MARKET ANALYSIS OF DISTANCE TRAINING IN THE EUROPEAN UNION
Desmond Keegan
Distance Education International
Chapter 44
Market analysis

The EU distance training industry market

The Voctade study provides a market observatory of the EU distance training industry market. Part IX deals with trends within the market in statistical terms.

This is analysed from the following perspectives:

These further analyses are provided. The subject of this section is the funding of distance education and training by government.

There have been many studies of the funding of normal face-to-face education and training by government, and extensive reference has been made in this report to the two most recent analyses in the European Union: Lasonen (ed.)'s Reforming upper secondary education in Europe on initial vocational training, and Ant, Kintzelé, van Haecht, Walther (eds.), Access, quality and volume of continuing vocational training in Europe on continuing vocational training.

These are excellent volumes which make a major contribution to the study of the field of vocational education and training (VET).

They do not, however, treat government funding of distance training. This is understandable as much of the data is provided by government departments and government training agencies, set up specifically to fund schools, centres and colleges to which trainees travel to be trained.

The focus of the Voctade study is the home-based student or the work-based student or the World Wide Web-based student, who does not travel to training centres to be trained, and an important part of this study is government funding of such training.

The Voctade study takes the view that government provision of distance training is complementary to and parallel to normal training, thus enriching the provision of education and training to citizens.

Future market

It is important to point to a new type of distance education student emerging in 1997: the Web-based trainee. Work carried out in 1997 at the Zentrales Institut für Fernstudienforschung has commenced the delineation of these trainees, especially in continuing vocational training courses:

Here are a sample of answers to a recent training questionnaire:

How long did it take you to get to your Web course page?
Average 2 mins 35 seconds Median 2 mins 10 secs

How fast is your connection to the Web?
T1 or better 35%
ISDN or better 24%
28.8 modem 31%
14.4 modem 8%
Slower 0%

How much time did you spend last week looking at a computer screen?
No time 0%
Less than 5 hours 2%
6 to 10 hours 20%
11 to 20 hours 33%
More than 20 hours 44%

Can you construct/change a web page yourself in HTML?
Yes 62%
No 37%

Here is a clientele for vocational education and training courses in 1997 that already spends more than 20 hours per week at a computer and can write HTML. This raises questions on whether governments should fund conventional training or distance education or virtual provision that are beyond the scope of this survey and analysis project, but are constantly present to those undertaking it.

Government provision of training at a distance

History

Three of the four sectors of distance training identified in this report deal with government provision of distance training: There is, however, little analysis of the history of government funding of distance training in the distance education literature, so a brief sketch is provided here.

1. In the 19th century distance education courses were offered from a number of US universities, but this was a private initiative by a lecturer or departments rather than government financing.

2. This study, therefore, places the entry of government initiative in training at a distance in the year 1909. In 1909 a health Inspector named William Allen Gundy started correspondence courses for rural health nurses in outback New South Wales. There is, according to Erdos (1989) a direct line from his work through to the foundation of the New South Wales College of External Studies, of which she was the first woman principal in the 1960s. Today this institution is the Open Training and Education Network of the New South Wales Government Department of Technical and Further Education.

3. In 1910 the University of Queensland was created and immediately started teaching at a distance. This was because it was a university of a state, and not a university of a city like Oxford, Bologna, Sydney or Melbourne, and because it had the whole state with an electorally important and widely scattered farming community as its campus.
The University of Queensland (1910) and the University of Western Australia (1911) were established later than their counterparts in Sydney, Melbourne, Adelaide and Hobart. The new universities turned to the American state universities and Britain's provincial universities for utilitarian and egalitarian models that appealed to states that were huge in area, thinly populated, economically reliant on primary industry, and politically dominated by rural voters who were suspicious of urban interest, and belligerently egalitarian and utilitarian in mood and ideology.
Not for them the dreaming spires of Oxford and Cambridge; they wanted universities serving government and industry interests throughout the whole state, and especially responsive to the needs of the rural population. The, then, Labour Government in Western Australia took these themes further when in 1911, it abolished student fees at the University of Western Australia, thus opening Australia's first (and for sixty years its only) free university (White, 1982:256).
The University of Queensland Act carried specific clauses requiring the introduction of a correspondence programme, and steps were taken in the first years to ensure that the university took a liberal view of part-time and external study.

