From the issue dated June 28, 2002
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International Consortium Readies Ambitious Distance-Education EffortUniversitas 21 seeks profits and a global reach, but faculty unions fear a lack of qualityBy MICHAEL ARNONE The next year will see whether Universitas 21 -- a high-profile international consortium
Now that the courses are almost ready, Universitas 21's member institutions -- including the University of Virginia in the United States -- are starting to put more effort into their other emphasis: devising new ways of academic cooperation. But questions persist about whether the consortium's goals -- collaboration and commerce -- truly complement each other. Can Universitas 21 and its business partner successfully sell online degree programs and nondegree certificates, as it hopes? Can the member institutions find ways to work together on scholarly projects across a world of time zones? Fearing for the academic reputations of the member universities, faculty unions in five countries have protested their institutions' participation in U21global, the company that the consortium co-owns with Thomson Learning, a major academic publisher. The consortium hopes to reach into developing markets through the for-profit venture, which it formed in 1999. The faculty unions say professors from the partner institutions have been given too limited a role in creating and teaching the courses. What's more, the University of Michigan and the University of Toronto, once members of the consortium, withdrew because they didn't feel confident associating their names with the project. Meanwhile, the Asian market may prove more difficult to penetrate than had been expected. Despite those hurdles, both Universitas 21 and Thomson express optimism about U21global's future. A recent study by Merrill Lynch found that the higher-education market outside the United States is worth $111-billion a year and has as many as 32 million potential students, says Robert C. Cullen, president and chief executive officer of the international division of Thomson, which joined the effort in 2001. The research predicts that more than half the market, in terms of both students and money, is in China. U21global won't offer its programs -- master's degrees in business administration and information systems, and certificates in electronic commerce and information systems -- in the United States and Europe. The company will focus instead on booming markets in developing areas, especially in Latin America and Asia. At first, the programs will be taught in English; versions in Mandarin are due by 2005. "We felt the best way to enter the market would be to get partners," Mr. Cullen says. So far, 16 of the 17 consortium members have signed up for U21global. One of the Chinese members, Peking University, still needs permission from the government to participate, says Alan D. Gilbert, vice chancellor of the University of Melbourne, in Australia. Former chairman of Universitas 21, he was a main force in creating it. Mr. Cullen expects a few hundred enrollments next year and up to 60,000 by 2010. U21global needs about 10,000 students to break even, but he envisions that hundreds of thousands of students will eventually enroll -- bringing enormous profits, he says. Thomson supplies U21global with technological expertise and administrative support; it also contracts with professors to create the courses. The participating universities lend their names and provide quality control for the academic material. The consortium and Thomson Learning have promised to provide up to $25-million each to the venture in its first round of financing. U21global's M.B.A. program is scheduled to start in the first quarter of 2003. The master's degree in information systems and the certificates are to be offered later in the year. Undergraduate courses are scheduled for release by 2005. The Right Markets Peter J. Stokes, executive vice president of Eduventures, an education-research company in Boston, says Thomson Learning and Universitas 21 are looking at the right markets, especially China. Postsecondary education is "going to explode" in developing regions, he says, and universities and companies alike are rushing to enter the same markets. The consortium model of Universitas 21 has substantial potential for profits and success, Mr. Stokes says, because it can bring credible academic brand names into new markets. The geographic diversity of the consortium should mean that U21global could reach more markets than any of its partners could on their own, he says. Corporate and academic competitors, he says, worry that it could quickly dominate for-profit online education worldwide. "It's no wonder that the consortium came about," says Pamela S. Pease, president of Jones International University, a for-profit institution that provides online degrees and has many students from outside the United States. Her institution is looking to expand its operations and faces many of the challenges that U21global does, but isn't considering joining a consortium. No institution can do everything, and alliances between corporate and academic partners can help institutions focus on their specific missions, she explains. Even so, she wonders what return the Universitas 21 members will get on their investment. Thomson gets to borrow the universities' academic clout, she