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2010 PLS Career Summit: Chris Slatter, Senior Analyst, Eduventures
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2010 PLS Career Summit: Chris Slatter, Senior Analyst, Eduventures

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Chris Slatter's presentation regarding new programs & market opportunities at the 2010 PLS Career Summit in Atlanta

Chris Slatter's presentation regarding new programs & market opportunities at the 2010 PLS Career Summit in Atlanta

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2010 PLS Career Summit: Chris Slatter, Senior Analyst, Eduventures 2010 PLS Career Summit: Chris Slatter, Senior Analyst, Eduventures Presentation Transcript

  • New Programs and MarketOpportunitiesPearson Learning Solutions SummitAtlanta, GeorgiaDecember 1, 2010
  • Eduventures: Research and Consulting for Higher Education Continuing/ Online Higher Enrollment Prof. Education Mgmt Education Schools of Academic Development Education Leadership Consulting • Areas of focus - Learning Collaboratives - align with strategic parts of the university • The Online Higher Education Learning Collaborative’s (OHE-LC) purpose is to provide member institutions with uniquely rich data and insightful commentary on the online higher education market and operations. This is accomplished through member-wide investigations and custom studies, as well as roundtables, and strategy sessions • Over 100 members including Colorado Technical University, University of Alabama, Drexel University, New York University, Strayer University © 2009 Eduventures, Inc. 2
  • • Explaining Growth in the Online Higher Education Market• The Role of For-Profit Providers• A Closer Look at Growth Sectors: Markets and Programs© 2009 Eduventures, Inc. 3
  • To date, online is both acyclical and counter-cyclical; low penetration/improving brand combination should perpetuate pattern five years out By 2014, online 160% headcount is forecast to 4,500,000 Online Headcount hit c.20% of total 3,970,720 140% 142% Growth headcount, up from 4,000,000 c.11% Fall 2009 129% 3,500,000 120% 2,903,592 3,000,000 105% Counter-cyclical 100% tailwind- current and previous recession 2,500,000 80% 2,139,714 1,783,095 2,000,000 66% 60% 53% 1,260,605 1,500,000 47% 40% 38% 39% 35% 1,000,000 31% 27% 20% 22% 20% 18% 16% 15% 12% 500,000 229,363 78,332 11% 10% 6,916 0% 0 Online significance in the adult market- Eduventures estimates that in Fall 2009, online headcount represents c.24% of total adult (aged 25+) headcount at degree-granting schools and is forecast to hit 35- 40% by 2014 © 2009 Eduventures, Inc. 4
  • Online share up for all major credentials; strong associate growth;unrivaled master’s online penetration 900,000 30% 30% 800,000 Est. Fall 2009 25% 700,000 % Growth from 2008 600,000 20% 17% 17% 500,000 12% 15% 400,000 300,000 Credential Est. Fall 2008 Online Share Est. Fall 2009 Online Share 10% Associate 375,000 7.8% 486,000 10.1% 200,000 Bachelor’s 711,000 7.1% 835,000 8.3% Master’s 438,000 20.9% 510,000 24.4% 5% 100,000 Doctoral 46,000 11.8% 52,000 13.3% 0 0% Associate Bachelors Masters Doctoral © 2009 Eduventures, Inc. 5
  • What Factors Are Likely to Shape the OHE Market Moving Forward? Credential Key Market Influences & Expectations Strong growth expected as a result of: (a) Growth in the adult learner age demographic, particularly ages 25 to 34 Overall (b) Federal policy initiatives and economic stimulus funding creating incentives for adult learner, career transition, and online programming (c) Credential inflation driving working professionals to seek more advanced degrees Very strong growth expected as a result of: (a) Current prevalence of online courses at community and junior colleges Associate (b) Recent federal policy activity focused on community colleges (c) Success of online two-year schools such as Axia College and Rio Salado College Steady growth expected as a result of: (a) Ongoing strength in the bachelors degree completion market Bachelors (b) Continued lack of evidence on likelihood of increased online enrollment among traditional aged college students, however, makes projections difficult © 2009 Eduventures, Inc. 6
