The UK government is urging UK universities to start online courses so that they take advantage of an “historic opportunity”.
Countries such as India and Indonesia have a soaring demand for university courses – creating a market for the UK’s universities, says Mr Willetts.
But he argued that the scale of demand would need to be met by online courses as well as campus universities.
Mr Willetts, spoke at the Guardian Higher Education Summit where he told university leaders that online universities were going to be an important part of the global expansion in student numbers.
The minister described as “astounding” the likely rise in demand in Asian countries for university places, driven by demographic and economic changes.
But he questioned whether the “classic model” of a traditional campus university would be able to respond to such a “huge appetite” for higher education.
Online universities were no longer going to be seen as an “alternative”, outside of the mainstream, he argued.
“Online learning is going to be a big thing, very significant, when you look at the hunger for higher education,” he told the conference.
The online university market is currently dominated by networks set up by leading universities in the United States through MOOCs.
MOOCs- Massive Online Open Courses- however only currently offer modules of courses- not full degree or advanced courses.
Coursera, set up by Stanford academics, and edX, set up by Harvard and MIT, have registered more than 3.5 million students within a year of launching.
In the UK, the Futurelearn consortium of 18 institutions, headed by the Open University, has announced plans to offer online courses from later this year.
Such courses are intended to be cheaper and more flexible than conventional, campus-based degrees, bringing higher education to a wider range of people.
What no one has so far cracked are the issues of plagiarism and the validation of students’ identities when they are invigilated for examinations.