessen the impact, noted in the ranking reports from the EIU and from NOIE, of broadband adoption rates affecting Australia's e-readiness. Indeed NOIE (2003a, p. 41) suggests that the growth has sufficient momentum to elevate the Australian results in the rankings.
NOIE also reports (2003a, p. 42) that two core drivers for the increasing take-up of broadband facilities are “to increase the 'efficiency'“ of use and here they point to “freeing up telephones lines and faster access speeds” (emphasis in original) for the shift from narrowband to broadband. These desires are apparently an attempt to respond to the increasing richness of online content and use of “interactive media, transaction and information services ie high volume transmissions” (2003a, p. 42).
Whilst Turban et al (2004, p. 182) have reported, in general, that security and transmission speed issues continue to be constraints in electronic commerce developments, the e-readiness reports suggest that those issues are less problematic in Australia than has been the case in the past. Broadband communication capabilities remain an ‘Achilles heel’ to some extent though the government and the major telecommunications companies are working to increase the rate of take-up and to broaden the customer base for this technology. Security concerns are also
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noted in the reports just discussed, as well as in others (NOIE, 2003b) and a couple of relevant
remarks are worth noting. NOIE (2003a, p. 26) points out that:
Internet banking and the related activities “transfer funds between accounts” and “check account balance” have shown the largest growth of any of the online activities measured by the Nielsen/NetRatings since December 2000. At June 2003, “Internet banking” had grown by 226% on the December 2000 figure (ie from about 1 million to 3.5 million users). This translates to a compound annual growth rate of 60.5%.
Another report from NOIE (2003b, p. 33) argues that:
For citizens to be comfortable in undertaking e-commerce transactions such as banking and shopping online, a secure e-commerce infrastructure is critical to guaranteeing the integrity of electronic transactions, protecting the Internet user from fraud and other computer based crime. A country's level of infrastructure development can be measured in a number of ways. In particular, the number of secure servers available in proportion to Internet users/population is a useful indicator of the level of security in place for e-commerce. For this indicator, the US had the highest ratio of secure servers per million inhabitants (330) at January 2002. The US was followed by Australia and Canada (each with 218 secure servers per million inhabitant[s] respectively.
This report also notes that the US and Australia had led the rankings in the period September
2001 to September 2002.
These quoted passages suggest that the level of security in Australia for Internet transaction has been a high-priority item over the past years and that it continues to be a reason why the citizens are beginning to accept the Internet and web for their banking and purchasing. It also ameliorates fears that the infrastructure is inadequate in this country thereby minimising the impact of this issue and to some extent countermanding the general view put forward by
Turban et al in 2004.
Some final comments on these matters are now presented before the discussion moves to the core purposes of the chapter. For Australia to be placed in the upper reaches of the reports
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suggests that the foundations shown in Figure 6.2 have been well laid and that they continue to serve the electronic commerce in the country in an efficient and effective fashion. It is reasonable therefore to conclude that the electronic commerce applications, which sit at the upper levels of the edifice shown in the diagram, are capable of being provided. In the case of universities the applications will be seen to be numerous and varied but nevertheless will be viable in the environment existing in Australia now.
The EIU report (2004, p. 21) includes in its conclusion the following view:
Countries where government is most actively involved in putting citizens and businesses online … tend to have other assets in place—infrastructure and supporting services, good education systems, strong legal and regulatory systems, positive business environments, and money to spend.
The NOIE report (2003b, pp. 48-49) provides the following information about the Australian performance in regard to e-government12:
On the basis of both sets of e-government metrics … Australia and Canada stand out as the best performing nations. Both nations have a high level of demand for e- government amongst their population and a high level of preparedness on the part of government agencies in terms of providing relevant services online and the necessary supporting e-government infrastructure and regulatory systems.
The salient point here is that the Australian government's leadership in terms of regulation, use, and support for business and personal access to the Internet and the web are recognized in studies from disinterested third parties. It is in keeping with the views reported here, and contained in the reports cited, that NOIE (2003a, p. 15) would take the following stance:
12 Note that the results here were not self-serving as the NOIE report based this aspect of its findings on the work of two outside agencies—namely the UN/American Society for Public Administration (ASPA) report of 2002 entitled Benchmarking E-government: A global perspective, which is available at http://www.unpan.organization/e-government/Benchmarking%20E-government%202001.pdf and the study by the Accenture group entitled eGovernment leadership: Engaging the customer, published in 2003 and available from http://www.accenture.com
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Electronic service delivery is now a key component of organizational business plans, providing opportunities to reach out to markets not normally accessible through traditional communication channels which are unable to offer the convenience of twenty four hour service or the visual sophistication of the World Wide Web.
The plans, the opportunities, the channels, the outreach, the convenience and the sophistication spoken of in the prior passage are all-important components of the ensuing discussion. They cannot be achieved or utilized if the electronic commerce infrastructure depicted in Figure 6.2 has not been constructed and as the foregoing discussion has shown, Australia is now well- placed to take advantage of the efforts it has expended in building such an infrastructure. The study now moves on to present and analyse the ways in which organizations can utilize ICT in their pursuit of organizational goals and objectives. The following discussions lead toward the final objective of the current chapter which is to gain an understanding of the role, and state of development, of the software that is essential to enable the electronic commerce applications needed for the carriage of distance education in Australian universities.
6.4 Innovation theory
Electronic commerce has been evolving and has continued to be refined and improved as countless businesses, governments and organizations have moved to grasp the potential of using the web to meet business needs and organizational goals and objectives. The field is anything but stagnant and stationary. It is assumed in the current study, therefore, that universities in Australia will witness a similar period of experimentation and development in the adoption and use of the web for higher education.
Innovation theory (Rogers, 1983, 1986) suggests that phases such as experimentation, development, adoption, use are likely to be encountered and in the current study it is useful to keep in mind the likelihood that the introduction of these technologies will pass through similar phases. Those using the technologies will similarly go through a 'learning curve' of personal knowledge building and increasing experience. Both aspects are likely to exhibit
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characteristics that conform to innovation theory expectations. Among these it is likely that
'champions' (innovators) and 'early adopters' in the initiation process (Rogers, 1986, p. 120;
Daniel, 1996, p. 89) will lead the adoption and use of the web-based technologies. There will also be an 'expectation gap' that will slow the rate of progress before adopters see the benefits of their decisions set in. When the technology is adopted and institutionalized, there will be resistance to its use by some members, known as the 'late majority' and a final group known as
'laggards' who will in turn slow down the rate of adoption. Daniel (1996, p. 89; see also Bates,
2001, pp. 73-74 for discussion of the ‘curve of adoption for innovation’) provides a depiction of the innovation phases in Figure 6.3:
Figure 6-3 Phases in the innovation cycle (Source, Daniel, 1996, p. 89)
Figure 6.4 was developed by Christensen (cited in Bowles, 2004, p. 22) and presents what he refers to as the 's-curve' of e-learning and which also encompasses the innovation theory ideas just discussed.
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Figure 6-4 The S-curve of e-learning transition (Source: Bowles, 2004, p. 22)
The diagram encapsulates Bowles’ understanding of the nature of the take-up of e-learning technologies, a process that he explains as follows:
As more businesses deploy e-learning effectively, one would expect the 'bandwagon' effect — doing it because competitors or other major companies are doing it — to be replaced by deployment based on real understanding of the available options. This usually occurs as technologies mature. The growth stages through which technology- induced changes tends to progress can be depicted as an S-curve (Christensen 1997; 44-7 cited in Bowles, 2004)
Whilst this is the expected shape or form, Bowles also makes the point that a paucity of reliable and systematic data in Australia constrains further application of the analysis, a problem that he believes will only be overcome as data becomes more readily available. A similar point can be made in relation to the data being produced within Australia that is specific to universities. One of the most recent studies in this area, however, provides some input to furthering the current discussion. Bell et al (2002) undertook a wide-ranging study of online education and services in Australia with a particular emphasis on the use of the web. Their study:
was commissioned by the Department of Education, Science and Training (DEST) in order to ascertain the current extent of online education in Australian universities. …
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This survey was designed as a first stage of enquiry into the ways in which universities are employing the Internet, in teaching and learning and services that support university education. Data were collected from 40 out of 43 universities in Australia between August and December 2001. (Bell et al, 2002, p. ix).
The report breaks the key findings into three areas:
• those dealing with online courses—courses here is an aggregate term that encompasses a grouping of subjects/units; • those dealing with online units—units here refer to three different levels of use of the web, as follows: • online units are those which have a portion of the content and interaction provided via the web. Some were compulsory and some were not; • web supplemented units are those in which students have a choice as to whether, or not, they participate online; and, • web dependent are those in which student participation online is mandatory; and, • those dealing with online services.
Among the key findings reported by Bell et al (2002, pp. ix-x) were the following:
Online courses: 23 universities were offering a total of 207 online courses and of these 31% were only available in an online modality. Over 120 of the courses were concentrated in the disciplines of Management and Commerce (55), Education (35) and Health (32) with a wide spread across disciplines among the remaining courses.
Online units: All universities were found to be using the web for teaching and learning to some extent though the level varied greatly. Seven universities had 99-100 percent of their units using the Internet whilst one had only 9 per cent. In total, universities reported approximately 54 per cent (50,704) of their units had some content available over the web. Of these units, those that were fully online represented the smallest component at 1.4 per cent
(with post-graduate units having a greater proportion than under-graduate units). Bell at al reported that 'web supplemented' units were the “most prevalent form of online delivery”
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(2002, p. x). The discipline making the highest use of either fully online or 'web dependent' approaches was IT with 40.5 per cent of units offered in these forms.
Online services: These “consist of university services and information, which students can access via the Internet” (Bell et al, 2002, p. x). The report found that 87.5 per cent of universities provided access to their intranet for their students, with 70 per cent making this access also available from off-campus locales. Among the services being made available were access to university handbooks and calendars (present in 92.5 percent of universities), access to library catalogues (95 per cent), access to online journals and monographs (90 per cent), and online access for making reservations for library resources (82.5 per cent).
The report (2002, p. xi) makes the important point that online registration and enrolment services were still limited at the time of the study—40 per cent of universities provided these for current students whilst the figure dropped to 27.5 per cent when considering these services for new students and only 30 per cent allowed students online access to make variations to their enrolment records. Students could pay their fees online in 30 per cent of universities at the time of the report. Universities also offered online student learning support at 57 per cent of universities and 45 per cent provided access to training in ICT skills. Finally, Bell et al report that there were differences between universities in relation to the adoption and use of
'courseware management' systems (CMS). Some universities had more than one CMS, whilst the most common commercial products were Blackboard (17 universities) and WebCT (29 universities). 20 universities had developed their own CMS.
The report's findings are illuminating and point to the differential rates of adoption of web related approaches to online education in Australian universities. The developmental phase and stage of experimentation and investment in these approaches is likely to mirror the peculiar needs of each institution and seem to reinforce the expectations of innovation theory. It is also
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likely that the stage and rate of adoption reflects institutional priorities and their view of the role that distance education has to play in their capacity to compete in the higher education environment in Australia.
What is also clear from the report, is the paucity of quality information that is available for researchers in this area, an aspect that will need to be systematically overcome if Australian knowledge of the appropriate ways in which to utilize the technologies of the Internet and web for higher education are to be improved13.
6.5 Introducing value chain analysis
The report by Bell et al in 2002 allows for another aspect of the current study to be furthered.
Their study points to a number of the areas in which software has been developed for supporting student and administrative activity in regard to higher education. Identifying the activities and assessing the degree of ICT support available to them is consistent with a tool of business known as 'value chain analysis' (Porter, 1985). According to Porter (cited in Ward and
Peppard, 2002, p. 244):
Every firm is a collection of activities that are performed to design, produce, market, deliver, and support its products or services. All these activities can be represented using a value chain. Value chains can only be understood in the context of the business unit.
The value chain approach characterizes business activity in terms of processes that Porter claimed were of two major types—primary and secondary (or supporting). Primary value chain
13 In September 2004, the author of the current study contacted Margot Bell, the leader and principal author of the Bell et al report, who works for the Department of Education, Science and Training. Also contacted was Denise Kirkpatrick, Chair the Australasian Council of Open Distance Education and E- learning. Both gave information to the effect that there has been no update of the 2002 Bell et al report information. Kirkpatrick suggested that CAUDIT had been conducting some attempts to capture data in areas related to those in the Bell et al report, but an investigation of the CAUDIT web site has provided no further insight into the current states of development in Australian universities.
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activities were broken into five separate categories which he called inbound logistics, operations, outbound logistics, sales and marketing, and servicing. Supporting activities were likewise separated into four categories—finance and administration (sometimes referred to as
'infrastructure'), human resources, research and development, and procurement. The value chain is depicted as in Figure 6.5.
Figure 6-5 The generic value chain of a firm (Source: Porter 1985, and Ward and Peppard 2003, p. 265)
The value chain has also been applied with a view to understanding the wider industry within which a firm might compete and it has also been developed to include the interactions that a firm has with its suppliers and customers. Respectively, these are known as the industry/external value chain (or value system) and the extended value chain (Ward and
Peppard, 2002, pp. 245-273). Both the extended value chain, which tries to capture the linkages between the firm and its suppliers and customers, and the industry value chain, which tries to capture the totality of value-adding in a competitive marketplace have been featured in attempts to understand the emerging role and place of information in electronic commerce approaches to business. Ward and Peppard (2002, p. 244) locate the relationship between the value chains in the following extract:
The value chain of the business is only one part of a larger set of value-adding activities in an industry—the industry value chain or value system. The value chain of any firm
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therefore needs to be understood as a part of the larger 'system' of related value chains— those of its suppliers, customers and competitors, before it can be optimised. The actions of those other parties will have a significant impact on what the firm does and how it does it. This is especially true in the area of information systems. … For an organization to identify the overall implications of e-commerce for its business in terms of opportunities and threats, the information flowing through the industry—the external value chain—needs to be analysed before the information processes can be optimized inside the business—by considering the internal value chain (emphases in original).
As a tool of analysis, the value chain, in all its forms, is more easily applied to firms that manufacture physical products than it is to those firms producing services. Porter's original contention was that all manufacturers go through a generic set of activities that he separated as shown in Figure 6.5, and in his view the nature of the product was not important. The activities of organizations producing services, however, do not 'map' onto the value chain with the same ease and they are therefore more difficult to analyse using this tool. In the period of time since
Porter first published his work in this area, a number of alternative conceptions of the value chain have been developed to overcome what were seen to be the limitations involved in its application to services oriented firms. The 'value shop' and the 'value net' have been among those newer attempts (Ward and Peppard, 2002). Unfortunately these developments are not well known nor applied and no instance of their use for analyzing the universities in Australia has been found. Consequently, and notwithstanding the limitations, the application of the value chain analysis holds much value for understanding the range and nature of activities involved in an organization's approach to achieving its strategic objectives. For that reason the value chain analysis tool is used in the current work to show the range of software that is needed across the value chain and in support of the organizational goals.
6.6 Distance education value chain analyses
Few in-depth value chain analyses seem to have been produced in relation to universities in general (see, for one example, Sir John Daniel's commentary about the Open University in the
United Kingdom (UKOU), 1996, pp. 73-85) and fewer still in relation to Australian
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universities. None seem, from an extensive review of the literature, to have been produced to study modern Australian universities and their distance education activities. It is possible, however, to gain a composite view of the activities to be found in a university value chain by bringing together elements from different documents and by adding inferential and deductive logical processes to that combinatory effort. The purpose in doing so is to establish a basis for supporting the initial contention in this chapter that the software needed to support a systematic endeavour to undertake distance education in an online format has reached a level of maturity that allows the claim to justified and to be seen as plausible.
From his former position as Vice Chancellor of the UKOU, Sir John Daniel was in a privileged position to witness the operation of that institution. He reveals (1996, p. 73) that a change in funding regimes in 1993 obliged the UKOU to closely examine its calculation of costs. In order to do so they broke the operations down into 40 discrete activities surrounding the four principal functions of teaching, research, management of the organization, and student support.
The results of that atomization of the work are shown in the Table 6.1 with the intention being to show the kinds of activities they detected, rather than the cost figures associated with them.
The tabulated activities show what was needed in a distance education university in the UK in the early 1990s, well before the world wide web become commonplace. The activities are therefore likely to be informative in terms of pre-WWW media and will be used to inform the argument and discussion in the rest of the chapter even though the UKOU, as a dedicated 'open university', cannot be directly compared with Australian universities of that period.
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Table 6-1 Distance education activities of the UKOU (1991).
(Source: adapted from Daniel, 1996, p. 74)
Further, Daniel (1996, p. 75) claimed that the use of Porter's generic activities was not particularly helpful as approximately half of the costs fell into the 'operations' section of the primary activities. His team therefore developed their own approach based on functions within the university and ultimately arrived at the following breakdown of activities. Support activities included:
• direct, plan and manage the institution; • provide institutional infrastructure services; • human resource management.
Whilst primary activities included:
• carry out research; • develop educational materials, courses and programmes; • provide educational services logistics;
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• carry out marketing and sales; • provide educational services
Armed with the output from the value chain analysis Daniel (1996) was then able to bring
Porter's (1985) work on strategic advantage into his discussion in order to generate a compelling case for the open universities in relation to their operations and their need to use
ICT. For the current study, however, Daniel’s case for the open universities is less important than is recognizing the benefits of understanding the chain of activities involved in the modern university. The value chain analysis enables the study of how inputs are converted to outputs that provide a workable operating margin for the producer. This applies to not-for-profit organizations as well as profit oriented organizations. Daniel’s book is important in the current work because it contributes to the knowledge of the range of activities that are carried out in the management, production and delivery of distance education, though admittedly in the special case of the Open University. To gain greater insight and detail about more generic situations other literature needs to be introduced.
Panda (2003) has edited a twenty-two-chapter tome on planning and management in distance education from a global list of authors. Drawing on that work it is possible to gain an insight into the range of activities that they believed are necessary for an institution to offer distance education. In his introduction, Panda (2003, pp. 6-7) declares that that:
The process of distance education may include such subsystems as material design and development, their production and distribution, operations management, learner support services, telelearning and networked learning, assessment and evaluation. The structure and organization of these subsystems differ considerably for different models of distance education and training…
To this list can be added the 'meta' factors of “programme evaluation, performance indicators, quality assurance and accreditation” (Panda 2003, p. 9). Though the 'meta' factors may not be seen to be essential to the offering of distance education in many universities, their existence
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and the need for them to be undertaken are implied from the increasing literature of accountability issues—universities are being required to become transparent and accountable in their operations and in their use of public funds. Performance indicators are also being introduced into the review of universities in Australia (and in the UK via the Quality Assurance
Agency). It seems reasonable to include such components in this chapter's discussions because the functions are likely to become widespread in Australian universities and will, in part at least, apply to distance education activities. The supporting evidence the universities will have to produce for audit, quality, and performance management requirements is likely, in part, to be based on, and a by-product of, the use of ICT in universities. So software is likely to be used in support of the data collection and reporting requirements.
Panda's list overlaps with Daniel's, though neither is exhaustive and both will be expanded as this discussion progresses. Their lists do, however, point to the processes involved in the provision of distance education and can therefore form a starting point for use of the value chain in relation to distance education.
Otto Peters (Chapter 1 of the Panda anthology, 2003) discusses the variety of distance education models being used around the world and reviews what he calls the 'prospective' model of distance education, namely the 'virtual distance teaching university'. Of relevance to the present discussion is his commentary on the distance education oriented Fern Universität in
Germany, which has redesigned its electronic, public 'user interface' (Peters, in Panda (Ed.),
2003, p. 24) to include the following services:
• teaching: access to virtual teaching; • research: both teachers and students can acquire information on the state of research in individual fields; • topnews: contains information found on notice boards; • shop: above all, for buying additional learning and teaching programmes; • cafeteria: for informal contacts with other students, not necessarily to do with studies;
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• office: carries out administrative procedures; • library: for ordering books, examining digital books and magazines, bibliographical research; • information: answers all questions on the Fern Universität, shows the university to potential students, i.e. virtual visitors, and is used for talks with tutors.
Peter's Fern Universität listing indicates that further features can be added to the value chain activities if the use of ICT is seen holistically to include the interaction with customers (here, current and prospective students) though it does not refer to its suppliers at this level. The provision of the shop and cafeteria also point to the need for student support in areas unrelated to the teaching and learning processes. Whilst Panda's list also includes 'learner support services', the interface design from the Fern Universität implies further facets are necessary.
Among the most recent work that deals with the value chain is the online book by Anderson and Elloumi (2004) and their colleagues from Athabasca University—Canada's Open
University. The book recognizes the place and role of value chain analysis and even goes so far as to organize its contents using what they call a “value chain of online learning framework''
(2004, p. 4). This framework not only provides an interesting means by which to divide the contents of the book but also helps to focus the authors' intentions. Elloumi's work appears as
Chapter 3 and it is, as are the other chapters in this electronic book, focussed on understanding the theory and practice of online learning.
Elloumi's contribution is entitled Value chain analysis: a strategic approach to online learning and is consequently very relevant to the current discussion. Being a 'strategic approach', his chapter is mindful of the failures to be found among institutions attempting to undertake new forms of business and argues that they have generally not had a total understanding of the means by which value is added and retained. In order to investigate that position, Elloumi posits that value chain analysis is one means by which to achieve what he refers to as 'strategic power' (2004, p. 63). His chapter presents an overview of the theory of the value chain before
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moving onto what he refers to as the “online distance teaching value system” (2004, p63). He discusses the means by which a value chain can be constructed and used and then applies his views to a case study of Athabasca University. The following discussion draws heavily on
Elloumi's work, to understand the relationship between competitive advantage and the value chain, and to then derive a value chain applicable to the carriage of distance education in modern universities. From there, the resulting value chain can be used as the basis to appreciate the need for software to support the overall endeavour. Where necessary, other sources will be used to supplement Elloumi's contribution to achieve a more complete assessment of the activities to be included in the chain.
6.7 Competitive advantage
Michael Porter initiated his enduring and major contribution to the theory of competitive advantage in the mid-1980s following an earlier book on competitive strategy. In these works
Porter argued the case for the view that firms are collections of nine generic sets of activities that are undertaken in order to produce value for the organization. He, with Millar (1985, p. 4), also subsequently argued that the value chain was being radically affected by the application of technology:
Information technology is permeating the value chain at every point, transforming the way value activities are performed and the nature of the linkages among them. It is also affecting competitive scope and reshaping the way the products meet buyer needs. These basic effects explain why information technology has acquired strategic significance and is different from the many other technologies businesses use.
