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Keynotes from the book, " The Trillion Dollar War- The true cost of Iraq conflict" by Nobel Laureate Stiglitz & Linda

4/23/2014

The Running Total: Budgetary Costs of the Iraq War ( Best case Estimation)

Total Operations to date ( Spent to date- 2001-2007) : $ 473 Billions
Future operations : $ 382 Billions
Future Veteran's Costs (Veterans Medical+ Disability + Social Security) :$ 371 Billions
Other Military Costs/ Adjustments (Hidden Defense + Future Defense
Reset + Demobilization, Less no fly zone savings ) : $ 66 Billions

Total (without Interest) : $ 1292 Billions

Interest costs : $ 462 Billions

Total with Interest : $ 1754 Billions

The Running Total: Budgetary Costs of the Afghanistan War ( Best case Estimation)

Total Operations to date ( Spent to date- 2001-2007) : $ 173 Billions
Future operations : $ 139 Billions
Future Veteran's Costs (Veterans Medical+ Disability + Social Security) :$ 51 Billions
Other Military Costs/ Adjustments (Hidden Defense + Future Defense
Reset + Demobilization, Less no fly zone savings ) : $ 66 Billions

Total (without Interest) : $ 429 Billions

Interest costs : $ 151Billions

Total with Interest : $ 580 Billions

The Running Total: Budgetary Costs of the Iraq & Afghanistan War ( Best case Estimation)

Total Operations to date ( Spent to date- 2001-2007) : $ 646 Billions
Future operations : $ 521 Billions
Future Veteran's Costs (Veterans Medical+ Disability + Social Security) :$ 422 Billions
Other Military Costs/ Adjustments (Hidden Defense + Future Defense
Reset + Demobilization, Less no fly zone savings ) : $ 132 Billions

Total (without Interest) : $ 1721Billions

Interest costs : $ 613 Billions

Total with Interest : $ 2334 Billions

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Business Vocabulary from the language of War

4/16/2014

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Exercise: Meaning Army derived from the Latin exercitus

Campaigns: Mountain climbers regularly call their expeditions 'campaigns'. Launching one, they try to overcome the "resistance" of mountains , which , they like to pretend, put up a 'fight' so as to avoid being 'conquered'.

Game plans: In several sports , each time two individuals or teams prepare to play a game they start by gathering 'intelligence' about their opponents. They collect statistics, watch videos, send out observers, and may even resort to espionage in order to sniff out 'game plans'.

Strategy: Having identified their opponents strengths and weaknesses and how how they fit into their own, they sit down to work out a "strategy" and perhaps, "tactics" as well.

Goal: Once the game has started, one side defends, the other attacks.
One side retreats, the other advances. One tries to hold, stop, and block, the other maneuvers, breaks through, and ends by "shooting" at the goal.
One triumphs, the other loses.

Game: War- The ultimate game, war demands from players all the physical, moral and intellectual qualities required by lesser games and then some.

References

Martin van Creveld (2008) . The culture of War. Ballantine books: Newyork.

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Ben Dyson - How money is made and printed?

2/22/2014

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Who is Ben Dyson and what is his objectives?

Ben founded not-for-profit Positive Money in 2010 to raise awareness of the connections between our current monetary and banking system and some of the biggest social, economic and environmental challenges that we face today. Positive money now have over 11,500 members in the UK and internationally, and have been mentioned in mainstream UK press (such as the Telegraph, Independent and Guardian).
Ben co-authored Modernising Money, a book which explains how our current monetary and banking system can be fundamentally reformed. Ben also spoken about this issue for BBC Radio 4's FourThought programme, and have met senior regulators and government officials in the UK to raise awareness of these issues.
Visit Positive Money for more information and to join the campaign.

References:

http://www.bendyson.com
http://moneymyths.org.uk

Andrew Jackson & Ben Dyson (2012). Modernizing Money

Josh Ryan Collins & Tony Greenham (2008). Where does Money come from?

