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In the early 1990s, management guru Peter Drucker proclaimed that the internet would revolutionise learning, with virtual universities eclipsing brick and mortar institutions.

In the context of the internet euphoria of the time, it was easy to buy into his vision. But, the bursting of the dotcom bubble has led to a reality check. Mr Drucker’s bold vision now looks fuzzy indeed, as many online education ventures are nursing burnt fingers.

In recent years, several attempts have been made to mount online higher education on a global scale led by universities, private groups and consortia supported by governments. But, the result has been disappointing.

Many e-learning ventures have failed, while the survivors are just limping along.

Britain’s vaunted e-university, UKeU, suffered a quick demise after its launch in 2000 at the height of the technology boom.

Unable to meet its student target UKeU, which had government funding of £62m, had to close its doors in April last year. Across the Atlantic, online universities suffered a similar fate.

New York University sank $20m into NYU online, a for-profit e-learning company, while Columbia University launched Fathom in spring 2000 in collaboration with 14 universities, libraries and museums, including the London School of Economics and the British Museum.

Columbia put up most of the initial $20m, which was followed the next year with another $20m. Fathom went under in January 2003.

Other unsuccessful ventures included: the virtual Cardean University; an e-learning company at Cornell; a joint project by the Wharton business school at the University of Pennsylvania and a company called Caliber, which went bankrupt; and Temple University, which closed its “for-profit” company without offering a single course.

Among the few left still standing, albeit precariously, is Universitas 21 Global, launched in September 2000 with headquarters in Singapore as a S$90m joint venture between Universitas 21, Thomson Learning - a US-based educational publisher - and a global consortium of 16 universities, including Birmingham and Nottingham in the UK, McGill in Montreal, Canada, and the University of Hong Kong.

Universitas 21 Global wants to tap into the vast market for higher education, particularly in Asia. It aims to break away from the elitist model of higher education by making tertiary education accessible to more people.

So far only an MBA is on offer, with plans to roll out a masters in travel and tourism and information systems this year. It managed to recruit about 600 students last year, and aims to double the head count this year.

Simon Marginson, director of Monash University’s centre for research in international education and an expert in online learning, is surprised U21 still exists.

In a research paper released last year, he says the group is still missing its intake targets, with student numbers being boosted by a variety of means, such as steep discounts to affiliated members and through scholarships.

He thinks that the online mode of higher education hasn’t failed as such. It is still growing as part of the mixed delivery modes of traditional institutions.

However, he says: “Given the resources absorbed and expectations created; given the hopes the nations and universities invested in commercial online education, as the major new direction for higher education, the industry’s failure is catastrophic.”

Mukesh Aghi, chief executive officer at Universitas 21 Global, acknowledging the rnumber of online failures, says it is hard to market a product that is still viewed with scepticism.

“The way I see it, education is a reference-based market. I admit it’s not an easy sell when you’re still not a known brand. You have to approach potential customers. I think we got the foundation right by offering valuable education that’s widely accessible. Our students have access to topnotch professors and a global networking pool.”

The next few years will be critical for the university. It has to attract 2,500 students by 2007 to break even. Mr Aghi says, the shareholders and the universities involved remain committed to U21 for the long-term.

“At the moment, based on our financial and revenue prescriptive, I am pleased we’re still afloat.” The institute is still targeting the huge markets of India and China.

For virtual learning to take off globally, Mr Aghi thinks there has to a mass shift in mind-set in seeing online degrees as second rate to face-to-face learning.

He points to the commercial success of University of Phoenix, with 150,000 students at campuses across the US and online, where the virtual university model has worked. He believes online education has to emulate a classroom environment in order to succceed.

While the jury is still out on U21, the market will judge the value of its degree when the first batch of its students graduates this August.

Eagerly awaiting the day, Mr Aghi notes: “I think we have it, but I guess the market is going to decide it for us. As they say, the proof of the pudding is in the eating.”

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