Mar 14, 2004
Again - let me stress - I am not an expert on China. In order to obtain an accurate statement of Chinese perceptions and opportunities, you should at least consult with some who jas been to China, or better, with someone who is actually Chinese.
(Quotes are all from Levy's article.)
I noticed that most of their inquiries were right on target, suggesting a good understanding of the field. Their prior knowledge and unexpected enthusiasm piqued my curiosity. In the days that followed it became apparent that, in China, the development of online learning may have far greater importance and urgency than in the West, and that the recent marriage of technologies enabling online performance support may be an important accelerator for China's overall economic development.
This sounds right. There is no doubt an interest, even enthusiasm, in China for e-learning; this is evidenced by the number of large contracts they have signed in recent months with e-learning vendors such as Blackboard. I haven't seen any evidence of an interest in "performance support" in particlar, however, and suspect this may be more reflective of Levy's interests than China's.
There are three reasons for China to develop quickly. One is the scale of the challenge and opportunity: There are as many companies in China as there are people in New York City. Two is the dramatic need for growth: Nearly 400 new cities and millions of new jobs will be created over the next 20 years. Three is economic inequality. China has an extreme bimodal distribution of wealth. There's a vast difference in economic development between the wealthy provinces in the east and the poorer provinces in the west. As a new member of the World Trade Organization, China is feeling the pressure for a rapid transformation from a labor-based economy to a knowledge-based workforce -- a task that has pushed learning to the top of its agenda.
This paragraph looks at the drivers for e-learning from the point of view of business needs. I suspect there is a wider set of drivers at work. The main message here, I think, is that if China decides to do anything in this area (as it probably will), it will be on a huge scale, simply because China is so much larger.
That said, I think there a danger of over-estimating the scale in China. It's a lot like Brazil, in the sense that Brazil has a modern industrial population roughly the size of Canada's, and then an impoverished pre-industrial population about four times as large. Demand from Brazil would emanate mostly from the smaller group, with the larger group only following later. I think the same is true of China. Effectively, China's population, from the point of view of being an e-learning market, is probably only in the 300 million range. In other words, the potential market is as large as the U.S. or Europe, but it won't dwarf those markets for the forseeable future.
This observation varies depending on the type of product being considered, of course.
Combining scale, growth and immediacy of need into a single scenario, a cogent picture of China as the perfect target for core investment in a scaleable e-learning solution begins to emerge.
Of these three, I think that 'immediacy of need' is the most salient. China's size isn't the major factor, it's the fact that the market in China exists all at once. It's the difference between providing the U.S. market with the computers it needs over a 20 year perios, as compared to a much tighter time frame for the Chinese.
But such ambitious plans carry the burden of retraining most of China's 1.3 billion citizens. The spectrum of people in need ranges from those who currently perform menial or agricultural labor, to those who will manage the new knowledge workforce but who have little or no education or experience in a market economy. In addition, as many as 30 million new jobs will be created within the next decade just in high-tech and management areas.
Levy continues to talk about need. He has to talk about how all this will be paid for. An analysis based on need without respect to means is flawed.
China can't get there from here. It's generally acknowledged that the existing educational infrastructure is inadequate to prepare its men and women for those positions. Contemporary management knowledge and techniques were developed and have been taught in an established market economy in the west. But most Chinese managers have had little or no access to that material. The Chinese Cultural Revolution relocated millions of students and businesspeople to agrarian collectives in eastern China, while their western counterparts were attending business schools and cutting their teeth in market economy positions.
Again, this is true in broad strokes - China cannot use a traditional approach to education to get where it wants to go, because the costs would be too great. It needs to be able to educate a large number of people directly, instead of the 'train the trainer' approach characteristic of traditional educational systems.
I would be cautions about defining China's need as a need for management training. Though China is moving toward a market economy, I think that it is still a long way from capitalism. I also think that business practices that are appropriate in a western context would be less so in China. These are just thoughts, though; they would need to be verified empirically.
I don't think the Cultural Revolution is a factor here. The generation that went through the Cultural Revolution is, chronologically, the same as the Baby Boom generation here. In other words, these are mostly people who are approaching returement age. Most learning will focus on post-Cultural Revolution children, people who entered the work force in the mid to late 70s, or younger.
I have not read studies (they may exist; if not, they would be well worth conducting) on the levels of expertise and the attitudes of potential Chinese students. I suspect that they are much more worldly and educated than Levy depicts. The Tiananmen protests were technologically enabled, as protesters communicated with each other and with the outside world by computer, fax and other electronic means (I know, because I was at the other end of some of those communications). The current generation has a substantial online presence; their situation (and, so far as I can tell, their attitudes and expertise) is on par with the Iranians (who themselves have a much larger presence than people realize) or the Indians.