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Key Notes from the book " Animal Spirits " written by two Nobel Laureates - George A. Akerlof and Robert J. Shiller

2/19/2014

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This book is a landmark book in Economics. After Newton in Physics, Alfred Marshall tried to make Economics as a rational science. He introduced supply and Demand curves similar to Analytical Geometry. In 20th century end, Economics ended with lot of equations which common man can not understand.

If we go through classics like Adam Smith's The Wealth of Nations, Ricardo's On the principles of Political Economy and Taxation, Karl Marx Capital , Alfred Marshall's Economics, Ludwig Von Mises's Human Action, we cant find too much mathematics.

From 1970s , due to the revolution in Finance , Mathematics took a greater part in Economics. Just go through some books on Derivatives, Options and Hedge funds. Your brain may blow up!

When most of the Economists forgot the reality of how Human psychology drives the Economy, Nobel Laureates Akerlof and Shiller woke up from sleep and wrote a classic , Animal Spirits- How Human Psychology drives the Economy and why it Matters for Global Capitalism.

According to my view, this book will have a huge impact in coming generation as the Keynes General theory of Employment, Interest and Money had in 1930s. Let us wait and watch.

Some of the illuminating passages from this book are as follows:

" To Understand How economics work and how we can manage them and prosper, we must pay attention to the thought patterns that animate people's ideas and feelings, their animal spirits. We will never really understand important economic events unless we confront the fact that their causes are largely mental in nature."

"Part One of this book will describe five different aspects of animal spirits and how they affect economic decisions-

confidence
fairness
corruption and antisocial behavior
money illusion
stories

The cornerstone of our theory is confidence and the feedback mechanisms between it and the economy that amplify disturbances.
The setting of wages and prices depends largely on concerns about fairness.
We acknowledge the temptation toward corrupt and antisocial behavior and their role in the economy.
Money illusion is another cornerstone of our theory. The public is confused by inflation or deflation and does not reason through its effects.
Finally, our sense of reality, of who we are and what we are doing, is intertwined with the story of our lives and of the lives of others. The aggregate of such stories is a national or international story, which itself plays an important role in the economy.

Part two of this book describes how these five animal spirits affect economic decisions, demonstrating how they play a crucial role in answering eight questions:

Why do economics fall into depression?
Why do central bankers have power over the economy, insofar as they do?
Why are there people who can't find a job?
Why is there a trade off between inflation and unemployment in the long run?
Why is saving for the future so arbitrary?
Why are financial prices and corporate investments so volatile?
Why do real estate markets go through cycles?
Why does poverty persist for generations among disadvantaged minorities?

We see that animal spirits provide an easy answer to each of these questions.
We also see that, correspondingly, none of these questions can be answered if people are viewed as having only economic motivations which they pursue rationally- that is, if the economy is seen as operating according to the invisible hand of Adam Smith.

Each of these eight questions is fundamental. They would occur to anyone with a natural curiosity regarding the economy. In providing natural, satisfactory answers to all of them , our theory of animal spirits describes how the economy works.

In answering these questions, in telling how the the economy really works, we accomplish what existing economic theory has not. We provide a theory that explains fully and naturally how the U.S. economy and indeed the world economy , has fallen into the current crisis.

And-of perhaps even greater interest- such a theory then allows us to understand what needs to be done to extricate ourselves from the crisis."

" So many members of the macroeconomics and finance profession have gone so far in the directions of "rational expectations" and "efficient markets" that they fail to consider the most important dynamics underlying economic crises. Failing to incorporate animal spirits into the model can blind us to the real sources of trouble."

"The financial-markets egg has broken. If Humpty Dumpty had had the correct view of how the world works, he would not have fallen off the wall in the first place. Similarly if the purchasers of assets had realized how the economy really works, they would have been more careful in their purchase of assets, and the economy would not have taken a tumble. But even now, because of a false sense of how the world works, many policy analysts and especially, most of the public fail to see that Humpty Dumpty cannot be fixed and needs to be replaced."