Written almost two decades ago Porter's research and views have been influential in western business and his theories of competitive advantage, in which he derived three generic strategies—differentiation, low-cost leadership, and niche or focus—continue to be studied in mainstream management and business courses. He has also maintained his interest in research in these areas and has more recently published an analysis (Porter, 2001) of the impact of the
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Internet on business strategy. Elloumi's work, being based on Porter's theory14, is a further directed attempt to understand the implications of the Internet and the web for universities, especially in relation to online learning.
As Elloumi explains (2004, pp. 63-64):
The value chain framework is an approach for breaking down the sequence (chain) of business functions into strategically relevant activities through which utility is added to products and services. Value chain analysis is undertaken in order to understand the behaviour of costs and the sources of differentiation (Shank & Govindarajan, 1993). In education, differentiation is achieved by creating a perception among targeted learners that the course, the program, or the university's offerings as a whole are unique in some important way, usually being of higher quality. The appeal of differentiation is strong for higher education institutions, for which image and the perception of quality are important. This perception allows the institution to charge higher fees, and so to outperform the competition in revenues without reducing costs significantly.
Some universities, however, prefer (or are obliged) to pursue low-cost leadership approaches in order to attain a competitive advantage. Quality then may be perceived as the relationship between the relative price of the higher education and the status of the institution. In Australia the national approach to higher education (known as the 'unified national system') ensures that the value attributed to the awards offered applies across the entire university sector. For this reason students can be assured that the value of their accreditation will hold good in any place in which Australian qualifications are recognized, regardless of the 'brand' value of the institution. Universities offering distance education routes to their degrees and other qualifications also are able to seize the advantage that follows on from this aspect of Australian higher education.
14 Three other useful adaptations of Porter's value chain theory that relate to the general discussion in this chapter but which are not specifically drawn on here are The value chain for digital learning content in England (Towell, Stewart and Ghose, 2003), Strengthening the Alberta Advantage: Business models for distributed learning (Standing Stones Consultancy, 2000), and Paul Casey's animated online resource available at http://www.bctechnology.com/statics/pstacey-jan2502.html
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This aspect does not hold in the USA, for example, where there is no national system and in which accreditation of universities, and awards within them, is handled by a number of different, often regional, bodies. Australia's national system of recognition and accreditation also helps to explain why Australia has been a significant 'exporter' of higher education.
Elloumi claims (2004, p. 64) that:
A low cost/price strategy focuses on providing goods or services at a lower cost than the competition, or superior goods or services at an equal cost. In education, it might be accomplished by limiting programs and course offerings, by reducing the complexity of the course deign and production process, or by limiting service or learner support. This strategy requires as well a tight cost-control system, benefiting from economies of scale in production, and experience curve effects.
Elloumi promotes the view that the for-profit University of Phoenix (UoP), with its online affiliate being arguably the most competitive and successful online university in the USA, pursues a low-cost strategic approach. The report from Cunningham et al (2002) comes to much the same conclusion and sees the UoP success stemming, in part, from its 'no-frills' approach. UoP is able to pursue a low-cost strategy, in part, by using contracted, part-time, rather than permanent academic staff, who are engaged to focus on teaching rather than the other usual academic roles such as student advising, research, administration and community service. UoP also tries to keep costs down by minimizing outlays on infrastructure and, for example, does not have a 'bricks-and-mortar' library but instead provides access to such resources entirely via the Internet (2004, p. 65).
Elloumi (2004, pp. 65-66) also discusses a strategic differentiation approach using Capella
University Online, as an example. He claims that the major thrust of this strategy:
is to create a unique position in the market through provision of goods or services that are valued for their uniqueness o[f] fit to the needs of a particular group of buyers. A differentiation strategy also requires ongoing cost control efforts within a strategic
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management emphasis geared towards differentiating offerings. For example, the course package by itself could not provide competitive differentiated advantage, as it is fairly easy for other institutions to duplicate it, whether by buying it directly from the producing institution, or by creating a very similar package. However, when the services of highly competent academics and tutors, registry staff, student advisors, and counsellors are added, a strong and unique bond can be created between the university and its learners. This unique bond becomes a differentiating competitive advantage when the institution subscribes to a vision of quality, support, service, and excellence (Woudstra and Powell, 1989).
Elloumi (2004, p. 66) then goes on to argue that
A vision of excellence for online learning institutions is not a choice, but a market driven imperative. The institution cannot rely upon the recruitment of learners within a geographic catchment area, as can many campus-based institutions. In order to gain global competitive advantage and respect, the online learning institution must prove that it is an “excellent fit for purpose”, not only for its suitability to its target market, but also for its strategic and operational processes.
The “excellence of fit” phrase is often seen in definitions of quality and it is no surprise that it is raised in Elloumi's work above. Quality assurance and performance management activities are on the rise in Australian universities, applying as much to on campus activities as to distance education operations in our dual-mode institutions. Ranking tables, whether official and sanctioned within the sector, or not, loom as a basis for comparison between universities.
Such comparisons subsequently form one platform for competition in Australian higher education.
These contributions from Elloumi, and Porter and Millar link the value chain and competitive advantage. Competitive advantage comes about by having a thorough knowledge of the value chain activities within the institution and by then refining the activities to such an extent that they provide a greater value output for the customer than do competitor organizations. The
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value chain also presents an overall view of the production and supply chains for the organization to the extent that each function and its component parts can be identified.
With that in mind it is now possible to move ahead to analyse the value chain of a university and its distance education operations. This discussion is less concerned with the specific strategy that might be employed by the various universities than it is with the resulting implications that the choice will have on the value chain and then, subsequently, on the choice of information systems (software) and technology utilized in support of the overall operation.
Turban et al (2004), Ward and Peppard (2002), Porter (2001), and Porter and Millar (1985) argue that information technology can be applied throughout the value chain to support an organization attain its strategic objectives. For this reason any university's current (and planned) information infrastructure could be examined to gain an insight into the strategy that might be operationalised. A university involved in distance education, especially where their offerings are wholly or partially online, will need to build an information infrastructure to support their courses and their students. Being aware of the value chain in such an institution, therefore, provides an insight into the activities that they believe add value as well as providing a conceptual map of the software that they will need in order to achieve their purpose.
Elloumi has adapted the work of Porter to produce the diagram of the value chain found in
Figure 6.6. For the purpose of the present discussion the diagram needs to be further explained.
Elloumi has followed the usual approach to present the value chain and presents the nine generic categories of activities as espoused by Porter. Like Porter, Elloumi believes that the adoption and use of ICT by universities and other online education institutions is “enabling the integration of the industry's entire value system” (2004, p. 72). As a result the value chain of the higher education institution is connected and intertwined with those of the other actors in the market including suppliers, such as publishers, and those who purchase educational goods and services, such as students and corporations.
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To aid analysis in the current study, bolded items show exact matches with Porter's original depiction and italicized items indicate those that have been modified to apply to online learning. Plain text indicates Elloumi's presumed input in regard to universities.
Figure 6-6 Online learning value chain (Source: Elloumi, 2004, p. 75, adapted from Porter, 2001.)
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Elloumi's diagram of the value chain is also supplemented by his attempt to capture the value system as shown in Figure 6.7. Together these diagrams provide an opportunity to analyse the software that will be necessary components of an information system to support distance education. Notwithstanding the fact that Elloumi was focussing on online institutions, his diagrams, and analysis, provide significant insight into the range and types of software that would be needed to undertake distance education in universities that are not currently wholly online. Such institutions may make varying use of the web across the four categories referred to by Bell et al (2002, p. 5) namely, informational, supplemental, dependent, and fully developed. Each level requires an increasing sophistication in organizational ICT infrastructure and software and an equivalent escalation in investment and planning within the organization commensurate with their emphasis on optimizing investments and seeking competitive advantage.
Learning specific - client/server - wireless Hardware - peer-to-peer - PDA/cell phone
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The value system and market map also point to another feature of importance in the current study. Commercial software developers envisage a world marketplace in order to gain sufficient demand for their products. The value system thereby intertwines the competing institutions, at least at the level of application software, and again reinforces the view that
Australian universities can not adopt an attitude of isolation. ICT can provide advantages and those universities that use ICT to facilitate ease of access to higher education, to provide high quality teaching and learning materials, to provide sophisticated student support systems, to provide online payment facilities, and to provide incentives to return to the institution over the course of a career will expect that they will prosper from their ICT investments.
Proprietary solutions, built in-house or by external vendors, offer some advantages over off-the- shelf packages but may not include the full list of features of those packages being developed for a worldwide marketplace. Similarly, as an institution's infrastructure changes over time, issues of compatibility and connectivity may cause problems for wider scale development of information infrastructure within an institution if it has chosen to pursue in-house, proprietary approaches to development.
6.8 The value chain and software availability to support processes
Distance education in Australian universities has been predominantly print-based in the past
(and may even retain that dependence for some time to come) but universities have shown a desire to move some courses, wholly or in part, onto the web. In doing so they are experimenting with new forms of business and their value chains reflect these developments. It would not have been possible, in the early days of the web, to do what is now possible. There have been developments in software that now allow many new activities to be conducted online and different sectors of industry have started to seize the opportunities that have been opened up. Universities too are experimenting with new approaches and so understanding their value chains can provide one avenue of insight into their activities. Additionally, such an analysis
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can further the examination of the relationship between distance education and electronic commerce by revealing similarities and differences.
Electronic commerce, as a new approach to business, required development of new software for firms so that they could move to adopt these new approaches to their activities. It is argued here that the universities will also need to be supported by development of new software. If the software development is extensive enough to incorporate the value chain activities then they will be able to pursue new forms of business too. Distance education offered by universities may then be seen to have a relationship to that of electronic commerce, in terms of the supporting infrastructure that has been developed.
6.9 Generic support activities and software development/availability
Elloumi's value chain diagram, Figure 6.6, shows that there are four support activities, namely—organizational infrastructure, human resource management, technology development, and procurement. There are also five primary activities, namely—inbound logistics, operations, outbound logistics, delivery (sales), collaboration and marketing, and service.
The task to hand now, is to establish the availability of software across the spectrum of activities depicted in the value chain for a university involved in distance education. That task will be approached by analysing each of the generic sections listed above.
Table 6.2 shows Elloumi's support activities and the relevant sub-components, derived from
Elloumi and the other resources cited earlier in this chapter, together with sources of related software. The sources have typically been located via document and web searches and source locations and vendor addresses have been included. The existence of the software is seen to be the critical issue in this exercise and no attempt has been made to assess the relative merits of the available software, nor to verify vendor claims about their products.
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Table 6-2 Software and the value chain: support activities.
Activity and Sub-items Applicable software Web address - examples Organizational infrastructure
Web-based distributed Jenzabar - Campus Intelligence - financial analysis and www.jenzabar.com/products/ci.html financial systems accounts receivable; SAP higher education & Research http://www.sap.com/company/press/fa products - Campus Management ctsheets/highed.aspx/ Online learner relations (e.g., Web-based portal software from vendors and www.jenzabar.com/products/crm.html information dissemination) developed in-house. Examples - Jenzabar CRM www.sap.com Modules - Constituent and Candidate and Jenzabar Internet Campus Solution (JICS); SAP Enterprise portal Marketing Jenzabar - Alumni (CRM module); Distinction www.jenzabar.com www.nexted.com Software Systems and proprietary development www.distinction-systems.co.uk many universities have built this component in-house Human resource Ryan & King (2004, p. 57) reports that PeopleSoft, management Callista and TechnologyOne each provide HR and student administration/ information systems
Self-service personnel and Jenzabar CRM Module - Staff; Talent2 web self- www.jenzabar.com/products/crm.html benefits administration service www.talent2.com
Web-based training A range of vendors e.g, Microsoft, PeopleSoft, www.microsoft.com OnlineLearning.net, SkillSoft; Worldwide Instructional www.onlinelearning.net Design System (WIDS) www.skillsoft.com Internet-based sharing and Jenzabar - Campus Intelligence (intranet and extranet) www.jenzabar.com/products/ci.html dissemination of organization and data marts; PeopleSoft Human Capital www.peoplesoft.com/corporation/en/pr information Management; TopClass oducts/ent_one/index.jsp Electronic time and expense Jenzabar CRM (Constituent Relationship Modules) www.jenzabar.com/products/crm.html reporting Recruitment software Monster.com Harvard Business School Exeter Ryan (2001) and www.monster.com software; Mamook - from University of Victoria www.exeter.com www.mamook.net Australia - a web-based recruitment tool; First Choice www.rdbpro.co.uk/default.asp?page=1 Software Ltd.; Recruiting Solutions International Inc. www.recruitingsoftware.com/solutions /student-tracking.cfm Technology development
Collaborative course/program Jenzabar Campus Intelligence and LMS solutions are www.jenzabar.com/products/ci.html design across locations and integrated across this element. PeopleSoft Campus www.peoplesoft.com among multiple value-system Solution. participants (knowledge directories accessible from all parts of the organization) Procurement
Internet-enabled demand Jenzabar claim an integrated approach dealing with www.jenzabar.com/products/ex.html planning; real-time such issues. PeopleSoft also produces packages e.g., http://www.peoplesoft.com/corporation available/capable of promise Enterprise Supply Chain Management; SAP campus /en/products/ent/scm/all_modules.jsp and fulfilment management www.sap.com Other linkage of purchase, Some linkage to publishers is noted in specific context www.peoplesoft.com inventory and forecasting (see Ryan, 2001) for U21 global links to Thomson www.jenzabar.com systems with suppliers publishing. Jenzabar and PeopleSoft also have software. Automated 'requisition to pay' Jenzabar EX - accounts payable/receivable; general www.jenzabar.com/products/ex.html and 'expense claim' systems ledger; purchasing; enterprise reporting modules Direct and indirect As with cell above but specifically 'third party www.jenzabar.com/products/ex.html procurement via marketplaces, interfaces' exchanges, and auctions
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Whilst it is possible to add further elements to the tabulated listing in order to cater for every conceivable permutation of online delivery (and blended learning where students may take some classes electronically and some in a face-to-face mode), the essential argument here is that such an exercise is not necessary as the major features have been captured.15 Some software, such as firewall applications for securing the investment in information and technology may be needed and can be added without compromising the value chain analysis.
Universities in Australia will have, however, differing degrees of interest in pursuing distance education, and their resultant strategies and investment in ICT will be likely to reflect a variety of anomalies that are unique. Taking a generalized stance in the software investigation is therefore required, as universities will have differing levels of software in place to support their value chains. Further, it is also possible that the universities will not have centralized approaches to the investment in, and strategic planning of, their ICT. For the current study the assumption has been made that the ICT is a centralized responsibility. What therefore is evident from Table 6.2 is that the generic support activities are well catered for in terms of software.
Table 6.3, also based on Elloumi's (2004) sub-components, is the result of a similar investigation into the existence of software for universities to support their primary activities.
Some sub-components have been added from case studies dealing with adoption and use of the web in universities. Likewise, some sub-components have been omitted due to their focus on hardware or non-software related matters.
15 Tables 6.2 and 6.3 do not attempt to include instances of software that has been developed in-house or contracted out to software developers for use in-house, nor does it attempt to isolate software packages that can be bought off-the-shelf and customised under appropriate licensing arrangements. Those instances are, however, likely to be in effect in universities in Australia and internationally for idiosyncratic reasons. Their non-inclusion is not to signify that they are inferior to the software shown in the Tables. Furthermore the inclusion of software is neither an endorsement nor a statement that the software has been ranked in any way in this study.
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Table 6-3 Software and the value chain: primary activities
Activity and Sub-items Applicable software Web address - examples
Inbound logistics
Learning specific software University of Illinois has created Mallard, CyberProf www.ui.edu and NetLearning Place as authoring and teaching www.macromedia.com systems; Arguably this could also include software for authors such as Macromedia's Authorware Professional; Many individuals also produce such software in-house though it may not yet be widely available; WIDS Learning management systems (LMS) Jenzabar LMS, Blackboard, WebCT, Peoplesoft, www.jenzabar.com SAP, Microsoft, IBM www.nexted.com www.peoplesoft.com Learning content management systems SunGard SCT content management; Blackboard, www.sct.com/Education/solutions (LMCS) WebCT /s_acad_elearning.html Knowledge management (KM) Jenzabar Campus Intelligence hints at KM without www.jenzabar.com using that term; Blackboard Digital Asset www.blackboard.com Management Real-time integrated scheduling of Some links to libraries and publishers noted in reference materials literature but not highlighted in software vendors literature Dissemination of real-time inbound Jenzabar, SAP www.jenzabar.com www.sap.com inventory data Authoring tools Authorware Professional, Dreamweaver; Learning www.macromedia.com Space Operations Course instructional design Worldwide Instructional Design System (WIDS), www.blackboard.com Blackboard www.wids.organization/about_co ntent.asp?id=35&groupid=2 Content (learning objects, units etc) Worldwide Instructional Design System (WIDS), www.blackboard.com Blackboard, WebCT (digital content); Publishers www.webct.com Courseware, study guide and student SAP; Jenzabar Internet Campus Solution (JICS); www.blackboard.com manual development PeopleSoft; WebCT;Blackboard www.sap.com www.webct.com Writing & formatting Multiple solutions e.g., Microsoft WORD, www.microsoft.com Dreamweaver, desk-top publishing software; Adobe www.adobe.com Acrobat Capture, edit As with cell above As with cell above
Multimedia creation Digital cameras, animation and so on from a range of www.macromedia.com vendors - Authorware Professional; Photoshop Graphic design Photoshop; Macromedia Dreamweaver and Flash www.macromedia.com
Printing Numerous well-known vendors www.canon.com www.hp.com
Integrated information exchange, Jenzabar and SAP provide information about such www.sap.com scheduling, in-house course capabilities in their software solutions. Some production, contract SMEs and universities have printing presses on campus. publishers Outbound logistics
Real-time transaction of orders SAP solutions, Jenzabar, PeopleSoft www.peoplesoft.com
Online registration Jenzabar, Verity Teleform, Peoplesoft, SAP, www.peoplesoft.com Blackboard, Cognos www.verity.com www.jenzabar.com www.cognos.com Integrated portal Jenzabar Internet Campus Solution (JICS); NextEd, www.jenzabar.com Hewlett-Packard www.nexted.com Packaging and storage of courses SAP and Jenzabar comment on data storage and data extraction though no vendor specifically mentions this element. Online approaches may eliminate this aspect? Learner access to course Jenzabar Constituent Relationship Management www.jenzabar.com/products/crm. (CRM); Blackboard; WebCT; TopClass html Integrated channel management Most of the vendors moving to integrated solutions www.sap.com (process control) claim they do this e.g., Blackboard, PeopleSoft and www.blackboard.com SAP www.peoplesoft.com Automated learner specific account Jenzabar Constituent Relationship Management www.jenzabar.com/products/crm. and contract terms (CRM) html Page 244
Real-time information available to Most of the vendors moving to integrated solutions www.sap.com advisors, PR, and channels claim they do this e.g., Blackboard, PeopleSoft and www.blackboard.com SAP www.peoplesoft.com Delivery (sales), collaboration and marketing
Live learning Web-casts; streaming video, Blackboard www.realaudio.com
Virtual classroom Depending on what this is intended to mean - www.blackboard.com WebCT, Blackboard and other software that provide www.webct.com (a)synchronous interaction. Computer mediated communication (MUDs & MOOs) threaded email and forums. Some software also produced by academics Course delivery Most of the software vendors listed in these tables See most vendors' information for claim this is a major aspect of their products. details Threaded discussion Email, and forums - WebCT, Blackboard, FirstClass, www.hp.com/hp/network/nw_ica TopClass, Hewlett-Packard mpus.html Audio/video over IP Online radio, telephone and TV; desktop video www.cornell.edu conferencing (CUSeeMe). Streaming media www.realaudio.com Real-time access to student Most of the software vendors listed in these tables See most vendors' information for information, calendars, fees, claim this is a major aspect of their products. details course/subject availability Real-time learner feedback through Jenzabar CRM www.jenzabar.com web surveys and promotion and response tracking Branding Portals and marketing via web. NextEd and other www.microsoft.com; vendors build this into their platforms www.nexted.com www.peoplesoft.com Entering strategic partnership Vertical and horizontal integration - eg online testing www.thomsonlearning.com at CSU with Prometric. Content producers such as publishers and media groups with U21 Shared communities 'my.csu', my.ebox, MUDs and MOOs; threaded e- www.csu.edu.au mail; CMC; forums. Often built in-house and may www.jenzabar.com not be commercial. Jenzabar JICS Service
Online support of learners Forums; e-mail, MUDs & MOOs; web-cam and many vendors desktop vid conf; streaming audio and video Coaching, mentoring As with above ICT, VOIP
Assessment and testing Prometric, Thomson Learning, Sungard Enterprise www.sct.com www.webct.com Assessment, WebCT Technical and support services (e.g., Downloadable software and help files. Help Desks www.hp.com for modems) and call centres - single point of service. Hewlett- Packard focus on providing services relating to connection and support. Learner self-service via web sites and (See Taylor's USQ case study; Ryan 2001). Jenzabar www.jenzabar.com/products/crm. intelligent service request processing CRM - Student Module html Real-time field service access to Jenzabar CRM - Student Module www.jenzabar.com/products/crm. learner account/courses reviews etc html Localization and globalization Examples- language translators (NextEd); www.lotus.com; collaborative software such as Lotus Domino; MOOs www.nexted.com and MUDS; Tutor support e-mail such as Outlook, and many other examples www.microsoft.com from providers in this Table Academic experts Via email, portal, forums, chat rooms. www.microsoft.com Marking Prometric for online exams and results www.thomson.com
Counselling Not software specific though other ICT used e.g, video conference, telephone. Email could be used in some cases and developments may see web streaming and web telephone used Granting awards No specific software found for this.
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Tables 6.2 and 6.3 combined, provide support for the view that the software needed to carry out distance education via the web is currently in place. Furthermore, the provision of this software has become a competitive environment in its own right with many companies vying for a share of this increasingly dynamic and lucrative market. The software tabulation points to the fact that the entire value chain for institutions of higher education is now catered for in terms of modern technology.
Universities will of course have the opportunity to develop their own solutions in-house in a proprietary fashion. Institutions such as University of South Australia and the University of
Southern Queensland (see Ryan and King, 2001 for case studies of these two institutions) have taken this approach to some extent, whilst others, as reported by Bell et al (2002), have decided to move to vendor products such as Blackboard and WebCT. As yet neither of these latter vendors provide enterprise-wide architectures for the universities though there are indications that both are making significant strides toward increasing the breadth and depth of their software and making their products integrated (see for example, www.blackboard.com).