4. From 1914 each Australian state government set up a distance education school for the education of isolated, hospitalised and other children unable to attend a local school. To these were later added the short-wave radio Schools of the Air for children in the outback.
The dates of foundation of each of these schools, the location, and the responsible government Ministry of Education are:
 
Year Ministry of Education  Location
1914 Victoria  Melbourne
1916 New South Wales  Sydney
1918 Western Australia  Perth
1919 Tasmania  Hobart
1920 South Australia  Adelaide
1922 Queensland  Brisbane
1922 New Zealand  Wellington

Table 5 Dates of foundation of government distance training colleges

Most of these survive today, often with new names and restructured.

5. These Australian and New Zealand government foundations were followed in the 1920s by a series of foundations by the Ministries of Education of the Canadian provinces. A recent contribution to the literature of distance education, Opening education edited by Evans and Nation in the Routledge Studies in Distance Education Series in 1996, contains a major study of these Canadian schools today by Haughey and Roberts under the title 'Canadian policy and practice in open and distance schooling'. They write:

While Ontario's initial focus was the establishment of telecommunications infrastructures, Alberta began by identifying problems with the operation of the Correspondence School. In 1987, a task force to develop a vision for the Alberta Correspondence School (ACS) was established and reported (Alberta Education, 1988) that several issues required resolution, many of which could benefit from technology, such as: reducing turnaround time due to postal delivery; exploring the use of technologies for teaching and curricular enhancement; providing student support; enhancing course design; developing local partnerships to support distance learners; and pursuing equity. The report writers concluded that the Alberta Correspondence School (ACS) should change its focus from correspondence tuition to the provision of decentralised learning services, and that a renamed centre should focus on the provision of centralised course design and liaison with regional centres.

New delivery alternatives such as audio-teleconferencing, electronic mail telephone tutoring and media resources were to be integrated in this decentralised concept. The report was well received by government, which renamed ACS the Alberta Distance Learning Centre and instituted a number of pilot projects to begin implementing the two main thrusts of the report: renew delivery alternatives such as audio-teleconferencing, electronic mail, devolution of responsibility to regional centres and the integration of new delivery alternatives (Haughey and Roberts 1996 : 65).

Thus by the year 1930 a range of nearly 20 Ministry of Education distance education institutions existed in Australia, New Zealand and Canada.

6. In France in 1939, again for children, the French Ministry of Education founded the Centre National d'Enseignement par Correspondance (Cnec). This today is the EU's largest provider from a government institution of vocational education and training with 381,000, most of them adults, enrolled in 1997.

7. In the aftermath of World War II the state governments of Australia and the government of New Zealand set up government vocational education and training at a distance colleges on a model remarkably similar to the French system. The goal was the speedy training of soldiers demobilised from the forces and the retraining of the workforce in the aftermath of war. This lead was later followed by the governments of Belgium and Spain. The Belgian college is today divided into two institutions in central Brussels, and there is a new development in Austria. It would be correct to align the National Extension College at Cambridge in the United Kingdom, founded in 1967, with this group of institutions.

8. The period 1950 to 1989 was characterised by massive investment in distance education by the communist governments of the Republics of Central and Eastern Europe and of the People's Republic of China, both in distance education institutions and in distance education departments of conventional institutions. Dieuzeide of Unesco pointed out in 1986 that one third of all distance education students in the world at that time were in the USSR or China. In eastern European countries distance education was introduced and developed systematically by the respective ministries of higher education in order to increase the number of qualified specialists in many branches of the economic and political system.
At the same time, the governments intended to provide for additional access to the professions for wider sections of the working people.

Finally, the governments believed that distance education was a good example for reaffirming the ideological concept of the close connection of theory and practice. Such a high degree of political motivation and, above all, the enormous demand for highly qualified specialists, meant that the number of distance students increased so dramatically in the fifties and sixties that they made up a considerable percentage of the students in the universities - that is, 20 to 50 per cent, and in some disciplines even more.

