IT takes the e-learning back seat

May 19, 2000

As new knowledge experts converge in Vancouver for the World Education Market, Alison Goddard highlights the key themes

The business of e-learning in Europe is conducted very differently from its counterpart in the United States - to the benefit of European universities.

Annie Wegelius, co-founder and executive deputy chairman of the Swedish company K-World, will tell delegates at next week's World Education Market in Vancouver that e-learning in Europe is driven by educational content, whereas in the US, the business has grown from an IT sector seeking new applications for technology.

Business-to-business learning dominates the market in both areas, with leading companies being built through cooperation rather than competition. European universities are poised to exploit their educational content through collaboration with commercial partners.

K-World, provides more than 4,000 training courses to customers from the Fortune 500 companies and international businesses, including Ericsson and Volvo. K-World's partners include the Chalmers University of Technology and Sun Microsystems.

Ms Wegelius said: "Our approach to learning is a bit different - the learning environment has a story-telling context, and we deal with the motivation necessary for students to stay in a distance learning environment."

In common with other e-learning businesses worldwide, K-World emphasises how it cooperates rather than competes with other knowledge providers.

"The key strategy in the new economy is integration. K-World is cooperating with prominent universities and training companies around the globe. K-World packages and distributes the expertise of these institutions to a new universe of end-users, creating value for content-providers and customers," Ms Wegelius said.

That value has yet to translate into hard cash, though. K-World is funded by venture capitalists and has yet to make a profit. "This is a long-term investment, we intend to be in the black in a few more years," said Ms Wegelius.

The potential market for e-learning is huge, according to Thomas Christel, vice-president of Viviance, a Swiss company specialising in web-based learning that is about to expand to the US.

"By 2003, web-based learning will be worth $11.4 billion (Pounds 7.6 billion)in the US and Canada alone," he said.

Founded in 1996, Viviance has taken a similar approach to K-World by "thinking education first, then enabling technology". It has taken the idea of integration seriously - it invests money in its customers. Viviance provides half the capital for companies, such as Volkswagen, to expand their educational courses into web-centric modules. In return, Viviance takes half the profits.

"Our true differentiation is our unique business model. We provide our customers with limited capital development. At the back end, we share revenues," Mr Christel said.

Two months ago, Viviance raised $14 million in venture capital, with 3i as the lead investor. It is about to merge with a leading US-based e-learning company and aims to be profitable within two years.

Another prominent e-learning company working in partnership with traditional education is Blackboard.com, which was developed with staff at Cornell University.It helps lecturers and teachers to put their material on its website for free. It also has links with commercial providers such as the Pearson subsidary FT Knowledge.

In the United Kingdom, the Open University has been approached by many companies and overseas institutions seeking to provide e-learning, and it has formed partnerships with some of them. It has also launched a US Open University and now sees itself as "a confederation of partner institutions that could, between them, develop into a genuinely multinational university," according to Sir John Daniel, vice-chancellor of the OU.

The business of e-learning has proved successful even for institutions that have gone it alone. Embracing e-learning alongside more traditional distance-learning methods has allowed Canada's equivalent of the OU, Athabasca University, to double its enrolment to 20,000 students over the past four years.

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