Free stuff on the web is changing everything. The new ways we communicate with each other and the resources available are amazing. Can you imagine life without Google Maps? However, it often makes MBAs (like me) scratch their head wondering, “who pays for this?”

Following the release of Chris Anderson’s Free, Fred Wilson (avc.com) reiterated his views on Freecomonics, “if you don’t start with free on the Internet, most companies will never get paid.”

Education lags the business sector in technology innovation by about a decade. Because it is predominantly a public delivery system, the pressure for innovation and efficiency are simply not as strong as they are in the private sector. While this is frustrating to some of us that think we could do a better job educating young people, it does give us a chance to watch new technology be developed and deployed in other sectors. Watching widely adopted sites like Facebook and YouTube struggle to turn a profit will prove to be a useful lesson.

We’re beginning to see Freeconomic effects in education:

· Free textbooks: CK-12 and Flatworld Knowledge are marketing free high school and college textbooks

· Open content: Hewlett Foundation has been a leader in open content supporting projects including Monterey Institute’s comprehensive math and science curriculum Hippocampus

· Open software: open operating systems and productivity tools are gaining penetration in education

· Learning networks: dozens of free social networking sites are connecting educators

So, who pays for all of this free stuff? Education has the benefit of substantial philanthropic support—both non-profit and for-profit organizations have and will benefit from foundation grants. But the innovations likely to achieve scale and impact will have a business model behind them. In this regard, Wireless Generation is showing the way; they launched FreeReading.net, an open primary reading curriculum supported by fee-based assessment and training.

Other web 2.0 edu-sites that gain wide adoption will be monetized by ads and sponsorships as well as premium services. Combined with cheap access devices and increasingly ubiquitous broadband, free stuff will help ease adoption of education technology and will increasingly personalize learning.

New schools that blend online and onsite learning are becoming increasingly common. Just three years ago, the total cost of ownership of a laptop was over $2000. Netbooks now cost about $100 per year to own—well within the reach of even cash strapped districts trying to stretch class sizes.

Education Freeconomics got a boost last month when Gov. Schwarzenegger jumped on the free stuff bandwagon out of financial desperation. Obama’s stimulus package includes a $650 million innovation fund that, with parallel foundation grants, will also give a boost to EdTech.

Like the rest of the economy, Freecomonics will play a role in reshaping education. It will occasionally be confusing and there will be a few missteps by entrepreneurs as well as school districts. Personal digital learning services, a mixture of free and fee, will replace the model we grew up with—25 kids in a classroom reading the same textbook and answering questions at the end of the chapter. And our kids will be better for it.

1 COMMENT

  1. Hippocampus: “Institutional use of this content by educational organizations is prohibited… All use by commercial vendors is prohibited…Organizations wishing to purchase a license for this content should contact us…”

    That’s a pathetic excuse for a foundation-funded, non-profit “free” and “open” service. Simply pathetic.

    • the folks at Hewlett have been pioneer funders of ‘open education resources’. I agree with them, Gary Lopez at NROC has developed a thoughtful model that allows the service to be sustainable and scalable. It’s free to anyone but if an institution wants to adopt it, they have to help cover the costs. The alternative is an organic ocean of free stuff. Take your pick.

  2. First let my naiveté poke through: a few people do look at the greater good, and make various forms of knowledge accessible without regard to their own profit (e.g., OpenOffice.org).

    I do not doubt that “the innovations likely to achieve scale and impact will have a business model behind them–” not because only business models are capable of sustaining innovations but rather because monied interests will ultimately squash others.

    Prior “free” entrepreneurial gifts in the classroom had hidden costs. Channel One, for example, required that a certain percentage of children watch their programming and their ads. Joel Babbit, the former Channel One President, bragged that “the biggest selling point to advertisers [is]. . . . we are forcing kids to watch two minutes of commercials.” Exxon sponsored the Energy Cube, with a biased view against alternative sources.

    I take in loco parentis seriously–if the state is going to make schooling compulsory, it had better put in safeguards to protect my children from forces that are not acting in the best interests of my children.

    The primary concern of a publicly held company is to increase the bottom line. That’s not my business. The primary function of the public school is to create a functional citizenry, and that is my business.

    As far as the “the model we grew up with—25 kids in a classroom reading the same textbook and answering questions at the end of the chapter.” It’s already dead, at least in my district, and my district is not unique.