My bet would be that they have a large need for learning in particular niches, and none at all in others. I am not as convinced as Levy that management is one of those niches where they have a need.
Even following that period, managers learned skills within a socialist economy. China's Second Revolution of a shift to a market economy is only 20 years old, so most Chinese managers learned little about market economies in their university years. Even those younger managers just out of school are the product of an educational system that focuses more on traditional knowledge and less on skills training. Classical teaching methods combined with a lack of appropriate content continue to exacerbate that problem.
This is Levy's argument that one of those niches will be for management training. I am sceptical. I would not launch any manor initiative without a good study.
China knows it must rapidly retool for the knowledge economy of the 21st century. Its people are aware that they face a dangerous lack of skills and knowledge at a critical time of increased expansion and global competition. But in the Chinese language, the pictogram for the word crisis is composed of two elements: the symbol for danger joined with the symbol for opportunity. And opportunity there is aplenty.
This paragraph depicts the situation as an American businessman would imagine it. I have no doubt that the Chinese assessment of the situation differs. This does not change the conclusion - that these is a need for expanded learning. I would hesitate to characterize this need in terms like 'retooling', 'dangerous lack of skills', and 'global competition'.
The current state of online learning is like a model from quantum mechanics that suggests that a field in a steady state will enter a turbulent phase transition as it moves into another steady state. For example, water in a glass and water vapor in a cloud are both in a steady state. But to transform the water from liquid to vapor it must boil, churning with great turmoil and chaos.
Levy is apparently unfamiliar with the phenomenon of sublimation, in which matter goes directly from the solid state to vapour, without any vigorous boiling involved. This is what produces the mists over a field of snow. It seems to me that the Chinese are practised masters of sublination, and will avoid the boiling state whereever possible.
Similarly, the field of learning has been in a steady state for hundreds (some would argue thousands) of years. But now faculty-centered teaching is slowly being replaced by more robust just-in-time personalized support. At the moment, however, the boundaries between old and new are ambiguous and intertwined, and no sustainable model is available. Traditional learning content is sometimes shoveled on to the Web (thus the term shovelware) and passed off as new. It isn't. It's essentially the same wine in a new bottle. It's not sustainable, as demonstrated by the large number of failed ventures in that field over the past few years.
I would respond to this point by asking a rhetorical question: what are the odds of the Chinese investing billions of dollars on an unproven technology?
Performance support learning isn't there yet. It is something that Levy has been promiting, for the last few years, to American audiences, with mixed success. It would represent an enormous risk for the Chinese to go down that road before robust, working solutions are in place.
If you look at where China is focusing it's energy, you see four major trends:
- backbone infrastructure
- mobile and wireless technologies
- content delivery, including broadcast and LMS
In other words, China is more concerned about access than optimization at this point. the major strategy seems to be to develop systems to get information out there, and then to test for knowledge acquisition. This is, in a certain sense, shovelware. But I think the point of view would be: shovelware is a whole lot better than nothing, and is sufficient with a motivated audience and a good testing system.
Recently, however, a new steady state has begun to emerge. Corporate momentum is shifting away from traditional training toward a more sustainable model of targeted performance. Farsighted companies are experimenting with the integration of business performance, knowledge management, and e-learning software to create new and more valuable knowledge engines. At Harvard Business School Publishing, we see that trend moving steadily toward a demand for more granular learning solutions. In addition, we are being asked by our online learning customers to provide customization and integration with in-house human resource information systems and enterprise resource planning systems that weren't discussed a few years earlier. The new model is beginning to come into focus.
These are U.S. trends. It is not clear that they apply in China. And while I agree with some of them (more granular learning solutions, for example), it's not clear they all apply to the U.S.
There may be a market for linking learning with human resources information and tracking. I have raised this point with Levy, as he frequently depicts online learning as a means for companies to exercise more control over learning outcomes, up to and including the target of having employees internalize corporate values. This may be appealing to the Chinese, though I think it raises serious ethical issues here.
China may be able to meet its growth objectives by adopting smart, extensible, and perhaps even revolutionary ways of rapidly deploying knowledge to a large number of workers. China could do that in a short period of time if it can navigate the whitewater to the next steady state. Most Chinese learning is done in a classroom. Even when electronic methods are used, they closely model instructor-led teaching, focusing mostly on broadcast television and synchronous classes on the Web. The predictable migration of Western Web-based interactive instruction has already begun, but most of those solutions are equally grounded in conventional instructor-driven strategies.