" It is necessary to incorporate animal spirits into macroeconomic theory in order to know how the economy really works. In this respect the macroeconomics of the past thirty years has gone in the wrong direction. In their attempts to clean up macroeconomics and make it more scientific, the standard macroeconomics have imposed research structure and discipline by focusing on how the economy would behave if people had only economic motives and if they were also fully rational."

" Let's review the current U.S. economic cycle (we could do this as well for other countries) and see how the themes in this book have played themselves out. The role of animal spirits is central to our description.

The tale basically begins in 2000 and 2001. In 2000 there was a tremendous stock market crash, as the economy recoiled from the irrational exuberance of the dot-com years. The growth rate of real GDP decelerated from about 4% for 1999 and the first half of 2000 to only 0.8% for the first half of 2001. The Bush administration used the downturn to argue for massive, permanent tax cuts. The first and largest of these was signed into law in June 2001. The Fed also came into act. The discount rate , which had been 6% in the last half of 2000, was brought down to only 0.75% by November 2002. There is every reason to believe that both of these measures were effective. The previous boom had been top-heavy in expenditures on capital equipment. Investment in equipment and software had been especially high just prior to Y2K scare. In this new boom the stimulus came from housing. In the four short years from 2001 to 2005 expenditures on housing increased by 33.1% , while GDP growth was only 11.2%.

But then, as we had already recounted , odd things began to happen. These are the types of things that happen in booms as overconfidence takes hold. People began to buy housing as if this were their last chance ever to buy a house (because, they thought, prices would continue to escalate beyond their means), and speculators began to make investments in housing, as if other people were going to think that they should buy now, at almost any price, because they would not be able to afford to buy a house later. Home prices increased by almost two-thirds in the short span of time between the first quarter of 2000 and the first quarter of 2006. In Los Angeles, Miami, San Francisco and some other areas they increased considerably more. Vast areas of farmland were turned into new housing developments almost overnight. It was housing speculative fever.

Even more surprisingly, it was not just home buyers who engaged in this fever. The financial markets- which are supposed to be so cautious - aided and abetted the process. Of course the real estate dealers and mortgage brokers had no reason to dampen the fever. They were collecting transaction fees. And, with business so brisk, those fees were enormous. Most surprisingly, those on the other side of the ledger took in those mortgages and gave the home buyers the massive funds they needed for their unwise speculations.

We have recounted in a nutshell what has happened in the current financial crisis. It corresponds to our description of what causes most of our economic ups and downs:
over-confidence followed by under-confidence "

References:

George A. Akerlof & Robert J. Shiller (2009). Animal Spirits: Princeton University press

By
SK

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A Year In MOOC: Results Of The First 17 edX Courses Released

2/4/2014

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From the fall of 2012 to the summer of 2013, HarvardX and MITx launched 17 courses on edX, a jointly founded platform for delivering online courses. Participation statistics and tentative conclusions from these courses were released today in a series of reports. Here are the highlights:

Two-thirds of registrants only deep their toes:

There were 841,687 registrations from 597,692 unique users in the 17 courses offered in the first year of HarvardX and MITx courses. About 35% of registrants never engaged with the online content and a little over 5% (43,196) earned certificates of completion. The rest accessed varying amounts of course contents.

Try to hang in there for the first 2 weeks:

Most registrants leave within a week or two of their entering the course, but remaining registrants are far less likely to leave in subsequent weeks. On average, about 50% of registrants quit in the first week of the course and 16% do so in the second week.

Not only for young males with a bachelor’s degree:

29% of registrants were female; 33% had a high school education or lower; 6.3% were 50 or older and 2.7% had IP or mailing addresses from countries on the United Nations list of Least Developed Countries.

Some like it MOOC:

Over 4,000 registrants earned more than one certificate across HarvardX and MITx, including 1,912 who earned at least one certificate from both institutions. A total of 76 registrants earned 5 or more certificates from the first 17 courses.

The term “students” does not apply:

Traditional metrics like certification and enrollment rates do not reflect the behavior of MOOC “students,” many of them wish to learn only one specific aspect of a course. Many instructors are deliberately designing courses that allow for different forms of engagement.

