<<December 19, 1999>>

Dear Electronic Colleagues:

(1)  I am taking the liberty of distributing the following:

     (a)  ATTACHMENT I:

          Becker, Gary S.,  How the Web Is Revolutionizing Learning,"
          BUSINESS WEEK, December 27, 1999,

     (b)  ATTACHMENT II:

          Reich, Robert B., Review of "The Rise of the Virtual State:
          Wealth and Power in the Coming Century," by Richard Rosecrance,
          The New York Times, Book Review, December 19, 1999.

(2)  The author of ATTACHMENT I, the 1992 Nobel Laureate, endorses distance learning.

     The collaborative regional groups of our Global University System (GUS)
     created at our Tampere event intend to foster youngsters around the
     world for the *Virtual State* of the 21st Century with *competition for
     excellence* through affordable and accessible broadband Internet.  We
     are to prepare them for the transformation of the world from the industrial
     age (where obedience predominated) to a knowledge age (where creativity
     and competence predominate).

(3)  We sincerely thank each one of you for your continuing encouragement and
     strong support. We especially thank those people who made the highly
     successful Tampere event in August. It was certainly a significant historical event.

     We will have a lot of very exciting things to do in the next millennium!!

              Have a very wonderful holiday season
                 A HAPPY AND HEALTHY NEW YEAR!!

Best, Tak
            ****************************************                          ATTACHMENT I
                          Excerpt from

                       ECONOMIC VIEWPOINT
            How the Web Is Revolutionizing Learning
                         GARY S. BECKER
Modern economies require that people invest in the acquisition of knowledge,
skills, and information throughout most of their lives. Yet the basic methods
of acquiring such human capital have hardly changed since the time of
Socrates. For 2,500 years, teachers and students have met face-to-face for
lectures and discussion. The growth of the Internet may revolutionize this
system by allowing ''distance learning,'' in which teachers and students
interact closely even though they are separated both physically and in time.

My professional research on human capital and my long career as a teacher led
to a fascination with the Internet as a medium of instruction. As a result, I
have been involved in the development of a for-profit company, UNext.com, that
is delivering online courses, especially in economics and business, through
contracts with employers.

The key economic advantage of distance learning over traditional on-site
schooling is that it saves students time. The value of the time spent learning
is the principal cost of investment in human capital among adults with even
moderate earnings. It is especially large for executives and highly skilled
employees. Web-based instruction eliminates regular commutes to colleges and
other teaching facilities, which can amount to more than an hour each way.
Online instruction also allows greater time flexibility for students to
interact with course materials, ''chat'' with other students, take quizzes,
and submit written papers. People with full-time jobs can choose the most
convenient time to do their coursework: during weekends, before work, or after.

Thousands of Internet students could take a single, popular course, instead of
the small numbers in a typical classroom. The spread of faster and,
ultimately, of broadband access to the Web enables online teachers to move
about and gesticulate as if they were in front of live audiences. They can
enliven lectures with colorful graphics and attractive simulations. Online
instruction may well widen the market and raise the popularity of
''superstar'' teachers who command large audiences and very high salaries.

Although Web-based teachers and their students may be scattered all over the
world, the Internet can help to overcome the disadvantages of physical
separation. ''Chat rooms'' encourage group discussions among students and
teachers and reduce the feeling of isolation fostered by sitting alone in
front of a computer. Internet instructors can also customize their questions
and discussion to fit the needs of individual students.

Distance learning appeals mainly to adults who want to take courses toward a
bachelor's or master's degree, or maintain and upgrade job skills that have
grown dated. Highly skilled professionals, such as doctors, have always had to
keep up with change in their fields by reading and by taking short courses.
But the continual introduction of new technologies makes skills obsolescence a
serious prospect for all professionals and for many other working adults.

WORK FARE. For example, to better assess and manage their considerable
investments, financial officers of large companies need to understand the use
of modern options markets to reduce risks. And growing numbers of men and
women in many nations want to learn to read and write English, the global
language of trade and commerce.

Already, U.S. colleges and universities offer over 6,000 accredited courses on
the Web. Some students customize their online degrees by choosing courses
offered by different colleges located all over the U.S. and in other
countries, too. Clearly, physical proximity between schools is not necessary
for their online cooperation. Meanwhile, for-profit companies have begun to
provide online instruction in numerous subjects. To gain faster acceptability
and recognition, some of these companies have entered into cooperative
arrangements with accredited colleges and universities.