says, but how will the universities benefit? Unless the company really takes off, they won't make much money, because each institution would only get a fraction of half the profits. The institutions and Thomson Learning are willing to wait for profits, says Sir Graeme Davies, vice chancellor of the University of Glasgow, who is chairman of Universitas 21. In the short term, the company is a way for the consortium's institutions to achieve prominence in online education quickly and without risking a lot of money, says Peter W. Low, a law professor at Virginia. He and John T. Casteen III, president of the university, are its representatives to the consortium. Virginia has put $1-million into the venture, and that's all it can lose, Mr. Low says. The consortium also provides its members a chance to learn from experts in online education and apply the knowledge on their own campuses. Ms. Pease, of Jones International, and Mr. Stokes, of Eduventures, say the consortium's biggest challenge is how to organize U21global so that it doesn't compete with its members' own offerings. Universitas 21 will have to find ways to keep its members in the partnership and not release online courses on their own, he says. For example, Michigan's business school was working on its own distance-education programs, says Gary D. Krenz, special counsel to the university's president, and so didn't see the need to invest in U21global. Another problem is overcoming concern about the quality of the courses, which arises in part because the professors that Thomson retains to write the courses will be from outside the consortium. Graduates will get their degrees from Universitas 21, not from individual consortium members, but their diplomas will feature the crests of all of the member institutions. Faculty Fears Faculty unions have no love lost for U21global's strategy, which limits the role of instructors from the consortium's members -- and, in turn, jeopardizes academic quality, says Jane L. Buck, president of the American Association of University Professors. Her union and other unions in Australia, Britain, Canada, and New Zealand, wrote a letter of protest last year to Mr. Gilbert, who was Universitas 21 chairman at the time. In March, the Association of University Teachers, in Britain, encouraged its 45,000 members to boycott participation in the consortium. The boycott never materialized, says Sir Graeme, the Universitas 21 chairman. Universitas 21 and U21global haven't been controversial at all at the University of Virginia because faculty members have taken scant notice of it, says Michael J. Smith, a professor of political science who is chairman of the Faculty Senate. Cuts in the state budget have dominated professors' attention, he says, so it's too early to say what faculty members think of the consortium's for-profit activities. The senate has been briefed on the consortium's activities and trusts Mr. Casteen and Mr. Low to uphold high standards. The institution itself isn't unionized, but some of its professors are AAUP members, he says. The consortium partners and Thomson Learning hope that the controversy will diminish when critics see the quality of the courses that U21global is creating for the Asian market, where it is starting out. A hurdle that Thomson has yet to overcome, Mr. Cullen acknowledges, is how to deliver high-quality education online to hundreds of thousands, if not millions, of students. In response, Sir Graeme and the consortium have created U21pedagogica, a company that will evaluate the rigor of the programs that Thomson creates. The consortium is the sole owner of the company, to keep operations separate from those of Thomson Learning. The University of Virginia plays a major role in running U21pedagogica -- Mr. Low is chief executive officer and Mr. Casteen chairman of the board -- but all members of the consortium contribute to ensuring the quality of the courses. "Our most important attribute is our reputation," says Sir Graeme. "We're not going to jeopardize it." Thomson has yet to submit any courses for evaluation. When it sends material from the M.B.A. program next fall, Mr. Low says, consortium-member deans and professors with expertise in the subject areas will evaluate every course and instructor. An Academic Standards Council comprised of U21pedagogica's board and five other professors will make the final decision whether to use a course. The company will have U21pedagogica review the courses every two years, as well as each time they are updated or translated into another language. Ms. Buck, of the AAUP, says such vetting doesn't allay her concerns. Michigan's Mr. Krenz says his university had similar reservations before it pulled out last January, without having participated in U21global. Michigan was concerned that the academic partners didn't have enough control over either the final product or the use of their names and logos, he says. Sheldon Levy, the University of Toronto's vice president for government and institutional relations, says its legal counsel warned that as a consortium member, the university would share liability for any problems with U21global even without participating in it. "We said, 'See you later.'" Toronto left Universitas 21 in January 2001. New York University, which joined the consortium with the University of Virginia in May 2001, backed out just a few months