Universities that decide to develop solutions in-house will also need to ensure that they have regard for issues such as security of transactions, confidentiality of their web sites, compatibility of their solutions with emerging standards (e.g., shareable content object reference model—SCORM and those developed by the International Electrical and Electronic
Engineers Association - IEEE), and interconnectivity with external operating systems and relevant applications. Arnone (2002, p. 1) argued that:
For the first time, evolving technical standards for software are making it possible for colleges to customize distance-learning programs by easily mixing online-learning software from multiple companies. Dozens of colleges around the world are participating in creating the new standards, and hundreds of institutions, corporations, and government bodies are already applying them.
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As it is likely that legacy systems in universities will stay in place for some time to come, any developments in relation to standards may help to delay the need for immediate technology spending, especially if the standards can alleviate the information sharing problems that will haunt universities that have had decentralized approaches to ICT development.
As the value chain stretches across the whole institution, enterprise wide information systems are emerging as one answer to the need for information integration. Software vendors including Blackboard and WebCT (Arnone, 2002, p. 2)16 are also aware of this trend and are moving to supply software that provides a whole-of-chain solution. Such software solutions are also in keeping with the literature relating to strategic information management (see, for example, Ward and Peppard, 2002; Boar, 2001). Integrated software also enhances the potential to support the value chain activities and in doing so to provide better quality services to the customer, in this case the students. It also optimizes information sharing across the universities, reduces data redundancy and helps universities meet compliance reporting requirements.
Another important attribute of the value chain analysis is that it allows its users, because of its atomizing approach, to isolate activities that may be suitable for outsourcing to external providers. By breaking the overall activities into component processes the organization is better enabled to understand the activities that add the greatest value in the chain. Armed with that insight the managers of the organization are then positioned to make informed decisions about their future deployment of resources, including decisions to place responsibility for carriage and completion of tasks to outside agencies. In relation to distance education,
16 Other vendors, among many, offering integrated solutions include Jenzabar (see www.jenzabar.com), PeopleSoft (see www.peoplesoft.com), SAS (see www.sas.com), Onbase (see www.onbase.com), Distinction-Systems (see www.distinction-systems.co.uk), and Microsoft (see www.microsoft.com). Not all vendors are trying to produce software that spans the entire value chain but rather seem to be focussing their efforts in defined sections such as student support and learning, whilst others concentrate in back-end software to contribute to overall support activities including payroll, human resource management and recruitment.
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universities may decide that collaborative arrangements are warranted, with value chain activity separation, when contributing institutions are better placed to make value-adding input to a collaborative agreement. Perraton (1998, cited in Hawkridge 2003, p. 23-24) has detailed five different types of production partnerships—central funding; consortia; production only partnerships; partnerships between universities and companies; cooperative structures—that can be seen as exemplars of this distribution of responsibility. Whilst such arrangements will be discussed in further detail in the following chapter, when the study moves to examine business models, it is useful at this point to realize that the value chain approach can facilitate better identification and appreciation of those functions and activities that the organization does very well and those that it does not do well. Armed with these insights the organization can then make an informed decision about how to address problems or capitalize on the things that they do well.
Also associated with the value chain is the notion of the supply chain. This refers to the activities that are undertaken once an order has been placed by a customer (see for further detail, Shaw (ed) 2003; Turban et al, 2004; Shaw et al 2000; Monteiro et al, 2003). As a tool it includes flows (such as those of finance, goods and services, and information) as well as each of the actual tasks that are undertaken. The supply chain has become increasingly prominent in the business and electronic commerce literature over the past decade as organizations move to client-centric approaches to their business activities. Typically this movement has been hand- in-hand with developments in ICT enabled web commerce. The supply chain as a conceptual apparatus enables organizations to appreciate their own capability in delivering goods and services in terms of quality and efficiency. The concept seems, however, to be rarely applied to universities but its raised profile in commerce and industry suggest that it will also begin to be found in the literature relating to universities in the near future.
As a tool it has a close relationship with the value chain with each taking a process approach to analysis of a business’ activities. Furthermore, electronic commerce approaches to business
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have been capitalizing on the supply chain approach as they wrangle with the complexities of trading across international markets using information and communication technologies to enable those approaches. Supply chain management (SCM) requires that the various partners are inter-connected electronically so that they can share information to help expedite their respective responsibilities. When customers are also connected as a part of the supply chain then SCM applies to both B2B and B2C forms of electronic commerce.
The concept of mass customization (Davis, 1987) whereby customers are involved in the design or tailoring of final products is essentially based on the capabilities that arise when SCM is broadened to include customers. Mass customization also enhances the capacity of a firm to build-to-order, rather than build in a standardized fashion. Customers therefore get the permutations within the product that they prefer and the firm gets the benefit of only producing those assemblies that have immediate demand (see Turban et al, 2004 for further information about the concepts presented in this section). In addition, inviting customers into the value chain via ICT (typically via an extranet) also enables Customer Relationship Management
(CRM). In both CRM and SCM, flows of information are critical and the value chain analysis promotes this perspective.
Business, both traditional and electronic, is moving to a fuller appreciation of these information-based, customer and quality centric attitudes, to enable higher competitive capabilities. Understanding these features of change in the world of commerce would also arguably be of benefit to the universities, especially those that wish to be recognized for being responsive to societal and industry needs. To some extent the intent of the universities will be mirrored, or captured, within the models they choose to use to do their business. Further insight will therefore be gained from the discussion of business models in chapter 7.
A final point about the value chain is that it can help institutions identify those activities that may be best performed in new ways. To that end, a process known as disintermediation—
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replacing middle players—may be effective. Similarly, the electronic commerce literature
(such as Turban et al 2004, p. 218) also suggests that as the technologies and models have matured, the alternate process may be found. Reintermediation refers to the insertion of new providers of services into the value or supply chain. It is apparent that both phenomena have been largely generated by the ferment associated with the experimental use of the web to enable new approaches to business. Turban et al (2004, p. 218) argue that “the web offers new opportunities for reintermediation” especially where the service providers offer value-adding options that be important to the organization. Universities may therefore have to consider the nature and number of service providers along their own chains so that the most optimal solutions can be found. This will of course impact the students as customers, especially where the assumption of student access to the web has been taken for granted by the universities involved.
6.10 Discussion
This chapter has been concerned with presenting, and supporting, the argument that the software necessary to conduct distance education in a manner akin to electronic commerce now exists. The bases for conducting fully online higher education have been laid, from a technological (software) point of view. This supports the contention made by Turban et al in the electronic commerce infrastructure diagram, Figure 6.2, that broad-scale availability of applications to conduct electronic commerce requires a sophisticated underlying infrastructure be put in place. In Australia it is reasonably clear that such an infrastructure has been built and the e-readiness rankings have alluded to that state of preparedness. Those rankings were based on a detailed analysis of a range of categories and criteria, the outcome of which is a deduction that Australia is now well placed in regard to the rest of the major nations, including the UK,
Canada, and the USA, which are the countries with whom Australia competes for international students in higher education.
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Having the infrastructure to enable electronic commerce in place is one thing. Whether universities in Australia now see fit to use that infrastructure in order to follow a competitive strategy in terms of the global competition for students is another matter all together.
Nevertheless, the existence of the solutions provides a set of possibilities and choices. Potential therefore exists for institutions of higher education to become engaged in distance education in ways that have, hitherto, been foreign or outside their realm of experience. Australian universities that have been dual-mode for some time seem set to be able to follow the dictates of their decision to provide distance education years ago and to be able to pursue increasing numbers of students via the technology of the web.
Innovation theory has shown over time that whenever new technology is introduced in to an organization it is met with a pattern of resistance/acceptance and adoption. Australian universities will also have to face those phases of innovation as they too introduce new approaches to the conduct of higher education. Students may be beneficiaries of university decisions to conduct higher education via heavily technologically mediated methods and they too will need to go through a learning curve to optimize their learning. They will also have to face the prospect of preparing their own e-readiness by purchasing the means of access to higher education provided online via the web and by becoming educated about the technology itself and what it is that universities will have on offer.
The discussion of the value chain pointed to other uses of that tool of analysis such as for supporting business strategy and for understanding the areas in which an organization might seek out competitive advantages. It also contributes to an organization's understanding of which employees are responsible for which tasks/activities. It can also assist in gaining a better understanding of the activities that contribute most or least to the value-adding processes in the organization. In the present study the value chain was seen as a means to atomize the process activities conducted by the students and the universities so that the full extent of those activities
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was clear. From that point of clarity it was then possible to go on to examine the state of development and availability of the software needed to support the full range of activities. It was shown that there is in fact a full range of software in existence to support distance education and online approaches to higher education.
Technologically it is now possible to use software to support each and every element of the value chain in Australian universities. Furthermore, the software once in place will also enable and support other activities within the universities. Though those activities have been outside of the interests of the current study the synchronicity and synergies that will be created will have a significant effect on university attempts to control costs and to optimize benefits from their technology investments.
It was argued that distance education delivered via the web would require a similar infrastructure to that which enables a business to pursue electronic commerce. The chapter has been able to show that the full suite of software necessary to support the value chain is now available to universities, so it appears reasonable to conclude that the major purpose of the chapter has been achieved. Juxtaposed, the activities in a university’s distance education value chain and those involved in a business undertaking electronic commerce can be seen to be in need of the same types of technological support. The infrastructure needed for electronic commerce applies equally well to commercial firms as it does to the universities in pursuit of international and domestic advantage but is wider and more encompassing than the technology that underpins it. Legal, technical and other regimes need to be in place as well and it was shown that Australia is well developed in these matters. Australian universities are therefore arguably well-positioned to utilize the web to pursue their strategic aims and objectives.
Armed with that knowledge and insight it is now time to consider how universities might go about making use of the software in support of their distance education activities. As the distance education value chain is supported technologically, senior university staff will have to
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make decisions about the most appropriate way in which to configure their institution's activities in order to achieve their strategic plans and goals (see also Bates, 2000 & 2001;
Latchem, 2003). Optimizing their investment in information and communication technology is also likely to be high on their agenda. Both these concerns and myriad other matters, such as providing high quality education and being effective competitors, will be affected by their choice of business model. If Michael Porter (2001) is right, then organizational strategy will be the key to the universities and their capacity to compete in the globalized marketplace of higher education. As strategy is essential to closing the gap between where an organization is currently placed and where it wishes to go, then the choice of business model will be an important decision for universities.
The world, however, has borne witness to the hotbed of experimentation with business models that commercial organizations have undertaken over the past decade in the field of electronic commerce. Those organizations have made sizeable errors along the way but the path that they have pioneered is now better illuminated and universities may be able to gain some comfort from this knowledge given that they have been late to arrive on the electronic commerce scene.
Investigating university business models to support distance education enabled via the web therefore becomes the major focus of discussion in the following chapter.
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7 Business models for universities in borderless education
The impact of technology on the whole institution is of such magnitude that the leaders of the university cannot delegate decisions about technology strategy to the information office. For most universities the senior team needs to own the information technology issues and to integrate them into the strategic vision for the university. Institutional leaders must develop and support this vision and communicate it to the whole university community. They then need to ensure institutional alignment of support structures and policies (Mason 2003, p. 11).
7.1 Introduction
Robin Mason's views arise in her contribution in The Virtual University (in D'Antoni (ed.)
2003), a volume that has an international focus which seeks to better understand the models of higher education that might be envisaged with a web-centric approach. Mason's chapter looked at the current challenges and opportunities that face universities and the citation above provides a bridge between the discussion of technology in the prior chapter and the need for strategic planning to realise the potential stemming from the adoption of web technology to pursue and provide distance education.
As the necessary electronic commerce infrastructure is in place in Australia, and with requisite software to support institutions providing distance education being available internationally, it is now time to consider the issue of how distance education can be provided in such an electronically supported and mediated environment. To seize competitive advantage requires that universities take the initiative and to do so their strategic planning becomes a crucial activity. Putting appropriate business models in place to support the carriage of a university's strategic plans therefore also becomes critical to ensuring success. But, as was noted at the end of chapter 6, it is not at all clear what such business models should look like nor is it clear that any have been implemented to enable universities in Australia to effectively link the traditions of the past with the prospects of the future. It does seem logical, however, to presuppose that
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providing such an effective link is going to be necessary in the period of transition that universities, including those that are dual-mode, face as they experiment with web-mediated approaches to distance education. Those models therefore become a major and essential component of the current study as the relationship between distance education and electronic commerce is investigated.
The web has presented the opportunity for organizations to move past the proprietary approach to electronic commerce that its precursor, electronic data interchange (EDI), represented.
Where EDI had been private and generally shared between a small number of business partners or collaborators using agreed upon protocols, the web is very public, available to all, and uses protocols that are standard across the globe. One outcome of this has been that the organizations that have experimented with and adopted electronic commerce have had to spend time and money in the development of new business models to take advantage of the new medium of the web. They have been pioneering and path-breaking because it was necessary for them to be so—new business approaches were required to optimise use of the new medium. In investigating a relationship between electronic commerce and distance education it would seem reasonable to suggest that a similar process of development of models would be found applying to universities as they too need to experiment.
Chapter 7 therefore addresses the issue of whether or not new models for electronic commerce approaches to the business of universities are being formulated. In particular, models applying to web-based distance education will be the focus. If historical developments in the wider field of commerce and industry are indicative of the time taken to experiment with new electronic approaches, then universities are likely to be undergoing a period of transition. They will be faced with a learning curve where they will be taking note of the lessons learned by those businesses that have pioneered use of electronic commerce. In keeping with the literature of innovation theory introduced in Chapter 6, they may even be experiencing the ‘chasm’ where
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the benefits proclaimed for web enabled distance education take much longer to be realized than might otherwise be expected.
The chapter assumes that the universities in Australia that decide to use distance education approaches to fulfilling their higher education charters will wish to optimise their ICT investments and, to that end, it is argued that the universities will see the burgeoning international education market as a stimulus to ongoing experimentation with business models.
Some universities will have a need, others a desire, to enter the market in distance education in order to pursue sources of revenue and/or to reduce operating costs. In either case, universities will need to find a suitable business model for their distance education activities. To ascertain which models might be suitable, this chapter draws on the international literature to understand what has transpired in terms of the development of business models since the web was conceived.
The argument for this chapter is graphically represented, according to the approach taken by
Toulmin (1958, pp. 94-145), in Figure 7.1.
Figure 7-1 Toulmin diagram for the argument that universities will seek new business models in order to be effective competitors
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7.2 Universities responding to pressures
In Rethinking Teaching for the Knowledge Society, Diana Laurillard (2002, p. 16) points to the tensions that are being created in modern societies as universities attempt to understand their place and role in times of turbulence. She notes:
For over a decade now, universities have been aware of the pressures to expand access to higher education. The knowledge society needs more graduates, and those graduates will keep returning to study as lifelong learning takes its place in both work and leisure time. These are the positive pressures for expansion. But the knowledge society, fueled by the expanding higher education sector, is in turn generating more knowledge industries, producing additional, competitive pressures for traditional institutions of higher education. Those involved in university teaching in this digital age must cope with the fact that the knowledge industries are creating the means by which individuals can acquire the immediate skills and knowledge those industries need. As a result, many individuals are questioning the true benefit of a university education, given its cost.
A report from the OECD entitled The Knowledge Based Economy (1996, p. 3) argues along similar lines:
OECD analysis is increasingly directed to understanding the dynamics of the knowledge-based economy and its relationship to traditional economics, as reflected in “new growth theory”. The growing codification of knowledge and its transmission through communications and computer networks has led to the emerging “information society”. The need for workers to acquire a range of skills and to continuously adapt these skills underlies the “learning economy”. The importance of knowledge and technology diffusion requires better understanding of knowledge networks and “national innovation systems”. Most importantly, new issues and questions are being raised regarding the implications of the knowledge-based economy for employment and the role of governments in the development and maintenance of the knowledge base.
Given their role in the production and dissemination of knowledge in modern economies the universities need to understand the changing nature of the higher education environment, the pressures they face, and the need they also have to respond in an informed fashion. Those responses will include decisions about the modalities used to provide access to higher
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education. Distance education, as one modality enabled by modern technology, is sure to be seen as a means to continue their valuable role in society. The decisions to be made are going to be long lasting and will need senior management to take a strategic long-term view of the development of the institution. Those that decide to move down a pathway to provide higher education via web-based technology will need to make important decisions about the models that they will use to support those decisions. The outcomes of their decisions will set the tone for the university’s capacity to compete in the higher education marketplace that has been discussed in the current study. Similarly, those decisions will demonstrate the way in which the universities are responding to the pressures, changes, and challenges to which the Laurillard and OCED citations pointed.
With many stakeholders, Australian universities have significant and diverse sets of demands that need to be met. Not least among these are their longevity and survival in an increasingly competitive environment. Business models that enable Australian universities to satisfy the range of demands will take time to develop. The models will require new thinking not only to facilitate distance education activities nationally and internationally but also to ensure optimization of the information and communication technology infrastructure investments.
Universities will need to make decisions that lead to models that can be cost-effective and which provide a significant return on investment, thereby further enhancing the institution's capability to pursue their missions.
7.3 Businesses responding to pressures
The universities are not alone in their need to respond to changing circumstances, in particular those generated by globalization and the rise of ubiquitous technology. The business community has led the way in making adaptations to the presence of newly developed information and communication technology. As has been pointed out earlier in this study, the developments in electronic commerce over the past decade have represented a period of
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transition and experimentation as businesses have grappled with new approaches to commercial activities.
It is to be expected that universities will benefit from the documented history of those developments in the field of electronic commerce. Nevertheless, universities will need to be mindful of the pitfalls that exist and which have taken their toll of organizations during the period of the so-called dot.com crash. Appropriate organization structures and underlying infrastructures (as discussed in Chapter 6) need to be developed and fine tuned as organizations attempt to capitalize on the market space opened up by the application of information and communication technology. Universities moving toward electronically mediated forms of interaction with their stakeholders will need to assess and then institute business models that are appropriate to their situations and which are in keeping with their strategic directions.
The current study therefore proposes to undertake an investigation of models that have been suggested, developed, and/or tried thus far in higher education. This investigation will draw on the limited literature dealing with Australian university approaches to the provision of web- based or web-enabled higher education. International literature will also be drawn on in order to better appreciate the developments in relation to business models for universities. Relevant electronic commerce literature will be used to inform the discussion and to further the investigation of the relationship between electronic commerce and distance education. In order to proceed with these intentions it is necessary to clarify the terminology to be used and the following section is used to that effect.
7.4 Business models and terminology
Among the literature to be discussed in this chapter is a much-cited report by the Standing
Stones consulting firm in Canada produced for the Council of Presidents of the Public
Universities, Colleges and Institutes of Alberta. The authors state that the research was
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conducted in order to develop a "conceptual business model(s) for distributed learning"
(Standing Stones, 2000, p. 1) and with regard to the concept of a business model they comment that:
A business model is a tool to help understand a business and how it does things. To better understand business modes for distributed learning, this document uses a model that includes three distinct components:
1. The actors and the role that they play Actors include institutional providers that offer e-learning courses, brokers that act as an intermediary between the institutional provider and the learner, and home institutions that offer learner support services.
2. The activities of each actor The heart of any business model is the series of activities that are undertaken to provide value to a consumer — known as the value chain. …
3. Revenue streams and the potential return on investment The business models identify sources of revenue and flows of funds when they are unique to a model (Standing Stones, 2000, p. 10-11).
Chapter 6 has provided an extensive discussion of the value chain concept and its role in business analysis and the Standing Stones report adds further weight to the importance that can be placed on that tool for understanding the operations of universities. The addition of the other two elements in the quotation points to the need for a business model to incorporate people and financial elements and underscores the interdependent and commercial nature of the model used in the cited report.
Canzer (2003, p. 119) states that:
A business model is a descriptive representation of the fundamental components of a business ... described ... as a group of shared or common characteristics, behaviours, and methods of doing business that enables a firm to generate profits through increasing revenues and reducing costs.
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Canzer (2003, p. 119) also goes on to say that:
An e-business model is a descriptive representation of the fundamental components of a business that operates partially or completely on the Internet.
Canzer also remarks that there may be similarities between the two, even in an enterprise that has both models, though business operations in either model are likely to be very different.
Canzer (2003, p. 120) also suggests that the term, for many people, boils down to the way in which the firm earns its revenue and even though that stance may be narrow it does focus attention on:
The single most critical point and sheds light on the feasibility of what the firm is trying to do.
Where Canzer sees the term business model relate to a description, the Standing Stones report sees it as a tool. Yet another view, which posits the business model as a method, comes from
Turban et al (2004, p. 9) who suggest that:
A business model is a method of doing business by which a company can generate revenue to sustain itself. The model spells out how the company adds value that consumers are willing to pay for, in terms of goods and/or services the company produces in the course of its operations.
Chesbrough and Rosenbloom, from Harvard Business School, provide a further comprehensive analysis in their paper detailing different business models used by the Xerox Corporation in pursuit of success with new technology. In their work they relate business models to business strategy which they see as separate though related constructs. They argue that:
The business model provides a coherent framework that takes technological characteristics and potentials as inputs, and converts them through customers and markets into economic outputs. The business model is thus conceived as a focusing device that mediates between technology development and economic value creation (2002, p. 532).
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Chesbrough and Rosenbloom are of the view that organizations need to be aware of the valuable role that the business model plays and especially when it is inappropriate to pursue approaches that are incongruent with the existing model. As far as universities are concerned, the advent of the commercial use of the Internet and world wide web has thrown up new technology that requires them to consider their mode of operation. If they are to do as
Chesbrough and Rosenbloom advise—namely to take the technological characteristics and potentials and convert them through customers and markets into economic outputs—then it would appear that they will need to review their business models. Chesbrough and
Rosenbloom are also aware of the impact of the web (and of electronic commerce) when they state that:
The rise of e-commerce, with its myriad new firms eschewing conventional ways of doing business, has thrown a spotlight on the topic [of business models], which is widely discussed by practitioners and investors, but is not yet prominent in academic discourse (Chesbrough and Rosenbloom 2002, p. 532)
Chesbrough and Rosenbloom then offer the view that the academic discourse is barren in the treatment of business models because the concept is drawn “from and integrates a variety of academic and functional disciplines” (2002, p. 533). Considering the importance that is currently being placed on finding suitable approaches to business in universities, the concept is well placed in the discussions in the current study.
