The end of universities?

Demand for online education explodes

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published November 12, 2012 12:45 pm AEDT

For anyone looking to undertake some sort of study in the future, it's getting easier and much, much cheaper. How's free sound?

Universities globally are increasing the number of online courses, and trying to capitalise on the growing demand for education, as people in developing nations seek out additional means of improving their living standards and incomes. Demand could also increase when global economic conditions deteriorate, as more people look to improve their employment prospects.

Massive open online courses (MOOCs) are following the explosion in popularity of online games, with many universities now offering courses – with the ultimate aim being to attract students to enrol in additional fee-paying courses.

It's not just universities offering training, but a multitude of training organisations taking advantage of the internet to offer online training. According to training.gov.au, there are 4,910 registered training organisations, competing with 135 universities in Australia alone. The advantages for universities and other training organisations is the ability to free up teaching resources, with fewer teachers needed for a similar number of students.

Education is one of Australia's largest industries and appears to be one where Australia has a competitive advantage. It is ranked in the top 10 in the national accounts for "gross value added". But it could also be under threat, with some experts suggesting that online education could mean the end of universities. We all know what happens when people can get something for free instead of having to pay for it – just look at the rise of peer-to-peer file sharing programs and music and DVD piracy, and how that has transformed several industries. Newspapers are also suffering similar pains with news online available for free.

Australia has just a few listed pure education companies, including Navitas (ASX: NVT), Redhill Education (ASX: RDH) and Academies Australasia Group (ASX: AKG), although job advertiser, Seek Limited (ASX: SEK) has also entered the education market. They could be stocks to watch, as we see online education expand further, and demand for education from developing Asian nations rises.

If you only invest in one company this year, make it our "Top Stock for 2012-13". Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

More reading

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.