ETHIOPIA & PRESIDENTIAL ADVISOR
0368 EU Proposal
[This was the first draft of the proposal which ultimately, after several more years of work, resulted in OUBS setting up a general management programme in Ethiopia – running from the Certificate on]
22 February 1992
a proposal to the European development fund for a linkage agreement between the open university, UK and the government of Ethiopia
for short courses, certificates, diplomas and degrees (initially in management)
[This was part of the proposal which eventually led to the OUBS Cert/Dip programme in Ethiopia. The costs in this document reflected, though, our original intention to offer such programmes much more widely in the Third World]
appendix A
MAIN ELEMENTS OF COLLABORATION between the open business school (obs) and local institution(s) in Ethiopia to run a pilot programme of management courses/qualifications
The main concepts behind the formal proposal to commence a pilot collaboration, which would ultimately lead (if proven successful) to provision of a range of distance-taught graduate and post-graduate courses, include;
a) INITIAL PILOT - USE OF OBS (MANAGEMENT) MATERIAL ONLY
Despite the intention to broaden the offering to a wider range of disciplines - including developmental economics and especially technology - as soon as possible, the initial pilot would be deliberately limited to materials taken from the programmes run by the Open University (OU) School of Management, popularly known as the Open Business School (OBS - despite the fact that more than a third of its 20,000 students come from non-profit/public sector organisations).
The main reason for this approach is that they would therefore be much simpler to run as a pilot. Thus, these courses (Certificate, Diploma and MBA) would have the significant administrative benefit that they are handled outside of the undergraduate programme, and , hence would avoid many of the complexities of the wider programmes. For instance, there are less than 30 full courses currently involved, rather than the hundreds available across the OU as a whole. In addition the OBS already has experience of transferring these courses to Eastern European countries. The work in those countries has been remarkably successful, with several thousand students already participating, and the procedure (and the related costs) proposed for the initial pilot in Ethiopia are based upon those we have, in practice on the ground, experienced in Eastern Europe - in that case initially funded by the UK 'Know-How' fund (though they are proving to be sustainable thereafter on the basis of local funding).
Whilst the initial limit in coverage (to the OBS courses) would dramatically simplify the task of transfer, it need not as significantly reduce the coverage of student needs; since it is our experience that a large and growing number of students (particularly mature students - at whom this pilot would be aimed) look for practical business qualification (and even in the US the proportion of those taking business qualifications is approaching half the total). It is for this reason that the OBS is the fastest growing part of the OU; consistently growing at 35% per annum in student numbers. The same OBS courses would also be available as specific (short term) management training; where they would be, as in the UK, also offered as separate modules for this purpose.
In any case, the OBS material may be rapidly extended to be as wide ranging as required. It already uses courses from the Technology Faculty and is considering developing courses in Economics and foreign languages. The overall MBA programme already contains specialised courses for the National Health Service, for the Voluntary Sector (charities) and for small businesses; and could easily be extended to cover specialised Ethiopian needs in the same way.
b) subsequent developments
Although not formally part of this proposal, the intention would be to incrementally add, as rapidly as possible (and within the constraints of funding and academic resources), courses from other faculties; such as those of Developmental Economics and especially those from the Technology Faculty. The plan envisages that other OU distance-taught qualifications, including in the longer term those in the wider undergraduate programme, might then become more generally available in Ethiopia.
We recognise that the most urgent need is for undergraduate (BSc) courses - with the highest priority being given to technology, although it is intended that other disciplines would follow in due time. By their nature, however, such courses will require significantly more development (demanding higher levels of finance, and most importantly in this context, longer timescales) to meet local needs, and call for a rather more sophisticated infra-structure. The plan, therefore, is to initially set up the simpler infra-structure required by the business programmes and to prove them (together with their sustainability) in practice in Ethiopia, before developing these incrementally to the level needed by the more sophisticated programmes. In the medium term, even before the more sophisticated (undergraduate) infra-structure was in place, some of the more urgently needed parts of the other programmes might be deliverable under the broad umbrella of the MBA.
c) LOCAL PARTICIPATION
The programme would be run in Ethiopia by a local institution(s), to be determined by the Ethiopian government; since it is seen to be of such importance for the development of the infra-structure that it is likely that it will be decided at the highest level. This institution would also locally validate the qualifications to be awarded. Whatever the final choice, however, assistance would be provided at all stages by the OU (and the administration would be run to its specification - as already successfully implemented in Eastern Europe), which would also provide the requisite expertise in distance teaching - in addition to the student material used.