On-the-job training and learning offer a particularly promising online market.
Companies have long provided investments in employee education mostly in-
house, eliminating travel time to off-site schools. Distance learning offers
an opportunity to outsource teaching to specialized companies without taking
employees away from their work. Web-based courses are rapidly developing in
information technology, finance, accounting, marketing, management, the global
economy, and many other subject areas.

The Internet has begun to radically change the teaching of adults in the U.S.
who want to improve their skills or further their general education. Before
long, this will become a global movement, as access to the Web continues to
spread rapidly to other nations.


Copyright 1999, by The McGraw-Hill Companies Inc. All rights reserved.
                     Terms of Use   Privacy Policy
                         ATTACHMENT II

                          Excerpt from

                   New York Times/Book Review
                       December 19, 1999
The Rise of the Virtual State: Wealth and Power in the Coming Century
                     By RICHARD ROSECRANCE
                  Reviewed by ROBERT B. REICH
"If Rosecrance's sunny forecast is not entirely persuasive, he offers abundant
evidence for it . . . Rosecrance may be right about the coming of the virtual
state. But he hasn't explained why we or anyone else should care about it."
First Chapter: 'The Rise of the Virtual State'

December 19, 1999


National wealth and power, Richard Rosecrance says, will be determined by a
country's cerebral resources.
Related Link
* First Chapter: 'The Rise of the Virtual State'

[R] ecently I woke up to discover that I'm working part time for a German
company named Bertelsmann A.G. While I wasn't looking, Bertelsmann bought
Random House, which published several of my books and still occasionally sends
me tiny royalty checks. Bertelsmann is now the largest publisher of English-
language trade books in the world. Who's ''us''? Who's ''them''? Does it matter?

Richard Rosecrance thinks it still does, although not the way it used to.
Nations still compete with one another, and they still have different
interests, but the terms of the competition have radically changed. During the
first centuries of modern history (roughly 1500 to 1900), power went to
countries with large amounts of land and key natural resources like iron, coal
and copper. They enlarged their power by taking over lesser nations and their
land and resources, adding to their military prowess. But roughly a century
ago, and again after a pause for the Great Depression and World War II, the
terms of competition shifted from territory to trade. Between the 50's and the
80's, the growth of trade easily outpaced the growth of national economies.
With goods more mobile than capital or labor, the key resources became state-
of-the-art equipment and well-trained workers. Thus were nations like Japan
and Germany able to gain large shares of global commerce and indirectly exert
significant influence on world events.

The central idea in ''The Rise of the Virtual State'' is that power is
shifting once again, this time to nations whose people are most adept at
summoning global financial capital and turning it into conceptual insights for
sale around the world. Rosecrance calls these new centers of power virtual
states, because their wealth and influence depend on intangible flows of money
and ideas. They don't need a lot of exports to finance their imports and their
investments in plant and equipment. They need a lot of brains, with which to
generate research, software designs, entertainment, engineering concepts,
advertising, marketing, styling, legal and financial innovations and
information-based inventions. And it is brains -- not land, not armaments, not
capital equipment -- on which national wealth and power will depend in the future.

In Rosecrance's view, all nations are evolving toward virtual states, but some
are becoming ''head'' nations, specializing in ideas, and others are becoming
''body'' nations, making tangible products on the basis of those ideas. In the
former category are the United States, the nations of Western Europe and some
of the nations of Southeast Asia; among the latter will be China, Eastern
Europe, South Asia and the African countries. Rosecrance concedes that the
world may grow further divided, yet, like Jesse Ventura, body nations can
transform themselves with enough emphasis on training their people's minds.

Indeed, this is an unremittingly cheerful book. Rosecrance expects the planet
to become steadily more peaceful because nations no longer need additional
territory in order to thrive. And under the new terms of competition, one
nation's gains don't come at another's expense. Countries endowed with a lot
of capital don't have to conquer countries with a lot of labor; they can just
admit more immigrants. Nations with a lot of well-trained but poor workers
don't have to pillage their neighbors for capital; they can rely on global
capital markets to transfer money to them from capital-rich places, so long as
nations on the receiving end remain open and friendly. Developing countries no
longer nationalize foreign plants, because that would stem the flow of foreign
capital, and flow is more important than any physical plant. The rise of the
virtual state will inaugurate ''a new epoch of peaceful competition among
nations, promising a cooperative transition to the new millennium.''

