How does Digitalisation Affect the Universities?

Dr. Wolfram Laaser

Former “Akademischer Direktor“

FernUniversität in Hagen



This work is the preprint of an article in issue number 57 of RED

Este trabajo es el preprint de un artículo en el número 57 de RED.



At present a substantial insecurity prevails about the future of eLearning and particularly about the future of recent MOOCs. Those who have been enthusiastic at the beginning are now more esceptical about the future development of teaching with digital media, others maintain their positive attitude and look for ways to promote and implement their use in the university. Numerous institutions publish forecasts and time frames about relevance of the upcomong innovations. We took the critique raised against the methodological background of some studies as a point of departure to discuss the possible impact of digitalization  on a future digital university from a historical and economic perspective. It shows that digitalization followed a  continuous development especially pushed by  distance education universities and that phenomena such as MOOCs turned out to be  not as “disruptive” as some providers pretend. Instead  national policies, economic sustainability and the impact of digitalization on different stakeholders will determine the future shape of the “digital University”.


Introduction:  Chrystal gazing about future innovations in educational technology


These days forecasting of future implementations of teaching and learning technologies and the related concepts is very much “en vogue”. The Horizon Reports (NMC, 2017), the Innovation Reports of the British OU (Sharples et al. 2016) or the Gartner Cycles (Gartner, 2016) are prominent examples. A very recent one is from a blog and shows the 9 top eLearning Trends in 2017.

Fig. 1: ELearning Trends of 2017 (Jones,  2017)


The problem is that the technological development is fast and underlying varying economic and political influences. Therefore, the reliability and validity of such attempts is not easy to be achieved. Most of the studies are based on simple questionnaires filled in by educational stakeholders or “so called experts”. Unspecific terms are used in the description of the innovations such as “grassroots video” (see also critical points raised by Baggaley, 2016) or are overlapping such as “Adaptive Learning “and “Artificial Intelligence”, probably chosen to avoid some future criticism, after time has passed and the forecasts turned out to be wrong (see also the critique of Baggaley (2016) and Watters (2017). Therefore, it seems to be extremely risky to sketch the “Digital University of the Future”, without taking into account the history of the university and its cultural and technological development.  However, the option that the university as such might even disappear some time ahead can not completely be excluded (Bates, 2014).


We will not add another forecast. There is a sufficient number already in the market. Instead we will discuss some aspects of past and present development that may be relevant for the future development of digital media in Higher Education. So firstly, we will look back and relate the findings and experience with digitization experienced up  to the present state of the art. We will furthermore focus mainly on a small subsystem, the pubic universities and discuss different views and options that will impact on the future “digital university”, assuming, that something like a digitalized university may then exist.


Historical flash back from Distance Education to Blended Learning

Traditionally lectures at the classical university used face to face lectures with chalk and blackboard supplemented by textbooks and reading assignments. This changed after the Second World War. Media played an increasing role to satisfy the high demand for continuous adult education which the conventional universities could not provide at short term. This was the time when distance teaching universities entered the scene, first in Europe Canada and the United The printed modules remained the core medium used. Many Distance Education Universities soon became Mega Universities due to massive enrollment.

The Distance Education Universities have been among the first to apply digitalization  to development and distribution of educational content. For example the German Distance Teaching University of Hagen started already in the early 1980ies experimenting with text processing and computer conferencing. Later didactic computer simulations, online courses and virtual laboratories have been developed. Digitalization allowed for a very close integration of the different media. Pushed by the developing internet, digital media such as pdf files, podcasts or webcasts etc. have been added and integrated into complex learning management systems that provided also web spaces for simultaneous or delayed communication.


The media development in distance education and the potential of the world wide web forced the conventional universities to keep up with the rapid development and to make greater use of the new facilities for teaching and learning. With regard to the learning management system developed to integrate teching and administrative  task it turned out that these systems initially were isolated from each other. Put together, learning management systems and integration of smooth data linkage with administrative processes such as matriculation, certification, lecture schedules, costing led to the complete campus management systems that are introduced today. This development is still ongoing and has a great potential for future development (Shacklock, 2016).