In his Foundations of distance education Keegan (1986) analysed this communist model, which he labels 'the consultation system' and highlighted characteristics of communist distance education that are not found, or are not found so clearly, in other models. Among these were:

9. From 1969 a series of government distance education foundations, known usually as the open universities, commenced with major foundations in the United Kingdom (1969), Spain (1972), Germany (1975) Netherlands (1982), Portugal (1985) with more recent foundations in Catalonia and Greece. Nations which did not found an open university, encouraged provision from all or a selection of their existing conventional universities.

10. The Voctade analysis of Government investment in the EU in distance training serves to underline the commitment of national systems to this form of provision and to provide data for policy on future provision. It also draws attention to, without focusing directly on, the little studied but crucial question of how governments see their future involvement in institutional provision.

Society provides itself with privileged places where the teaching/learning process takes place. These are called schools or colleges or training centres or universities. Citizens who study at a distance choose not to frequent the schools, colleges, universities that society provides or are unable to do so, and choose to study at home, or in some cases at work. They expect to be awarded their certificates and diplomas and, even, university degrees at home.

Society, therefore, in parallel to the provision of schools, colleges and universities provides distance schools, distance colleges and distance universities or distance departments of ordinary universities, to teach those who choose to study at home (or work) and this form of provision is the subject of the Voctade programme of surveys and analyses.

The politico-economic challenge for the EU and national governments in the 21st century is whether to invest in:

National institutional provision

Specialised distance institutions

The status of distance education in a national education system can, to a certain extent, be measured by the creation of specialised institutions for distance education by the national government and the acknowledgement thereby of the contribution of distance learning to national training provision.

It seems clear that distance education systems and their staff, can focus better on students who study at home and do research on the particular needs of such students; it seems that distance systems can better provide training for those citizens who choose not to, or refuse to, or are unable to, attend schools, training centres, or colleges or universities and can focus on specialisation and professionalism in dealing with students at distance.

Some scholars (Peters 1973, Keegan 1996) have argued that distance education is a distinct form of educational provision with its own didactic laws and institutional structures and that therefore specialist providers and staff are an advantage. It seems clear that few teaching staff can cope adequately with the four different didactic modes of conventional and distance teaching at the same time:

Critical volume of annual enrolment

However, a major proviso is required. It is clear that below a certain annual enrolment it is sensible for a government not to create a separate distance education institution. It is argued that beyond a certain annual level of enrolment it is sensible for a government to provide a distance education system.

The question is what is the critical volume of annual enrolments?

In a 1982 study Keegan and Rumble came up with these indicators for governmental administrators in the planning of distance systems:

In the light of these considerations, 1996 provisions from EU governments is:
Country Provision  Foundation
Austria National distance training college  1996
Belgium Flemish National distance training college  1968
Belgium French National distance training college  1968
Denmark  too small  Nil
Finland too small  Nil
France National distance training college  1939
Germany State distance teaching university  1975
Greece National distance teaching university  1997
Ireland too small  Nil
Italy Attempted consortia solutions  1980's
Luxembourg too small Nil
Netherlands National distance teaching university  1984
Portugal  National distance teaching university  1988
Spain National distance training college 
National distance training university 
State distance teaching university 
1968 
1972 
1995
Sweden Nil  Nil 
United Kingdom National distance teaching university  1969
Table 5 National provision of distance institutions

Creation of employment

Range of employment

A measure of the importance of the distance learning industry to the EU economy is the volume of employment created. Distance education systems have the potential to create extensive and permanent positions for qualified staff in a wide range of professions: The Open University of the United Kingdom, for instance, employees 10,919 staff and the French Cned employs over 6,000.

Clearly it is possible for distance institutions to outsource some or most of these jobs but then increased employment is created in the companies and individual contractors so outsourced.

The previous section has shown the outline picture of the four models of provision of employment and the data is presented here from the point of view of employment creation by distance education systems.