There's no room here for doubters predicting a collision of cultures between a
capitalist West and a fundamentalist East or fretting about tribalism. Yet if
Rosecrance's sunny forecast is not entirely persuasive, he offers abundant
evidence for it. More than a decade ago, he wrote ''The Rise of the Trading
State,'' to which this book is something of a sequel. There's a bit of
overlap, because much of the history is the same. But in ''The Rise of the
Virtual State,'' he ventures more daringly into a new digital economy whose
products move through space at the speed of light, and offers some useful
insights. Rosecrance, a professor of international and comparative politics at
the University of California, Los Angeles, points out that Hong Kong, which
used to be known as a cheap place to make things, now earns almost all its
money as a center of business services. Moreover, as land continues to decline
in value, population density is now positively correlated with a nation's
wealth. Consider tiny Singapore.

Rosecrance also makes an admirably strong case for education and job skills as
the keys in determining a nation's wealth and influence. A virtual state, he
argues, must invest in its people, not worry about amassing expensive
production capacity. ''At the ultimate stage,'' he writes, competition among
nations will be competition among educational systems.'' Nations in effect
choose their comparative advantage through the prowess of their graduate
schools. But deciding to be an engineering center and not a biotechnology
center will have little practical effect, he reasons, if too few citizens have
the basic education to specialize.

But there's a paradox at the heart of Rosecrance's argument that he never
quite addresses. Who exactly are the citizens of a virtual state, and what
exactly are its businesses? Rosecrance refers in passing to a ''new type of
international crisis'' apt to occur as virtual states compete, citing ''a
frantic two weeks'' in December 1994 when, according to his account, the White
House and the French vied over a $1 billion deal to manage Brazilian rain
forests and air traffic; Washington won it for the Raytheon Company. But it's
not at all clear what America's interest was in securing the deal for Raytheon
in the first place. After all, Raytheon is fast becoming a global corporation
whose employees and shareholders span the world. It's only ''virtually''
American. Presumably most of the people it would hire to work on these
projects in Brazil would be Brazilians. A few years ago my home state of
Massachusetts gave Raytheon a lot of money in return for its agreement to keep
thousands of jobs in the state. A few weeks ago, Raytheon announced it was
pulling the plug on many of them.

I like Rosecrance's idea of investing more money in the education of
Americans, especially poor children who are now in lousy schools. But his idea
neglects the central question. Whom does he expect to fork up the money? The
money Massachusetts gave Raytheon could have been used for public schools, as
could all the money states around the country are spending to bribe companies
to stay put or move in.

What about individual citizens? By Rosecrance's logic, the citizens of a
virtual state will, like corporations, be virtual citizens of the world.
They'll be selling their services globally and investing their savings
wherever they can get the best return. A growing proportion of the American
work force is already employed by companies with headquarters outside the
United States. A chief executive of General Motors once said that what was in
G.M.'s interest was in the interest of the United States, but G.M. has now
gone global. And what about DaimlerChrysler? America bailed out the old
Chrysler; the new one seems to have moved its headquarters to Stuttgart.
Meanwhile, the fund manager of my 401(k) plan is investing my pension dollars
in Europe and Asia as well as America. And don't forget about my part-time job
with Bertelsmann.

At the core of a polity are bonds that unite a people and give them a sense of
belonging to a common culture. But a virtual state, by its very nature,
generates few such bonds and snaps the ones already in place. Rosecrance may
be right about the coming of the virtual state. But he hasn't explained why we
or anyone else should care about it.

Robert B. Reich, the former secretary of labor, is university professor of
social and economic policy at Brandeis University and national editor of The
American Prospect.

              Copyright 1999 The New York Times Company
* Takeshi Utsumi, Ph.D., P.E., Chairman, GLOSAS/USA                  *
* (GLObal Systems Analysis and Simulation Association in the U.S.A.) *
* Laureate of Lord Perry Award for Excellence in Distance Education  *
* Founder of CAADE                                                   *
* (Consortium for Affordable and Accessible Distance Education)      *
* President Emeritus and V.P. for Technology and Coordination of     *
*   Global University System (GUS)                                   *
* 43-23 Colden Street, Flushing, NY 11355-3998, U.S.A.               *
* Tel: 718-939-0928; Fax: 718-939-0656 (day time only--prefer email) *
* Email: utsumi@columbia.edu;  Tax Exempt ID: 11-2999676             *
* http://www.friends-partners.org/GLOSAS/                                   *

Return to: Global University System Late 1999 Correspondence
Web page by Steve McCarty, World Association for Online Education President