  • What Factors Are Likely to Shape the OHE Market Moving Forward? Credential Key Market Influences & Expectations Very strong growth expected as a result of: Masters (a) Increasing number of adult learners (b) Previous strength and success of the online masters market Strong growth expected as a result of: (a) Emergence of clinical doctorate degrees as professional norm in various fields (e.g., physical therapy, nursing practice) Doctorate (b) Previous growth and success in online doctoral market (c) Online penetration at the master’s level, coupled with general credential inflation, may generate demand for online doctoral programs © 2009 Eduventures, Inc. 7
  • • Explaining Growth in the Online Higher Education Market• The Role of For-Profit Providers• A Closer Look at Growth Sectors: Markets and Programs© 2009 Eduventures, Inc. 8
  • For-profit share of online market has increased, spurred by greaterdemand, constrained nonprofit supply, and for-profit marketing Est. Online Headcount by Control, Fall 2009 50% 48% 49% Control Public For-Profit Private 46% 45% Fall 2008 865,000 700,000 225,000 42% 40% 39% 38% Fall 2009 989,000 895,000 255,000 % change 14% 28% 16% 35% Higher Ed, 73% 9% 18% Fall 2009 30% Fall 2014F 1,950,000 1,500,000 520,000 25% 20% Fall 2008 15% 12% 12% 13% Fall 2009 10% Fall 2014F 5% 0% Public For-Profit Private Source: IPEDS, school data, Eduventures analysis © 2009 Eduventures, Inc. 9
  • For-Profit Higher Education: Central to Expanding Participation Undergraduate Students Aged 25+ 700,000 666,176 Net Gain 1997-2007 600,000 For-Profits= 77% of net gain 500,000 403,441 In 2007, without for-profits, 4-year 400,000 schools enrolled 50,000 fewer undergraduates aged 25+ 300,000 compared to 1997 190,189 200,000 107,319 100,000 40,628 14,841 0 For-Profit 4- Public 2-Year For-Profit 2- Private 4-Year Private 2-Year Public 4-Year TOTAL Year Year -100,000 -90,242 Sources: IPEDS data and Eduventures analysis © 2009 Eduventures, Inc. 10
  • Similar, if Less Striking Evidence at Graduate Level Graduate Students Aged 30+ Net Gain 1997-2007 300,000 270,998 250,000 200,000 For-Profits= 47% of net gain 150,000 126,264 122,481 100,000 50,000 22,253 0 For-Profit 4-Year Private 4-Year Public 4-Year TOTAL Sources: IPEDS data and Eduventures analysis © 2009 Eduventures, Inc. 11
  • • Explaining Growth in the Online Higher Education Market• The Role of For-Profit Providers• A Closer Look at Growth Sectors: Markets and Programs© 2009 Eduventures, Inc. 12
  • Participation Rates, Population Patterns Signal Online Opportunity 25% Higher Ed Students by Age- Fall 2008 U.S. Population by Age- July 2008 Est. Online Headcount % 22% 21% 20% 19% 16% 15% 10% 9% 9% 5% 3% 0.2% 1% 0% Age 18-19 20-21 22-24 25-29 30-34 35-39 40-49 50-64 65+ Key takeaway. U.S. higher education remains a fundamentally front-loaded system, with the 18-25 age band vastly over-represented. The online higher education market is concentrated in age bands where participation and population are most closely aligned. In absolute numbers, the 18-24 band (participation) and 50+ band (population) look attractive, but historically have either been unreceptive to online programs or to higher education generally. To sustain growth, online must develop current markets and seek new ones Online Opportunities? 1) Build on online interest in 25-49 band to grow participation (develop fields, credentials, differentiate to build market share); 2) Attract key segments of 18-24 band, including “traditional” graduate students, to online; 3) Grow 50+ demand; 4) Diagnose unmet subgroup demand (gender, ethnicity); 5) Branch away from domestic/consumer market to serve corporations and international 13 © 2009 Eduventures, Inc.