As far as possible, the intention would be, beyond this direct involvement, to collaborate with a range of local academic institutions, such as the University of Addis Abeba. This would be especially true of support for the maintenance of academic standards through membership of examination boards, provision of external assessors etc. We would hope that it also might extend to joint development of the specific Ethiopian material. In addition, however, we would hope, in return, to be able to provide some academic support/materials for their existing courses where they found this useful, and requested it.
We believe such an approach would have major benefits; adding to the status of the local institutions involved, obtaining much of the expert input from Ethiopian sources (whilst adding to its academic expertise), perhaps reducing the brain drain (where the emphasis would be on the local content), and limiting the potential overload on OU systems.
d) MATERIALS AND ON-GOING RUNNING COSTS
The key to being able to offer distance taught education at a price which is affordable the minimisation of running costs; and, in particular, of the costs of materials involved. The feature that enables the Open University, uniquely, to offer the possibility of high quality mass education which is affordable, on a sustained basis, by large numbers of students in countries such as Ethiopia is its use of highly developed techniques which enjoy very large economies of scale. Where there are large numbers of students, usually numbering in the thousands (though often dispersed over wide areas), these techniques result in very low per student costs; even within the UK - as the recent agreement to add a further 3,000 students to the UK undergraduate programme for a total of only £750,000 per annum ($1.3 m - $450 per student) of additional funding from the Department of Education indicates.
In the UK typically around half the cost comes from on-going (running) costs. Large parts of this cost might not, however, be applicable to courses run in countries such as Ethiopia. We believe that the irreducible minimum of materials cost (if the expensive packaging and videos which are provide in the UK, were removed) on typical OBS courses could be below £50 ($90) - which figure also includes the direct overheads as well as all labour and materials costs. This would, for example, give a total of student material costs for the whole MBA programme (starting with the Certificate and moving through the Diploma to the final MBA qualification, over four years say, and made up of 16 such modules or their equivalent) of no more than £800 ($1,400), and possibly below £500 ($900) overall - even if produced in the UK. The OBS originates almost all of the material itself, making only limited use of the expensive text books which make most other distance teaching courses relatively expensive to run. In the case of Ethiopia it is likely that, after the pilot stages, the materials would be printed locally. This could reduce these costs even further, and might even halve them again - especially when the related overhead reductions were taken into account - as well as contributing to the local economy and requiring no specific expenditure of hard currency.
The remaining running costs (including tutorial support and administration) would be all incurred locally; at local rates of pay (where these elements are largely manpower related) and again to the benefit of the local economy. With local labour costs significantly below those obtaining in the UK, we would expect that these other costs might be held to a similar total. In this way, the overall cost of a (4-5 year) MBA programme might be below £1,000 ($1,800) per student, mostly in local currency; and might eventually be available for considerably less than this; perhaps less than half this level - when all components are sourced locally, and with virtually no hard currency involved. Individual elements of the programme would be available at even lower costs - possibly as low eventually as $250 dollars for the Certificate part of it, which represents the first year, or $70 dollars for an individual (three month) module - and might accordingly be made even more widely available. It would also ensure that the programmes could continue, albeit with reduced numbers, if external funding were removed and local funding (by the Ethiopian government or the students themselves) had to be substituted, We would hope though, in view of its very important (and very cost effective) contribution to the infra-structure, which would be (predictably, both in terms of cost and supply, and to a continuing high standard) deliverable on an on-going basis, the aid agencies would continue to consider it an excellent investment.
In addition, the distance teaching approach would allow students to study whilst they are still employed (which would, in any case, be a requirement of management students). This significantly reduces the resources needed to support such students, and we believe it is virtually a necessity for mass higher education in low wage economies; especially where sustainability is a criterion. It is especially important where provision of employment for graduates is difficult to achieve; since, unlike other forms of higher education, it would not require them to find employment at the end of the course. The modular nature of the material also means that students can study individual courses from the overall programmes separately, in effect as training to meet their specific professional/management needs, whilst accumulating them eventually until they obtain a qualification; the Certificate, say, in the first instance, but ultimately perhaps the MBA.