MOOC happen in the cloud and their future success may follow the pattern of adoption of cloud computing. Enterprises move into public cloud computing as an augmentation (not replacement) to their internal data centers. Similarly, MOOC will not replace face-to-face education but they will probably augment the learning experience for millions around the world, especially in situations where a direct and personal connection with an instructor is not needed or is not possible. Eventually, however, MOOC may become the educational option of choice for completing a degree in specific knowledge domains.

This article is taken from Forbes.

References

http://www.forbes.com/sites/gilpress/2014/01/21/a-year-in-mooc-results-of-the-first-17-edx-courses-released/

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February 04th, 2014

2/3/2014

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Google and edX Create a MOOC Site for the Rest of Us

Until now, massive open online courses have mostly reinforced existing hierarchies in higher education. MOOC providers have recruited elite institutions and offered them and their professors the opportunity to broadcast their courses to the world.

But now edX, a nonprofit provider founded by Harvard University and the Massachusetts Institute of Technology, is joining forces with Google to create a spinoff Web site where ordinary folks—and professors at colleges that have not been invited to join high-profile MOOC consortiums—can not only sign up for a MOOC but also build one themselves.

The new site, MOOC.org, will provide tools and a platform that “will allow any academic institution, business, and individual to create and host online courses,” says a blog post by Dan Clancy, a research director at Google. In an interview, Anant Agarwal, president of edX, referred to the site as a “YouTube for courses.”

As such, MOOC.org is likely to be more freewheeling than edX proper. The new site is similar, perhaps, to Udemy—which also welcomes anyone, professor or otherwise, to teach a course on its platform. Mr. Agarwal said it had not yet been determined whether edX would keep MOOC.org courses free of misinformation and copyrighted material (the latter having been a big problem for YouTube itself).

Previously, Google tried online education with Course Builder, a free tool for building MOOCs; the company plans to fold that project into MOOC.org, which will live on Google servers. The company has pledged to devote its development expertise to MOOC.org’s open-source platform, which will be called Open edX.

Like those of other MOOCs, offerings on MOOC.org will yield a trove of data describing how learners are interacting with course materials. Google and edX “will collaborate on research into how students learn and how technology can transform learning and teaching,” says a news release. But edX alone will own the data generated by the courses, said Mr. Agarwal.

“EdX has control of how the data is being used and shared, and edX will definitely do the right thing by those data on the site,” he said. Details of what kind of access Google will have to learner data “are not worked out,” he added.

EdX is still searching for ways to generate revenue streams that will enable it to become financially self-sustaining. “We want to be able to monetize MOOC.org much the same as how we want to monetize edX,” said Mr. Agarwal. “But specifically how we want to monetize MOOC.org is TBD.”

References

1. http://chronicle.com/blogs/wiredcampus/google-and-edx-create-a-mooc-site-for-the-rest- of us.

2. mooc.org

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Is NFC the future of trading? Will the ‘Cash king’ become a pauper?

1/19/2014

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Near field communication (NFC) is a short distance radio communication standard used for contactless communication between devices.
Contactless payment made at some POS (point of sales) terminals today (using credit/debit cards) uses this technology.
Applications may include contact less money transaction and data transfer among others. The communication distance is typically 10cm compared to bluetooth distance of 50m~100m.

Generally the communication is of 2 types:

a) between 2 NFC communication devices (2-way communication)or

b) between a NFC device and a NFC tag (unpowered NFC chip).

The latter of the 2 is used for information reading, similar to passive RFIDs.
NFC standard ISO/IEC 18092 is based on RFID standards which includes ISO/IEC 14443 (standard for contactless IC cards )and FeliCa (Japanese standard for money cards). NFC forum was first formed by Nokia, Philips and Sony in 2004 and to date there are more than 160 members.

Game Changer?