  • Est. Online Bachelor’s Market- top 10 unchanged from 2008 to 2009; mostwith average or better growth; handful of fields with real penetration300,000 30% Best Growth: Criminal Est. Online Headcount, Fall 2009 257,400 27% Justice and Education- c.22% Est. % Growth from Fall 2008250,000 25% Est. % Online, Fall 2009200,000 20% 19% 16%150,000 15% 14% 13% 98,600 12%100,000 48,800 10% 73,200 9% 62,640 8% 6% 41,760 6% 50,000 28,250 25,850 25,740 5% 16,660 0 0% Field of study skew- vulnerability or opportunity? At bachelor’s level overall, these ten fields represent c.55% of enrollment. In Fall 2009, these fields represent c.81% of online enrollment. The online market is steadily broadening by field of study, but remains very skewed by enrollment volume. Outside the top 10, no major field stands out as up-and-coming. Greater diversification is visible within key fields compared to total field range. This skew may signal longer-term growth limitations, as well as opportunities for disciplinary innovation. © 2009 Eduventures, Inc. 14
  • Est. Online Master’s Market: top 10 unchanged from 2008 to 2009; businessand education dominate, but online is mainstream in other fields, too 140,000 50% Est. Online Headcount, Fall 2009 117,000 45% Est. % Growth from Fall 2008 45% 120,000 105,300 Est. % Online, Fall 2009 41% 40% 100,000 35% 30% 30% 80,000 26% 23% 24% 25% 60,000 19% 19% 20% 19% 40,000 33,320 15% 15% 25,080 19,210 19,200 17,700 10% 20,000 12,650 9,360 6,900 5% 0 0% Master’s programs remain by far the most developed online higher education market: master’s programs offer the best combination of student maturity, short length, career focus and institutional comfort with experimentation- hence often very high online penetration. The big question is how deep might online penetrate, particularly in fields where online is already thoroughly mainstream. Outside the top 10, no major field stands out as up-and-coming. Compared to bachelor’s level, the online market is somewhat less skewed by field of study (c.72% v. 81% for top 10 fields by enrollment). This skew is in fact not much greater than for the top 10 fields in the master’s market in general- c.65% of enrollment. © 2009 Eduventures, Inc. 15
  • What variables may influence the future of online higher education? • Only more of the same? Focus/profit/online/marketing has “uncovered” significant additional adult demand, particularly at undergraduate level; this strategy will continue to pay dividends, but must recognize it’s limitations • Additional innovation- around student experience and outcomes/value- may be necessary to ensure socio-economic absorption of credentials, and sustain rapid growth in the adult market beyond c.2015 • Demographics- ending of traditional age student growth in favor of 25-44 group • “Gainful Employment”- due to regulation, for-profit growth may be tempered, and nonprofits may gain; but medium-term scenario is for-profit price/value & innovation may ultimately enhance competiveness • Nonprofits assets- nonprofits may be able to attain additional growth if assets (e.g. price, setting, curriculum, faculty, brand) are better articulated to the market. More robust commitment to online/hybrid delivery, targeting both adult undergraduate and graduate markets, will sustain most nonprofits, focused on local/niche markets. What’s the for-profit response? • Emergence of a genuine alternative to the 4-6 year bachelor’s and 2 year master’s- that addresses cost, completion and value challenges. Unlikely to scale past cultural/accreditation norms, but disruptive possibility © 2009 Eduventures, Inc. 16
  • Answering the Big Question: What program areas are poised to grow? • In light of previous stability in programming, new program areas at scale seem unlikely – Instead, continued growth of established fields, with new specializations to meet evolving sectors, particularly “green” industries and information technology • Upward pressure on credentials in established fields also presents a key area for growth – Ongoing capacity constraints, career incentives generating upward pressure on credentials – Credential inflation in many healthcare fields, particularly nursing – Likewise in business, education, and IT: move toward master’s, though bachelor’s still prevalent • Business programming, though slackening at associate and bachelor’s levels, is likely to remain a large field – Some specializations – accounting, business administration, management information systems, marketing – displaying strong growth • Most “intriguing” growth potential is in prevalent disciplines where online is not yet mainstream: social sciences, sciences, arts – Given strong evidence for the need for lifelong learning and demand for a more educated workforce, these fields in degree completion and adult-centric offerings are likely to be crucial to meeting workforce demand © 2009 Eduventures, Inc. 17
  • How, then, should program development decisions be made?• It is important to build on and extend traditional strengths – Leverages institutional credibility, reputation, resources – Capitalize on potential competitive advantages in niche markets and in serving local employer needs – Moreover, this strategy minimizes the operational risks of building wholly new areas• Recognizing that the true innovative success of online education has been in offering high quality content in new, effective ways that are accessible to a wider audience © 2009 Eduventures, Inc. 18
  • Thank You Christopher Slatter Senior Analyst Continuing & Professional Education Learning Collaborative Online Higher Education Learning Collaborative Eduventures, Inc. 857-221-9798 cslatter@eduventures.com www.eduventures.com © 2009 Eduventures, Inc.
  • Appendix© 2009 Eduventures, Inc. 20
  • At Associate Degree Level, There Has Been Considerable Alignment BetweenOccupational Growth and Program Share 40% Share of Associate Degrees Awarded, 10 Largest Program Areas 250% % All Associate Degrees 35% 200% Growth, 1988-2008 30% 150% 1988 25% 100% 20% 50% 15% 10% 0% 5% -50% 0% -100% 1988 1993 1998 2003 2008 Assoc. Degrees Awarded, All Fields 1988 1993 1998 2003 2008 Growth 435,537 514,756 558,555 632,912 750,164 Over the past 20 years, healthcare at the associate level has grown rapidly, echoing employment trends. Liberal studies has grown steadily, solidifying its position as the largest program area, similarly reflecting the increasing general demand for postsecondary training © 2009 Eduventures, Inc. 21