Costly but Valuable

Training and constant human development has become a priority for a majority of firms operating in modern and increasingly global economies, and for countries searching for development approaches. In the United States alone, with a GDP for 1999 of $9.3 trillion, estimates of the percentage of funds spent on education and training vary from $800 billion to $1.0 trillion per year—just under 9% to just under 11% of GDP across all sectors within the economy. In selected sectors (such as tertiary education—a $258 billion per year enterprise in itself) the expenditures for training and continuing education of employees has been estimated at over $200 billion per year. Other developed economies are spending on average 4.5% of GDP directly on education. One of the biggest factors in the variability of estimates for training and education is whether the income and living expenses of those being trained is factored in as a cost. For example, 90% of all corporate and government training in the U.S. occurs on paid time. The cost of a senior executive attending training, at a location different from his/her normal workplace, includes not only the direct outlay for the training activity (speakers, computers, rental site, other costs) but also the cost of attendance. This covers the trainee's salary, transportation costs, living expenses, out-of-pocket costs and, in some cases, business that was not conducted or not accomplished, because the person was off being trained.

In many instances—particularly for international training—the cost of attendance far exceeds the direct cost of training. The higher the salaries of persons involved, the more precious their time is, and the more the training costs a firm. For most educational enterprises, the effective cost of a student’s time is zero. The institution does not pay students a salary, nor, in most cases, does it cover their living expenses. Hence, formal education seems to be a much less expensive enterprise than training for those who are employed. For an employer who is effectively bearing the full cost of training—direct outlay plus the cost of the employee—training is very expensive. And yet, most modern firms in modern economies continue to place extremely high priority on training. Several factors are driving this type of priority setting:

1. Modern economies tend to move from High Volume activities to High Value activities—high value activities usually involve higher skilled individuals. Countries and economies seeking to advance need a reasonable mix of high value items to export or produce.¹
2. Speed and agility are key to maintaining high value—this requires communication and quick understanding—meaning additional training and people who know how to learn.
3. Modern firms need a web of relationships to produce what they do—as an example, the modern automobile, sold in the U.S., may have parts from 25 or 30 countries, all brought together to create one automobile. In emerging economies, such webs of relationship are also important, because the various factors of production are now very distributed. A classic example is flowers produced in Kenya for sales in Amsterdam. The entire activity, including transportation is arranged via the Internet.

In addition, the focus on Web and Internet based ways of operating firms has created a new set of needs. Two innovations (used in both the service and the product economy) have driven much of the recent dialogue on these matters:

1. Enterprise Resource Planning (ERP) involves integrating the "back office" of firms so that one can provide ordered goods rapidly and accomplish all the needed inventory, distribution, quality control, financial, and status updating easily and rapidly. ERP involves reengineering the normally separate functions within enterprises (including educational institutions) so that services and goods are produced more consistently and rapidly.
2. Customer Relationship Management (CRM) involves recording all interactions with a customer/client in order to note past buying patterns, anticipate new purchases or interests, determine changes in lifestyles, and respond to preferences in ordering. CRM is becoming increasingly powerful as multiple firms attempt to become the preferred supplier of goods and services—not only to individuals but to other businesses as well.

Training in a modern economy needs to respond in the following ways:

1. Highly focussed on needed skills in the context of the work enterprise.
2. Provided at the right time in the cycle of work and travel for an employee.
3. Structured to respond to personnel who begin at different points in the learning cycle—for example, some people have more mathematics than others, some need more drill and practice to understand an issue, others need more writing practice.
4. Easily modified and quickly mounted—training which can be reconfigured and delivered rapidly.

Traditional training and education, delivered most often in a face to face mode, has had trouble adjusting to the above pressures. While face to face training can be rapidly modified (with good instructors) such training may have a limited audience or access, and cost pressures can become intense, particularly for senior personnel. E-Learning and E-Training offers an opportunity to respond more cost effectively to the pressures noted above. In most instances, as long as E-Learning can provide equivalent or better outcomes (retention of knowledge, demonstrably better skills, or higher levels of problem solving) at the same or lower cost than traditional training, then the convenience of E-Learning and its ability to reach a wider audience will often win out.

As will be noted in subsequent articles, there have been a wide variety of approaches to E-Learning—many of which are in fact multi-mode—using a variety of means to carry the instruction and a variety of means to create the necessary "learning experience." The best of these techniques, borrowing heavily from A.W. (Tony) Bates’ excellent taxonomy for Open Learning is:²

1. Audience appropriate—in terms of access and level;
2. Cost effective for the economies in which it is operating (perhaps higher cost in richer economies, lower cost in less well to do environments);
3. Teaching and learning appropriate—suits the styles of the learner;
4. Interactive and user friendly;
5. Organizationally appropriate;
6. New enough to generate interest and enthusiasm; and
7. Capable of being speedily altered and rapidly delivered.

• We must continue to focus on the outcome of learning—what is it that must be known to prepare for or perform key functions?
• Different learning outcomes require different skills and ways of acquiring those skills (such as the obvious challenge of teaching laboratory skills remotely). Corporations may value convenience (instruction at the desktop) much more than face to face interactivity—undergraduate education institutions do just the opposite.
• Humans require interaction in order to learn well. Interaction is a human enterprise that technology may only partially be able to support.
• Younger learners may not be the best candidates for a lot of E-Learning, even though they may conquer the technology faster than adults may. There are issues of socialization, teamwork, and physical presence, which have become a part of every culture’s education process. Training, the imparting of skills, and commercial judgement for a mature learner may, however, be very appropriate for E-Learning.
• Learning styles differ by culture and the culture that most advances E-Learning will also tend to dominate the style (just as has happened traditionally).
• The mass customization of learning will become increasingly important as more and more countries wish to know the basic skills that others share, but also wish to alter and make it their own.
• We still need to certify the outcome in some fashion, either through the pedigree of the sponsoring institution (becoming less likely), through certification by respected persons (connections still count), or through various "objective" tests which are independently certified.