Rappa (2004, online p. 1) supports this view as well when he says that “Internet commerce will give rise to new kinds of business model” though he goes on to say that “the web is likely to reinvent tried-and-true models”. In addition to providing the following definition of a business model Rappa also provides a taxonomy of web-based business models which will be drawn into the discussion at a later stage. In keeping with the definitions provided to this stage, Rappa
(2004, online p. 1) says that a business model is “the method of doing business by which a
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company can sustain itself—that is, generate revenue. The business model spells-out how a company makes money by specifying where it is positioned in the value chain.”
Another definition, by KMLab Inc, appears as a footnote in the Chesbrough and Rosenbloom
(2002, p. 532) publication and is as follows:
... a business model is a description of how your company intends to create value in the marketplace. It includes that unique combination of products, services, image, and distribution that your company carries forward. It also includes the underlying organization of people, and the operational infrastructure that they use to accomplish their work.17
Brandtweiner and Mahrer (2002, p. 474) draw on other authors and offer the following definition:
A business model “is the method by which a firm builds and uses its resources to offer its customers better value than its competitors and to make money doing so” (Afuah & Tucci, pp. 3,4), this means a business model can also be seen as “the organization (or architecture) of product, service and information flows and the sources of revenues and benefits for suppliers and customers” (Timmers, 2000, p. 31). [emphasis in original]
These authors (2002, p. 474) go on to clarify two important issues which are captured in the following quote:
Based on these definitions business models are regarded as “pictures” of the utility generating production, service, and sales systems of an enterprise. We prefer the phrase “utility generating” rather than “profit or revenue generating” because we think generating incomes alone might be good enough for a revenue model but not for a business model. A business model is more holistic, it comprises all benefit generating elements for the enterprise, its customers and partners. Nevertheless the ability of generating revenues is the most important capability of a business model.
17 The KMLab Inc definition can also be found online at http://www.kmlab.com/4Gwarfare.html
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Many enterprises of the new economy have not payed enough attention to the revenue generating ability of their business models. We think that this is one of the major reasons why the new economy has been in trouble (falling stock ratings, drop of wages, ...) since the NASDAQ crash in March 2000 (Brandtweiner, 2001).
The definitions thus far, whilst lacking in unanimity, do highlight the important role of the business model in modern commerce. Furthermore, they seem to underline the role that value creation has in the overall process and thereby the need for the organization to focus on the customer who will be the arbiter of quality and consequently value. The assertion that business models have not been well understood or enacted in the technologically enabled environment of the modern marketplace, suggests that those universities moving to increased use of the web will also need to study, and then adopt, suitable business models.
After being critical of some definitions for being too abstract or conflated with business unit strategy, Chesbrough and Rosenbloom (2002, pp. 533-534) offer what they consider to be a detailed and operational definition of their own as follows:
The functions of a business model are to: • articulate the value proposition, i.e. the value created for users by the offering based on the technology; • identify a market segment. i.e. the users to whom the technology is useful and for what purpose, and specify the revenue generation mechanism(s) for the firm; • define the structure of the value chain within the firm required to create and distribute the offering, and determine the complementary assets needed to support the firm’s position in this chain; • estimate the cost structure and profit potential of producing the offering, given the value proposition and value chain structure chosen; • describe the position of the firm within the value network linking suppliers and customers, including identification of potential complementors and competitors; • formulate the competitive strategy by which the innovating firm will gain and hold advantage over rivals.
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Whilst this is certainly a comprehensive set of elements that serve to clarify the components of the business model it too can be criticised as the set does not comprise a definition in a scholarly sense. That aside, their attempt, and those of the researchers provided previously enable the current discussion to move forward with a better understanding of the essence of what a business model might be. Clearly there is a lack of agreement on use of the term though each application ultimately points to the purpose or intention of the business model, which is creating revenue by means peculiar to the firm or organization. With that in mind it is possible to see the business model as a tool of analysis and also as being a depiction of reality when the model itself is presented in textual or graphical forms. What is clear from the definitions is that a business model is intended to depict the way(s) in which a firm intends to make its way in the marketplace. A useful way to consider the business model is to see it as an “architecture of the revenues”, a phrase that Chesbrough and Rosenbloom use during their discussions. This architecture incorporates the customer, mechanisms for value adding and payment, relationships with suppliers, marketing, and the major activities found in the organization’s value chain (Chesbrough and Rosenbloom, 2002, pp. 529-534).
In their discussions, Chesbrough and Rosenbloom make another point that is relevant to the current discussion. They claim that “the technological management literature shows that firms have great difficulty managing innovations that fall outside of their previous experience, where their earlier beliefs and practices do not apply” (2002, p. 531). Here the universities could well be faced with new paradigms as the information and communication technologies related to the web are utilized to offer distance education. As a new medium, the web not only presents pedagogical challenges for those involved in distance education but also requires that the administrators of the distance education operations consider and then confront the new business paradigms that are raised. In this scenario new business models may well be appropriate and it comes as no surprise that universities the world over are experimenting with the ways in which they can create value and reap economic reward from business models that are continuing to evolve. Not all are succeeding in these attempts, however.
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The recent demise of the United Kingdom e-University (UKeU) (Garrett, 2004a, p. 1-5; Rood
2004) is a timely reminder that business models, even with new ventures, need to be well thought through. Garrett reports that there has been significant media coverage of the demise of that start-up institution and that criticism has been levelled at the UKeU for “pursuing an unrealistic business model” (2004, p. 1). The failure of the UKeU can be added to those of
NYU Online, Fathom, and Scottish Knowledge each of which has attempted to capture market share with bold initiative. Universitas 21 Global is another international venture which has struggled to fulfil expectations (Rood, 2004). Their incapacity to generate revenues sufficient to sustain their early years in competition collectively point to, and mirror, the lessons learned from earlier failures in the business world. It is clear that the new medium of the web has its own share of pitfalls for those who would wish to seize the advantages that have been heralded for some years. Effective business models would seem therefore to be among the primary concerns for any university, or other entity, wishing to establish itself in the new territory of higher education enabled by the web.
Osterwalder and Pigneur18 from the University of Lausanne have been publishing frequently in the past few years and concentrating on the development of what they refer to as their business model ontology (Osterwalder & Pigneur, 2002, 2003a, b, c). Their work is an attempt to integrate a variety of aspects of electronic commerce, which till now they argue, have been kept separate. They provide a brief overview of other literature relating to business models criticizing some for being too simplistic or for being focussed on only parts, rather than the totality, of the business environment of the organization. Of use here is their attempt to provide
18 Yves Pigneur is a Professor at the University of Lausanne, Switzerland, whilst Alexander Osterwalder has recently completed his PhD under Pigneur’s supervision. Pigneur has an extensive list of recent publications alone and with others at his website. For further information about several of the issues discussed here see http://www.hec.unil.ch/yp/ Osterwalder has been helpful as well and is keen to pursue research with others interested in the business model and its development. His email address is [email protected] – once in contact he may see fit to provide access to his publications as he has done for the author of the current study.
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a formal means to understand the relationship between business strategy, business technology and business organisation (2003a, p. 2-4). They propose their ontology (they equate this with
“rigorous framework” 2003a, p.1) could be a “federator” (2003a, p. 2) to draw these otherwise separated and disparate elements, including the different people involved in their formulation and enactment, together.
In attempting to federate the three elements they adopt a framework that addresses what they see are critical foci for a business model, as follows:
• [Product innovation] What business the company is in, the product innovation and the value proposition offered to the market? • [Customer relationship] Who the company’s target customers are, how it delivers them the products and services, and how it builds strong relationships with them? • [Infrastructure management] How the company efficiently performs infrastructure or logistics issues, with whom, and as what kind of virtual enterprise? and finally, • [Financials] What is the revenue model (transaction, subscription/membership, advertising, commission, licensing), the cost model (cost of goods sold, operating expenses for R & D, sales and marketing, general and administrative) and the business model’s sustainability? (2003a, pp. 1-2; 2002, pp. 2-3)
For Osterwalder and Pigneur, the term business model is vexed—“a buzzword with no commonly accepted meaning” (2003a, p. 2)—and they attempt to overcome that, and the criticism they level at other offerings, by providing their own definition as follows:
A business model is nothing else than a description of the value a company offers to one or several segments of customers and the architecture of the firm and its network of partners for creating, marketing and delivering this value and the relationship capital, in order to generate profitable and sustainable revenue streams (2003a, p. 2)
Perhaps their Swiss language skills do not translate well into English but this definition seems awkward. Their intention, however, is clear when the definition and the ontological framework
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are brought together as a part of their detailed discussions in the various papers they have produced. They produce a systematic analysis of the various component parts (people, policy,
ICT, finance, infrastructure) and try to meld these into a viable whole. Their intention in expanding on their framework is to “create a shared and common understanding of the domain and facilitate communication between people and heterogeneous and widely spread application systems” (2003a, p. 3). The framework represents the business logic of the firm and how it can lead to value creation.
They go on (2003a, p. 3) to clarify the need for a business model in the following tract:
... we perceive business models as the conceptual implementation (blueprint) of a business strategy that allows to align strategy, business organization and information systems and represents the foundation for the implementation of business processes and information systems. The role of the manager is to adapt a company’s business model to external forces, such as competition, legal, social or technological changes in customer demand.
From their input it is evident that the business model plays a significant role in helping an organization move to use of ICT-enabled approaches to business. Formulating a business model requires that an organization understands clearly who their customer is, how value is created and delivered by the processes they perform in their value chain, what technical infrastructure is necessary to enable the model, and what options the organization may have within its competitive environment. Choice of business model will also determine the extent of returns the organization can hope to achieve, and this itself will depict the relationship between revenues generated and the costs borne in producing value for the customer.
In terms of the current study the business model can be seen as one point of confluence of the themes and threads that have been examined thus far. The business model is the enabler for the creation of value for the customer, is closely linked to the value chain, and is informed by the experiences of businesses elsewhere. Enabled by modern technology, electronic commerce has
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led to the creation of distinctively new and innovative approaches to the creation of value for the customer. The challenge for the universities in Australia is to similarly conceptualize their own business models so that they can engender value creation along their value chains in ways that have not been standard practice in days passed. The literature dealing with the experiences of commercial organizations as they move to develop electronic commerce approaches to their business will provide one avenue to become informed. That literature will provide many and varied insights as to how the universities can hope to construct the architecture of revenues suited to their emerging needs. Not least among those insights will be the need for alignment between ICT spending and organizational structure and purpose which has been constantly reiterated in the literature over the past decade (see, for examples, Morrissey, 2002 p. 2421;
Ward & Peppard, 2002). To gain an understanding of how the universities are responding to the need to create an architecture with new business models it is time to move to an examination of the variety of initiatives that have been observed in the literature.
7.5 Business models and electronic commerce
Rappa19 (2004) proposes a taxonomy of business models which are able to be differentiated among firms using the web to conduct their operations. He makes clear that his taxonomy is neither exhaustive nor definitive and argues that the models will continue to evolve. He is of the view that whilst new approaches will be invented, “tried-and-true” models (presumably pre- dating the web) will also serve as the basis for reinvention. Appendix 4 depicts Rappa’s full taxonomy and includes the basic classes as well as their essential sub-elements. A summarized and composite view is presented in Table 7.1 to assist reading.
19 Professor Michael Rappa is, according to the web source for this taxonomy, the Alan T. Dickson Distinguished University Professor of Technology Management at North Carolina State University, Raleigh, North Carolina.
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Table 7-1 Summarized form of Rappa’s business model taxonomy
(Source: edited from Rappa, M., 2004 Business Models on the Web.)
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The taxonomy will serve a dual purpose in the current study: first, it serves as a summary of commonly found approaches that have been refined since the introduction of the web; second, it acts as a basis for reflection as the discussion moves ahead to consider the business models that universities are using, or may move to use in the future. If the universities replicate the processes of discovery and experimentation that commercial organizations have undertaken over the past decade, then Rappa’s taxonomy will serve as a pointer to the likely permutations, and indeed the broad range, which their business models might represent. Investigating the business models that have been developed by commercial organizations for use in electronic environments and comparing them with the models that are being used by universities will also help to further an understanding of the relationship between electronic commerce and distance education.
Rappa (2004) makes two other important points in his treatment of business models: the first of these is that firms may combine two or more models (e.g. advertising and subscription models) and, the second is that firms in the USA are starting to see their business models as a form of intellectual property deserving of patent protection. An observation that stems from these points is that electronic commerce has led to an evolution of approaches to the way firms organize themselves, significant enough to represent new intellectual property. That evolution has taken time during which organizations have been forging new ways of doing business. It follows that universities too will have to reconsider their approaches in electronically enabled environments and that their business models are also likely to go through an evolutionary process as they seek an “architecture of revenues” that satisfies their needs. The universities will be looking to generate revenues from their education activities and will also have to review their value chain processes so that they can reduce the costs encountered in the creation of value.
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Taking a different approach to that of Rappa, other researchers and commentators have contributed to understanding the development and utilization various of business models in the modern world. Tapscott et al (2000) have also developed their own taxonomy of business types (later equated with models) based on their concept of the business-web (b-web) which they saw (2000, p. xi) as the “emerging heir to the industrial-age corporation”. A condensed account of the five separate forms of the b-web they derived is as follows:
• Agora – the Agora, based on the public meeting area of ancient Greece, facilitates the meeting of buyers and sellers who are then encouraged to negotiate mutually acceptable prices. eBay is offered as an example of one such Agora by the authors which provides a link to Rappa’s brokerage model (Auction broker sub-element). It is not clear how universities and their products and services would fit into this type of b-web, if at all. • Aggregation – In an Aggregation, a firm positions itself between the producer and the buyer and provides a value adding capability in doing so. Retailers and wholesalers exemplify this type of approach. Wal-Mart and E*Trade in the US are given as examples. Again it is not clear how universities operating online could be seen to fit this type of approach, unless they are clearly operating as brokers bringing together other institutions and essentially providing intermediary value adding and, if that were the case, then the now defunct UKeU may have been an example. Australian universities do not fit this role. • Value Chain – In a Value Chain, the provider “structures and directs a b-web to produce a highly integrated value proposition” (2000, p. 33) to meet the needs of a customer or an opportunity in a market. The university in this scenario may not undertake all the activities involved in bringing the product or service to market and others may be involved in the chain. As discussed earlier in the current study this type of b-web has a high level of accord with the operations of modern universities. Whether they are dual mode Australian institutions or virtual universities with an emphasis on web based facilitation of delivery of higher education, the Value Chain is an appropriate mechanism through which to study these institutions. • Alliance – An Alliance is according to the authors, the most ‘ethereal’ of the b- webs and attempts to achieve high value integration without hierarchical control. To do this it has to rely on the participation of the members of the electronic community for their contributions for the design of goods and services, creation of knowledge, or shared experiences. Linux, the user-driven and created software system is one example. In the field of distance education the only seemingly
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affiliated aspect would be that achieved in fora such as threaded email related to subject support for students. Here the students would be creating value by contributing their own views and experiences so that they all benefit from each other. At the institutional level itself it is difficult to envisage the university as an example of an Alliance though component parts may approximate this mode. • Distributive Network – The authors distinguish this b-web as being important to facilitate the general activities of the economy and they provide banks, postal services, telephone companies and power suppliers as typical entities of this form. Universities in any guise do not seem to fit this category (Tapscott et al, 2000, pp. 30-36).
Tapscott et al differentiated the five variants of b-webs along two dimensions—control (self- organizing or hierarchical) and value integration (high or low) as shown in Figure 7.2:
Figure 7-2 The B-Web typology (Source: Tapscott et al, 2000, p. 28)
In review, the business model work of Tapscott et al does not seem to generate a high level of compatibility with the operations of modern universities. The insight provided from understanding their Value Chain b-web has largely been discussed in the current study already and the other types of b-web do not readily lend themselves to the current analysis. What has been important, however, has been the realization by these authors that the electronic medium
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of the web has instigated innovation in terms of business models. Their input therefore reinforces this point as well as enhancing the role of the value chain in analysis of the distance education operations of the universities. The b-web types do not have a great level of overlap with the business models observed and provided by Rappa though there is some intersection within the Aggregation b-web.
This overview of their contribution also points, at a meta-analytical level, to the on-going development of thought about the changing nature of business models in modern commerce.
Whilst the business model views of Tapscott et al has not been of major use in the current study it is significant that they saw a need to study the emerging forms of organization that the web was enabling or encouraging. What is important to the current study, was the fact their analysis was predicated on the notion of digital capital, which for them resulted from:
the internetworking of three types of knowledge assets: human capital (what people know), customer capital (who you know, and who knows and values you), and structural capital (how what you know is built into your business systems). With internetworking, you gain human capital without knowing it; customer capital from complex mutual relationships; and structural capital that builds wealth through new business models (Tapscott et al, 2000, p. 5).
Tapscott et al (2000, pp. 26-27) provide further clarification of the three critical knowledge assets that underpin their notion of digital capital, in the following way:
Knowledge-management theory describes human capital as the sum of the capabilities of individuals in the enterprise. It consists of skills, knowledge, intellect, creativity, and know-how. It is the capability of individuals to add value for customers. ... Customer capital is the wealth contained in an organization’s relationships with its customers and, according to most thinkers, its suppliers. ... When internetworked in your b-web, customer capital becomes relationship capital. ... Structural capital consists of codified knowledge and business processes that enable an enterprise to meet market requirements.
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According to Tapscott et al, the use of electronic networks, which they conflate with the digital world/economy, causes profound changes in or to the three knowledge assets. It is the possibilities that are then opened up that are the focus of their analysis. The underlying implication is that the world of commerce has been changed irrevocably by the advent of the commercial use of the web and that new models for business, whilst still being formulated, are inevitable. By deduction, one message that universities can glean from this work is the value that is contained within their processes. As those processes are reconfigured, refined, or re- engineered then the knowledge-based capital will be affected. Successful business models therefore stand to assist the universities in adding value throughout their own operations as well as to the customer/student.
Given the relative infancy of the web it is clear that analyses such as those of Osterwalder and
Pigneur, Chesbrough and Rosenbloom and Tapscott et al are merited, and it seems clear that researchers will continue to attempt to understand the implications of the electronic media for business operations and for trade in general. Whether the universities have been paying attention to these analyses, and conceptual developments such as those relating to the three layers of ‘capital’, and whether they see the need to appropriate, or develop, new business models is the topic of the next section of discussion.
7.6 Universities and business models 20
It is self-evident that existing universities must already have in place, some form of operational business model even if they have not attempted to define, map or detail such a model.
Universities are complex organizations and managing them is an increasingly onerous undertaking.
20 For information about electronic commerce and Vocational Education and Training (VET), rather than universities, see the work of John Mitchell. His PhD thesis looks at these areas in Australia. He has published several titles relating to electronic commerce as output from his business (John Mitchell & Associates). See his publications online or email him at [email protected]
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The emphasis in the current study is on the changes afoot in the modern university and in the higher education sector in general, rather than the existing mechanisms for managing the organization. So the focus here is on the implications of the adoption of electronic media, and the impact that this has on the universities’ distance education activities. These web-enabled changes, it has been argued, are leading to new forms of business and to new forms of competition in which business models may need to be re-enacted or created afresh. With that in mind the discussion now moves on to consider the business models available to the universities as they move toward greater use of electronic media in their distance education and general value chain activities.
Standing Stones Ltd emphasized the value chain in their analysis, though they adapted it for their purposes, in order to understand better the means by which Alberta’s universities might seek to add value and compete effectively in the environment of ‘e-learning’. Their investigation integrated the value chain with an analysis of business models being used by universities “offering web-based learning” (2000, p. 30). Like Rappa, they too suggest that universities might use a combination of models. Their models are focussed on distribution channels rather than revenue generation or provider characteristics. In prefacing their analysis of the business models the authors of the Standing Stones report made the point that most of the public universities they studied were using the web as a supplement to their conventional activities. This seems to be in accord with the Australian study by Bell at al (2002) and the two studies suggest that public universities in Canada and Australia were not, at that stage, using the web with fully developed business models. The use of the web as a complement or supplement to conventional delivery also supports the trend toward flexible delivery and blended learning on campuses. Here the ICT is enabling further support for on campus students rather than being seen simply as an enabler for distance education.
Though this report has produced a selection of business models, it is not as extensive as the range provided by Rappa, which was derived from the practices across the realm of commerce
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and industry. Consequently there will be a limit to the degree of overlap and similarity that can be expected when comparing the two sources and the models they have included. Each of the models appropriate to universities, provided in the Standing Stones report, needs to be examined in order to reveal their features and the way in which they add to the current investigation.
The Standing Stones report concentrated on the six business models, shown in Table 7.2.
Table 7-2 Business models proposed for university use
(Source: Standing Stones, 2000, p. 31)
The following section draws heavily on the original work, (2000, especially pages 30-54, which
deal with business models) as it attempts to illuminate the range of models and their application
within universities.
Direct Sales/Virtual Universities. The University of Phoenix and Jones International
University, according to the authors, use this model. They also claimed it was the most
common business model in use though significant variations were found in its implementation.
The universities that use this model tend to undertake all the value chain activities resulting in a
vertically integrated organization. Several of Australia’s dual mode, and also the specialist,
distance education providers exhibit aspects of the direct sale model including Charles Sturt
University, University of South Australia, and the University of Southern Queensland. These
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universities develop their own materials, do their own marketing, provide all student support by themselves, deliver the materials to students (using a range of technology including the web), and provide for the teaching and learning environment required of a higher education institution.
As the Bell et al (2002) report indicates the web can be used to differing degrees to achieve realization of this model. Furthermore, as that report and others have indicated, the courses using the web more extensively tend to be focussed and narrow in their subject matter. IT and business subjects are prominent as too are health related subjects. One benefit of using this business model is that students have little concern about the need for credit transfer as the university is able to deliver the entirety of the course of study on its own.
The providers on the other hand are able to focus their marketing and they can also ‘cherry pick’ the subjects that they believe will offer the most likely return on investments, especially when the course delivery is web enabled or where student support is provided via the web.
When they choose to do this they also open up an international market space for their education thereby potentially increasing the numbers of potential customers for their products and services. The corollary of this is that are also exposed to increased competition in that same international market space.