Since the end of the 90ies production and distribution of teaching content could be provided at very low cost via learning and campus management systems, conferencing facilities and network services.  So, conventional universities could adjust their teaching model to integrate off campus learning and teaching activities into their programs. The outcome is for most universities at present a mixed mode system labelled “Blended Learning” which includes recordings of online lecturing activities, mediated self study, group work and face to face activities. At present the mix of these system components vary across universities and even between departments or chairs. The term “Blended Learning” though, is another example of a buzzword which practically does not exclude any specific teaching mode. Offline learning by reading a book at home before attending a classroom lecture is in a broad sense a representation of blended learning as well.  Concluding we can state, that the innovation called “distance education” finally trickled down to some extent to the entire educational sector and is going to dissolve itself as a specific teaching model.

Some Economics of the “Digital University”

Distance education had since its early years already applied a type of industrialized pattern of development, production and distribution, which included course development teams, modular teaching units and professional management and organization. The digitization and the web changed the cost structure step by step as well for the conventional universities turning from investment in “Brick and Mortar” to investment in content, IT and training of staff. The inexpensive or free digital web tools allowed for a more decentralized mode of production and distribution of digitized media. The communication technology changed from “one to many” to a “networked community” with different clusters which include also social networks outside the university.

Some Economics

Wagner (1972) showed that the cost per student at the British Open University, the famous distance teaching university, is about one third of the other conventional British universities.


Fig. 3: Cost of F2F and Distance education (According to Wagner, 1972)

Symbols used :

TC = Total Cost;  F2F = Face to Face;  DE = Distance Education N = Number of Students


From the diagram it can be observed, that there exists an enrollment level where distance education becomes cheaper than face to face education. Whether distance learning can really be sketched like shown in the diagram is debatable, because also output quality and other factors might be relevant for the comparison. In any case, what is presented by Wagner is not equally valid for todays blended scenarios.

The introduction of phases of self-study by recording of lectures or other digital material (flipped classroom model) needs training of teachers, the acquisition and updating of software and probably permanent technical support services for teachers and students.  These costs can be balanced against some cost reduction for lecture halls and other local assets. Though, the lecture halls for types of blended learning must be especially equipped with good recording facilities and some location for final editing has to be provided if this can not be done by the teacher himself.

Blended learning is at present the predominant style of teaching and learning. One of the general problems of blended learning, as a mixture of face to face meetings with phases of autonomous learning with digital media, is the pacing of individual learner progress considering very heterogeneous learner experiences. This holds especially for the Massive Open Online Courses when offered without any restriction of access and free of charge. The coordination especially with respect to f2f meetings is difficult and  time consuming for both teachers and learners. Individualization needs free timing of your own activities, which can conflict with obligations with respect to collaborative learning or f2f events. Thus, a system which concentrates heavily on network based instruction without face to face meetings but with some delayed and simultaneous support feed back by conferencing or fora maybe still an economically attractive alternative. The relatively strict mix of online and offline phases will not achieve comparable cost reduction as those known from the former distance education systems.

Fig.4: Total Cost of a Blended Scenario

Due to regular phases of self study an increase in student numbers will require less additional lecturing hours than in a fully F2F teaching model. So, some workload is transferred to the students. However, a jump of fixed costs will happen from time to time for the additional cost of expanding the number of lecture halls and updating the recording and editing facilities once the capacity limit is reached. Furthermore, there are still some variable cost such as operational cost of the platform or software updates.  Therfore there is a certain trade off between scalability, educational quality and the share of simultaneous communication. Every type of fixed schedules for simultaneous communication, be it electronically or face to face, is hampering the full exploitation of economies of scale (Laaser, 2008).


The “disruptive evolution” of MOOCs – Are they sustainable?