And I don't see this changing in the near term. Experimenting with non-instructor led learning would be like experimenting with a free press. It poses enormous risk to internal stability. I think that, insofar as personalized learning is enabled, it will only be within a relatively closed and controlled environment. This makes the implementation of any workplace support system that much more difficult.
A smart and highly personalized performance support model that combines human resources, knowledge management, and learning technologies is an ideal solution. Managers will be able to access precisely the right amount of information at precisely the time they require it. As the Chinese economic transformation continues, an enduring solution is required, not a one-shot remedy. This level of support is much more of an ongoing process than just taking a course. Though such solutions are slowly making headway in the United States and Europe, most Western companies still aren't sufficiently motivated to invest the resources to fully integrate. In the current economy, many Western CEOs prefer to stretch their sunk costs in older technologies and solutions for another year or two.
I think there is a lot of potential for personalized learning (not a personalized 'support model'). But there is so much to be worked out here, it will be years before it is widely adopted in the western world. It won't be adopted in China before it is adopted here.
There are few reasons that would compel Western companies to move ahead quickly with next-generation online learning. But the Chinese, familiar with the leapfrog concept in other areas of their economy, may chose to be first to address the challenge. If they do, the next revolution will have less to do with politics and more to do with how people learn on the job.
The Chinese have a track record of implementing improbable scenarios. The city of Shenzhen, for example, was created from farmland in just 20 years.... Chinese telecom companies sped directly from no technology to state-of-the-art cellular telecommunications, totally bypassing the need to develop a costly landline infrastructure.... Now imagine the growth in online learning and performance support should the Chinese apply that same strategy to creating a scaleable learning solution.....
Still won't happen, even if the Chinese do build cities.
Cities are proven technology. Bicycles are proven technology. Cellphones are proven technology. Levy is making a mistake here.
Given the size of the market, China could soon be in a position to dictate standards to an industry that had virtually ignored its existence a few years ago. The leapfrog strategy can move a player from last place to first place in a very short amount of time. And with one-quarter of the world's population and an ongoing need for continuous training and support, China is well-positioned to do just that.
I don't believe the Chinese are in a position to leapfrog. Insofar as they 'dictate' standards, it is generally for internal use, to adapt standards that haven't really considered the Chinese context in their inception. Chinese participation in standards will grow, of course, but mostly with an eye to making sure new standards do not cause upheaval in China and can be implemented in a secure manner at low cost.
China has to go through an export phase first, before it can think about leapfrogging, so that it can generate revenue from this new industry. It is most likely to follow India's example (I have seen a few articles from India warning of potential competition of exactly this sort). The outsourcing model depends on following existing standards, catering to established markets in America and Europe.
The Chinese market has not gone unnoticed by suppliers of technology and content; its need for online learning has drawn many outside providers. For those companies, China's online learning market is significantly easier to enter than its market for traditional educational content and publications, which is rigorously censored by a labyrinth of governmental regulations.
I find it fascinating - and naive - that Levy thinks that there would be less regulation and censorship in a Chinese environment.
Online learning for performance support is largely exempt from governmental scrutiny, and -- with the exception of scholastic content -- passes under the radar. Even better, government policy encourages the development of online learning solutions for China's millions of industrial enterprises, opening the door to the West for both content and good ideas. The government recognizes needs in IT training, management training, and human resources -- all of which have become even more important now that China is a member of the World Trade Organization.
Again, a rhetorical question: do you think the Chinese will adopt on a massive scale a technology a technology known to be resistant to government scruitny? As I write right now, the Chinese have currently ordered two major blogging networks to shut down, BlogBus and Blogs.cn. It seems unlikely that they would adopt a system where this sort of order could not be enforced.
There are more than 8 million companies in China, and while not all of them will be consumers of online content and technology, if just half participate that will dwarf all other nations combined. Separate from the corporate market, an equally staggering consumer opportunity exists within the population. The Chinese savings rate is an astounding 40 percent of income. A recent survey suggests that Chinese families would spend 10 percent of their US$725 billion savings -- about US$72.5 billion -- on education. Some of that expenditure certainly will take place within the performance support market.
If you look at these numbers, it means that the average Chinese person has saved roughly $725. Ten percent of that is $72. What sort of education does it make sense to think that the Chinese will buy for $72?
The numbers don't add up. I think we are looking at a large market for very low-cost content, not high-end support systems. For $72, you don't even buy an online course, at least, not at today's prices.