The fact that the universities using this model are vertically integrated also means that they should be very diligent in self-examination, especially when it comes to their value chain activities. Whilst having total control has its merits, the management and business literature of the past decade has shown that commercial organizations have been moving to focus on core business activities. This may mean that disintermediation and reintermediation, discussed in chapter 6, may become more commonplace for universities as they seek the optimal solution to their operations. An area where this seems to be happening is in the provision of technological operating platforms. One example of this is detailed in the University of Southern Queensland
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(USQ) case study21 provided by Ryan and King (in Bacsich (Ed) 2001, & 2004 update) which reported that NextEd, a Hong Kong based company, had provided the operating platform for the USQ push into web based delivery. Neither the University of South Australia (UniSA) nor
Charles Sturt University (CSU) has moved to external platform providers at this stage, preferring instead to develop largely in-house solutions (see Ryan and King 2001, and 2004 update pp. 51-58, for a case study of the UniSA development).
For the Australian universities involved in distance education the direct sale business model may have other disadvantages as well, particularly in the area of cost efficiency. In order to generate economies of scale the institutions need to enrol large numbers of students. Where the
‘mega universities’, i.e. those with over 100,000 students (Daniel, 1996), have been be able to sustain large numbers of student enrolments, Australian universities typically do not have access to populations that can support such initiatives22. Without partners, universities using this model have to meet all costs involved in the value chain by themselves. This model may also limit the capability of the institution to remain flexible and responsive to demands in the marketplace because the significant investment required to become competitive will tend to lock the institution into its own chosen selection of subjects.
By comparison the University of Phoenix, a for-profit institution, tries to ensure small group learning and seemingly manages to make ends meet by reducing costs to an extreme extent as discussed earlier in this study (see Cunningham et al, 2000 and CVCP, 2000a & b, for further discussion of UoP).
21 Another full case study of value is called Online Teaching and Learning in Higher Education: A Case Study produced by Postle et al for the Australian Department of Education, Science, and Training (DEST) in 2003. It is available online from the DEST (publications) website – http://www.dest.gov.au and details a comprehensive look inside the USQ move to use of the web for distance education. 22 The mega-universities generally only use the web as a supplement to their print-based materials.
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For example, staff are mainly contracted and do not undertake research as would be expected of academic staff in Australian universities, thereby allowing staff salaries to be kept to a smaller proportion of operating costs.
One final point worth mentioning here is that the Standing Stones report makes use of a stylized format to represent the various business models. In those graphics they depict a variety of flows from the institution to the student/learner. These flows include items such as content, learner support, accreditation, instruction, agreement, and payment. However, they also depict a flow from the student to the institution and in each case (for some reason it is not shown in the
Partnership/Joint Venture business model) this is labelled ‘tuition/fees’. How this item varies from that of ‘payment’, which travels from the institution to the student is not made clear though it may be meant to indicate that the mechanisms to enable electronic payment have been made available by the institution? More importantly, however, is the absence of a flow from the student/learner back to the institution that could be labeled ‘information’ and which is of significance to any university wishing to ensure that the value chain is equipped with mechanisms for feedback. These are critical in the pursuit of customer-centric approaches to commerce and the omission is raised here because of the potential loss of opportunity that the failure to collect student feedback represents (see Schneider 2003, Ch 3 for further discussion).
Increasingly, customer relationship management (CRM) is being seen as a critical component of value chain optimization and information gathering from customers is an inherent and central portion of that approach. Tapscott et al (2000, p. 192) emphasize this in the following statement, that is related to their earlier views on digital capital and knowledge assets:
The wealth embedded in customer relationships is now more important than the capital contained in land, factories, buildings, and even big bank accounts. Relationships are now assets. This relationship capital accumulates and provides a new foundation for marketing and sales revenue. A firm’s ability to engage customers, suppliers, and other partners in mutually beneficial value exchanges determines its relationship capital.
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As chapter 5 has demonstrated, knowledge-based goods and services have become central elements of modern economies and the teaching and learning activities of modern universities are of this type. Failure to encompass reflection on these activities would be potentially disastrous for universities in their initial forays into the market place enabled by the web. In such a market space much of the interaction is electronically mediated, eliminating the significant ‘body’ language that occurs in face to face meetings, representing a potential reduction in the transfer of information from the student to the institution. Textual transmission on the other hand is less ephemeral, leaves a trail, and can be analysed by an organization in order to gain critical insights into the student/customer perspective.
The ‘virtual university’ (VU) aspect of this business model does not receive a great deal of attention in the Standing Stones report, possibly because these forms are relatively new in higher education. Though a number of such institutions have come and gone, according to the authors of the report, they have tended toward use of this business model. One possible reason for doing this is that all profit/revenues go straight back to the VU offering the education.
Since the report was written in 2000 there has been a proliferation of literature dealing with virtual universities in many different countries, though systematic analysis of those organizations and their business models has not been as prolific.
Partnership/Joint Venture. In this business model two or more institutions combine to provide higher education. The motivation for the institutions is to find synergies among their respective strengths/needs and "they typically share curriculum or delivery of courses"
(Standing Stones, 2002 p, 35). Students may benefit from having increased access to education and may benefit from enhanced credit transfer arrangements between the partners as well as potentially having a greater range of subjects and courses from which to choose. Partners stand to benefit from being able to share costs (e.g., in course development or delivery), by having a greater skill and knowledge base from which to draw in their activities. Combined marketing drives may benefit partners as well and they may be able to concentrate service provision so
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that clients of all partners go to the same place to gain assistance (e.g., help desks, information bureaux). MIT in the US has formed such a partnership with two Singaporean universities according to the report.
An Australian example is the recent move by Charles Sturt University (CSU) to partner with the company called IT Masters23. Under this agreement IT Masters undertakes most of the marketing responsibilities and the forging of new agreements with large companies to provide access to ongoing education focussed on ICT. This partnership interacts with industry giants such as Microsoft and Cisco to provide formalized higher education and accreditation for industry professionals. They study a combination of industry based certificate programmes and
CSU post-graduate subjects leading to graduation from CSU with a full masters degree as well as industry level certification from the industry partners e.g., Microsoft Engineers Certificate.
The partnership now extends to the delivery (wholly via distance education with some online components for the part of CSU) of four masters degrees and, as the current study nears its end, there is further discussion of a fifth degree focussed on the further education of teachers of IT related subjects in State schools.
In this partnership, CSU provides half the course of study and a means for the students to gain access to a qualification that will endure for life as opposed to the industry certificates which have a life-span of about three years. IT Masters brings its expertise as a broker to the arrangement as well as its network of industry contacts.
23 Note that Thomson Prometric is also involved in the partnership with their role being to provide an online examination platform so that students enrolled in different places around the globe are all able to be concurrently examined. See http://www.prometric.com/PressRoom/CharlesSturtUniversity.htm for further details. See also http://www.microsoft.com/australia/presspass/news/pressrelease/mscharlessturt.aspx for information about the partnership between IT Masters CSU and Microsoft (April 2003) or http://www.microsoft.com/australia/presspass/news/pressreleases/worlds_first_masters_qualifications.aspx for further information about the original arrangements (Nov 2002).
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The fact that CSU has decided to deliver their subjects via distance education, with varying levels on web use, means that the typical benefits of this mode are available to the students who are almost all full-time working industry professionals. The additional players in this partnership do however require that fees for the courses are higher than for subjects in comparable higher education studies. Via this partnership, however, students gain considerable benefit from the mix of industry and university subjects and the dual qualifications they earn.
Without such a partnership it is difficult to envisage such a blend occurring. Furthermore, the opportunity arises for increasing the scale of the operation enormously. Web enabled distance education in this case means that the courses and the overall arrangement can be moved into any English speaking country in the world where IT certificates and degrees hold value.
Several Australian universities have also entered into joint venture agreements with offshore partner institutions. Universities such as Monash, Deakin, RMIT, Curtin, Swinburne and CSU have each established contracts with partners in foreign countries (such as South Africa for
Monash; Hong Kong, Malaysia, Sri Lanka, and the U.K. for CSU) so that their higher education products can be delivered to the local population (see Breaking News 11th Nov 2004,
Observatory on Borderless Higher Education). Often the arrangement led to a local college being the partner for a foreign international university under twinning or franchising formats.
Branch campuses were also another of the permutations of the joint venture agreements. More applicable to the use of the web are those agreements that effectively provide a franchise for the offshore partner to operate as an independent entity under the auspices of the Australian partner. CSU has this type of agreement with London School of Commerce whereby that institution provides the staff and facilities to provide CSU education in London, though all the activities are subject to ‘moderation’ by staff from CSU.
Brand Brokers. Under a brand broker arrangement a third party, typically a private company, works with one or more institutions of higher education to offer courses developed by the universities. Marketing is often done by the broker using the prestige of the members of the
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pact as a basis to gain a foothold in the market place. The use of the universities’ brand is an important component of the commercial arrangement and the broker’s role is often to promote the brand(s) in the target markets.
Providers stand to benefit because expertise that they may not otherwise have in-house is now available especially in the advertising and marketing areas. The broker may also have responsibilities for quality assurance and student support thereby contributing to the combined value chain and value adding capabilities of the universities involved. With quality assurance duties the brokers are determined to improve value to clients (students) and often institute feedback mechanisms for this purpose. Fine tuning of course materials and curriculum can result from this attention to student learning needs. Student requirements for social interaction and for learning support are also professionally handled in a well-run brokerage arrangement.
Students benefit from the improved service delivery as well as from the improved learning materials and environment in which learning takes place. They may have increased breadth of choice in subjects and courses depending on the nature and membership of the broker arrangement. Their qualifications may also attain additional prestige depending on the membership, and relevant standing of the institutions, in the brokerage.
Members need not be from one country and it would not be unusual to witness reciprocal benefits being available to the member universities. A lesser entity may need the prestige and support of a more illustrious university in order to raise its own standing whilst the allure for the better placed institution would be access to an international market where local knowledge and culture are important considerations (see Bates, 2001; D’Antoni et al, 2003, for discussions of the importance of these matters).
The drawbacks in this business model are that the broker has an important role to play and much of the success or failure can hinge on their performance. There are also potentially
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damaging issues that stem from loss of reputation by participating members. Furthermore, the brokerage may actually submerge identity rather than elevate it for some institutions.
The UK e-university was established along the lines of brand broker business model. Having run into bad times this institution is now being wound down amidst a furore of political and media criticism (see Garrett, 2004a & Rood, 2004 for commentary). Garrett, Deputy Director of the Observatory on Borderless Higher Education in the UK, is well placed to make his comments. He said that the UK e-University (UKeU) was a private company “majority owned by the U.K. higher education sector. It did not award its own degrees, instead contracting with
U.K. universities to offer theirs. The company focussed on infrastructure development, course development support, quality assurance, and marketing.” (2004, p. 1). Garrett (2004a, pp. 2-3) was of the view that the UKeU suffered from four major problems:
• timing - it made its debut immediately before the so-called dot.com crash in 2000 • focus - it was focussed on online learning as an alternative to conventional higher education, rather than as a complement or supplement and the market for this style of higher education was at the time unproven • branding - according to Garrett the UKeU failed to differentiate itself from what already existed in the U.K., and • platform - the fourth problem was that the UKeU decided to develop its own electronic platform rather than use existing solutions. It spent millions in doing so and, to some extent, delayed focus on its core business activities.
Given the nature of a brand broker business model it would seem that at least three of the critical contributions that the broker has to make were questionable in the UKeU instance.
Garrett (2004a, p. 1) claims that “much press coverage has accused the venture of wasting public funds and pursuing an unrealistic business model.” What is clear is that the higher education sector is still learning how to enter and operate effectively in web-enabled environments. It also seems reasonably clear that the problems will not only stem from lack of experience in the online environment but will also emanate from a lack of customer confidence in the quality and value of studying online.
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Open Learning Australia (OLA) is another of the commercial companies that operate using this business model. As discussed in chapter 3 the OLA was originally:
established in late 1992 with initial Commonwealth Government funding. OLA, a company representing a consortium of Australian universities, acts as an educational broker for the higher education sector in Australia, offering people, regardless of age, location or educational qualification, the opportunity to study university and TAFE units leading to diplomas, degrees and other qualifications. (Walker, 1998, pp. 30- 35).
It continues to operate in a self-sustaining manner though its progress seems constrained. It does not offer its own qualifications and students choosing to study via the OLA, whilst able to move reasonable freely between provider institutions, graduate from the member institutions not from the OLA itself.
Mall/Aggregator Brokers: The principle behind this business model is by analogy much the same as in shopping centres. The idea is to provide a central location for a range of goods and services with benefits accruing to those who choose to be a part of the agglomeration by virtue of their proximity. In the higher education field the idea translates to a provider, producing an electronic mall that aggregates the course and subjects offerings of any number of institutions.
This has typically been done through the provision of an electronic portal, which can be visualized as the equivalent of the ‘yellow pages’ in a telephone directory. The portal presents an informational database to viewers with the fees payable to the portal provider coming from effective purchase of subjects or courses via their mechanism. Users are able to search and compare prices across the institutions that are represented in the portal space. Portal providers may also charge fees for adding an institution to the portal (see Katz & Associates, 2002 for further discussion).
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Standing Stones report that this business model is becoming less common in higher education partially because there can be a lack of added value and partially because universities are capable of establishing their own web sites. Hungry Minds is put forward as one example of a successful mall broker and they seem to have gone to greater lengths to provide extra services for the participating institutions. Yahoo is sometimes offered as an example as well, but others
(see Kemp, 2002) argue that it is more a gateway than a portal,
though the terms are inclined to be overlapping and conflated in the literature. Indeed Kemp
(2002, p.4), citing Katz offers the following definition among a number of others to show that the term is still evolving:
The portal ... is more than a gateway. It is ... a unifying principle that may enable organizations – including colleges and universities – to leverage their investments in enterprise systems, in data warehouses, in reengineered institutional processes, and in staff talent (Katz, 2002, 2)
The term, however, is fraught because many universities are developing their own portals thereby confusing the usage as no third-party, such as a mall/aggregator broker, need be involved in such instances. In her review of the literature, Kemp concludes that there is some agreement about the term portal, and that it can be characterised by its:
• Bringing together at a single point of access the learning and administrative resources and systems of an institution for the whole institutional community including academic, research, support and administrative staff, students (potential, undergraduate, postgraduate, CPD) and alumni • Allowance of personalisation by the user • Use of authentication/single logon by the user • Role definition of the user to tailor appropriate access to the portal and allow development and change as the individual’s circumstances change, for example one individual’s role and access might be initially given as an undergraduate, become a postgraduate researcher and finally a member of staff or alumni • Provide security of resources and data. (Kemp, 2002, p. 5)
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Noting these differences in usage helps to explain why the Standing Stones report is of the view that this business model is becoming less common in universities.
Returning to their commentary of this form of business model, they are of the view that benefits to users will depend on the nature of the contract between the provider institutions and the mall/aggregator. Efficient marketing seems to be one likely benefit and it is possible that credit transfer arrangements could also be arranged. The use of these portals would seem to be a good idea at a national level in Australia so that prospective students, whether domestic or international, can find the levels of detail they need to make decisions about their intended field and course of study. To some extent EdNA (Education Network Australia) can be viewed as a mall/aggregator broker though it is not its intended or sole reason for existing, nor is EdNA restricted to higher education.
One downside to the use of the mall/aggregator model is that it places side by side, competitors in the field of higher education. Furthermore, the portal approach does not specify the target audience that should view the web site and the advertising therefore is likely to be less effective in gaining new enrolments. Current participants also have no control over the other members of the portal nor over which other institutions or companies can join. So whilst the mall broker will be seeking ever larger numbers of subscribers there may be a diminution of perceived quality if there is a lack of control over the types of institutions that are represented.
Ryan and King (2004 update, p. 37) describe Open Learning Australia as “a portal to all
Australian universities’ distance education offerings.” Though that may be correct, the agency itself is unlikely to see itself as a mall/aggregator broker especially since it has expanded its areas of interest to become involved with the Technical and Further Education (TAFE) sector.
This point is included simply to highlight the capacity that exists for overlap in these business models.
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Regional Consortia: This business model received the greatest amount of extrapolation in the
Standing Stones report (2000, p. 42-52) where they advise that this business model is a collaborative approach taken by provider institutions (often locally) to share activities so that the learner benefits and efficiency is improved among the participants. The model is based on a belief that co-operation is the best approach to take to ensure flexibility and responsiveness to market pressures and demands. Consortia are claimed to have two primary goals—enhanced service to domestic markets, and international export of courses programs and expertise. Some newer consortia combine both goals in their activities whilst others concentrate on a single goal.
Consortia are often run through a third party, “some form of association or non-profit corporation that acts as a brokering agency between the member institutions and learners. The brokering agency has a combination of academic, technical, and business staff for implementation” (Standing Stones, 2000, p. 43). Some consortia form independent companies to undertake the broker role. The broker in whatever guise typically has the role of providing information for learners about the courses that can be undertaken.
Consortia have a range of structures, goals, scope, and agreements and examples includes the
Western Governors University in the USA, Contact North in Canada, Scottish Knowledge
(until its closure in 2002), the UKeU was also able to be viewed via this lens, and the California
Virtual University. Universitas 21 (U21), the brainchild of Alan Gilbert, the former Vice
Chancellor of University Melbourne, is a major example of a consortium though not all member institutions are from Australia. Ryan and King (2004 update) state that U21 was formed in the mid-1990s and had intended to join with Rupert Murdoch’s News Limited in
1997 though that arrangement never became fruitful. It did however subsequently join forces with the Thomson Corporation and in 2001 signed up to the alliance agreement now known as
U21 Global (see their web site at http://www.u21global.com). U21 Global was established as a joint venture between Thomson Learning and U21 (15 universities spread across the planet) to
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operate as an online university. This international consortium also has quality assurance subsidiary known as U21pedagogica Ltd. (Ryan & King, 2001, p. 23-25). According to Ryan
& King (2004 update, p. 28) the courses to be offered via U21 Global will be different from those of U21 so that there will be no competition within the consortium for students. The fact that Thomson owns 40% of WebCT also seems to ensure that the consortium will be well supported in terms of their operating platform and suggests another reason for supporting the consortium model. The members bring different skills, knowledge, capabilities, software expertise, networks and political connections, as well as finance to the arrangement and, in the case of U21 and its subsidiaries, indicates the level of commitment that may be necessary in order to compete in a marketplace that is still evolving and that is less than perfectly understood.
As a harbinger of the level of interest in global approaches to competition in higher education,
Australian universities will need to be mindful of the activities of U21, U21 Global as well as a number of other active consortia if they are to seize opportunities to export Australian education. The two reports from Cunningham et al (1997, 2000)—the borderless education reports—were ostensibly one reaction from the Australian education ministry to investigate exactly this type of threat to higher education in Australia as well as to the export of higher education by Australian universities. Hard data about the operating success (or not) of consortia such as U21 are hard to come by (possibly because of commercial-in-confidence sensitivities) though this group seems to be slow-moving in attracting large numbers of students to their courses. Nevertheless, the history of development of electronic commerce with commercial organizations suggests that this is typical of the innovation cycles and U21, having taken its time to lay the ground work for its own operation internationally, may well be demonstrating the degree of preparation and planning that is going to be needed for successful competition. Building brand recognition has been important in the consortia and the Thomson
Corporation has been an integral component in that exercise as well. Australian universities with an interest in expanding the range, scale, and scope of their offerings internationally will
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have serious competition for the territory. Finding an appropriate business model will be among the matters with which they have to deal. Similarly, integrating the chosen model with their current modus operandi, and aligning the business model with institutional strategy will be important issues.
According to Ryan and King (2004 update, p. 26) the U21 consortium expected24 to:
deliver large savings to the members though the sharing of core curriculum resources, Gilbert estimates they will save A$1 million (373,900 pounds) each within three years simply by common use of learning resources currently being compiled in the databank by UNSW, with some 10 million objects collected thus far.
This reinforces the discussion in chapter 5 of the current study whereby information and knowledge were seen to become the basis to some assets and tradable commodities. Though the learning objects were to be available to members on a shared basis the underlying theme is that these information-based objects were essential to the reduction of duplication of effort within the consortium. It also reinforces the view that revenue generation is not the only focus of interest, but rather that cost reduction in the value chain processes is also of enormous significance. Operating efficiently as well as effectively is therefore of importance in moving toward efficacious learning environments and high quality student outcomes. Again this consortium began establishing some important benchmarks for other universities wishing to compete in the international higher education arena.
Another consortium with links in Australia is that of the Global University Alliance (GUA).
The University of South Australia and RMIT are the two Australian members and the
24 Since the 2004 Update, U21 partners have abandoned the UNSW learning depository project. Details of the resources can be found at http://www.lrc3.unsw.edu.au:8010/ and further plans for co-operation are at http://www.universitas21.com/staff/EdTec.htm
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consortium has relocated from Hong Kong to Australia as well (Ryan and King, 2004 update, p.
35). The consortium has a non-university shareholder, NextEd, which provides the online integration expertise and which also takes responsibility for supplying the technical and learning platform, as well as assuming the marketing role and responsibility for establishing facilities such as learning centres complete with computer facilities. The consortium still exists though it too has been slow moving into international waters. The combination of ten universities from various countries together with NextEd as a technical and marketing specialist suggests that GUA also conforms to the general concept of the consortium, with members bringing a range of different attributes to the alliance.
Students enrolled via a consortium can expect access to a wide range of courses and subjects emanating from the diverse curriculum that the consortium represents. They also stand to benefit from credit transfer arrangements though not all details for such transfer are immediately obvious especially when they cross national borders. With a focus on quality, or with advertising hubris to that effect, students stand to gain from the consortium members’ adherence to standards of service delivery. Similarly, learner support should be of a high standard among the members and if it isn’t then the transfer arrangements suggest that the students can ‘vote with their feet’ and move to another member. Recognition of qualifications across the nations represented is a major benefit to those students who wish to be mobile in their search for employment.
Consortium members expect to gain from the synergies available from bringing the members together. Technical expertise, such as that provided by NextEd in the GUA arrangement; content creation and distribution capabilities such as those provided by Thomson in the U21 agreement; political connections, evident throughout the literature with universities interested in entering the Chinese and South Asian markets; and, cash resources, are all features of the consortia model.
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Consortia need be wary of the pitfalls that have been witnessed in the demise of some prior attempts (see Ryan and King 2004 update for further insights). California Virtual University
(CVU) was a consortium of all of that State’s colleges and universities but it still failed.