We believe that these cost structures, unique to the OU, should enable such management education, and higher education in general (and especially that in Technology), to be made much more widely available in Ethiopia.
These facts, coupled with the OU's international reputation for distance teaching, is why the OU's new Vice Chancellor in his inaugural address justifiably emphasised the fact that '.....of all the world's universities we are the best equipped to become the first global university....'
e) DEVELOPMENT OF NEW COURSES AND TRANSFER OF EXPERTISE
On the other hand, the initial investment in each course is high - which means that there is inflexibility in dealing with the special requirements of small groups of students, and this needs to be recognised in any programme design. It has been estimated that development of the third stage of our MBA programme alone cost in excess of £5 million ($10 m), and the overall programme (including the Certificate and Diploma) probably cost twice as much.
A typical UK course/module, involving 110 hours of self-study ( a 'quarter-credit' in our jargon, on average three months of part-time student effort - equivalent perhaps to around 40 hours of expert face-to-face teaching), requires an investment of around £350,000 ($550,000).
Some elements of this investment, needed for new courses to meet specialised requirements outside of the existing UK MBA - such as, for example, particular elements of (Alternative) Technology specific to Ethiopia (starting as part of the MBA but, say, building to become the basis for the Technology course itself) - might be significantly reduced; without any dramatic reduction in teaching quality. Thus, for instance, if high quality videos (currently produced by the BBC to network broadcasting quality) would not be included, and if a significant element of academic work is sourced from Ethiopia itself, it is quite possible that these overall costs might easily be halved; though this would need to be subject to a more detailed investigation. The quality of the courses (in delivery as well as in production) would be underwritten, as usual, by the use of external assessors and external examiners from other European universities, as well as those in Ethiopia.
In any case, these fixed costs (which include large elements of research and development - to ensure the very high academic quality) are significantly reduced if the new courses use basic work which has already been undertaken for similar courses; and our experience to date in Ethiopia (teaching the MBA to small groups of students in the administration) indicates that the necessary changes on most courses might not be major. For instance, in the UK the National Health Service courses have, in this way, built on the work already carried out for mainstream MBA courses; as have the courses for the Voluntary Sector (charities), which are almost as short of funds as some of their overseas clients.
This investment is perhaps in a form which aid agencies find most acceptable (not least because it is very controllable and, perhaps uniquely in this case, contains a large element which is spent locally - in Ethiopia, to the benefit of the economy there). Most importantly, it is a genuine one-time cost. It is the same whether 500 students a year study it, this being the minimum we work to in the UK where costs are recouped over 5 years (from a course price of around £600 - $1,000, usually born by a sponsoring employer rather than the student), or 10,000+ students join it (which is the case for some of the OU's largest courses). It would still be the same - at least in theory - if 100,000+ students studied it, across a number of countries in Africa and the rest of the Third World! It is this feature, which lies at the heart of the massive economies of scale which are potentially available.
On the other hand, it should be noted that this means that any small scale pilots must almost inevitably use existing OBS material as it stands; though this is in any case wide ranging.(offering courses for most managers, from small businesses to large government departments) and, of course, additional, face-to-face, elements may be added locally.
Thus, new courses would either be already covered by existing development within the UK MBA programme (as all the existing material, to form the basis of the initial work on the project would be) - and hence would be a shared cost (on an agreed basis) - or they would be specific to Ethiopia, in which case they would need to be totally funded. In either case, we would expect funding to be provided by the international aid agencies; for whom it should be - on the basis of the costs and philosophies spelled out in this appendix - a very attractive investment.
Even though the emphasis is on keeping the tasks as simple as possible, the OU would also need to transfer some expertise, in running (and in particular in administering) distance taught courses; and once more we would expect the funding of this transfer of expertise to be attractive to the aid agencies.
f) PILOT WORK
An important point to note is that at each stage the work could, if proven in practice (and if the demand, and funding, was forthcoming) lead the way to larger projects. In the first instance it would be a relatively small scale pilot, but based on actual experience obtained - and a review of the local needs (including demand) with local bodies (such as the Chamber of Commerce) - this could justify a further expansion (of distance taught management education in Ethiopia). It might, especially, lead to the introduction of the additional, top priority, higher education in Technology, as well as that of Developmental Economics. But even those later phases might also provide useful experience for subsequent expansion of such an approach to cover other African countries - and beyond.
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