That sounds like a negative first observation.
No, because what Wharton does isn’t a commodity. There’s a unique magic here that can only happen in a face-to-face environment of our MBA program. It means in our classroom, in-residence experience, the connection between alumni and students and the hands-on work experience for students is important. So I would say the return on a Wharton degree is going to go up, not down, in an online world, because try as you might, an online program can never replace that real life experience.
And what’s your second observation?
That online is actually a great opportunity for us, because you can do a lot of experiments about pedagogy and get real time answers. As you know, we’re a leader in MOOCs, and thanks to that we can experiment with the big data and instant feedback mechanisms that come with it.
Could you give some examples?
Sure. Think about a final exam in a regular offline class. In some sense that’s a dead assessment. In the online world we can do continuous assessment. I can get instant feedback as a teacher. Or, you can go through a different learning experience as a student.
A second example: thanks to online education we can also raise the bar to come into class. There is a temptation for all of us, as students, not to prepare in advance for classes we attend, and to learn in class instead. But through online learning we have the ability to require and check what people do before they attend.
And here’s a third example: think about capacity. In our classroom, place is finite. So if we can both educate students here, and through MOOCs and online devices, why wouldn’t we do that? It’s not a zero-sum game. I see it as very positive sum.
Let’s talk about MOOCs. As you said, Wharton is a leader in these free online classes, but aren’t you giving away something for free that is valuable? What’s in it for you?
I see two main functions for us. One, they’re a fantastic brand projection. Thanks to our MOOCs, people from all around the world know who we are, and understand our quality. And second: they help with talent identification. Imagine there might be a student in Rwanda that through traditional processes would have never applied to Wharton. But if he does very well in our online courses, maybe we can invite him and give him a scholarship.
Seen in that way, MOOCs might be a positive story for a top school like Wharton, but a negative story for the schools that now target local students. In an online world, might everyone not prefer to take MOOCs from top schools, leaving the other schools with the crumbs?
I don’t want to make a projection for others. But for Wharton the online evolution is positive. I don’t think other schools will disappear. You have the public function of universities around the world. Societies will not allow universities to go the way newspapers went. And secondly, the uniqueness of the on-campus experience isn’t going to go away anywhere.
Yet there are already some business schools that have seen drops in their full-time and part-time MBA applications.
I agree with you, because it’s in the data. But if I interpret why this has happened, I’d say the opportunity costs for a student to do an MBA have gone up. Because in addition to tuition, you have to quit your current job. Some students in today’s job market don’t want to do that anymore.
Is the right answer then to offer more capacity through Executive MBA formats, rather than online degree programs for MBAs?
Yes. The market has catered to those that don’t want to step out of their degree through the fully employed EMBA degree. We have it, Harvard and Stanford don’t have. And we’re seeing it works: we have growth in these programs.
Let’s talk about another challenge that Wharton is facing: globalization. With all sorts of global MBAs appearing, think of the NYU Trium offering, for example. What should Wharton’s answer be?
We already have a campus on the other end of the world don’t we? San Francisco! (laughs). No but seriously, let me say two things about NYU. One, they have done great work under John Sexton, and Trium is a great example of a global MBA. But two, if you go to NYU, it’s not a campus based university. It’s an old commuter school in the Village. So if you are NYU, building a global alliance with other schools is an option. Because you’re not engrained in an existing university and campus.