With 2.7 million students and 167 educational institutions on its books, as well as a fast-growing digital ream of micro-credentials catering to the needs of today's professionals, OpenLearning (ASX:OLL) is at the forefront of the wave of e-learning that has swept through universities due to COVID-19.
Underpinned by the philosophy of "social constructivism" that encourages collaboration and project-based problem solving, the company is but a fraction of the size of international competitors like Coursera and FutureLearn, but co-founder Adam Brimo believes it has a unique advantage in Australian and Southeast Asian markets.
Brimo tells Business New Australia the online education trends accelerated by the pandemic are here to stay, offering insights about what this means for the international student sector and how to make the experience more fruitful for students and educators alike.
In the world of business, disruption tends to go hand in hand with positive connotations by overhauling dated, inefficient systems with exciting modern technology and practices.
But for the education sector, disruption is not necessarily an indicator of progress. For students, the dramatic shift to online in 2020 presented a massive challenge with many finding their educational paths waylaid by poorly executed e-learning arrangements, not to mention the loss of social connection.
"Some lecturers when they first look at moving online just think 'I've got my content', which is usually Powerpoint slides, and they want to upload that to a website," says OpenLearning (ASX: OLL) co-founder and CEO Adam Brimo.
"I mean, if you're going to do that you might as well just use Dropbox, because there's no learning experience there."
The proliferation of educational technology is tipped to be one of the biggest trends of 2021, although Brimo - last year's Trailblazer winner of the Sydney Young Entrepreneur Awards - has been working towards this moment for almost a decade.
"We launched back in 2012. I got together with Professor Richard Buckland from UNSW and one of my classmates, David Collien who is also also a founder and CTO of the company, and what we were trying to do at a high level was increase access to quality education," Brimo tells Business News Australia.
"What that meant at the time was we were looking to expand access to one of UNSW's high school computing programs and their computer science courses generally.
"Back then lecturers had started putting their videos on YouTube, but you can't learn that much from just passively watching a video. What you really want is to have a difficult problem to solve, and work with others to solve that problem."
The co-founders came up with the idea of OpenLearning to help run courses that were more engaging, more active, based on projects, and with a strong focus on community practice.
"Since then we've put a lot of work and effort into building out the platform. It's aligned to a learning sciences area called social constructivism.
"The idea in social constructivism is that you learn best when you're actively engaged, when you're intrinsically motivated, when you're constructing and co-constructing knowledge with your peers.
"That means working together rather than in isolation, learning by doing rather than trying to learn by watching."
Brimo claims the company has stayed true to this vision, which culminated in its 2019 initial public offering (IPO) on the ASX with growing revenue ever since.
The core business is the OpenLearning platform provided to institutions and educators around the world via a Software as a Service (SaaS) model, but the group has branched out into partnerships with the likes of UNSW, UQ and Open Universities Australia, and has "learning designers" working in tandem with experts to build new courses that are tailored to online "so that students have really engaging and exciting experience".
OpenLearning has also embarked on longer-term projects to develop new educational marketplaces.
"We have the OpenLearning.com website which is a global marketplace for education. It only features a subset of the courses running on the platform, maybe 5 per cent of the courses, but those courses have quality assurance criteria and they're usually available to anyone in the world to enrol in, which provides exposure to the institution and provides courses to the public, many of them free.
"The other element in Australia which we're gaining a lot of traction is in short courses and micro-credentials."
Last year OpenLearning developed its own micro-credential framework called Open Creds, which Brimo hopes will become an industry standard in Australia across a range of sectors.
"OpenCreds we think is becoming quite a strong category of micro-credentials, and a number of Australian higher education providers are adopting it. We also work with Universities Australia on micro-credentials.
"We also have the OpenCreds investment fund, where we're allocating funding on a competitive basis to education providers to help them build out OpenCreds.
"We're effectively trying to create the market for micro-credentials because we see that there's quite a bit of demand from the public, but a lot of education providers aren't sure where to start so we're trying to de-risk it for them."
Brimo highlights since COVID-19 more people are looking to upskill and reskill, and to do so much faster than ever before.
"Working professionals are less and less likely to go and take a two-year master's degree when they have to take time off work or try to fit in with their busy schedule," he says.
Finding a niche in a competitive global marketplace
OpenLearning was founded in the same year as two significant global competitors, UK-based FutureLearn and Coursera in the USA, although they have gotten much further ahead in that time.
With a market capitalisation of $34.5 million, OpenLearning is tiny compared to private company Coursera which according to Forbes was worth US$1 billion in 2019, while SEEK-backed FutureLearn was estimated to be worth £100 million pre-pandemic.
"They have a combination of platform, marketplace and additional support. We have a number of advantages - our platform is much more advanced, and we are end focused on the social constructivist approach," says Brimo.
"We are focused on the Australia and South East Asian markets and that's where we dedicate our time and resources, so we can provide a much more localised approach," he says, noting the bulk of OpenLearning's revenue currently comes from Australia and Malaysia.
"For example, OpenCreds is aligned to the Australian qualifications framework."
However, Brimo believes a lot of OpenLearning's competition actually comes from the legacy systems at universities.
"In some cases we're competing with the traditional learning management system, because the university will attempt to do things themselves and just use whatever they've got.
International student sector outlook
When asked whether Australia's closed borders to international students present a threat to his business model, Brimo thinks the opposite is true.
"There's actually a new market coming up now which is offshore online international students - that's where Australian universities are able to offer part or all of their degree programs to students overseas online," he says.
"There's still obviously a tonne of demand for coming to Australia, but we are actually seeing that there is a subset of the market of international students who want an Australian degree and would be open to doing it in their own country if that was more affordable; that way they don't have to pay living costs and things like that."
That said, the entrepreneur still expects strong demand for international students to come here, especially given Australia has handled the pandemic relatively well compared to other countries with a relatively good economic performance as well.
"Australia is a very appealing destination," he says.
"I think there will be a change in the numbers and it will take a long time for onshore international student numbers to come back to what they were, and the mix of countries may change.
"But I think there's also this new market that's coming up where people are used to doing more courses online. Even when things go back to normal people may end up doing one or two years of the degree online, and then coming to Australia for one or two years."
In March Brimo expects OpenLearning to launch a transition program for international students UNSW Global, which is part of a five-year licence agreement signed in October last year.
"Their transition program is a pathway program into university for international students. This was a program that was previously run face-to-face and pretty much all pathway programs for international students were run face-to-face in the past," he says.
"But now that's obviously not possible, and international students want a higher quality experience. You can't just give students a subpar distance learning experience running a course via Zoom.
"You actually have to design something that's tailored to online, and that's what we're doing at UNSW," he says, adding OpenLearning currently works with nine Australian universities, representing more than a fifth of the market.
Brimo concludes the conversation by emphasising the move to online education is nothing new, and nor is it a passing pandemic trend.
"I think it's not clear to some people's minds whether online education is here to stay, or whether it's going to experience a temporary boom because of COVID," he says.
"What's been pretty clear is that there's been a long-term trend towards moving education online. Many of the things we've worked on like the pathway program and micro credentials, these have been in discussion for many years; it's just that COVID has been the impetus to accelerate it.
"What we're seeing through all of our discussions with institutions is the medium-to-long-term outcome is more things will be done online. That's here to stay, regardless of how quickly COVID goes away, and we hope it goes away quickly because then I think that will be even better for all of us."Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.
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