To illustrate the arguments above we will look at the actual debate about MOOCs (Massive Open Online Courses).  MOOCs seemed to be a low-cost alternative to conventional lectures and a strategy to enter global markets. The massively enrolled students in the first xMOOCs (MOOCs offered by leading US universities) were not supported by tutors or lecturers. They received streamed or downloadable video lectures and some multiple-choice tests. Initially the development and running of MOOCs have been funded by large grants in the US to offer the programs free of charge. But after funding cuts the universities had to look for other sources of financing. If there is no special permanent budget for MOOCs allocated, the activity has to generate some own revenue to cover the development cost of new courses and pay some amount for the platform operation. However, with increasing enrollment and increasing heterogeneity of participants the necessity to offer more specific support services such as online or f2f tutorials will increase and in case that they are not provided will lead to high drop out rates. So, MOOCs either will loose one of their constitutive attributes – being free of charge – or they will be restricted without special funding to offer a limited number of short “low service quality” courses with high enrollment numbers and high drop out rates, hoping to be compensated by some image gain that may lead to new enrollments in other courses. Udacity and  Coursera already gave up  their policy to offer certificates or tutorials completely for free.

Thus, the xMOOC concept is in a dilemma situation, either to deliver low service quality and high drop out or charging at least for some  running cost such as platform operating, tutorials  or certificates. In this case the number of students will be more limited and the xMooc-type of courses turns out finally to be just  a regular offer that is only independent of having a respective entrance qualification and of being a student of the university. As expressed by a report of Siemens “The sheer scale of numbers of students led to bold proclamations of education disruption and a sector on the verge of systemic change. However, from the perspective of 2015 , these statements appear increasingly erroneous as Moocs have proven to be simply an additional opportunity instead of a direct challenge to higher education itself” (Siemens et al. 2015, p. 6).

The MOOC programs represent a marketing strategy by which some of the university’s teaching content is provided for free as an appetizer but soon after the institutions will  look for business models to cover the substantial expenses (see also Laaser, 2014). Though it may be fascinating to think about the accessability of internet screencasts or classroom lecture  recordings for free which  can be viewed at real time or later by an nearly unlimited number of students from a webpage at minimal  costs or for free as the marginal cost for distributing  an additional lecture copy tends to be zero for the institution. The old economies of scale seem to re-appear to a certain extent. Though, even if marginal cost are zero, the fixed costs – or after investment also called “sunk cost” –  in terms of recording facilities, teacher training and time for preparation of the lecture as well as initial expenses for the platform development will remain a substantial cost driver for further programs.


In economics, a situation where the costs of production per unit of output (students taught) is mainly dominated by the fixed initial investment cost and is characterized by very low or zero distribution cost has an inherent tendency to lead to a “natural monopoly”.


Fig.5: Marginal and average total cost of software (according to Shy (2001)

Each output unit is generated by lower average cost.  Prices(P) can not be determined anymore by marginal cost (MC) in a way as they are determined in an ideal competitive market because the competition  would lead to permanent losses. Therefore, these markets need either government control or suppliers can make excessive profits. At price P0 and enrollment N0 the profit is zero because the price equals average total cost, as it prevails in non profit public institutions,  but profit increases if N > N0 while maintaining the price level.

Fig.6: Enrollment, average total cost and quality                   

Let us come back to the case of a  natural monopoly for a public good. You can see from the graph, that if the state sets the price at P0 for a public  company to cover at least its costs           (P0 ∙N0)  at output  N 0 , average costs equal the price for a given small amount of variable cost that is needed for the basic level of quality to serve the students.  If the price remains fixed a further  extension of the production up to N1 , net profits will be made. But the higher enrollment can lead to a lower quality of the course. To maintain a profit of zero with the price kept unchanged the quality has to be increased, which could be done by more tutorials or increased operational cost of the platform. The cost curve shifts to the right until profits equal the average total cost.  The quality level is now Q1 .

If students´ fees are zero then the production will be increased until the demand of students is completely satisfied. If the fees rise for the students, their contribution lowers the public subsidies necessary assuming that the price does´t change. Probably the willingness of students to pay for higher additional services (quality) will not be linear or progressive but will drop at some point.

Any newcomer has to invest in the developed technology before offering his product whereas the already existing companies are able at least temporarily to offer their product at marginal cost in order to kick newcomers out of the market, as their investment is already made and thus, considered as sunk cost.

