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The idea that digitising your services will open the door to a global audience has not proved true for online education, according to US data on business schools.

Internet-based teaching may in theory be borderless, but early adopters of these online courses still tend to pick those run by schools close to home, the research found.

The analysis, compiled by online education business 2U from data held by the US Bureau of Labor Statistics, US News business school rankings, the National Center for Education Statistics and its own figures, found that about two-thirds of students enrolled on online graduate courses had done so with schools either in their state or region, barely different to the statistics for conventional campus-based programmes.

The results suggest that location still matters to students whether they are online or attending an institution in person.

Rob Cohen, president and chief operating officer of 2U, which runs online degree programmes with 13 universities and three business schools, admits that he was surprised by the results, but insists that new entrants like his would still disrupt the market.

“We are seeing that there will be more winners among existing business schools from online education, but it will put pressure on the market,” he says, although he admitted that his previous view that one provider could be the “Google of MBAs” has been challenged.

2U has partnerships with 13 US universities, running online courses on their behalf that together generate $795m of retention adjusted tuition bookings.

Teaching is a combination of online lectures, which students can watch when they wish, and virtual seminars, where students are required to connect at a certain time and can see themselves and their fellow participants on screen.

“This is not a mooc,” Mr Cohen says, referring to the massive open online courses in which students watch a video rather than interacting with a teacher. “It is a classroom where everyone is on the front row.”

Although online education may not have caused the death of distance, Mr Cohen claims that 2U’s partner schools do see a broader demographic of students taking the online courses.

Many are taking online courses so that they can study while holding down a full-time job, he claims, noting that many of those taking the masters in public health that 2U offers are doctors.

“We are able to attract not a weaker student but a better student,” he says.

Copyright The Financial Times Limited 2017. All rights reserved.
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