The opportunity that Massive Online Open Courses (MOOCs) offer for cost effective massification of learning has generated significant interest from governments, higher education institutions (HEI) and commercial organisations. A growing number of HEI have been involved in experimenting with MOOCs for the purposes of expanding access, marketing and branding, as well as the potential of developing new revenue streams. The motivation for some MOOC providers is a philanthropic one and for others a business proposition. However, in both cases, there is the challenge of finding a viable business model that allows for sustainability of MOOC provision.
This paper will use the theory of disruptive innovation (Bower and Christensen, 1995) to examine MOOCs development and how their approach could be used to help institutions explore innovative approaches for teaching and learning and to develop new business models in order to gain competitive advantages in the education market. MOOCs provide institutions with a vehicle to think creatively and innovatively to explore new business models and flexible learning paths in HE provision. However, there is a need to rethink current higher education structures and policies and working practices that obstruct innovation. This includes funding arrangements and the ability to disaggregate teaching from assessment and accreditation for differential pricing and pursuit of marketing activities.