The distance teaching university model

The major distance teaching universities are national institutions of great prestige, contributing to national ethos and status in the fields of academic teaching, research and public service:

The Open University of the United Kingdom
The Universidad Nacional de Educación a Distancia, Spain
The Fernuniversität in Germany
The Universidade Aberta, Portugal.
The Open Universiteit, Netherlands.

As has been shown these open universities are major creators and maintainers of employment, as they seek to provide university degrees at a distance of the same quality and prestige as their conventional counterparts. They seek to achieve academic research as well; and provide public service, win national research grants and serve on national scientific and social committees on a par with the conventional universities in their national systems.

To these have been added recently:

The Universitat Oberta de Catalunya
The Hellenic Open University

Distance education provision from a conventional university model

There are a variety of models for the provision of distance education courses from a conventional university; Many of these models do not necessitate the employment of university staff, either full-time or part-time. Course development can be done by consultants on a contract basis; instructional design, editing and graphic artists can be outsourced; printing, publishing audio tape production and videotape production can be done by professional companies.

The teaching of the students enrolled in the courses can be assigned to consultants on a contract basis; counselling can also be assigned to consultants; enrolment assignment turnaround and statistics can be assigned to the existing university face-to-face structures.

It depends on national policies in the late 1990s whether distance education system models which create and encourage employment are favoured against models which are based on outsourcing and contractual staff.

The government distance training college model

Government distance training colleges provide employment for administrators, academics (from basic education for adults levels to university level), technical support staff, course writers and course teachers. Most of these staff are employed for adult students, on the same payroll as secondary and primary school teachers, by Ministries of Education.

In a number of systems, complicated rules govern the number of hours per week that these staff may be employed teaching adults at a distance, and the number of hours per week they may be employed doing other work, often teaching children face-to-face in secondary schools.

The private distance training college model

A number of corporations own distance training colleges and many distance training colleges are companies, corporations or registered charities.

Some, especially in the Scandinavian countries, receive taxpayers' funding from their governments. Many receive subsidies from taxpayers' moneys for enrolment of citizens in professional, technical and vocational courses. Many receive grants for development of courses for the unemployed and other target groups.

Most of these institutions are run as businesses with some (like Kilroy's College in Dublin, Ireland) in which the administrative staff only are employed full-time, with course development, student support and counselling staff all employed on a contract basis. Others, like Leidse onderwijsinstellingen in Leiden in the Netherlands, are staffed with teaching and academic staff as well as management and administration staff.

In the institutional case studies in Volume 1 attention is drawn to the unique range of staff normally employed in distance education institutions; the unusual mix of academic and technical staff (with attendant employment problems of the status and salary scales of academic and technical staff if both contribute equally to a course) and to the varied mix of full-time staffing positions or consultants in the four models developed.

Professionalism

Leadership has been claimed by the CNED by the setting up of an academic institute at Poitiers, Futuroscope for the identification of distance training skills, the training of distance training professionals and the marketing of these professional skills.

A range of post-graduate degrees in distance education is available from a selection of universities throughout the world.

There is a clear need for a new professional figure: the expert in virtual and distance training, and the development of skills, know-how and professional expertise in the future.

The cost effectiveness of distance training

Provided certain laws are observed, distance training will always be cheaper than conventional provision and to other forms of open, flexible or ODL provision.

The laws for this cost effectiveness were established by, amongst others, Rumble of the Open University of the United Kingdom.

An overview of the issues was provided by Keegan in his Foundations of distance education, 3rd edition, 1996, Chapter 10 pages 163 -185.

A vigorous restating of the cost advantages of distance education systems was made by Sir. J. Daniel in 1996 and reiterated in 1997 in a series of articles and speeches published on the Internet.

The practical consequences of these laws, especially with reference to the use of low-cost technologies, is provided in 1997, by Cherkov Beheer B.V. by its enrolment of 650,000 students from its bases in Nijmegen and Cyprus.