I think this is a really important point to stress. The total numbers in China are very large. But the per-person numbers are quite small. If there is an e-learning market in China, it will be based on providing learning for a fraction of what it currently costs here. Even though the total market is $72 billion (this is probably an overestimate), the market for $700 courses is tiny, much smaller in total value than the market for $7 courses, or even $0.07 courses.
Given the enormous stakes, it's no wonder that other governments are targeting the Chinese online learning market. The Norwegian Trade Council, which has an office in Beijing, recently published a 55-page paper outlining higher education and business-to-business opportunities in China for companies and universities in Norway. Major companies in the Greater China market area, especially Hong Kong, also are queuing up for a piece of the action, each hoping to gain first-mover advantage over their counterparts in the United States and Europe.
By now it is too late to be the first mover, I think.
But Western companies have an established foothold as well. Hewlett-Packard, IBM, Lucent, SAP, NETg, SmartForce and Harvard Business School Publishing, to name a few, have all established a presence in China. Cisco has established networking academies throughout the country. Oracle recently opened an e-learning center in Beijing, an extension of its product development center in Shenzhen. Motorola University China claims the largest range of training services of any foreign-invested enterprise in China. Oztime targets the continuing education market with certificate programs for young adults from age 16 to 35. Harvard Business School Publishing offers a full line of online learning products for managers through several distributors.
A caution with regard to this paragraph: Levy is describing what is offered, rather than what is sold.
On the downside, there is significant risk. Piracy continues to be a major problem for content and technology providers, despite recent government attempts to improve the situation. It's interesting to note, however, that the risk is greater for static content than for dynamic performance support programs, which are created at the moment of need. In this case, the next-generation solution is also the less vulnerable one. Moreover, the situation is in flux, and the Chinese have yet to decide how much of their solutions they want to import from the West and how much to create on their own. Though importing content seems a sure bet, the Chinese may decide to develop their own infrastructures.
Again, this needs to be looked at from a different light. For Levy (and western businesses), piracy is a 'problem'. For China, what we call policy is a responsible adaptation to overpriced content. Now, what are the odds that the Chinese will adopt themselves to a learning strategy that commits themselves to western price points? It may be more difficult to 'pirate' material offered through a performance support system, but this is not an advantage from the buyer's perspective, it's a disadvantage. Using a performance support system could price most materials out of the reach of most people - this wouldn't make sense.
Many people may wonder whether the traditional Chinese are flexible enough to make the leap to performance support in the workplace. Certainly, many barriers must be overcome, especially in the western provinces, but they have adjusted to many more dramatic transformations in the past. It took me a while, but I think I finally figured it out. For her, there was no irony. To her way of thinking, there was value to be had from both leaders. Opposite ideas can indeed exist in harmony in China: Mao and Jesus. Communism and competition. An ancient, traditional culture and a revolutionary, next-generation learning system.
I am fascinated by an observation which depicts Jesus and Mao as opposites.
My understanding of Chinese philosophy (which is reasonably well informed) is that it is based for the most part on the seeking of harmony - Confucianism, harmony through proper protocol and respect, Buddhism, harmony through recognizing the impermanence of all things, and Taoism, harmony by seeking balance between opposing forces.
What this tells me is that any move into the future would have to be balanced with proper consideration of traditional values, that in addition to maximizing progress an innovation must also be focused on minimizing disruption.
As I read Levy's story, it strikes me that the woman responding was thinking more in terms of cultural balance - naming one figure from her culture, one from Levy's - in the immediate moment, rather than an analysis of Mao's social and political philosophies.
History has taught us that whoever controls the principal assets of the new age wins. The landowners controlled the agricultural age, machine owners were the big winners of the industrial age, and software barons have become the front-runners of the information age. If knowledge is the principal asset of the current age, then those who own the best systems to capture and focus its support resources will emerge victorious. Will the Chinese create the leading knowledge consortium? Can China, a country that arguably has more to gain -- and lose -- than any other international player, become the knowledge baron of workplace performance support? Only time will tell. But if any player has the right combination of reasons and resources to make it happen, it's China.
I wonder - is China's objective to 'win' in the sense Levy describes? This strikes me as oddly discordant with everything I know about China (which, again, admittedly, isn't a lot).
My own attitude via-a-vis China is that it would see itself as a Yin globally to the western world's Yang, a Yin in Asia to India's Yang. My view here is that China's object is to restore balance, not to 'win'. Perhaps I misread this (and of course it would always be a mistake to say what an entire country desires). But I'm pretty sure that China's motivations are not the same as, and probably cannot even be expressed in the same terms as, that of a Harvard Business School professor.