Reasons attributed for the failure included lack of up-front funding, lack of on-going funding, lack of faculty participation, and problems with the business model (e.g., some members had their own book stores but the CVU executive entered an agreement with US bookseller Barnes and Noble to allow them to sell direct without approval from the members) (Standing Stones,
2000, p. 50-51). Both Scottish Knowledge and the UKeU have also failed. Standing Stones
Ltd. drew some general lessons from their research into this type of business model and suggested that key factors for successful growth include:
• strong political support and leadership • sufficient funding for start-up – especially if competing outside the local region • a collaborative and inclusive planning process with all stakeholders (don’t build from the top down • clear goals and a well-defined business and marketing plan (Standing Stones, 2000, p. 51)
It is not at all surprising to see these suggestions as they amount to business common sense in the modern world. An integrative approach guided by a clear vision of goals and objectives is now also commonplace in the business and management literature and may underline, to some extent, the level of maturity that can be found in the universities moving to corporatised views of their domain and their raison d’être.
Channel Suppliers. The last of the business model models in the Standing Stones report refers to the situation in which a provider “offers courses or programs through an existing business channel which offers vertically integrated services to a specific industry. For example, a provider could offer agricultural accounting and economics to farmers accessing an existing destination portal for farming” (Standing Stones, 2000, p. 52). The report indicates this to be
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the most recent business model but one with high potential for growth in online learning due to the closeness of fit between the interests of the student and the channel through which the offers would be made.
It would seem that with the burgeoning interest in the concept of lifelong learning during the recent past (see, for example, Rowley 1998, or the reports from 1999 onwards from the
Department of Education, Science and Training in Australia) that many professions could well be served by universities targeting students via channels already installed and in use by current professionals. Examples could include the professions of accounting and engineering as well as medicine and teaching. In these situations the workers may already be using electronic means of communication and the universities would engage the provider of such media in contracts to allow them to promote higher education to the members. Modularised approaches to course delivery might be required in order to provide ‘just-in-time’ education rather than expect that the professionals undertake entire degrees.
Corporate education and training would thereby seem to constitute the bulk of the potential for such business models though this is a general deduction rather than a point of view expressed by the authors of the Standing Stones report. If this is indeed the case then it will be a marketplace that is fiercely contested. The initial years of the rise of virtual universities, often with an express focus on the provision of corporate training and education, suggests that the market is lucrative, vast, and will be ongoing as the half-life of professional knowledge continues to be reduced. The Cunningham et al report of 2000 attended to this component to some extent and reported that the corporate universities, for example Motorola University, and the virtual universities would see this as their predominant area of interest (see also,
Hawkridge, 2003, pp. 39-40 for further examples of corporate universities).
Deakin Australia, was established in 1993 as the commercial arm of Deakin University in
Victoria Australia (but has since become known as DeakinPrime). Its Capability Statement
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(Deakin Australia, 1993, p. 4) suggests that it sees the corporate market as among its major targets as it strives to provide corporate programmes, “professional education, training and employee development services” to its clients. It “works closely with organizational clients to design unique training solutions linked to their needs” and also claims to be “recognised as a national leader in flexible and lifelong professional learning, and in the innovative and timely application of information and communications technologies in teaching” (Deakin Australia,
1999, p. 4). They go on to show how closely they can connect to the client when they say:
We can, if required, provide a nomination system that is resident on your organization’s intranet. Staff nominate programs directly from the Internet and electronically direct their nominations to your organization’s human resource department. This information could be forwarded electronically to Deakin Australia’s administration system (Deakin Australia, 1999, p. 6).
Existing channels therefore seem to be one avenue that DeakinPrime is exploiting in order to enhance its own capacity to compete in the market for higher education.
Benefits to learners are reported to be ready access to courses via channels that they already use; the provision of occupationally relevant short courses; and, access to learning resources pertaining to the education that are available from the employer or professional body rather than from the provider institution. Education institutions and channel providers stand to gain from the efficiencies involved, as there will essentially be a captive audience for the education, and there will be an existing medium through which advertising and marketing can occur.
Marketing costs should be minimized and the potential for word of mouth advertising should be enhanced. The drawbacks include the capacity of the professional group to pitch education institutions against each other for the rights to be the official provider of the education and the risk that the channel itself might not be stable enough to support the ongoing educational use of the medium.
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7.7 Learning from further afield
David Hawkridge (2003), in his report for the Commonwealth of Learning (COL), provided five possible types of ‘production’ approaches to distance education, predicated on the basis of collaboration, between universities. Given the role of the COL and its mandate to assist in education, this presentiment to collaborate is understandable. The collaborative options he provided were based on Hilary Perraton’s work from 1998 and are now somewhat dubious given the evolution of the web and the diminution in funding to universities around the world.
Whilst that reduced funding may also act as a stimulus for collaboration, especially in order to provide education for the developing nations, collaboration seems less likely among the institutions of the developed world where the pressures, drivers, and needs discussed to date are strongly felt. Those forces seem to be encouraging the universities to compete rather than collaborate when the entirety of the sector is considered. Briefly, Hawkridge (2003, pp. 23-26), reported that the five types of approach could be as follows:
Central funding: under this approach one source of funding, perhaps from a government, is central to the project though this party may not undertake the development of the educational materials. Consortia: here, “institutions combine to share the cost of development and the responsibilities for teaching” (2003, p. 23). Hawkridge gives the example of Cardean (a platform developer and content provider) working in partnership with universities and with Thomson Learning who take care of marketing. The principles of this approach are the same as for the consortia discussed earlier in this chapter. Production only partnerships: in this approach institutions combine to share the costs of development of teaching and learning materials but then go their own way when it comes to providing the education and the student support. Partnerships between universities and companies: this approach has similarities to the channel supplier model presented previously. The idea behind this approach is for universities to produce degree programs for a company’s staff and then to deliver it to them wherever they may be. This was also one of the scenarios discussed in the second Australian Business of Borderless Education report (Cunningham et al 2000). Co-operative structures: This approach is very similar to that of the broker models discussed earlier. The example provided was that of the Open Learning Australia being established by the federal government to “work with tertiary institutions in producing
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material” (2003, p. 24) though that is debatable and the OLA has certainly moved on since Perraton initially made the comments in 1999.
The COL may still see collaboration as a desirable option but the trend, at least in Australia, is from aid to trade in higher education. Whilst there are still governmental initiatives (e.g., the
Virtual Colombo plan. See also the UNESCO position paper 2003 edited by Uvalic-Trumbic) to assist other nations, the Australian universities are autonomous institutions and their attention is likely to be more on survival and advantage than foreign aid. That said, the approaches provided by Hawkridge and Perraton reinforce the developments that continue apace on the field of higher education internationally. Collaboration may still be desirable and there are models presented in the current study that require institutions to work together.
However, that cooperation is an avenue to find commercial advantage by sharing the burden of costs of production or marketing or in relation to the development of software based operating platforms. The altruism of the past may well be forced to stay there as an historical reminder of different times and perceptions of the value and role of higher education.
7.7.1 Learning from failure
The UKeU – The UKeU, founded in 2000 has now joined NYU Online, Harcourt University,
DePaul University, Temple University’s Virtual Temple, and the UKOU’s attempt to enter the
USA market (Hawkridge, 2003 pp. 37-38), as exemplars of failed attempts to make a commercial success of electronically based higher education. There are lessons to be learned from such failures though, as Hawkridge (2003) and Ryan (2002) indicate, access to reliable information is hard to come by to inform the lessons. The UKeU project, however, has been a very public project and there is good documentation available about the initial periods of development that are useful in the current discussion.
According to Garrett (2004a, p. 1) the UKeU was funded to the tune of US$113 million and underwent a lengthy development so that it would be a well-designed and targeted institution.
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The UKeU was envisaged:
as a new organization which would focus on supporting the development and delivery of e-programmes. It would not develop its own programmes on traditional lines using its own staff. Rather, it would work with HEIs and other partners to: • identify and make available a planned portfolio of higher education programmes, learning materials and support services to meet, in an academically coherent way, market demand for e-learning overseas and in the UK • secure the development by HEIs (and perhaps others) of learning materials for that portfolio, commissioning new materials where necessary • secure and manage the necessary services to distribute programmes, including tutorial support services, a quality gateway, a technological platform, student advisory services and other forms of support (Frost, 2000, p. 1).
According to the Project Manager, Alice Frost (2000, p. 1) UKeU had a Steering Group and it commissioned a number of studies in order that the initiative would be well served by focussed research. It contracted PricewaterhouseCoopers (PwC) to undertake a business model study, and five other studies (about the virtual learning market, pedagogic tools, electronic learning resources, electronic administrative systems, and social inclusion) were also commissioned.
Subsequently, the Steering Group encouraged involvement of a range of stakeholders, discussing the reports and considering the options available. The overall motivation and rationale for the UKeU are summed up in the following quotation from Frost (2000, p. 2):
There is a growing awareness that these factors [sic: globalization, rapid change in e- technology, demographic change, increased demand for lifelong learning, and knowledge-based nature of modern business] constitute both a threat and an opportunity for UK higher education. Around the world, universities and companies are setting up new ventures to tap the emerging global markets for on-line higher education. If UK HE does not respond at least as fast and at least effectively, it will lose to others not just the potential to develop new markets but even its share of existing markets. Many young students in the UK will continue to want a full-time, campus-based experience of HE because of its wider educational and social benefits. But both the overseas and the part-time markets for adult lifelong learning and continuing professional development are amenable to e-delivery and offer the potential for rapid growth. If UK universities and colleges do not keep adapting to meet those emerging demands, then others will.
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Frost goes to say that the project was aimed to provide a “flagship for provision of UK virtual learning programmes" (2000, p. 3) in order to:
a. Expand the UK’s overall share in the global market for virtual higher education. ... b. Provide new ways of delivering higher education within the UK. ... c. Encourage new thinking in UK HEIs about, and facilitate approaches to, use of e-learning. ... d. Create new opportunities for HEIs to work with private sector companies and other non-HE partners in developing the innovative application of new technologies to the design, delivery and support of HE programmes. ...
The structure, operations, and markets for the UKeU were all spelled out in Frost’s paper as were the core focus on academic values and the need to differentiate itself from the UKOU.
About the same time a press release from the HEFCE (Walker, 2000) made a few interesting points about the launch of the UKeU. First, the business model for the UKeU had been published. Second, the ideal was declared that the UK would become a “leading player in the market for ‘virtual’ learning over the web” (Walker, 2000, p. 1). The Chair of the e-University
Steering Group, Professor Ron Cooke, declared that:
... A lot of UK universities and colleges are already working to develop e-learning, recognising both the opportunities and threats which the new technologies offer. At present too much of that development work is under-capitalised and too small in scale. The e-University offers a way of harnessing that energy and expertise in a way that all can benefit from (Walker, 2000, p. 1).
Walker also drew on comments from the Chief Executive of the HEFCE, Sir Brian Fender who said:
... We start from an excellent base. We have world-class technology infrastructure, outstanding skills in our universities and colleges, and some global technology related companies to collaborate with. The potential market for e-learning is large and growing, at home and overseas, particularly in the postgraduate, continuing professional development, and lifelong learning areas (2000, p.1).
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Finally, among the five distinctive features claimed for the UKeU, was the following:
cost-effectiveness – through a combination of public and private funding, the e- University will provide the significant upfront investment that is needed to develop high quality learning materials and provide the infrastructure to supply them globally. It will provide economies of scale by spreading costs of the expensive tools and services for global internet delivery among all providers (Walker, 2000, p. 1).
Out of all this comes the realization that the HEFCE, the U.K. government, the people actually involved in the UKeU project, and the collaborating universities and colleges each had tried very hard to make the UKeU a success. Even the most vehement critics would have to acknowledge that the project was open and subject to scrutiny. It published its aims and objectives, called for comments from interested parties during the developmental stages and appointed reputable people to be responsible for the operation of the UKeU and for its expenditure of moneys. It underwent a fastidious period of development and it supplied six commissioned reports to direct its own development. A principal report was the study into appropriate business models. All things considered, the UKeU seems to have followed sound practices in preparing for its stated role and yet four years later the whole operation has blown up in the face of its supporters.
Out of the debacle comes the very salient lesson that competition in higher education, especially that enabled by the web is not for the faint of heart. The Australian universities wishing to pursue global markets need to be aware of this, and the other failures that now litter the arena of distance education. Adequate financing, the need for sound business strategy and an appropriate business model, the support of a range of collaborators and of government, and a focus on good pedagogy may not be enough to ensure that ventures into the still-developing field of e-learning are successful. As the dust settles on the now aborted UKeU, Australian universities with an eye on the competitive advantage thought to be available in the global
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marketplace for international students, will do well to heed the details that abound about this failed venture.
Business models will be only one component part of an investigation into the demise of this well-resourced and planned venture. The publication by Quentin Thompson (the team leader),
The Business Model for the e-University (2000), is sure to be the subject of much attention as university planners around the world try to come to a better understanding of the perils and pitfalls that lay in front of their own endeavours to be involved in electronically enabled distance education.
7.8 Discussion
This chapter has focussed on the nature of business models that are being developed in response to the adoption of new electronic technology. The definition of the term business model is fraught, with researchers identifying several different foci associated with the term.
Universities are nonetheless moving on with their own developments in distance education and it has been argued that they will need to be aware of the role that an adequate business model will play in movements to offer web-enabled distance education.
The Standing Stones report and the taxonomy of Michael Rappa have formed the base for the section of the chapter that dealt with the universities. Rappa’s research crosses the full gamut of economic activity on the web, consequently he has identified many possible business models, each of which seems to have a number of associated sub-elements. He also reinforces the view that the models are in a continual process of renewal and reinvention. The Standing
Stones report has been discussed, and drawn on at length, as it is one of the few extensive analyses of business models that relate directly to the higher education sector. From the discussion of the major source documents comes the realization that the universities have a number of choices available to them when it comes to making decisions about business models.
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The people involved in the planning and decision-making will need to take into account the full range of models as well as their institutions’ idiosyncrasies and then try to find a match for their anticipated outcomes.
From the failure of several notable, and well-funded, institutions comes the lesson that there may still be much to learn about the manner in which universities can compete in the web- enabled environment, and which business models may be most appropriate.
Adding support to this view is the commentary provided by Susan D’Antoni, editor of The
Virtual University: Models and Messages (2003), a UNESCO publication that took a case study approach to analysing the Virtual Universities around the globe. D’Antoni, in her summation entitled Messages and Lessons Learned, comments:
Perhaps the most important decision with respect to creating a virtual university is the choice of institution model. This decision will have a wide impact on the policies needed, and the appropriate planing and management. The institution model will need to reflect the situation of the institution, student demand, and access to technology, among other concerns. The different models and approaches described in the case studies underline the fact, however, that there is no single model, and some of the comments by authors suggest that the best approaches have yet to be found (D’Antoni, 2003, final chapter p. 1 – emphasis in original).
Of course there is vastly more to effective competition than the choice of the business model.
Important as that choice may be, there are many other important issues that will also need to be considered though the current study in not focussed on those aspects (for further discussion of such matters see, for example, D’Antoni 2003; Hawkridge, 2003; Uvalic-Trumbic, 2003).
Apart from the literature already cited here there appear to be few, if any, other holistic and overarching studies of business models that have specific focus on universities. No systematic studies of the Australian higher education sector appear to have been conducted from the perspective of business models, though a number of papers discuss specifics aspects of business models. Consequently it would seem that the Australian universities still have a large amount
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of discovery in front of them as they attempt to bring their distance education activities to the web.
Many authors (see, for examples, Shaw et al 2003; Canzer, 2003) have provided research that details the history of the Internet and the web. Their work also informs and supports the argument that web technologies have been going through a period of progressive development.
Papers published as a result of conferences dealing with electronic commerce (see, for example,
Monteiro, Swatman and Tavares, 2003) often present case studies to further illuminate the progress being made in the digital environment of business. Of course business is not the only use to which web technology has been applied, as numerous instances of social and not-for- profit projects attest. Those that do focus on business often include a treatment of the value chain or supply chain and reinforce the highly changeable and reactive nature of business throughout the world under the forces of globalization. One indicator of this ferment is the vast literature now available about electronic commerce and electronic business and the underlying technology that enables it. Similar growth seems to be occurring in the literature that deals with the implication of the web and its use in a commercial world.
Universities moving toward more corporate positions will have to be aware of the history of development of these technologies and they will need also to be mindful of the learning curve that commercial organizations have had to experience as they sought a better grasp of the implications of the Internet and the web. Electronic commerce has been a major source of corporate creativity and even business models have become intellectual property in the United
States of America. Universities by comparison seem to have a considerable way to go before they can claim to be fully cognisant of the demands that the web will place on their operations.
Business models will be one, among the many issues that the universities will have to surmount before they are seasoned veterans of the competition in distance education delivered via the web.
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In her Higher Education Series briefing paper that reported on the second of the Borderless
Education investigations (Cunningham et al 2000), Yoni Ryan (2000a), a major researcher in the investigative team, made a number of observations about the knowledge she and her colleagues had gained from the research. The research team, for their second report, had a US centric focus and they investigated corporate universities, for-profit universities, virtual universities, traditional universities as well as the rise of the corporatised university i.e. the move by Australian and US universities to respond commercially to the forces of change surrounding them (Cunningham et al, 2000, pp. 9-25). Ryan said:
... there are important lessons those in traditional institutions can learn from alternative providers. They must learn some hard lessons about unbundling, particularly in relation to infrastructure, whether that be IT services of physical ‘plant’. They must learn the value of alliances with other service providers. They already see the potential of providing short courses tailored to corporate needs, but they must do so without compromising the integrity of their intellectual assets, which are in crude terms, their ‘unique selling point’, their credibility as disinterested producers of knowledge and critique. They must look to the possibilities of global consortia to offer courses world- wide to corporations seriously engaged in staff education and training. They must also recognise that many of these corporations are themselves struggling with getting value from education and training in their business ventures, that most are in the early stages of establishing Return-On-Investment for their online training, and that most are still to find an appropriate pedagogy which will maximise the potential of Internet-based learning. Business and Education are learning from each other in using new technologies (Ryan, 2000a, p. 5).
In effect Ryan has just outlined several of the business models foci that have been the topic of discussion within the current chapter. She has pointed to the need for Australian universities to consider a range of possible market initiatives from corporate training (perhaps using Channel models) through partnerships and alliances. She has identified the need for scrutinizing the value chain and its component activities, without using that terminology, and suggests to the
Australian universities that they outsource some components, which amounts to another of the partnering business models discussed earlier. Cunningham et al, did not expressly consider the concept of business models in either of their reports—in the second report they discussed
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“categories of institutions” (Cunningham et al, 2000, p. 3) whilst in the first report they referred to nine different and plausible ‘scenarios’. Interestingly, these scenarios may well represent the variety of business models that have been at the centre of discussion in the current chapter (see
Cunningham et al, 1997, pp. 169-197) though they were not identified as such in that report. In this regard, what the authors did point out in the first report was the likelihood of more than one of the scenarios being developed concurrently so that different sections of the higher education market could be targeted.
Returning to Ryan, she moves on to say that “[t]he business models for online education are not yet proven” (2000a, p. 5). She then provides some thoughts on possibilities in Australia, for example:
Twinning operations with overseas institutions and off-shore operations are proving attractive to Australian universities, but are high-risk; there are several instances of failed and loss-making ventures.
And while we may fear the intrusion of the corporate universities into the education market, it is worth noting that for business, the costs of accreditation are a major disincentive: they are not geared to the complex procedures necessary in most countries to accredit institutions and programs, and their curriculum changes so quickly that re- accreditation as each new product comes to market would be crippling. In any case, industry certification in certain areas such as IT is perhaps more portable, and certainly more in demand, than a degree: the Microsoft Certified Professional or Sun certification is a global currency. The IT industry has simply created its own qualification (2000a, p. 5).
While Ryan was pointing to the types of moves that the universities and their higher education competitors might make in the future, that future has now arrived. Twinning agreements and partnerships continue to be enacted in Australian higher education. It is also germane to recall the move by Charles Sturt University to partner with industry leaders and the IT Masters company to combine industry certification with Australian university qualifications. As a harbinger of competitive approaches and a reflection of business models that have been
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discussed in this chapter, perhaps the CSU arrangement will turn out to be a masterstroke in gaining competitive advantage. Other instances also exist in Australia in which universities are already involved in experimenting with different business models. The University of Sydney has, for example, created a position in its senior hierarchy entitled ‘Manager Special Projects and Manager of IT Education Ventures’ which is now part of the Office of the Vice-Chancellor
& Principal. The person who holds the position, Anne Forster, is a business manager involved with commercialisation of web-based courses. According to a website at the university (see http://www.usyd.edu.au/su/ctl/Synergy/Synergy18/forster.htm) Ms Forster’s “role at the
University of Sydney is to manage strategic initiatives including responses to the use of ICT in education ventures.” At the same location Forster (2002) points to the purpose of IT Education
Ventures (ITEV) as follows:
Postgraduate professional education is highly competitive and an important source of revenue for the University. In realizing a return on the investment needed to develop innovative and responsive programs, faculties are implementing business planning and management processes. The Innovation and Technologies in Education Ventures project (iTEV), provides support to faculties wanting start up a new education venture or to improve the return on existing programs. ITEV acts as a referral hub to existing University services, provides business and project management expertise and advisory services and supports a co-investment model for new program development.
The Charles Sturt University and University of Sydney examples demonstrate the range of responses that Australian universities are making, or have already made, to the imperatives discussed in this chapter. Similarly the University of Southern Queensland has made its own idiosyncratic responses in its adoption of the web to pursue distance education internationally, and details of its activities can be found in Postle et al (2003) and Taylor and Swannell (2001).
The chapter has argued that at the level of business models there is a relationship between electronic commerce developments and those that are now being witnessed in universities around the planet. Universities stand to gain from having a thorough understanding of the
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history of development of business models in the commercial domain and Rappa’s taxonomy has pointed to the range of business models that he has observed to date. The list of business models is continuing to grow and, in the USA at least, they are so arguably innovative as to warrant patent protection. Universities struggling to come to terms with the changing face of higher education and especially those wishing to use ICT in their educational and administrative activities will do well to consider the wealth of information that has been published in the field of electronic commerce. Adapting that information to their own learning needs so that they can prosper in their own distance education activities may mean that they too have to formulate new approaches to their operations which will, in essence, require that they reformulate their value chain activities.
Experimenting with new business models will be necessary over the next several years because the models are not as yet proven; they are nonetheless, being developed by the universities that see their future inextricably tied up with developments in ICT and especially the web. To the extent that experimentation will continue, the progress of the universities will reflect largely the experience that has been witnessed in commerce in industry as businesses have attempted to find effective ways in which to put the Internet and the web to use.
To consider the implications of the discussions to date is one of the purposes of the Chapter 8.
There, the importance of the study will also be considered, as will potential further research topics.