Rumble (1982) presented his laws for the cheapness of distance training in comparison with all other forms of training provision:

Broadly speaking, very significant costs are incurred in the preparation of materials irrespective of student numbers. The level of cost incurred will vary depending on the choice of media. Production costs of television are high but not as high as for film. The production cost of radio is relatively low. Print production costs vary depending on the level of sophistication, but overall are not normally significant in themselves within the context of a particular project. Where print is the principal medium the cost of academic staff time in its design and development may be significant.

Transmission and duplication costs are very high for video systems. The cost of film and video-cassette based systems increases with the magnitude of the project. The cost of distributing print and audio-visual materials to students depends on the means of distribution used, population dispersal, and difficulty of access to the target population.

In conventional educational systems teaching costs are traditionally held to be a recurrent cost that is variable with the number of students in the system. In contrast, in distance learning systems the cost of developing the materials can be regarded as a fixed cost that can be written off over the life of the course of which they form a part. This investment has been seen as analogous to capital investment in business, representing a move away from the labour intensive nature of conventional teaching systems. It follows that the more students there are using the materials, the lower the average cost per student of the materials. Hence at some point, and this depends on the choice of media, a distance teaching system should become cheaper per unit of output than a traditional system.

The use of face-to-face tuition tends to undermine the cost advantage of distance teaching by re-introducing a cost element that is directly viable with student numbers. As a result, face-to-face contact is usually restricted particularly at the higher level and has a different function to that found in conventional systems, where it is a major teaching medium.

From an economic point of view the investment in course materials is not normally warranted where student numbers are small. As a result the choice of courses in distance teaching systems may be restricted, at least in comparison with conventional systems.

Administrative systems for the control of course design, production and situation and for the teaching of students at a distance tend to be more clearly differentiated from the academic functions than is the case in conventional systems, as well as being more complex in themselves. The initial investment in administrative systems prior to the enrolment of any students is likely to be significant and on the whole more costly than is the case in conventional systems.

Keegan (1996) draws these conclusions:

From an analysis of all the studies presented certain economic indicators on the costing of distance systems can be put together:

The economics of conventional education is of little value for the cost analysis of distance systems.

The equation frequently used in conventional education as the basis of system costs:
Faculty Weekly student hours X average faculty salary
salary = Average class size X average faculty load expense has little relevance in distance education.

The proportion of fixed costs to total costs in conventional education (schools, colleges, and universities) is small; this is not true of distance systems.

Distance systems, like industries, have high capital investment in the production of courses; conventional education is labour -intensive.

The number of drop-outs in the system is crucial; once drop-outs pass 50 per cent and move towards 100 per cent cost effectiveness vanishes.

If student support services are face to face and compulsory, the cost advantages of distance systems move back towards those of conventional education. This is more marked for group-based distance systems.

The cost advantages of distance education systems are quickly eroded, and the costs the distance systems move back towards those of conventional education. This is more marked for group-based distance systems.

Daniel (1996) restates these findings with precision:

Over 20 years ago Wedemeyer (1974) expressed the economic expectations of distance education systems as follows:

'As an operating principle, the system is capable, after reaching a critical minimum of aggregation, of accommodating increased numbers of learners without a commensurate increase in the unit cost of the basic learning experiences: i.e. costs must not be directly and rigidly volume sensitive. After reaching the necessary level of aggregation, unit costs should show a diminishing relationship to total systems costs.'

In making this statement Wedemeyer had in mind distance educational systems in the correspondence tradition. The economics of remote classroom instruction are different. Whether that approach is cost-effective at large volumes is another important question. The analysis of China's Television University system provides some pointers.

Wedemeyer's description of the economics of distance education is another way of saying that this is an industrialized form of education where the ratio of fixed costs to variable costs is much higher than in pre-industrial production by craft work. A car factory is a good analogy. The marginal cost of producing an extra car is tiny compared to the investment in design, development and tooling required for each new model.

For example, Wagner (1977) claimed that in 1976 the ratio of fixed costs to variable costs per student was about 2000:1 in the UK Open University compared to 8:1 in conventional universities. The implication of these figures, which is central to the industrial approach in general, is that distance education is less costly than classroom teaching where the numbers studying a particular topic are large. The vital question is, how large?

