Economics

Online education promises nearly zero marginal costs to deploy online education to additional students, but this is contingent upon those students already having Internet access. How long will it take for the Internet to reach every human in a globe of 7 billion? In the meantime, are there social downsides to the inherent “digital divide” that temporarily occurs whilst free markets roll out any communications technology?

2035: The year when everyone will have Internet?

Adoption of the Internet in the developing world is led by mobile phones. This is because the cheapest way to provide basic voice and SMS service to a random area of terrain is to build cell towers, not lengthy and high-maintenance wire lines. Thus, developing companies receive cell service at

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a GDP threshold less than Americans would instinctively guess, because cell phones are actually cheaper than the US phone system per customer.

This massive spread of cell phone coverage coincides with the rise of services like Google Voice, Twilio, and Jana which transparently reveal the beautiful truth that the world wide web and ordinary telephone networks are part of the same automated, global packet routing grid.

The massive success of providing Internet access to the developing world will enable online education to spread like wildfire in those continents, (together with its cousin, online banking). But how long will it take before the janky, haywire patchwork of mobile/WWW protocols of text only are replaced by higher quality satellite Internet and eventually fiber line? The Internet can be the first social phenomenon to finally end poverty — if the Internet spreads fast enough.

Below are some useful estimates. The first chart is a time-series graph of the predicted global population, according to a study by the United Nations in 2004.

United Nations Population Projection (2004) -- http://www.un.org/esa/population/publications/longrange2/WorldPop2300final.pdf

The second chart is one we made, depicting our projection for how long it will take for Internet access to encapsulate the entire planet. According to a recent report by the International Data Corporation, the global number of Internet users is likely to increase by 35% from 2010 to 2015, climbing from 2.0 billion up to 2.7 billion. If we project that 35% growth rate further forward, we expect the following usage statistics:

2010 2.0 billion Internet users 29% of population
2015 2.7 billion Internet users 38% of population
2020 3.6 billion Internet users 49% of population
2025 4.9 billion Internet users 62% of population
2030 6.6 billion Internet users 80% of population
2035 9.0 billion Internet users ~100% of population

The Content Creators

There will be at least five sources of online educational content. Each type of source will carry different implications for the artistic and philosophical zeitgeist that will define the aesthetic of online education.

Universities Good because they already have all of the necessary teaching materials for a standard course (handouts, reading assignments, problem sets, essay prompts, group project assignments, and exams).
Companies Likely to produce the best content because of market competition.
Crowdsourcing Popular today as Wikipedia, Quora, and Stack Exchange. Will compete against company-built materials.
Non-profits Khan Academy may soon be joined by a lot of other similar STEM professionals who take free time out their day to create educational content. These people, being motivated out of kindness and love, may be the best teachers.
A.I. Watson may soon join WolframAlpha and Siri as real-life consumer “librarian” A.I.’s, like the librarian in Snow Crash. In this situation, educational content is generated on-the-fly out of large backing databases of facts.

The Business Model

Online education could be payed for by students, employers, or government. Who will end up paying, and what are the socio-ethical implications?

Students Like today, have students pay for their learning. The preponderance of free learning materials will probably (rightly) decrease students’ willingness to pay.
Government Provide financial aid to needy students. At

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the K-12 levels, a school voucher system could allow any student who wants to get a top-quality online education for no personal cost.

Employers Peter Norvig suggests that we could have employers pay for students’ data (i.e. submitted assignments, exams, and papers), in exchange for grant money to pay for the education. What are the privacy implications? Is it worth it to sacrifice educational materials’ privacy in order to have a flat society where anyone can afford an elite education?

We suggest: Facilitate transferring credits.

After the hours of research we put in, we happen to have come to the conclusion that there is a simple step that the federal government could easily take in order to accelerate the coming flowering of online education institutions.

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Quite simply: legislate up a brand new national exchange for college credits.

The federal government can provide a universal protocol for transferring credits between schools. We believe that this would greatly help online education through its early growth, by allowing students enrolled at in-person universities to take a few online classes from any provider and have the classes count toward that person’s degree.

$1k per student per year: The global education budget.

We leave you with this simple fact: the global education budget, per-student, per-year, is only $1,000. (See calculations at bottom of page).

No in-person mass education scheme can possibly reach 7-9 billion people for $1,000 each. Online education must be encouraged if we are to educate the world on a shoestring budget.

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Calculating the global education budget (per student):

As per the calculations below, the world can already afford $1,000 per student per year for every person 24 or younger in the world.
According to the UNESCO Institute for Statistics, global spending on education is approximately 4.4% of GDP.
Global GDP in 2010 was $63 trillion, putting global education spending at around $2.77 trillion.
Let’s consider education spending to apply to everyone in the world who is 24 or younger. This is 34% of the 6.84 billion world population, which comes out to 2.33 billion youth.
Thus, the world has about $1,000 per year to spend on educating each person 24 or younger.