The advancement of NFC into smart devices (mobile phones) is considered revolutionary as it has the potential to change the way people transact money (mobile commerce) and other information. A days outing in downtown SFO revealed that after all, hard cash is not needed anymore. You just need to carry only your mobile phone.
Latest Android phones from Samsung, HTC and others include NFC chip that enables NFC communication. The eco system for NFC communication is a complex one that involves a NFC chip, a smart device that carries the chip with an operating system that handles data securely, targets (POS or Tags for example) that has read/write capabilities to communicate with the device and a backend server at the bank.
As the communication path is extended to 3 or more parties at the least (eg: buyer, seller and the bank), data security over the channel becomes crucial. The NFC forum is responsible for the NFC standard that ensures secured connection.

Logo for NFC enabled devices:
When you see the logo attached to a device it means the device is NFC enabled and therefore a contactless payment option is possible between your device and an NFC enabled payment terminal.

Security concerns:

Due to its shorter communication distance NFC is less prone to attack compare to other contactless communications, however it is not without risk. Eavesdropping and unauthorized data modification (or jamming), relay attack and open access to lost NFC device are some risks associated with the use of NFC. Depending on the mode and design these risks are covered to a large extend.
Read ‘NFC Security’ for further details: www.nearfieldcommunication.org/nfc-security.html‎

Commercial scope to replace cash, plastic cards and our wallet:

Analysts estimate that NFC will make into 1.95 billion smart devices over the next 5 years. Total transaction that happened via plastic cards in the last year was at an astonishing $21.6 trillion. Only 1% of total transaction was using NFC, amounting to $24.6billion!
One can see the apparent opportunity arising from NFC when it sips into mainstream transactions, replacing the Visas, Masters, AMEXs and Diners.
No wonder these guys are scrambling to make deals with Samsung, AT&T, Verizon and the likes to offer their own version of NFC enabled devices.
Google included NFC in its Nexus 4 phones, Samsung has introduced S-Beam in its latests phones, Microsoft is planning to include NFC in its upcoming smartphone OS. The only exception was Apple as it was counting on its own patented technology called the iBeacon which uses low energy bluetooth instead. Recently Apple filed a patent (US20130211971) with extensive claims on NFC elements indicating that they too might enter the NFC field very soon. May be we will see it in iPhone 6 scheduled for summer release. With all the major smart phone makers designing in NFC in their devices it is just any bodies guess how important this feature would become. So far, 150 million NFC enabled devices are out there. I.E Market research estimates that $950billion would be transacted through NFC enabled devices within the next 5 years.

There is a lot of opportunity to make money from NFC.

Companies making NFC chips:
The leader in this category is NXP Semiconductors

Companies making NFC tags:
Numerous companies make NFC tags starting from $1 range that includes Samsung ‘TecTiles’ and ‘TagsForDroid’, Tag2 .

NFC integrators:
NFC integrator enables the communication between a smart device, a POS target , and the backend server that validates ID and provides secured data transfer. Eg: Nexpert, Tapit, NFCEngine

NFC Apps for tag read/write:
A great application that works well with Samsung and other android phones is the NFC Task Launcher. Helps create custom NFC tags to perform set of preprogrammed action with a single tap.
For interested readers here is a link that explains the NFC communication and its uses www.youtube.com/watch?v=Gbv2BIi9i58‎

Its good to keep a close watch on what’s happening in the NFC field before it expands and suck us all by surprise! May be we should keep some currency notes to sell as a collector’s item in the future.

What is your view? Will this happen in 5 years? 10 years? Or it will never be the case

authored by Srinivasan

References :

The Motley fools: “The plastic in your wallet is about to go the way of the typewriter...the Palm Pilot...and the 8-track tape player....” dated 17Jan 2014
NFC Forum
NFC World
Wikipedia

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Synthetic Biology- A Great talk by Craig Venter

9/13/2013

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Synthetic biology has pros and cons like Nuclear technology.
But it answers some of the most important questions in Life.
Synthetic biology opens the door to see how Nature works in creating and destroying Life .
Future Medicines (currently some of them) will be designed and manufactured using the ideas of Synthetic biology .
Also it shows the path to move from hazardous Chemicals to safe Bio-molecules. But all Bio-molecules and Organisms are not safe.It leads to Bio-terrorism if unchecked.
We should be cautious about the law every action has opposite reaction.
If there is a God then there is a Devil.