As an increasing number of universities offer courses at a distance they will want to know the values of two key economic measures of their activity,. The first is Wedemeyers' critical minimum of aggregation' after which unit costs being to drop.

The second figure of interest is the enrolment level beyond which the cost of teaching students at a distance is less than the cost of teaching them in conventional ways. This is another representation comparing the growth of total institutional costs with student numbers for distance learning systems and traditional methods.

Cost comparisons depend crucially on the assumptions made. The early polemics on the costs of distance education (Mace 1978; Wagner, 19873; 1977) duly explored the merits of calculating output as full-time students, graduate or some measure of value added. Wagner (1977) showed that the average annual recurrent cost per full-time undergraduate at the UKOU was less than one-third the cost at a campus university, and the cost of a UKOU graduate was less than half. Nearly two decades later, Peters and Daniel (1994) using a different type of analysis, showed that cost comparisons were still strongly in favour of the UKOU.

Erosion of cost leadership

There is ample evidence that the cost leadership of distance training can be eroded.

The most fundamental of Rumble's laws is that expenditure on technology must not be excessive on low tech systems or cheaper than high tech. Yet there is ample evidence of a move to high-tech.

Keegan's insistence on the shelf-life of courses is another law that is being eroded. There is ample evidence of a shortening of the shelf life of courses.

Fragmentation of the sector has been accelerated by the pump-priming of projects by governments. Examples of this are the Open Tech programme of the UK government's Management Services Commission and many of the European Union's Delta, Leonardo and Socrates projects.

The age old law of distance training is that academics love developing materials but do not like teaching students year after year at a distance all over the world. Some systems, like the Open University of the United Kingdom, have part time staff to do the teaching, while the university staff proceed from one project of developing learning materials to the next.

No training occurs from the development of learning materials, no matter how sophisticated. The training starts after the project of developing the learning materials has been completed. Training starts after the materials have been finished, often many years later, with enrolment and counselling, support and feedback for the learning process, examination and the award of certification and application to the workplace.

One does not have to be rich to learn. There is no evidence that students learn better from hi tech materials than from low tech. The example of the Charkov Beheer BV and its 656,000 enrolments in 1997 may be a salutary corrective.

Competitive advantage

The field of distance training has been greatly supported by a series of analyses presented by Sir J. Daniel, the vice-chancellor of the Open University of the Untied Kingdom in 1997.

A number of these positions contrast with published documentation of national government agencies and/or documentation from DGXII and DGXXII of the European Commission in Brussels.

They restate the primacy of distance education and training in competition with other forms of VET provision. Five of these positions are listed briefly here:

Daniel writes:

I shall now examine how the UK Open University - and all open universities - achieve quality. I suggest that there are four ingredients.

First, high quality multi-media learning materials. Study materials must be excellent and varied to make study in the home or the workplace a congenial university experience. One way of ensuring quality is to have courses produced by multi-skilled teams.

Such teams include a number of academics, so that the structure and concepts of the course are developed in a critical and intellectually fertile environment. They also include people skilled in the design and production of the media that the course will use: editors, TV and audio produces, graphic designers, software specialists, experts in student assessment and so on.

The challenge is to get a good balance between the time and effort invested in the making the course and the quality of the student experience. The great advantage of the large open universities - what I call the mega-univerisities - is that they can afford to make large investments. However, smaller universities can use the same principle by working collaboratively to produce courses.

I believe that the new technologies have huge potential to improve further the quality of distance education that is based on asynchronous communication with individual students. However, I also see them being used in a very teacher-centred way, as a way of displaying and distributing lectures electronically. The students may no longer be in groups, but the focus is still on the class.

I worry that these electronic correspondence course may harm the reputation for quality that some open universities have given to distance learning over the last twenty years. That would be a tragedy.

There are direct links from distance training to web-based training so that mutatis mutandis the distance training providers should be superior in electronic web-based training at a distance. Daniel writes:

A reason that distance learning has become a topic of live interest in may countries is related to the explosive growth of the interactive computer and communications technology of the Internet and the World Wide Web. The term virtual university has become associated with proposals for new universities that have previously taught only on campus now say they are 'making courses available on the Web'.

