Will MOOCs be the answer to the 21st century labour markets?

One of the defining trends of liberal market economies such as the US and the UK has been the steady decline in manufacturing jobs throughout the 20th and into the early 21st century. In the US, the decline was from 33% in 1950 to 12% in 2012, in the UK it was 40% down to 8% today. The decline was partly due to efficiency and automation and from the 1990s onwards due to low cost competition from emerging economies like China. Economic thinking at the time argued that this was a structural adjustment in the economy that ought not to be interfered with. However manufacturing jobs were once a route to middle class respectability — What would provide the new route for a generation deprived of this opportunity?

While manufacturing jobs were declining, the service sector had been steadily increasing during the same period. This didn’t necessarily create well paid jobs or require lots of education but as computers and latterly the internet became ubiquitous, what is now known as the ‘knowledge economy’ began to emerge. This sector was rapidly growing and the consensus was this was the sector of the future — Finance, Health, IT etc. While not necessarily a prerequisite, the thinking was that such jobs would increasingly require a degree, as they required critical and abstract thinking.

Sensing the shift, politicians sought to greatly expand access to universities, effectively shunting people that otherwise may have gone into manufacturing jobs in the past and push them into degrees for knowledge economy jobs of the future.

In the UK this included turning formerly technical colleges that had been the route into skilled manufacturing and professions into universities. Tony Blair famously had a target of 50% of UK students to go to university. More graduates meant a workforce more prepared for the knowledge economy, which politicians hoped meant lots of well-paying jobs for the economy as a whole.

The decision to let manufacturing jobs slide and then latterly make a full on embrace of universities was not repeated by all countries. Germany faced similar problems to manufacturing jobs but decided to intervene and instead doubled down on training. Germany invested in created a dual education system, as well as industry training initiatives. This highly skilled labour force was able to avoid automation by creating highly technical products such as machine tools and cars that could not be produced by the machines at the time and or by cheap, less skilled labour forces abroad.

These two different paths are crossing again, partly as a deliberate effort by governments and partly as the skill requirements of the economy have changed. The main stimulus for government response was the high youth unemployment among graduates, suggesting oversupply of graduates as economies weren’t able to create enough knowledge economy jobs. Liberal economy governments are now considering alternatives to degrees including creating the highly skilled technical workers who can make advanced manufacturing products.

Governments in the UK and abroad have been re-evaluating Higher Education and sought to revitalise Apprenticeships. In the UK this has taken the form of the Apprenticeship bill which relaunched how Apprenticeships were created and funded it through a levy. Now even the US is looking at this with Ivanka Trump recently travelling to Germany to view the apprenticeship which is will be a top priority for the Trump Administration.

What does any of this have to do with MOOCs? It’s not just that governments think they over-supplied graduates and under-supplied highly skilled technical jobs — the rise of coding and growing appreciation of the non-tertiary expertise is a huge market opportunity for which universities are not necessarily suited to address.

Coding is the obvious example of this — coders mainly emerged out of Computer Science Departments but as IT spread across the economy, companies became more interested in practical coding application, Computer Science graduates were over-qualified and in any case under-supplied. This led to the re-emergence of ‘Bootcamps’ typically 3–6 months programs run by private companies that taught the minimum skills to get people into jobs. In the US they’ve grown rapidly with 18K graduates in 2016 and growing by 170% year on year — the New york Times went as far as to suggest ‘skill training’ such as coding was the new route to the middle class. There are others — the Generation Scheme run in conjunction with McKinsey and many US employers provides a similar structure only it also covers growth areas such as Healthcare and customer service.

This brings us back to MOOCs. Central to the business model of MOOCs is the idea that there is further demand — particularly after graduation — for tertiary education albeit in smaller modular amounts. What the rise of boot camps and apprenticeships suggest is a more complex picture of a labour market with two different entry points. The former an Apprenticeship one that may require more physical presence that Edtech is less able to emulate and universities less suited to teach, and the more traditional tertiary entry point.

The fear for MOOC platforms is that without developing lots of subject specific pedagogical tools such as Codeacademy or Duolingo for languages they will be poorly placed to address the needs of the the first labour market and thus need to hope the latter market is sufficient for their ambitions. Certainly Coursera’s push to become an enterprise tertiary education solution rests on precisely that assumption as well as the role of low-cost online degrees to a lesser extent.

MOOC platforms may counter they can address both but at different stages. They could match all of tertiary demand and when the highly technical learners advance — such as coders that having mastered the basics wish to learn algorithms — they can serve them too. That might well be the case but specialists might counter they too could add on the tertiary level skills after having captured the learners with the introductory courses. It’s not at all obvious how this will play out, given it intersects subjects, pedagogy and labour market demands what is obvious is that this will be a fault line for which Edtech companies vie for control over.