Enjoy the video.

SK

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The Future of Money

9/12/2013

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The Future of Money is a title of book written by Bernard Lietaer. He is a monetarist who had helped to design Euro. David Suzuki & Holly Dressel has analysed and remarked about the current state of money in their book More Good News. In this book they had used Lietaer and Korten. Let us go to the point as commented in David Suzuki's book.

" Today's official monetary system has almost nothing to do with the real economy. Just to give you an idea, 1995 statistics indicate that the volume of currency exchanged on the global level is $1.3 trillion U.S per day. This is thirty times more than the daily gross domestic product (GDP) of all the industrialized countries of the world put together" (Bernard Lietaer).

Today it is many times that amount. This "money" being traded around the world is almost fully decoupled from any measurable physical wealth.

Lietaer says,
"Of that volume, only 2 to 3 percent has to do with real trade or investment; the remainder takes place in the speculative global cyber-casino. This means that the real economy has become relegated to a mere frosting on the speculative cake, an exact reversal of how it was just two decades ago."

One reason this happened is that during Nixon administration the U.S decoupled paper money from gold, because they found pegging imaginary wealth to something physical was too limiting.

Today most money is created by borrowing. When a bank decides to grant a loan, they create that money out of nothing; but it still represents a claim on the real wealth of anyone who wasn't given a loan."

A given individual or corporate group can, under our current system, apply to a bank for a $2 billion loan for various kinds of business development. The bank grants the loan, which means they create that $2 billion out of thin air, and by social convention, agree that it is now in the hands of the corporation. So with that money, the corporation can go off to Peru, China, India, Australia, Indiana and buy up mines, forests, factories-entire towns if they want-since they have the power of money against which the locals who used to have tenure over such things simply can't compete.

This means that "increasingly, your money supply is being controlled by outsiders, by the banks. They're creating the money and they're taking the profits out of a country or place, essentially for renting that money to some group or corporation when they made out a loan."

It's is a system of pretend money. We make it up, then award huge amounts of it to certain groups, like investment banks or dot-com start ups, but not to others, like disabled children or unemployed fishers. But there is not any reason we can't use the pretend money any way we want.

Only true wealth-water,soil,rocks and calories stored in plants , animals and organic materials like oil and gas-is limited by reality.

When financial assets and transactions grow faster than growth in the output of real wealth, that is a strong indication that the global economy is getting sick.That describes the 2008 economic collapse in a nutshell.

This is a war between Real and Imaginary.

References

David Suzuki, Holly Dressel . More Good News

Bernard Lietaer. The future of Money

David Korten . When Corporation rule the world

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Should higher education be free?

9/10/2013

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This is the question asked by renowned Harvard Professor Vijay Govindarajan. Along with Jatin Desai he had written an article in Harvard Business Review . The article which is available in his blog is re posted here .

In the United States, our higher education system is broken. Since 1980, we've seen a 400% increase in the cost of higher education, after adjustment for inflation — a higher cost escalation than any other industry, even health care. We have recently passed the trillion dollar mark in student loan debt in the United States.

How long can a business model succeed that forces students to accumulate $200,000 or more in debt and cannot guarantee jobs — even years after graduation?

We need transformational innovations to stop this train wreck. A new business model will only emerge through continuous discovery and experimentation and will be defined by market demands, start-ups, a Silicon Valley mindset, and young technology experts.

Neither the pedagogical model nor the value equation of traditional higher education have changed much in the past fifty years. Harvard, MIT, Yale, Princeton, and Stanford are still considered the best schools in the world, but their cost is significantly higher today than two decades ago.

According to Rafael Reif, MIT's president, who spoke at the Davos conference this past January, there are three major buckets that make up the total annual expense (about $50,000) of attending a top-notch university such as MIT: student life, classroom instruction, and projects and lab activities.