We can think of open universities and virtual universities as mirror images of each other. The open universities began with the goal of being open to people. To achieve that goal they had to adopt the secondary aims of being open to places and open to methods. The virtual universities begin with the goal of being open to certain new methods - the knowledge media - which they hope will allow them to achieve the secondary aims of openness to people and places.

The real and proven success of open universities and the apparent promise of virtual university projects have created an unprecedented interest in distance learning. This is causing many universities, implicitly or explicitly, to include in their missions the notions of openness to people, to places and to methods. Some people think that this is challenges the accepted notions of quality in higher education.

Conclusion

The laws of competitive advantage are known from marketing strategy and focus on seven key operational issues. These are: The four sectors of distance training provision in the EU can use these seven guidelines to maintain their massive 1997 industry market in the face of competition from conventional face-to-face training or from open or flexible or project based training, both of which have less synergy with the seven indicators of competitive advantage listed.

Fees paid

Procedure

In this survey and analysis the focus is on the annual volume of fees paid by EU citizens to EU government distance training colleges or to EU private distance education providers for enrolment in distance training programmes. Also of importance is the payment of these fees by the taxpayers of the country for the enrolments of individuals (in those EU countries where fees for individual enrolments are paid in whole or in part by government agencies from the taxes of all taxpayers).

The methodology adopted here, as a consequence of the decisions made and justified in the interim deliverables is:

To make the procedure fully precise the following rules are followed in this financial analysis.

The focus is the number of citizens who annually pay for an enrolment in distance training.

Multiple enrolments are ignored.

The length of enrolment is ignored.

Number of hours per week is ignored.

Level of qualification is ignored.

Parity of esteem is accorded to all programmes.

Courtesy

As a courtesy to a range of institutions that have contributed to this study, no individual fee income volumes will be published. It is clear that many institutions regard data of this type as important marketing and commercial data and do not release financial data of this kind to researchers. The popularity of a course, the volume enrolled in a course, trends and changes in enrolments in particular types of courses, can all be regarded as sensitive marketing data, not to be released to researchers.

Cells

The procedure adopted, therefore, will be to focus on the 64 cells into which the enrolment in EU institutions has been divided for the purposes of this study.

The Delphi methodology already described will be used to identify the volume of institutions in each cell and then the annual enrolment for all the institutions in that cell will be calculated. The figures will be refined and evaluated by the methodology described until the researchers are satisfied that the required accuracy has been achieved. This will establish 64 cell statistics.

A further survey will be undertaken to ascertain the average enrolment fee for the institutions in the cell being studied to establish from student surveys, institutional enrolment brochures and from the institutions themselves the average fee for their course enrolments. These fees will be aggregated to produce the average annual fee for the cell. Care is being taken to identify multiple enrolments, enrolments subsidised by taxpayers and enrolments which stretch over more than one year.

This annual aggregated fee will be multiplied by the annual individual enrolment to produce the global fee volume for the year in question and the sum of the 64 cells is the annual EU fee volume for the year in question.

The EU distance training market

Market growth

The market for distance education courses has been growing steadily for the last 150 years since the beginnings of distance education in Northern Europe and North America in the middle of the 19th century.

This market is mainly comprised of home-based learners, but there has been a growth in study-centre-based provision and in work-based provision in recent decades.

Estimates put the global total enrolled in distance education systems world-wide in 1996 between 20,000,000 and 30,000,000. This is, in the main, an adult market.

Earlier studies placed the EU component of this figure between 2,000,000 and 3,000,000 per year.

Market observatory

It was too early at the time of the first deliverables to attempt to define trends in the four sectors into which the market for distance training in the European Union has been divided for the purposes of this study because 1997 statistics were not yet available.

In the final deliverables, however, it is possible to attempt to identify trends for all of the sectors, for each of the 16 national systems, and for the EU as a whole.

The following data will be used:

1993-1994 data taken from D. Keegan, Distance training in the European Union published by the ZIFF in Hagen, Germany.

1994-1995 data taken from D. Keegan, Distance training in the European Union II, published by the European Commission, DG XXII in Brussels.

