Business Models for Open Educational Resources
One key strand of our work in the ENCORE+ project is to capture, crystalize and build consensus around the potential of open educational resources (OER) to support alternative and innovative business models. This blogpost summarises some of the existing work in this area and indicates some key areas for further exploration. This is the initial phase in writing a typology of OER business models that can be discussed with the ENCORE+ network of community Circles.
There are obviously lots of potential starting points for such an investigation, and we will draw on several perspectives to arrive at a rich description. Starting with the broadest distinctions, we can begin with the idea of Defenders and Prospectors.
Defenders and Prospectors
This distinction goes back to an original concept of organisational design from Miles et al. (1978), which is still frequently referred to. Miles et al. break the adaptive cycle into three main strategic problems:
- The entrepreneurial problem is focused on which product or service should be chosen to reach which target market.
- The engineering problem is about creating a system and choosing technologies to transform the entrepreneurial idea into a concrete product or service.
- The administrative problem is finally about reducing uncertainty within the organisation by setting up routines to rationalise and stabilise activities and decision-making.
Within this framework, the most innovative organisations are given the name Prospector by the authors. These organisations are constantly searching for new markets and new growth opportunities, whilst encouraging organisation-wide change and risk-taking. These organisations follow a ‘first-in’ strategy for market entry or market innovation, and have a disruptive or entrepreneurial mindset.
The counterpart to this organisational type is given the name Defender which concentrates on protecting its current markets, maintaining stable growth, and serving its current customers. This type prioritises improving efficiency and cost-effectiveness and so is largely focused on the engineering and administrative problems.
An organization that follows a prospector strategy is a highly innovative firm that is constantly seeking out new markets and new opportunities and is oriented toward growth and risk-taking. In contrast, an organisation which follows a defender strategy focuses on improving the stability and efficiency of its core activities whilst serving its existing market domain.
It should be noted that both Prospector and Defender approaches are valid, depending on the aims and strategies of the business model.
In the OOFAT Models study (Orr, Weller & Farrow, 2018) this typology was connected with a set of behaviours and values in relation to core aspects (Taran, Boer, & Lindgren, 2015) in order to explore contemporary higher education strategies which make use of open, flexible and technology-enhanced strategic approaches. The following table presents these dimensions.
| Core aspects | Defender-like approach | Prospector- like approach |
| Products and services | We deliver and/or support core institutional provision | We offer something different, complementary or alternative to the main provision |
| Target group | We target an existing market | We are targeting a new (or nontraditional) market |
| Communication channels | We interact with learners through traditional channels | We interact with learners through new or innovative relationship channels (physical or virtual) |
| Legacy or new value chain | We develop, produce and deliver the provision by making the most of legacy knowledge | We develop, produce and maintain our offering through exploration of new approaches and innovation |
| Competitive advantage | Our competitive advantage comes from traditional competences (e.g., market knowledge, expertise, improvement of existing technology) | Our competitive advantage comes from new, unfamiliar, competences (e.g., new or emerging technologies, innovation in working practices) |
| Networks | We operate primarily within traditional institutional or cultural parameters | We operate primarily in nontraditional or (dynamic) networks (e.g., alliance, joint-venture) |
| Profitability and sustainability | We maintain profitability through incremental cost cutting and efficiencies | We maintain profitability through new processes to generate revenues, or cost-cutting in existing processes |
The OOFAT Models global survey used this framework to classify the business models of different higher education providers along these seven dimensions. This analysis is broader than the classification of business models into two categories. Based on describing seven dimensions of their business models, the study uncovered five business strategies from the cases:
- Fixed core model, where providers maintain a legacy approach to their products and services and to their target market, although they may be innovating in other areas
- Outreach model, where providers maintain the same products and services, but are innovating in the dimensions of target group recruitment and utilising new communication channels
- Service-provider model, where providers maintain a focus on their target group whilst particularly innovating in the areas of product and service and communication channels
- Entrepreneurial model, where providers adopt innovative strategies for the areas product and service, target group and communication channel, i.e. they aim to be transformative in their services and provision
- Entrepreneurial model with fixed core, where providers maintain a legacy focus to their core services (teaching and learning), but focus on being innovative in all other areas
How does this relate to open educational resources (OER)?
On the face of it, the open educator shows affinity with the prospector – the innovator – since they are engaging in new and disruptive behaviours which are contrasted with the traditional or mainstream approaches. While this is typically true, it’s also a bit reductive. As the five models described above show, there are lots of different ways in which a business model might implement an open approach for a specific aspect of their operation. OER might be used to support an innovation strand within a business which is primarily a ‘defender’ as a route to retaining market share rather than to create or penetrate new markets.
Another aspect here which is almost completely unexplored in the literature is the ways in which open practices (OEP) might be used to support outreach, communication and community building.
In practice, most organisations of significant size or establishment are likely to have some combination of strategies for different parts of their operation(s). Articulating how open approaches can work for specific instances is a detailed and complex task, which perhaps explains why most of the typologies and models are still quite general.
One meaningful distinction we might make, though, is between models like OOFAT which seek to understand the role that openness or OER plays within a wider strategy or approach; and those business models which are specifically dedicated to understanding and supporting how the implementation of OER can result in sustainable business models.
Of the latter, we can say that this is an area which has been explored more fully – and this makes sense given that it is an area of interest to many working in open education (and more widely with respect to the commons).
This article includes remixed content from Orr, Weller & Farrow (2018).
References:
Orr, D., Weller, M., and Farrow, R. (2018). Models for online, open, flexible and
technology enhanced higher education across the globe – a comparative analysis. International Council for Distance Education. Oslo, Norway. https://oofat.oerhub.net/OOFAT/
Miles, R., Snow, C., Meyer, A. & Coleman, H. (1978). Organizational Strategy, Structure, and Process. Academy of Management Review, 3. 10.2307/257544.
Taran, Y., Boer, H., & Lindgren, P. (2015). A business model innovation typology. Decision Sciences, 46(2), 301-331. https://doi.org/10.1111/deci.12128
Tlili, A., Nascimbeni, F., Burgos, D., Zhang, X., Huang, R., & Chang, T. W. (2020). The evolution of sustainability models for Open Educational Resources: insights from the literature and experts. Interactive Learning Environments, 1-16.