later. Its representative to the consortium, Robert Berne, senior vice president for health, says NYU had only a "passive partnership" with Universitas 21, and declines to elaborate. The consortium must deal not only with internal pressures, but also with commercial forces beyond its control. Breaking into the enormous Chinese market, in particular, may be harder than Thomson Learning and the consortium realize. For example, the University of Michigan formed a partnership not long ago with Shanghai Jiao Tong University to deliver a master's-degree program in manufacturing engineering to Chinese students. But only a handful of students were enrolled when classes started in March -- and an employee at a multinational company had signed them up to keep the dean of the Shanghai university's School of Mechanical Engineering, a friend, from losing face. The dean, Lin Zhongqin, says the tuition, at $30,000, was too expensive. And some students at Jiao Tong say many of their colleagues who want a Western education prefer to travel for it. The Right Price Many Asian students prefer degrees from Western institutions, says Karla J. Lacey, vice president for marketing at the Graduate Management Admission Council, which administers the Graduate Management Admission Test, the entry exam for American graduate schools of business. In the past several years, those schools have seen a sharp increase in applications from China, India, and other Asian countries, she says. Sir Graeme, the consortium's chairman, says tuition for U21global programs, which will be set in the fall, is expected to be competitive in the various markets: "If we price ourselves out of the market, there is no market." Mr. Gilbert, the former chairman, says a master's degree from U21global should cost about $7,500 and take about 18 months to complete. That's exorbitant compared to many such programs in China, according to Mr. Lin, where the average cost of a master's degree in engineering is less than $2,000. And many students there get full scholarships, he adds. Ms. Lacey says an M.B.A. from U21global will be more affordable than many traditional M.B.A. programs that Western institutions provide in Asia. But any provider lusting for the huge Asian market should note that the number of students with sufficient education, income, and language skills to actually qualify for their programs is small, she says. "When you factor those in, you realize their potential market is a lot smaller than what they think it is." Since 1997, Universitas 21 officials have devoted much of their energy to getting U21global up and running. Now, with the courses nearly ready, the partner institutions are turning their attention to cooperation on academic and scholarly matters, Mr. Low says. Consortium members are seeking new and closer collaborations in many areas, says Michael Crommelin, dean of the law school at the University of Melbourne. The universities hope to share professors, students, course content, and expertise. Deans of engineering, medicine, and other disciplines have met to discuss opportunities for research and exchange. To involve as many people as possible in the planning, the consortium has set up travel fellowships for students and professors and has met with student unions and alumni groups. The institutions, which already are sharing courses and technology through a communal online library, have agreed to accept each other's courses to encourage student exchanges. The universities in Universitas 21 aren't the only ones joining consortia to expand the reach of their research or to get into online education. Five American, six British, and two Chinese institutions have formed the Worldwide Universities Network, which focuses on research collaborations. The Global University Alliance, with nine members, from Australia, Europe, and North America, sells its own online-education courses as well as those of its members. Universitas 21 has limited its membership to 25 institutions and is in no rush to expand, says Mr. Low, the Virginia law professor. It wants to add one or two more American institutions in the next 12 to 18 months, and hopes to find new members in Africa, Eastern Europe, Japan, and South America. But in academe and among the companies that serve it, there is skepticism whether the consortium is going to work, says Mr. Stokes, of Eduventures. And Mr. Low acknowledges that the member universities are still struggling to work collegially and not just one-to-one. Melbourne's Mr. Crommelin agrees. He adds, "That's a big step, if we can pull it off." UNIVERSITAS 21 MEMBERS 
1. Fudan University, China2. Lund University, Sweden 3. McGill University, Canada 4. National University of Singapore 5. Peking University, China 6. University of Auckland, New Zealand 7. University of Birmingham, England 8. University of British Columbia, Canada 9. University of Edinburgh, Scotland 10. University of Freiburg, Germany 11. University of Glasgow, Scotland 12. University of Hong Kong 13. University of Melbourne, Australia 14. University of New South Wales, Australia 15. University of Nottingham, England 16. University of Queensland, Australia 17. University of Virginia, United States
SOURCE: Chronicle reporting
http://chronicle.com Section: Information Technology Page: A28
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Copyright © 2002 by The Chronicle of Higher Education