As the production cost of online teaching content declined, e.g. video recording and editing can already be done just using a smartphone and then be uploaded to a free server space on the web, any educational software monopoly or oligopoly has to count with entrance of new competitors, as the cost of market entrance is lower. As a strategy to defend its strong position in the market upcoming new start-ups are simply bought up by the companies that are already in the market. Furthermore, the ruling companies take an enormous effort to defend or extend their market share by huge expenses for marketing using data analysis for targeting precisely the potential customer. So, smaller firms are much less visible to the customer.

A comparable tendency towards  high  market concentration can be  observed in digital academic publishing, where a similar cost structure prevails. According to Larivière et al.  (2015) since the advent of the digital era of the mid 1990s the leading publishers increased their share of scientific output published. In 2013 about 70 % of the papers published in social sciences are  from the top five publishers.

Several universities in the U.S. use a common platform for distribution of their xMOOCs like Udacity  or Coursera to reduce development and operating cost of MOOCs (for economies of scope see Li  et al. (2012) . However, it is already visible that at least in Europe there will be not one common “European MOOC platform” and probably not even a single national platform – as announced by the Norwegian Ministries –   because development of such a platform is not very expensive – e.g. they can created also with moodle –  and can be better tailored to the needs of smaller and more homogeneous institutional groups (Creelman, 2014), (Cooch et al.,  2015).

Nevertheless, the pressure of rising expenses for education onto public budgets to cope with salary increases to rise with corresponding increases in the private sector is not yet solved. The consequence will be, that the cost intensive parts like tutoring will be replaced to a

greater extent by robots or bots. To substitute lecturing time and evaluation by student’s peer collaboration and evaluation is not a convincing and efficient solution, because the time, students will need to organize  meaningful learning for themselves might enlarge study time and thus,  lead to a longer graduation period, which would be  costly as well  for the economy. It is furthermore, in the light of the past experience with applications  of artificial intelligence, insecure, up to which degree the human dialogue can be substituted in Higher Education by non-human machines, as Higher Education is  a segment of the educational sector, where repetitive processes or dialogues are less frequent and where the look, tone of voice, corporal expression etc. are important to establish a good rapport.

At first sight it would be reasonable to standardize somehow the MOOCs according to different criteria and thereby create a more transparent educational market that allows for mutual accreditation of the partners. Then, negotiations can help a university to round up their curriculum by adding special parts that would be too expensive to be produced by themselves.

In the U.S. so far there is not yet much standardization visible and no common credit point system existent. The American educational system of Higher Education is characterized to a great extent  by private universities and foundations. So, the former free of charge MOOCs offered by some prestigious universities had to create after initial funding own income by certification, even selling of student data to other institutions or charging for tutorial support.

In contrast to the US, Europe has already made some progress in standardization and accreditation of careers with the ECTS (European Credit Transfer System) classification. Furthermore the share of public universities is much bigger than in the U.S..However, the problem has been in the past, that cooperation between universities still is very deficient across national borders because of existing social, cultural and legal differences. Therefore, the market is still not sufficiently developed. Furthermore, an early standardization or regulation can hamper innovations.

Futurists like Jeremy Rifkin (Rifkin, 2016) claim that the low cost of educational media, distributed nearly at marginal cost will challenge the existing monopoly of knowledge that the traditional university still represents. The (public) university is a service provider that will be replaced increasingly by individual access to teaching content at zero cost which can also be created, shared and evaluated in collaboration with the peers.

The hope,  expressed by Rifkin and others,  that the capitalist market economy will be transformed into a society where collaborative commons and sharing of self produced goods and services are dominating seems to be still unrealistic both from a viewpoint of the dynamics of a market economy and by taking the actual distribution of economic power into account. It seems rather that the public educational sector will become more dependent on the policy of the huge international companies.

Which are the more specific effects of digitization, networks and IT on the university? We will discuss this by differing the impact according to the stakeholders of the university, namely the external ones, such as ministries of education and industry and the internal ones, as there are the central leaders (Rector, CEO etc.), the administrative staff, the teachers and the students.


The Impact of Digitization on the Stakeholders


Students are supposed to become digital literates, able to identify and use the resources of the web, learn to create content and to communicate and cooperate via the web. They will be able to check the correctness and credibility of web information and they will make creative use of the new options for ubiquitous learning. If these objectives are already pursued during school education, we might then get a much more autonomous learner to acquire the competences the European Community excels (see e.g. Williams, Kear & Rosewell, 2012).