    Your company’s existence is as good an example as any. You may mean well, and I believe that you believe that your heart is in the right place. Still, your purpose is to sell a certain point of view. There’s plenty of time to sell to the children outside of school.

    I agree that the web does change education in many marvelous ways, and districts can save a lot of money by taking advantage of open source code. I just hope that superintendents recognize that “free” often comes with hidden costs.

    • There’s a lot of great free stuff on the web-no strings attached-you just have to be able to find it and figure out how to use it. Open content won’t scale until it’s better organized/vetted and supported (ie, implementation assistance, PD, student support, etc). Those services will be fee supported just like they are today.
      The textbook and related tech sector is a $25B industry. In large part, we’re just talking about a reorientation of those services (ie, print to digital) and the potential for schools/districts to spend more on/in the classroom.

  3. Tom,

    No, the alternative is that foundations, government and other actors (like Wireless Generation did) pay people to create, improve and distribute free content, which is then distributed widely over the internet through a variety of channels. There is little subsequent cost.

    There are plenty of people willing to host, vet, package and distribute freely licensed content and software. There is an entire industry of Linux distributions that do all that with software (e.g., Red Hat, Ubuntu, Suse, etc). There could (and will!) be a similar industry in education eventually, but the NROC strategy blocks that kind of development. It blocks it! And when that part of the industry does start up, it will be excluded by its own design.

    Doyle,

    OpenOffice.org is not run for the greater good. Sun bought a commercial office suite and made it open source to bootstrap some competition against Microsoft more effectively than they could have done with a commercial alternative. They’re too small a player in that space otherwise.

    Most of the work done on OO.org is corporate (by several major corporations) or (non-US) government funded for strategic reasons.

    But here’s the thing, to the user, this is all irrelevant. Because OO.org adheres to the standards for free and open source licensing, there is no catch even when the motives are not strictly altruistic. That’s why licensing is so important.

  4. Also, Hippocampus does not fit Hewlett’s own definition of an open educational resource:

    “OER are teaching, learning and research resources that reside in the public domain or have been released under an intellectual property license that permits their free use or re-purposing by others. Open educational resources include full courses, course materials, modules, textbooks, streaming videos, tests, software, and any other tools, materials or techniques used to support access to knowledge.”

    http://cnx.org/content/m14466/latest/

    • Had a quick conversation with the ED of Curwiki today. She said the only way open content scales and continues to improve is with links to a business model. Gary Lopez, NROC, has developed part of a business model that makes Hippocampus sustainable. We’ll see OER sites that operate with a Redhat/Linux approach: free content with implementation support. Read Chris Anderson and Fred Wilson–this stuff only scales with Freemiums and Freeconomics.

  5. Here’s the business model, it is really simple:

    1) School, government, philanthropy pays someone qualified to write open educational resources in an open, interoperable format.

    2) School, government, philanthropy puts open educational resource on their website as a free cultural work.

    Once you do that, anyone can use, copy, redistribute, translate, modify, print, sell, or consult about the work. That’s what enables entrepreneurs, not business models around restricting content.

    Read Yochai Benkler — The Wealth of Networks, not that middlebrow Wired crap.

    • That’s one model–it’s just not very sustainable and it requires folks to find, adapt, and implement on their own. For widespread use of OER, districts/networks will want aligned services–and they’ll pay for them.

  6. Let’s say Virginia spends 10 million dollars to write a high school science curriculum aligned to their standards. The cost is offset by not paying for paper textbooks or licensing fees for computer versions.

    They put the curriculum on their website in a variety of open, interoperable formats, as a truly open educational resource, so that schools can download the material to their own servers and students can download it onto their shiny netbooks.

    Every open educational resource repository integrates it into their collection. North Carolina realizes that for just a few hundred thousand they can make a version of Virginia’s curriculum that fits their standards, so they do that. MIT gets a $750,000 from NSF to write simulations that go with the VA curriculum. Virginia forms a coalition with North Carolina and other states to fund development of an aligned middle school curriculum. Consultants across the country do a good business selling services around the VA curriculum. Vendors (any and all) sell printed versions, lab kits, sensors and other associated doo-dads. What’s unsustainable about that scenario?

    You’re thinking too small.

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