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8 Universities and borderless education: a conclusion
... for countries that already have reasonable access to secondary and higher education, and a reasonable Internet infrastructure, e-learning will provide advantages over both conventional and open universities. These advantages will increase particularly for those countries wishing to move into a knowledge-based economy, ... E-learning is heavily dependent on appropriate technological infrastructure already being in place for commercial or government reasons. ... government can certainly develop policies that will encourage a rapid growth of the Internet. Some governments have made the decision to invest heavily themselves in the basic infrastructure, because of lack of investment by the private sector. The trick here is to know when to open up the management of Internet services to the private sector, once a market has been created. Government’s main responsibility though is to do what it can to widen access to the technology, through opening up the telecommunications market to competition, and through regulation of services. (Bates, A W, 2001, p. 113)
8.1 Introduction
The opening chapter quote is from work by Tony Bates who was engaged to consider e-learning strategies for countries, both developed and developing. Bates’ comments underscore some of the issues that have been canvassed in the current study. First, there is discernable belief and expectation in the relevant literature that the web will provide positive benefits for higher education. Second, Bates reinforces the commentary in Chapter 5 of the current study where the need for an extensive information infrastructure to enable electronic commerce and distance education is emphasized. The sophisticated technological infrastructure available now in
Australia has been built up over the past decades with direct government involvement whose policy setting has often steered the direction of development. Third, access to the Internet and to the web is widespread in Australia already and the trend is to continue that growth. Similarly, global access to the Internet has continued to expand, and to reflect the growth in Australia, which means that any university with the technological infrastructure in place can make their educational offerings available across the globe. Needless to say, so too can any universities
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anywhere else in the world. The outcome of this is that higher education can be seen to be a contestable market in which the products are created, stored, and distributed as digitized packages and where affiliated services are similarly offered via digital infrastructure.
Although Bates’ work was aimed at a national level, several of the points contained in the quote, and within his larger treatise, seem equally applicable at the level of the individual institution. Universities in Australia and elsewhere are faced with a rapidly changing environment within which they operate. One aspect of these changes has been reduced government funding for higher education in Australia over the past decade. The universities as autonomous institutions have been faced with significant decision-making as a result and some have moved to attract ever-larger numbers of fee paying international students in order to raise revenue. Some universities have done this by building their on-campus student numbers whilst others have resorted to distance education, enabled by the web, to engender the growth in student numbers. The overall higher education cohort is now the largest it has ever been, and the proportion of international students has also reached a new high point. Similarly, as was shown in Chapter 3, the distance education cohort in Australian higher education is the largest percentage on record and is now approximately 15%. Clearly, Australia is providing some avenue of access to students with a desire to achieve education that may not be possible within their countries of origins. Those studying via distance education modalities are increasingly likely to be confronted with technologically mediated formats facilitated by telecommunications networks and university extranets.
A bystander with experience of electronic commerce, as a consumer or as a part of a commercial organization offering products and services via the web, would probably see a similarity between web-enabled distance education and online purchasing of goods and services.
That seeming similarity, and the perception that distance education might be an exemplar of electronic commerce, has stimulated the current study with its intention to try to gain a better
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understanding of any relationship that may exist between distance education and electronic commerce.
Within the changing higher education environment, responses by universities have been mixed, with one major study in Australia (Bell et al, 2002) reporting that universities were using the web to enhance on-campus education as well as for distance education. The extent of that usage was also seen to be variable across four levels. Some subjects/courses were web-enabled, some were web-supplemented, some were web-dependent and universities also used the web for informational purposes so that prospective students could assess the range and availability of subjects and courses on offer. Bell et al also pointed to web enabled developments in the administration of distance education courses. Universities were using the web to provide student support services, access to library and other online information resources, fee-paying facilities, self-regulated online student enrolment systems as well as many other utilities.
These developments in universities reflect similar experience in firms’ use of the web. At the start of their use of the web, firms had seen a web presence as entailing a simple collection of static, often textual material. Over time the interactive aspects of the web have been recognized and now a vast array of resources can be accessed, thereby reflecting the growing recognition by firms of the importance of facilitating customer relationships. This interactive feature has also been among those that help differentiate the web from other technology that has been used in higher education as well as in business. Added to this is the capacity that any organization using the web has to integrate their informational resources. This of course means that the information and communication technology serves both administrative and educational purposes concurrently. Extranets also afford a measure of information exchange that supports and enhances the university-student relationship. The same thing also applies to firms and their relationship with customers to the extent that some businesses now offer additional information- based features so that customers can track the movement of their own purchases – see, for example, Federal Express and other global couriers. Customers are also now able to be a part of
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the manufacturing and supply chain via use of the web—e.g., Ford Motor Company and the
Benetton clothing company both encourage customers to make use of their online facilities to custom design the final layout of the product.
8.2 Overview of the study
The Prologue for the current study outlined some of the motivations that have stimulated the work at hand. This study has set about trying to find out if there is a latent relationship between distance education and electronic commerce and, if so, then to what extent can an electronic commerce framework be useful for viewing the practice and theorizing of distance education.
To investigate these questions, the study has been undertaken using an approach based on the concept of argument as a research methodology and strategy. Being trans-disciplinary at a minimum, though arguably multi-disciplinary, it was argued that there was no single alternate means to pursue the investigation. The fields of distance education and electronic commerce intersect when modern information and communication technology is used as a facilitator or enabler of core activities in either field. When those fields coalesce because of the use of technology, then other fields or disciplines become intertwined. So aspects of management, economics, business, and politics each enter the frame of the investigation. Combining these eclectic fields means that an extensive knowledge of the relevant literature has to be gained. It also means that standard approaches to research from within any one field, domain, or discipline are less likely to be effective when the study is to be undertaken across disciplinary boundaries.
Armed with that rationale for its modus operandi, the study then provided insights into distance education in Australian universities and the development, and uptake, of electronic commerce in
Australia. Throughout the chapters dealing with electronic commerce and distance education, the literature has been reviewed and analyzed to tease out possible features that demonstrate a relationship between the two key areas. The rationale for this has been that the new technology
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of the web offers opportunity and has implications that differentiate it from any other media that have been used for the purposes of distance education. Historically, print-based media have been the mainstays of the distance education approaches taken in Australian universities. Over the past decades a variety of further media and educational technologies have been utilized for distance education. However, they are discernibly different from the technology of the web, which is based on computing technology and telecommunications networks. The combination of these technologies can equally well be applied to the administration of the university as to that of the educational aspects, whereas the same cannot be said for the prior technology used in distance education. In this respect the technology of the web is qualitatively different from the technology that has been used in support of distance education prior to the advent of the web.
The web as a new medium therefore allows an organization to consider new approaches to business as well as engendering new business itself. New business here is likely to be based on the principle ingredient of information, with the intention being the creation and sale of innovative information and knowledge-based goods and services, some of which will be complimentary to the business’ existing products and services whilst others will be entirely new. To this point in time, however, whilst there is an appreciation of the web and its potential, there has been little attempt to assess its potentials from the perspective of informing the practice and theorizing of distance education in Australian universities whilst simultaneously being mindful of the administration of the essential elements of distance education. The study of electronic commerce facilitated such an investigation.
Michael Porter’s well-known analytical tool called the value chain was used in the current study to investigate the series of activities and functions that comprise distance education. By using this tool, the entire atomized sequence of activities can be laid out for examination. The sequence entails both front and back office functions in keeping with Porter’s division of activities into those that are primary and those that are supporting. Primary activities are the major value adders but they rely on the supporting section in order that the firm is able to operate efficiently. The value chain analysis enabled a more informed view of the distance
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education operations that are to be undertaken using ICT. Subsequently, it was shown that the software needed to support the entire range of front and back office activities is now available to universities. That realization therefore enabled the study to move to ahead with a more solid grounding for its argument that there is a relationship between distance education and electronic commerce.
Another crucial aspect of the study has been the investigation of the business models that are being used, or could be used, by universities involved in distance education. It was argued that using the web effectively meant that the universities would have to re-evaluate their current modes of operation. Consequently, they would need to examine the ways in which they were able to add value for the students as customers. Business models therefore were implicated as a necessary part of those re-evaluations.
The study moved ahead to investigate the business models that had been developed in the general business sector over the past decade or so since the commercialization of the web. A large range of business models were found to be in use by commercial firms with different models being developed for niche purposes, to complement more generic models that were applicable to a range of industries. By comparison it was found that the range of models appropriate for use by universities engaged in distance education was less encompassing than those found across the breadth of commerce and industry, as would reasonably be expected. So whilst the demands to be met by universities are more focussed and restricted, distance education in a competitive, web-enabled, marketplace shares many common elements with any commercial enterprise, similarly web-enabled. This is important because it implies that the traditional universities can learn significant amounts from the developments that have preceded their entry to electronically mediated forms of education. Selection of a business model will necessarily be contingent on individual circumstance but is sure to be guided by the strategic goals and the role(s) that the individual university has set for itself.
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The analysis of the business models appropriate for use by universities led to the realization that there would be a range of benefits for the university and its students. However, the chosen model would not be a one-size-fits-all decision as each model also has limitations or even potential pitfalls. For example, a consortium model allows for cost reduction or cost sharing across the members but also locks them into agreements with legal ramifications. Decisions to withdraw may come at significant expense. Similarly the consortium model represents a compromise with each member expected to bring different knowledge, skills, technological prowess or course offerings to the combination. It may be the case that the trade-off involved in the compromise may not work out to be the most suitable for optimizing the collective capabilities. Consortia also require highly developed inter-organizational communication and management skills, which cannot be assumed to be in place in each member organization.
The literature that chronicles the failures of various higher education initiatives to use the web as the basis for their new operations, is also a salient reminder that government backing and good intent may not be enough to guarantee success. Good planning, adequate funding, talented staff, and well-targeted markets are necessary, though possibly insufficient, to ensure success in the burgeoning global marketplace for higher education. To these must be added an appropriate and viable business model. The business model as an “architecture of the revenues”, must ensure that the institution uses its talents to attract students, adds value to the relationship with them, manages that relationship and then builds on it over time. From this point of view the business models of the universities, using the web as a facilitator of distance education, are very similar to those found in modern businesses using the web to conduct electronic commerce.
Combined with the finding in this study that the value adding chain of activities in web-enabled distance education can be perceived as an example of electronic commerce, the analysis of the business models confirms the view that distance education enabled by the web needs to be every bit as well planned and enacted as the commercial pursuits of modern businesses. The business models need to be developed as a specific response to the demands of distance education rather
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than be left to serendipity. Just who is to be responsible for the choice of the business model and then for the planning of how the web is to best be put to work for the university is a matter of some importance. Clearly individual academics are unable to put into effect a systemic value chain viewpoint that encapsulates the totality of the value chain activities. Similarly, the technologists employed in a university are not able to achieve such a feat either. Senior administrators may possess a holistic perspective of what is needed, but their experience with business models that are enabled by the web are still likely to be found wanting across the sector. Also they may not have the requisite knowledge and skills to envisage the university’s operations from academic and technological viewpoints either, though this will depend on the career pathway they have navigated in rising to a position of authority in the institution.
Consequently, it is likely that teams comprised of a wide range of talented people will have to be formed to work together to realize the institution’s strategic goals and objectives. Of itself this is not a new finding, but the increasingly competitive nature of Australian, and global, higher education suggests that such teams will be working in territory that is unfamiliar to them.
Again it seems that the combined teams will have to look to the literature of electronic commerce to find guidance, and to learn lessons from the firms that have preceded them in the commercial use of the web.
Of course these statements about staffing are generalized across the sector in order to make it clear that the changes afoot will require coordinated reactions from the universities. It should also be clear from the many cases and documents cited to this point that some senior executives, as well as some managers of distance education units in Australian universities are developing their skills and knowledge across the domains implied in this and the preceding chapters.
Nevertheless, the broad suite of competencies, skills and knowledge required by an individual to become proficient in developing and inaugurating business models relating to distance education in an electronic commerce environment are likely to take some time to become more widespread.
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In attempting to provide a comprehensive case to support the perception that distance education and electronic commerce have a latent relationship, the current study has filtered thousands of documents to find those most relevant to the needs of the work. Approximately five hundred and eighty reference resources have consequently been brought to bear in the investigation so that the knowledge from the various fields could be melded and utilized in building an understanding of the interacting domains. Some of these documents have been used to introduce and support claims for the appropriateness of the argumentative methodology that has been chosen as the vehicle for the investigation. The remainder are representative of the literature from the other relevant disciplines and fields of inquiry.
The study has been structured as a case-building exercise in which the relationship between distance education and electronic commerce has been the focus. Many inter-related knowledge bases have been interrogated so that their potential to contribute to the argument could be determined. Those knowledge bases have then been applied within the case where the arguments establishing the nature of the relationship have been presented.
The next section provides a final discussion of the research material presented with the intention being to bring the case building exercise to a conclusion. The first question that has guided the research is reintroduced and is at the heart of the comments following.
8.3 Discussion – research questions
8.3.1 Research question number one
The primary research question presented at the start of Chapter 1 asked, “Is there a relationship between distance education and electronic commerce?”
In its use of the literature, the study has shown that there has been a metamorphosis underway in developed countries over the past four decades in which knowledge and information have
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become recognized as central to economic growth. Many titles, such as the information society, knowledge-based economy, and the information economy, have been used to characterize this transformation. Though there is a dispute about the nature and extent of the changes afoot, there is much more agreement that information and knowledge have become central elements to economies and that societies have become informatized. This informatization would also seem to be one component of the globalization process steadily spreading across the world.
The study also was able to show that the technological developments in computing and telecommunications are directly related to the transformations underway, and the Internet and the web are critical to the most recent series of developments. The metamorphosis has given rise to electronic commerce—in other words electronic commerce is one outcome of the developments in the information economy. The combination of new technology has led to profound changes in the way in which business has been conducted with many organizations experimenting with the technology in order to seize operational advantages in their activities.
These experiments have initially been predominantly inter-organizational (B2B) in character but as more people have gained access to the Internet and the web, the importance of business to customer (B2C) transactions has increased. Distance education enabled by the web is now arguably one further example of the B2C relationship, though it is clear that such a relationship, for universities, is still in its infancy. There is still much to learn about the relationship and about the implications that ICT has at every stage of the extended value chain for web-enabled distance education.
Technology has facilitated the capacity of organizations, previously outside of the field of higher education, to enter this arena to the extent that there has been alarm among governments that the corporate, for-profit, organizations were going to become major threats to established, traditional universities. Studies have been conducted in countries such as Australia, Canada, the
USA, New Zealand, the Netherlands, and the U.K as well as by supra-national bodies like the
World Bank, UNESCO and the OECD, to determine the level of threat that these organizations,
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and the commercialization of higher education, represent. One outcome of those investigations has been the realization that the web has changed the ‘playing-field’. Traditional universities no longer have the field of higher education to themselves and this can be seen to be either a threat or an opportunity depending on the stance taken, whether it be by a government, supra-national agencies, or by an institution such as a university. For-profit universities, virtual universities, and corporate universities have been created in response to the potential presented by the web and now traditional universities have to find ways in which to respond. World trade agreements such as GATS, and international free-trade agreements such as NAFTA (North American Free
Trade Agreement), the European Union, and between the USA and Australia will have some, still to be determined, effects on the responses made by universities. The nature of those responses will likely be informed experimentation for some time to come.
The current study has presented the case in favour of the view that a relationship exists between distance education and electronic commerce. It has argued that electronic commerce is one outcome of the developments leading toward a global information economy. Nationally or internationally such an economy marks a move towards the centrality of information and knowledge in the creation of economic wealth. Higher education is a paramount example of activity centred on information and knowledge and distance education is one means of providing trade in those elements. Such trade will be uniquely different from distance education that has preceded use of the web.
Electronic commerce requires informed and holistic thinking and planning if it is to be done well. The web, used well, allows firms to dramatically lower transaction costs (see Avenell,
2001; Shaw 2003) and this feature is one side of a coin of which the under-funded universities need to be cognisant. The other side of that coin is the capacity for revenue generation, and in this regard, many firms the world over have shown that electronic commerce can provide remarkable opportunities. By comparison, distance education delivered via the web will similarly need to be well thought through and strategically planned.
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Electronic commerce requires essential infrastructure be in place. Australia has constantly been placed by external agencies, among the most e-ready of countries, which is a testimony to the extent of Australian infrastructure, as well as its quality, and the propensity of government, firms and individuals to move with the times. The opportunity provided by the advanced technological developments in Australia can also be seized by universities providing web- enabled distance education, as the web and its related software, represent the infrastructure that is needed for both administration and delivery of higher education.
Electronic commerce requires appropriate, often newly conceived, business models. So too is the case for Australian universities attempting to offer distance education at the level of Taylor’s
(2001) fifth-generation.
For both electronic commerce and distance education, holistic visions are required from senior management. Executive level commitment is mandatory for electronic commerce and high quality, distance education delivery via the web. The electronic commerce infrastructure diagram discussed in the study is entirely underpinned by high-level management commitment to these new forms of business. For universities, the decisions to adopt web-centric approaches to distance education will necessitate that attention be paid to the institutions’ strategic planning. Strategic planning has not been “a prominent practice in Australian universities until the mid-1980s” according to Anderson et al (1999, p. 3), but it will need to be so when critical investment and operational decisions are made about the optimal use of the ICT infrastructure for distance education. Howell et al (2003) also provide a list of thirty-two trends that they believe are affecting distance education and which they argue will affect strategic planning.
Senior managers will do well to be informed about such trends, many of which have been noted in the current study. The abundant literature about electronic commerce may ultimately become a vital and informative resource for university management in their attempts to better
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understand the complexity surrounding distance education in an electronically mediated environment.
Zemsky and Massy (2004) have recently chronicled their views on why e-learning has been less successful in the USA than its proponents may have desired. Whilst the population base for their analysis was very limited, the authors were strongly of the view that the e-learning (here equated with web-enabled distance education) would not prosper until the way in which academics taught and managers administrated had gone through a revolution. They also were of the view that “higher education’s bureaucratic processes have proved more immutable to fundamental change” (2004, p. iii). Time will consequently be needed for the radical departures that may be required if the web is to become an effective medium for distance education, at least as far as the American experience in the report is concerned. Changes in administration and education techniques and approaches may be warranted before the true potential of the web for higher education can be realized. This finding would also seem to resonate strongly with the lessons already learned in business, including those arising from the ‘bursting of the bubble’ in the dot.com crash of 2000.
In review, the collective evidence and analysis presented in this study suggests that a plausible and defensible position has been achieved in the case. However, it must be acknowledged that the whole area of focus is currently a moving target. The failed attempts, often well-resourced, to put into effect enduring commercial (commodified?) web-enabled higher education are one testimony to the fact that much knowledge and experience remains to be gained.
Analysis of the second question in the current study has been contingent on the outcomes of the primary investigation of the first question. The second question would have been irrelevant had no relationship between distance education and electronic commerce been found. The next section considers the implications, and opportunities for informing the theory and practice of
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distance education, which arise from discerning the nature of the relationship between these two areas.
8.3.2 Research question number two
The second research question was to determine if an electronic commerce framework would prove to be an effective lens though which to view distance education, its theory and practice.
From a viewpoint of seeing distance education as a system, the answer to this question must be an unequivocal ‘yes’. The study has shown that electronic commerce demands an holistic perspective. In such a perspective the organization, whether a commercial business or university, must understand:
• its strategy,
• its capabilities,
• its customers,
• the demands of its stakeholders,
• its capacity to add value by providing products and services (especially those based in
information and knowledge),
• its current positioning in the market, and
• its desire and drive to provide higher education via the web environment.
Furthermore, the organization must have a full and firm command of the costs and benefits that accrue from education offered in such a modality. Distance education providers therefore stand to gain from a thorough understanding of electronic commerce and what it entails. Whilst this may suggest, or presuppose, that universities will in turn become electronic commerce entities, driven by cost efficiencies or revenue generation at the expense of more traditional roles in society, it need not follow. Instead it is suggested that having the understanding listed above may in fact lead to wise and prudent decision making related to their operations. That must
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surely be a major benefit to Australian universities, especially those that will compete in Mode
1 arenas internationally.
Effective use of limited resources is paramount at any time, but moreso when funding sources are limited, and electronic commerce offers a mechanism for better understanding how to integrate the distance education activities within the total infrastructure of the university. The value chain analysis that related to the offering of distance education under an electronic commerce framework also pointed out that a full appreciation of the total industry value chain— the value system—would be desirable. Understanding a university’s value chain is one step in building an operational knowledge of their capacity to add value efficiently and effectively.
Coupled with the knowledge that the value chain is intrinsic to electronic commerce approaches will ensure that the universities deciding to use such an approach are fully informed, cognisant of the ramifications of good planning, and more likely to bring about good outcomes.
It is also evident that the use of an electronic commerce framework will require that the business of borderless education enabled via use of the web be fully understood. Universities will do well to consider the failures, and perhaps to analyse them from the perspective of electronic commerce so that they learn all lessons that are available to be learned. Whilst each institution and each instance of distance education offered via the web is unique, there will still be object lessons that can be gleaned from the literature.
Operationally, decisions to adopt an electronic commerce framework through which to guide the development of distance education, will require that the universities are able to position their distance education activities in relation to their overall strategy. This can not be left to chance, nor can such decisions be made without an appreciation of the start-up costs required or the ongoing funding that will be needed if the venture is to be successful and self-sustaining. The lessons learned from business development of electronic commerce are testimony to that view.
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The discussion of appropriate business models stands to be of benefit for Australian universities as well. No literature has been found emanating from Australia that has analysed business models in the way that this study has done, nor has any research akin to that of the Standing
Stones report been produced in Australia. That suggests that this aspect is underdeveloped in terms of published research and the current study has moved someway to overcome that deficit.
More, however, is needed in this area and it looms now as an agendum for further research.
From a pedagogical perspective the current study has had little to offer. However, the electronic commerce publications reflect developments in the general field of business and those publications, and indeed the wider business and management literature, suggest that a customer- centric view is being sought by firms as they move to better competitive positions. If the literature about life-long learning is to be believed then all students will be engrossed in studies for a greater period of their working lives—the earner learners. One might reasonably expect that students, as customers, would become more discerning about their selections of subjects, courses, and institutional providers over time. As their experience of higher education grows, it is likely that they will be more interested in quality as well. In this regard the study has pointed to the electronic commerce literature and the documented developments that have occurred in relation to the precept of customer satisfaction. Universities will therefore be wise to understand the lessons that businesses have learned as they grew in their awareness of the use of electronic environments. The electronic commerce framework seems at this level to have some capacity to add to the pedagogical components even if that relates to ‘how to offer’ rather than
‘what to offer’. In this regard the teachers in the institution are necessarily engaged in a process of continual review and refinement of the teaching and learning material. Under an electronic commerce approach they can encourage and facilitate student (as customer) feedback using the interactive nature of the web. Back office administrators can also seek to improve the student services using a similar approach. Student support services can also be seen as being among the vital value chain activities and they can also be improved by seeking student (and stakeholder) input into their ongoing improvement. Such concern for the student may already be evident in
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non-web based approaches, the point here is that the web enhances the prospects for providing a high quality of distance education along the same lines that electronic commerce businesses have found to be necessary and successful in their commercial operations.