However, what will be the “dark side” for this changed ecology? Social cohesion and interaction of students with their direct social environment will be less and in part be substituted by virtual identities of peers that may deviate from their real identity. Presentation in social networks can be a sign of a narcist culture. Students will sympathize or not with persons they know only by their virtual identity. This opens-up a big potential for seduction and distribution of hidden or faked information and ideologies (World Economic Forum 2016, p. 31).


Furthermore, they will be more distracted by reading from screen as the information they usually receive is diverse in design, sources and context. So, they might have some difficulties to concentrate on a problem for a longer period. Brabazon describes the problem that way:

“As each semester progresses, a greater proportion a greater proportion of my students are reading less, referencing less and writing with less boldness. There will be always the top 25 % oft he class who are rigorous and committed scholars in the making. They can operate in the models of student-centered learning. Increasingly the middle fifty per cent, who require greater guidance, attention and commitment from the teaching staff to pass a course, is producing inadequate stuff……These problems are not caused by Goggle. Instead, the popularity of Google is facilitating laziness, poor scholarship and compliant thinking” (Brabazon, 2014, chapter 1, p. 1). Morgan cites another interesting aspect referring to Hassan, which is the intensification of time expressed by the label “network time”.

“The more we inhabit the network – on a PC at work or at home, on a PDA on the train, or in the street with a mobile phone clamped to the ear – the more we inhabit its temporally accelerated domain, with its potentially disorienting and frenetic pace” (Hassan, 2004 p.28).

According to Hassan, network time leads to chronic distraction. Students will face an academic environment where social objectives and academic scholarship are, inter-twinned with an increasing extent of commercial influences, be it at school, home or workplace, especially if we look at social networks.


Fig. 6: Social ecology of networks and institutions


In the digital university world university teachers are supposed to become facilitators, media experts and actors in front of a camera, knowledgeable users of web 2.0 tools and finally keep up to date with their own academic field of teaching. It is quite obvious that the teachers will have difficulties in following all of these demands. So, this problem will lead to splitting up the teacher’s role into different tasks carried out by a respective specialist, e.g. some of the lectures at Khan Academy are recorded with professional speakers or actors instead of the teachers voice. . In most cases the recorded lectures will not have the dynamics of the live lectures, because the teachers are aware that the material will be multiplied and distributed to a greater number of users.

One implication will be that some teachers will oppose to be reduced in their traditional role and autonomy. For those who accept the changing role they will take over a specialized task and will enter a system of coordinated professional production of teaching content. They will follow thereby the roads of early division of labour in distance education. A certain problem of the role of being just a facilitator lies in a tendency to present or moderate the views of other authors and not to develop their own view. The saying that “you have not to reinvent the wheel” is in a way not valid, because by reinventing also the knowledge embedded in the invention is reconstructed by the teacher and thus better understood by himself.

Another issue of importance is the trust that students will have for their teachers. In a time where many of the traditional functions of a university teacher are covered on the surface by content in the web or are accessible from the crowd of peers, the teacher will have to fight for establishing credibility. Students seem to trust often more on their co-students rather than on their teachers, eventually they even prefer to trust in search engines (World Economic Forum 2016, p. 18). Therefore at least some face to face contacts are so important to create a good emotional relation between the students and the teacher.

The educational policy makers

Educational policy makers usually are interested in limiting educational expenses without loosing efficiency. In a digital university environment they will have new options to use the available big data to influence and manage the entire sector. Formerly the main information items were enrollment data, number of graduates and programmes, salaries of employees and number of research publications. The huge quantity of digital data resulting from checking all workflow processes in detail offers ample possibilities to relate the different data and use them as inputs to manage the sector or the institution.

An important precondition is that data banks are compatible in their definitions and that programs to aggregate these data can be properly handled. To be effective the digitalized university needs to redefine IT supported processes which often implies structural adjustments towards decentralisation of the usually hierarchical organization of the academic and the administrative workflows. Otherwise it will not be able to react fast and flexible to the changing environment (Laaser, 2011). There have been made recently some interviews with leading staff of four European Universities but the results seem to be conflicting and the strategies towards innovations still rather vague (Bell et al., 2017).