1995-1996 data taken from the first deliverables of the Voctade survey and analysis project.

1996-1997 data taken from the final report of the Voctade survey and analysis project.

It is anticipated that with four sets of data for each of the 64 cells definite trends for each sector, for each national system and for the EU as a whole can be identified.

Sectoral trends

Indications of trends that the research and analysis final report reveals are:
  1. Distance teaching universities

  2. Continued growth in Spain and in the United Kingdom, stability in Portugal, Germany and the Netherlands, new foundations in Greece and Catalonia.
  3. Conventional universities

  4. Rapid growth in the United Kingdom, stability and new providers in a range of other EU nations.
  5. Government provision

  6. New government institution in Austria. Stability from the major providers in France, Spain, Wallonia and Flanders. An important contribution from the major radio/TV colleges; Teleac in the Netherlands, Funkkolleg and Telekolleg in Germany.
  7. Private provision

  8. Progress in Spain, stability in Germany, Ireland, the Netherlands and the United Kingdom, regression elsewhere.

Market challenges

The distance training providers have built up a valuable, if little studied, EU training resource.

They have built up a very considerable annually recurring market which in 1997 is almost equally divided between government and proprietary providers.

Can this EU training resource be maintained and developed ?

Can the EU distance training providers, government and proprietary, hold on to or expand their considerable market?

March of technology

Attention has already been drawn to the march of technology and the growth in 1997 the growth of a new clientele for distance systems: Web-based courses.

Will the provision of courses via the World Wide Web on the Internet or Intranets succeed where many new technological advancements in the last 20 to 30 years have failed: to establish themselves as permanent and didactically valid forms of distance training provision?

The Voctade study does not see these various forms of provision as competitive but as complementary to each other and as enriching the choice and availability of vocational education and training for citizens.

The Voctade study sees conventional training, distance training and virtual training as complementary, but in the market place they may well be competitors and one of the great challenges to governments and educational planners in the 21st century will be the correct allocation of funding to:

Cost of technology

The cost of electronic technology in the European Union, in comparison with the cost in the United States, is a major barrier in 1997 and beyond to the development of distance and virtual training in the European Union .

How much does it cost a student to access the internet to study a distance training course for a year, in addition to all the other fees and expenses?

Here are the figures for one year, for one European Union country in 1997: calculated on six visits to the WWW of 9 minutes each (the minimum for any meaningful research or interaction):
Internet connection £ 12 x 12 = £ 144
Service charge  £ 10 x 12 =  £120
6 X 9 min per day  £ 1,000 
Vat _at_ 21% £ 265 
Total £1,529  (2000 Ecu per year)

Calculation of fees paid

Fees paid is calculated by multiplying the volume of enrolment statistics for 1997 by the average fee for each of the 64 cells in 1997.

The volume of enrolments for the 64 cells, excluding the enrolments of the Charkov Beeher, is 2,483,936.

Van der Mark in 1993 calculated that the average range of fee in the European Union was between 100 Ecu and 1000 Ecu. This is a wide range.

The calculation is complicated by differing government policies for many of the 64 cells:

Data collected by the Voctade enquiry indicates that fee levels for certain MBA programmes at a distance are high: more than 5000 Ecu per year.

Data collected by the Voctade enquiry indicates that for certain cells (government distance training in Belgium) the real cost of the course can be calculated by dividing the annual enrolment into the annual government subsidy to the institutions.

Data collected by the Voctade enquiry, therefore, indicates that the average fee per enrolment paid in 1997 lies in the region of 400-500 Ecu.

Multiplying the number of enrolments, 2, 483,136 by the average 1997 fee of 450 Ecu/ Euro gives the annually recurring market as 1,117,411,200 Ecu/ Euro

To calculate the complete 1997 market volume of the EU distance training industry one needs to add to the total above:

It would be incorrect for the Voctade study to address these questions for these reasons: Sufficient data has been provided to demonstrate that the annually recurring volume of the EU distance training industry market is unlikely to be less Ecu/Euro 1,000,000,000 (one billion Euro).