The practice of distance education is also idiosyncratic in Australian universities. Whilst the literature speaks of dual-mode institutions, the Armidale (New England) model and so forth, the truth is that these are peculiar to each university involved in distance education. Each takes its own path to provide distance education and each seems to have its own interpretation of government policy in this regard. They also seem to have different interest in and capacity to compete with electronically mediated forms of education. In effect the universities represent something of a continuum of practice from highly web-centric to highly print-centric practices and delivery. As that situation must change in the environment of international competition, the
Australian universities will be well served by the current study and the emerging understanding of the relationship between distance education and electronic commerce.
Distance education theory – the study noted in Chapter 3 that the existing theories of distance education mainly arose in the 1970s. The work of Holmberg, Moore, Peters, Moore and
Kearsley and Saba was briefly introduced and discussed. The second research question also involves distance education theory because the practice of distance education is likely to go through changes as the web becomes more central to delivery. The practice should inform the theory and the theory should then be a guide to the practice in a mutually reinforcing cycle. The theories of the scholars named previously are in need of a review, however, as they were not developed with the facilities of the web in mind. There may be some question therefore about their currency and their relevance in a web-enabled environment. Whilst the current study can not attend to such a review it does move the author a step closer to being able to take on that challenge now that the electronic commerce analysis has been conducted, and so for the present, some informed comments will need to suffice.
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Börje Holmberg based his theory of distance education on the need for an empathetic approach to the student. To engender this, Holmberg was of the view that there was a need for distance education to be regarded as a ‘guided didactic conversation’ which print based media were capable of supporting. Driven by a social perspective of the role and value of higher education,
Holmberg’s work has been valuable in the development of distance education materials as well as being a guide for practitioners in their relationships with students. Nevertheless, Holmberg’s approach was based on the relationship between the teacher and the student and, as was pointed out in Chapter 3, there is some question as to the applicability of this relationship in a web- mediated environment. In such an environment the teacher may be seen to be a major contributor to subject content but may not actually be engaged in the teaching process from thereon. The UKOU, as one example, has established an extensive network of study centres in which tutors are employed to assist the students as they engage with the learning materials. The tutors are the closest to the teacher that the students get to know and yet the tutors were not those who created the materials. Whilst there may be no doubt that the tutors serve with good intention and with professional aplomb, the fact remains that the teacher may not be the one having the ‘guided didactic conversation’ with the student. Under such a scenario, Holmberg’s work must be questionable.
In instances where the distance education activities resemble an assembly line (see also discussion of Peters‘ following), it is increasingly likely that the creator of the materials
(codified knowledge) will not be among those directly engaged with the students. The deep understanding of the course content that the creators have may not be available to the students when clarification is needed. In other words the students will lose access to the tacit (non- codified) knowledge residing within the teacher. The web encourages a division of labour with specialists taking on compartmentalized roles to add value according to their talents and knowledge. Under an electronic commerce framework the possibility exists to review and regenerate theoretical approaches to distance education and the viability of Holmberg’s work could be evaluated from that perspective, and could be updated, further informed or dismissed depending on the findings.
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Again as discussed in Chapter 3, Michael Moore’s theory is built around the precepts of autonomy and transactional distance and the related features of dialogue and structure (see
Chapter 3 and Keegan, 1996 & 2000; Moore 1973 & 1990 for elaboration). As with the work of Holmberg, it is suggested that the theoretical contribution of Moore be reevaluated from the perspective of an electronic commerce framework to see if his long-standing theory needs to be updated to accommodate distance education facilitated via the web. The principal tenets of
Moore’s work stand to be affected by the media chosen for delivering the education to the student. Where he places emphasis on the need for the student to be self-directed and autonomous, and where he argued that dialogue was a necessary component of distance education support for students then it is possible that these elements will be significantly enhanced with use of the interactive features of the web. Transactional distance is similarly affected.
Otto Peters’ work on the industrialization of education seems to resonate well with the use of the web and with the division of labour that is essential in an electronic commerce approach. It is practically inconceivable that a single individual could conduct distance education, facilitated via the use of the web. The requisite tasks would imply a level of multi-skilling beyond most people. The value chain discussions highlight, among other issues, the need for a team-based approach to delivery of products and services in a modern organization. So too will this be the case in universities attempting to use the web as the base for their distance education offerings.
Peters’ work may form the base for an extended analysis of modern distance education activity in which the web forms the principle means of:
• administration,
• student support,
• delivery of teaching and learning materials,
• access to online information resources,
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• providing avenues of communication between teacher (tutor) and student, student and
student, student and institution, and student and materials,
• marketing,
• information-based feedback systems, and
• alumni contact.
Moore and Kearsley have worked together to produce a systems view of distance education which would also seem to correlate well with the approach being fostered in the current work.
The systems view encourages holistic understanding of the practice of distance education. Their
1996 book is soon to be re-released and it may have moved toward capturing the implications that the web has for distance education practice. The systems theory had not, in 1996, introduced an electronic commerce element and so the current work may have additional insight to offer their work, and the other works referred to in this section.
The use of an electronic commerce framework, based on an appreciation of the value chain, to better understand the practices of distance education may well encourage a more current theory of distance education. Many scholars are currently at work on understanding the use of the web for distance education, from a pedagogical perspective. Their work also needs to be assimilated into any theory development that would take an electronic commerce approach as a basis. It seems that this medium is still not well understood in terms of its educational efficacy. Distance education using the medium must be informed about such matters and it is argued here that theoretical development is one vital element of what will be needed by universities to sustain their use of the web in higher education. Perhaps the electronic commerce framework in question will help to provide a suitable and holistic solution to the problems at hand?
8.4 Importance of the study
The study has been an important contribution to the knowledge of distance education in general because of its extensive and systematic interrogation of the literature bases. That interrogation
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has integrated the disparate sources of knowledge used in the study, and has gone to show how they are inter-related.
For Australian universities, the study has shown that there is a relationship between distance education and electronic commerce. The discussion of the GATS agreement shed some light on potential developments in the trade in higher education products and services and it was noted that the intent of that agreement was the further liberalization of the trade in higher education.
Australian universities have vested interests in maintaining or improving their current status as major exporters of higher education and the study may help them identify ways in which to proceed with their endeavours to either cut costs or increase revenue by using a electronic commerce approach to their distance education operations. In this regard, and from an international perspective, it was shown that the universities in Australia are currently protected because Australian laws restrict the use of terms such as ‘university’ and ‘degree’.
As the public universities in Australia are a part of a national system that requires new institutions be formally proclaimed by acts of Parliament, the immediate threat that might be presented by overseas universities establishing a base in Australia, is less than is the case in less-regulated countries. For the time being, that provides a measure of insurance against this form of direct competition. This point was emphasized several times in the study, as the international nature of distance education requires that Australian universities be mindful that competition for students does not have to be in Mode 2 of the WTO schema – consumption abroad. Australia’s regulatory framework does not, however, protect against institutions that wish to compete with Australian universities using distance education approaches, enabled via the web. Such approaches fall into the Mode 1 category, labeled cross-border supply in the
GATS discussion. The study will hopefully be useful in enhancing understanding of these ramifications. So universities overseas can compete with Australian universities under Mode 1 developments and it is at this stage that the competition will have an impact. Australian
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universities will therefore need to track and monitor the Mode 1 developments that are occurring elsewhere.
The study has been meta-analytical in nature and the depth and breadth of inquiry into distance education and electronic commerce has not been found elsewhere in the literature, so Australian universities stand to gain valuable insight from the treatise. Their funding sources are under threat so it is inevitable that the Liberal government policy will have an enduring effect on this situation. Controlled fee deregulation allows universities some latitude in controlling their revenue sources but it also runs contrary to the wishes of some universities that still see their role in altruistic terms. The study may therefore shed some light on the alternatives that are available to universities of either persuasion in Australia.
From the perspective of electronic commerce, distance education can now be seen to be an exemplar of the trade in information and knowledge-based products and services. That realization means that our understanding of the domain of electronic commerce has been furthered as well. Though this may be a lesser outcome and contribution than those relating to distance education it is nonetheless of value.
From a systemic perspective of distance education, an electronic commerce framework could be useful for those wishing to better understand, organize and deliver higher education products and services. Understanding the business models and the full set of value chain activities must improve the overall capacity to fulfil expectations in distance education. In the modern university many stakeholders are involved and many parties are engaged in the deliver of quality-driven distance education. Taking an electronic commerce perspective would necessarily mean that those involved were fluent in their use of the electronic media, or have assistance to be so, in order to produce standards of service and delivery that exceed student expectations. Not understanding the electronic commerce framework, or distance education in
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web-enabled environments, essentially is a recipe for sub-standard outcomes and poor education if the university is going to go ahead with ICT based approaches.
The study has provided a springboard for further research into the area of overlap between electronic commerce and distance education. The point of intersection is sure to move in the future as both areas of study are still going through an evolution. Staying with those developments is more likely now that the study has built a foundation for further work. Among the issues worthy of further study are those relating to the differences between the conduct of distance education in Australian universities and business approaches to, and use of, electronic commerce. The current work has focussed on developing an understanding of the relationship between these entities and in part this has been based on realizing the nature and range of their similarities. Of importance for future investigations will be the lessons that can be learned from the aborted attempts and failures to introduce and sustain commercialized approaches to distance education. Such studies will likely reveal assumptions that have been based on an inadequate understanding of their differences as well as the likely misdirected enthusiasm to attempt to apply electronic commerce in the arena of higher education. A thorough analysis of real world exemplars of successful application of electronic commerce approaches to higher education will also be likely to produce revelations about the maturing relationship between these concepts. Orchestrated case studies of exemplars, both positive and negative, would seem therefore to be a desirable avenue for further research both for Australian universities and their international counterparts, if commercial exploitation of distance education is to be informed, successful and capable of meeting the demands of the various stakeholders. In view of the recent demise of the UKeU, it would seem that there is at least one ready example suitable for such a study and research into its failure may serve to inform people well outside of the British system itself.
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Finally, the study allows for the identification of new areas of research that would not have been perceptible had the current study not been carried out. Standing on the shoulders of those who have come before, the current study has similarly paved the way for further investigators.
8.5 Limitations
This study has presented a case based on a collection of arguments. Each argument has been supported by evidence distilled from disparate sources of literature about distance education, electronic commerce, strategic planning, information and communication technology, globalization, and trade in higher education, among others. Addition insight and evidence have been found by use of theory relating to the value chain, innovation theory, and business models.
Reasoning has complemented the literature analysis so that the overall case, as well as the individual arguments, could be adjudged to be rigorous, plausible and defensible.
However, the study should not be seen to be ‘proof’ of anything. As was pointed out in the discussion of research method and methodology in Chapter 2, an argument based, case building approach to research can only hope to gain an adherence of minds. That adherence is a result of the work convincing the audience that what has been presented is a reasonable interpretation of the material in question. To that extent, the present study has been formulated as a case—a collection of arguments—having the purpose of presenting a view of the relationship between distance education and electronic commerce that is capable of being supported and sustained by interpreting and using the literature. Another researcher using the same material may have come to different interpretations and conclusions, as is their right.
The study, however, has been a serious scholarly endeavour to add to the level of understanding of the changing dimensions of higher education around the world, and especially to hone in on the subset of higher education known as distance education. The work may lead to further
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research, informed by the arguments presented here, but the arguments are neither generalisable nor objective.
Another limitation of the current study is its breadth of its analysis. The modest personal resources of a sole researcher have worked to restrict the number of specific features of electronic commerce and distance education that could be investigated. A well-funded research team may be able to be more expansive and inclusive, in a similar investigation. Perhaps they could even go on to collect data from within Australian higher education institutions to use as evidence in support of specific areas of interest. Such data collection would also help to address the acknowledged paucity of information currently available in the published literature about many aspects that have been discussed in the study. However, concerns about commercial confidentiality are likely to inhibit such data collection and thereby limit the speed with which further knowledge is gained about the Australian higher education arena and especially about how the Australian universities are approaching the use of the web.
To study something does not necessarily mean that one is proclaiming its virtues. It is highly evident that the corporatized nature of the language used in this and other studies will be offensive to some traditionalists. Likewise the talk of commercial attributes of education and of trade in higher education products and services is likely to be anathema to many people. The literature of higher education is replete with evidence of change and the language issues just mooted are only one part of that change.
No attempt has been made in the current study to discuss the implications that a movement to corporatized distance education might have for developing nations nor are other equally important issues surrounding access and equity discussed. Those are subjects that need to be understood on an international level though they do stand to be informed by the work provided within the current study.
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The speed with which the world is changing necessarily limits the capacity of the present study to maintain its currency though all efforts have been made to try to ensure that the work is as up to date as is possible. Nevertheless, ICT, politics, higher education itself, management theory, and electronic commerce have all moved ground or changed significantly over the course of the current research and so some expression of limits to topicality seem warranted.
The study has not provided any insight real insight into pedagogical matters though that was never its intended role. Nevertheless, pedagogy is a core and critical concern for anyone looking to pursue studies of distance education in Australian universities. The insight that has been provided may deliver some benefit to those seeking to enhance the design and development of distance education materials especially where attention is paid to the commentary about customer relationship management.
8.6 Research agenda
Following on from the discussion of limitations, a number of areas for further research seem to emanate from the current study and consequently a research agenda can be generated that might help to guide further research.
It would seem a natural flow on from the current study to now seek a data about Australian universities and their current and future projects in distance education enabled via the web.
Similarly, the need for such collection internationally seems warranted and may form the basis for grant applications to that effect. International cooperation to achieve such a study would surely take our understanding past that provided within the present research.
Theories of distance education stem mainly from a spurt of interest in this area in the 1970s. An electronic commerce framework may offer the pathway to innovative and potentially beneficial new theories about distance education. Argumentation theory may also prove to one valid avenue to move ahead with an investigation of those theories and to provide a means to generate
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new discursive theory based on use of the web. Argument as theory, so conceived could literally be placed in the hands of the universal audience by means of the same technology that is to be used for providing distance education, i.e. the web. Collaborative theory building may then even ‘operationalize’ the theory of communicative action espoused by Jurgen Habermas
(1984, 1989) and, if so, would likely be far more universal and encompassing of global distance education practice than has been the case to date. Such an exercise though informed by the current study, would demand an international body or agency be involved to coordinate the efforts of all concerned and may even resemble the Human Genome experiment in terms of its sharing of responsibility. Taken seriously, an exercise of this nature would also be inclusive of a range of approaches, which collectively would further inform the field of distance education and may eventually bring about some greater realization of the web’s capacity to help educate the world’s populations.
Finally, the second question in this study has been contingent on finding an answer to the first question about the relationship between distance education and electronic commerce. It was not possible in light of this dependency for the second question to be investigated with the same rigour and depth as has been the case in regard to the first question. The necessarily constrained discussion of the second research question therefore leads to the conclusion that further analysis in this area is also warranted so that the value of the electronic commerce framework and approach to the study of distance education can be fully appreciated.
Trade in information and knowledge products and services seem set to continue and to develop as one avenue of the information economy. Borderless education seems likely to continue, as an area of international competition. Distance education is the standout candidate for further research, as it becomes the vehicle for such competition. If traditional values of higher education are to be respected and maintained amidst the changing demands for survival and prosperity of Australian universities then it is timely that the current study has provided one mechanism for further research.
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The trade in higher education, based on information and knowledge products and services, otherwise referred to as the business of borderless education, needs to be a priority among
Australia’s universities so that their understanding of the social and economic implications can be better understood. The research agenda facing these institutions is therefore of enormous importance and it is hoped that the current study has contributed to that necessary understanding.
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Appendix 1 Australian Universities – 2004
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(a) distance education enrolment figures are placed at the top with multi-modal being in the lower position for each university.
The table has been compiled from Marginson and Considine (2000, p. 190), DEST (Table 25. All Students by State, Institution, Mode of Attendance, Type of Attendance and Gender, Submission 1 2003), and from the Australian Education Network (online), accessed 17th March 2003, at - http://www.australian-universities.com/history-of-australian-universities.php
Only universities are represented in the Table and, as private institutions are not a part of the current study, their enrolment numbers are not given here.
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Appendix 2 Time series showing student enrolment figures for the period 1949-2000. (Source: DETYA 2001b)
(a) Figures for 1949 to 1964 are for universities only and are based on Australian Bureau of Statistics Universities Bulletins. (b) Figures for 1965 to 1989 include universities and Colleges of Advanced Education (CAEs) and are based on the statistics collected by Commonwealth Bureau of Census and Statistics (CBCS), Commonwealth Tertiary Education Commission (CTEC), and Department of Employment, Education and Training (DEET). (c) Data on CAEs for 1965 to 1973 are for the first time included in this bulletin based on the major findings of a Department of Employment, Education, Training and Youth Affairs (DEETYA) commissioned project. (d) Includes government Teachers Colleges from 1973 onwards. (e) Includes non-government Teachers Colleges from 1974 onwards. (f) Figures for years from 1985 to 1993 progressively include State-funded basic nursing students who would previously have been trained in hospitals.
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Appendix 3 Economist Intelligence Unit 2004 E- Readiness rankings
Appendix: Methodology and category scores Nearly 100 quantitative and qualitative criteria, organised into six distinct categories, feed into the e- readiness rankings. The majority of data is sourced from Economist Intelligence Unit and Pyramid Research. Qualitative criteria are assessed by the Economist Intelligence Unit’s extensive network of country experts, and their assessments are reviewed by our top economists. The six categories (and their weight in the model) and criteria are as follows:
1. Connectivity and technology infrastructure - Weight in overall score: 25% Category description: Connectivity measures the access that individuals and businesses have to basic fixed and mobile telephony services, personal computers and the Internet. The affordability, quality and reliability of service—all functions of the level of competition in the telecom market—also figure as determinants, as does the security of content delivered and transactions conducted via the Internet. This year, broadband development has been added to the category, replacing a criterion that measured telecoms rental charges as a proportion of disposable income. Phone rental rates are less relevant in a world were fixed and mobile charges are falling rapidly, and connections are increasingly available through non-subscription means, such as Internet cafes and prepaid cards. Broadband, meanwhile, is emerging as a key requirement for sustained e-business development. Category criteria: Fixed-line penetration; broadband penetration; mobile-phone penetration; Internet penetration; PC penetration; level of competition in telecom industry; quality of Internet connections; security of telecom infrastructure
2. Business environment - Weight in overall score: 20% Category description: In evaluating the general business climate, the Economist Intelligence Unit screens 70 indicators covering criteria such as the strength of the economy, political stability, the regulatory environment, taxation, competition policy, the labour market, the quality of infrastructure, and openness to trade and investment. The resulting business environment rankings measure the expected attractiveness of the general business environment over the next five years (2003-07). Calculated regularly as part of the Economist Intelligence Unit Country Forecasts, these rankings have long offered investors an invaluable comparative index for 60 major economies.
3. Consumer and business adoption – Weight in overall score: 20% Category description: The e-readiness rankings assess how prevalent e-business practices are in each country. What share of retail commerce is conducted online? To what extent is the Internet used to overhaul and automate traditional business processes? And how are companies helped in this effort by the development of logistics and online payment systems, the availability of finance and state investment in IT? Category criteria: State spending on information technology as proportion of GDP; level of e- business development; degree of online commerce; quality of logistics and delivery systems; availability of corporate finance
4. Legal and policy environment - Weight in overall score: 15% Category description: E-business development depends both on a country’s overall legal framework and specific laws governing Internet use. How easy is it to register a new business, and how strong is protection of private property, in particular intellectual property, which can easily fall victim to digital- age piracy? Governments that support the creation of an Internet-conducive legal environment—both through policy and enforcement—get high scores. Those more concerned with censoring content and controlling the web score lower. Category criteria: Overall political environment; policy toward private property; government vision regarding digital-age advances; government financial support of Internet infrastructure projects; effectiveness of traditional legal framework; laws covering the Internet; level of censorship; ease of registering a new business
5. Social and cultural environment - Weight in overall score: 15% Category description: Literacy and basic education are preconditions to being able to navigate the web. In addition, the rankings consider a population’s “e-literacy “— its experience using the Internet and its
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receptivity to it—and the technical skills of the workforce. And because Internet business involves risk- taking, the rankings assess the national proclivity to business innovation and entrepreneurship. Category criteria: Level of education and literacy; level of Internet literacy; degree of entrepreneurship; technical skills of workforce
6. Supporting e-services - Weight in overall score: 5% Category description: No business or industry can function efficiently without intermediaries and ancillary services to support it. For e-business, these include consulting and IT services, and back-office solutions. The rankings also take into account whether there are consistent, industry-wide technology standards for platforms and programming languages. Category criteria: Availability of e-business consulting and technical support services; availability of back-office support; industry-wide standards for platforms and programming languages.
Economist Intelligence Unit e-readiness rankings, 2004 Category scores
Source: Economist Intelligence Unit
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Source: Economist Intelligence Unit, available at http://graphics.eiu.com/files/ad_pdfs/ERR2004.pdf
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Appendix 4 Taxonomy of business models according to Michael Rappa
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Abbreviations
AVCC Australian Vice-Chancellors' Committee CEC Commission of the European Communities CVCP Committee of Vice Chancellors and Principals of the Universities of the UK DCITA Department of Communication, Information Technology and the Arts DEET Department of Employment Education and Training DEST Department of Education Science and Training DETYA Department of Education Training and Youth Affairs DIST Department of Industry Science and Technology DITR Department of Industry Tourism and Resources EIP Evaluations and Investigations Program, Higher Education Division, Department of Education, Training and Youth Affairs EIU Economist Intelligence Unit ESIB The National Unions of Students in Europe IDP IDP Education Australia NBEET National Board of Employment Education and Training NOIE National Office of Information Economy OBHE The Observatory on Borderless Higher Education OECD Organisation for Economic Co-operation and Development PSI/EI Public Services International and Education International UNESCO United Nations Educational, Scientific and Cultural Organization
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