Globalization of Higher Education


Who is interested in digital education, is it the individual learner, the teaching staff, the consumer or is it mainly the industry? As pointed out already there is hardly any academic discipline that is so closely related to industry like educational technology. Most of the academic conferences on educational technology are accompanied and sponsored by an exhibition of software and hardware vendors. Conference presentations frequently follow a simple modernization paradigm. The main interest seems to find out how educational applications can be identified for the new products developed for the consumer market. Therefore, critical issues such as detecting hidden ideologies or ethical problems embedded in vendor strategies are not very frequent. Buzzwords come and go at ease and keep the academic community going.

Today we observe that the educational global market is the target of the big educational technology providers. Translation is every time faster and easier to provide. Superficial localization became easier. With the globalisation a lot of underlying ideologies are connected.

The notion that the individual is best to control its learning progress, implies that the authority represented by the teacher is considered as an obstacle rather than being a partner or facilitator. The same ideology is underlying the claim that the crowd or peer group is the better teacher. The state and his academic institutions have to return to a policy that represent the social needs of the entire population. These needs do not match automatically industries interest.

MOOCs were concerned as a medium to ease access to everybody, that means to socialize a good that was accessible before only for a few. It is true that U.S. universities knowledge was opened-up a bit and was exported internationally at a subsidized price. It will probably loose some of its academic rigor and relate learning closer to edutainment accompanied by commercials (Bradford & Loble, 2016).

The xMOOCs have been criticized by the European Union for their low support of the teaching content delivered mainly by recorded lectures (EADTU 2015). However, in Europe the national differences are substantial and without special funding MOOCs will not survive in Europe either.



We tried to show in this article that the future of a “digital or digitized university” follows stepwise a trend towards more autonomous, individualized, interactive and media rich learning that can be traced back to the beginnings of distance education after world war two. So, a revolution or disruptive change in the way we learn and teach can not really be confirmed. Therefore, it is not surprising that after an intensive discussion of xMOOCs the conclusion remains that they represent in no way a disruptive approach and will end as another “come and go” episode of educational technology, at least what concerns the United States, or as Audray Watters puts it:

“After all, for many people edtech is a business, one that is quite excited by the prospect that – perhaps thanks to technologies – education itself is looking more and more like a private, consumer product rather than a public good. I think we must rethink both education practices and systems alongside our challenges to edtech as corporatisation and privatisation. Education technology is, after all, a series of practices itself – it isn’t just the hardware or software. Edtech carries with it ideologies and ideas” (Watters, 2017).


Rifkin writes in his book “The zero marginal cost society”, that different to Stanford’s students, who have to pay a fee of about 50.000 $ per year, the Udacity Online University had the objective to offer free university education for all, especially for the poor in developing countries (Rifkin, 2014, p.171). That unsupported, un-localized courses would be really a solution of the educational problems in developing countries, even if offered for free, is at best naive and reminds to the “One laptop per child” initiative of Negroponte.  In the meantime, Udacity courses and other American Moocs are anyway  not for free anymore.


The discussion of the possible influences showed that the future is still full of conflicting ideas and contradiction. A simple modernization paradigm according to  which the educational system just has to invest into the latest technology will be misleading. History is steered by interests of stakeholders and their conflict solving and cooperation ability. But also the general economic development is of considerable influence.


Educational network technology is based on the idea of a free economy and education will be regarded as a tradable good. So, governments are supposed to privatize the educational sector though education has been  regarded so far as a public good and not be determined by special interest groups. As the characteristics of educational software have some tendency towards natural monopolies we may expect a global educational market controlled by a few big players. If this will become our future, depends very much on the universities, their teachers and students to fight for their interests to determine change themselves. What the outcome of these struggles will be for a future “digital university” can hardly be determined by simple crystal gazing.






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       Disclosure statement


No potential conflict of interest was reported by the author.



       Notes on contributor


Dr. Wolfram Laaser was “Akademischer Direktor” at the Centre for Distance Education of FernUniversität in Hagen, Germany. He is consultant and  lectures face to face and/or online internationally.





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