There is a significant opportunity to help reduce the lecture portion of expenses using technology innovations.

According to the American Institute of Physics (PDF), as of 2010, there are about 9,400 physics teachers teaching undergraduates every September in the United States.

Are all of these great teachers?

No.

If we had 10 of the very best teach physics online and employed the other 9,390 as mentors, would most students get a better quality of education?

Wouldn't that lead to lower per unit cost per class?

Yes, you might argue the lack of "classroom experience" is missing. But when it comes to core classes which don't require labs or much in-person faculty interaction, does the current model justify the value-price equation?

What is traditional college education really worth?

In a recent interview, Laszlo Bock, SVP of people operations at Google, said, "One of the things we've seen from all our data crunching is that G.P.A.'s are worthless as a criteria for hiring, and test scores are worthless — there is no correlation at all except for brand-new college grads, where there's a slight correlation." Even more fascinating is his statement that "the proportion of people without any college education at Google has increased over time," leading to some teams in which 14% have not gone to college. "After two or three years," Bock said, "your ability to perform at Google is completely unrelated to how you performed when you were in school, because the skills you required in college are very different."

Mr. Bock's comments suggest that smart people can figure out how to pass college tests if they can master what the professor wants, resulting in great test scores — but this skill and knowledge has very little relevance to solving daunting business problems with no obvious answers.

Once leading companies embrace what Google is already doing, seismic shifts and breakthroughs will occur in college education. Maybe a two year college degree will be sufficient instead of four. Imagine a business model where you take two years of courses online with the world's best teachers, followed by two years in structured problem-solving environments. Driven by market forces, such new business models could emerge faster than we expect.

So what is happening now?

Who are some of the new education providers experimenting with new business models?

Emerging new education models

There are three strong players with millions of students and thousands of course offerings, all for free and available to anyone in the world. Coursera, Udacity, and edX have over four million enrolled students in their Massive Open Online Courses (MOOCs).

All three uniquely (and differently) replicate the classroom experience. Each uses top-notch professors and technologies in a creative manner — but not without challenges. One of the authors (Jatin Desai) enrolled in a few courses to test out the environments and found that, just like in the traditional classroom, courses vary greatly based on who is teaching. Some professors use the technology brilliantly and others use it as minimally as possible. (Access to higher bandwidth greatly enhances the experience.)

These three are not the only ones in the MOOC movement; many others are quickly joining. In fact, the New York Times dubbed 2012 "The Year of the MOOC" and Time magazine said that free MOOCs open the door to the "Ivy League for the Masses."

According to a recent Financial Times article, many employers are unsure of what to make of MOOC education — unsurprising, since many new technologies and business models go through multiple evolutions. The good news, according to the article, is that 80% of respondents surveyed would accept MOOC-like education for their internal employee development. We can extrapolate from this survey that the employer demand for online education exists — and, moreover, that it is only a matter of time until universities and well-funded venture capitalists will respond to this white space in the market very soon.

Georgia Tech, in fact, has already responded; in January, it will begin offering a master's degree in computer science, delivered through MOOCs, for $6,600. The courses that lead to the degree are available for free to anyone through Udacity, but students admitted to the degree program (and paying the fee) would receive extra services like tutoring and office hours, as well as proctored exams.

In the near future, higher education will cost nothing and will be available to anyone in the world. Degrees may not be free, but the cost of getting some core education will be. All a student needs is a computing device and internet access. Official credentialing from an on-ground university may cost more; in early 2012, MIT's MOOC, MITx, started to offer online courses with credentials, for "a small fee" available for successful students — and we're eager to see how Georgia Tech's MOOC degree will transform the education model.

What's next?

How far are we away from new business models where MOOC-type pedagogy will dominate the first two years of college experience?

When will most employers begin to accept non-traditionally credentialed MOOC-based education?

And what will this mean for the education industry?

With luck and ongoing innovation, perhaps the US's broken education system may be repaired.

References
http://blogs.hbr.org/cs/2013/09/higher_education--for_free.html

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