Changing Higher Education

A Nation-State Institution in a Market-State World

The other day I Googled Amarket-state higher education Bobbitt@, and came up with several interesting hits. One of these was a 2004 speech by Peter Scott, Vice Chancellor of Kingston University entitled The Impact of Globalization on Universities.

Scott begins by addressing the very pertinent question Awhy are universities afraid of globalization?@ He describes the present situation as one in which Amainstream university response to globalisation ..(ranges).. from reluctant acknowledgment that globalisation is inescapable...to a steely determination to resist its alleged corruption of the university=s core academic and public-purpose values.@ After providing a convincing list of reasons for this fear, Scott then goes on to describe what he believes will be the impact of globalization on the university. His analysis on all points is very useful, and well worth reading.

For me, Scott=s most thought provoking point begins with the statement that most universities have been created as a consequence of policies of States. As such, he argues, the university=s identity is ultimately aligned with the interests of its State. Of course, those interests have changed over time as constitutional organization has moved from the Princely State through the Nation-State, and universities have changed in response. Consequently, he concludes, the modern university is in myriad ways closely defined by the aspirations and organization of the Nation-State, and, in particular, its own Nation-State.

Our issue, then, is that the university of today is a Nation-State institution in a world transforming into a Market-State!

How would a Market-State change Higher Education?

How would a transition to a Market-State (Welcome to the Market-State, Feb.20, 2006) manifest itself in higher education?  Two quotes capture a good part of the core meaning of such a transition. The first comes from James Duderstadt, the former President of the University of Michigan, in “The Future of Higher Education in the Knowledge-Driven, Global Economy of the 21^st Century”:
“It is important to remember that most of our institutions were the result of public policy and public investment through actions of governments at the national and regional level. …Yet today, in the United States and many other nations, public leaders are increasingly discarding public policy in favor of market forces to determine priorities for social investment.”

The second comes from a Commonwealth of Learning/UNESCO report written by Robin Middlehurst and Steve Woodfield “The Role of Transnational, Private, and For-Profit Provision in Meeting Global Demand for Tertiary Education: Mapping, Regulation and Impact"(p.6):
“The tertiary education context in which students, providers, and national Governments now operate, is changing rapidly as a result of demographic trends, the complex effects of globalization on economies and societies, and a shift in the role of Government in public services – from provider, to facilitator, regulator, and partner.”

Offshoring moves up the education ladder

The Los Angeles Times reported on March 6, 2006 that advanced education is providing less of a buffer against offshoring than had been supposed. The article quotes Alan Blinder, a Princeton economics professor and former Vice Chairman of the Federal Reserve, as estimating that one-third of the total jobs in the US were susceptible to offshoring. Regarding the role of education in providing protection, he is quoted, “More education has been the right answer for the past decades, but I am not so convinced that it is the right course” for coping with the upheavals of globalization. (See related article by Blinder in Foreign Affairs, March/April 2006)

Disruptive Technologies: When Great Universities Fail?

Clayton Christensen's book, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail may have been read by more college and university administrators than any other business book of the last decade. It is easy to understand why, because there are some obvious parallels between the great firms that fail, and research universities.

Christensen looks at a very large set of corporations that were on everyone’s list of best run companies, leaders in their industry, that then lost their footing and in a very short time either disappeared or became almost irrelevant in their industry. He found that these companies failed because the management did a great job of analyzing their existing market, responded to the expressed desires of that market, and effectively allocated their investments to projects with the best return. They were so successful in handling the present that they were unable to see that innovations were occurring at the fringes of their industry that had the potential to completely restructure it. 

How about distance learning?

Distance learning (DL) took on new importance with the rise of the internet. It was suddenly possible to reach students 24/7 at any location in the world. Would DL be a disruptive innovation (in the Christensen sense, see Disruptive Technologies: When Great Universities Fail?, March 3, 2006 ) in higher education? What use might traditional universities and colleges make of DL? How would for-profit higher education utilize this new tool and how might universities respond?

In early 2000, I wrote a piece Distance Learning: Challenges and Questions to inform our trustees of some issues and opportunities in this area. This later developed into an article published in Change 32, 20 (2000), and one should read the Change article as it went somewhat beyond my piece for the trustees. Although the internet world has changed a lot since 2000, most of the questions and issues I discussed in these articles are still pertinent.

Competitive Higher Education

Research universities have traditionally been protected by a “moat” created by a value structure that produced very high barriers to entry for new players, and discouraged rapid change. Although that moat is still deep, there are numerous developments taking place that could ultimately remove the moat and introduce real multi-player competition into higher education.

I presented a keynote address at a conference at USC in November 2000 that was organized by our Center for Higher Education Analysis entitled A New Game in Town: Competitive Higher Education. That talk later was expanded and revised and published by Information, Communication & Society, 4:4 , p. 479-506 (2001), and in a companion book Digital Academe: the New Media and Institutions of Higher Education and Learning, eds. Dutton, William H. and Loader, Brian D. Chapter 6. (Routledge, 2002). Interested readers should consult the later, more complete versions of the manuscript. 

What business are we in?

A key question for every corporation over the recent decades of turbulence in the national and international marketplace has been "What business are we in?" As conditions changed, those corporations that really understood their business were best able to emerge in a strengthened situation. Often, companies decided that their existing understanding of their businesses were too restrictive. An oft-cited example of such a case is UPS, which realized its business was not simply delivering packages in its familiar brown trucks, but rather provision of logistics processes to a diverse spectrum of customers.  They are supply chain managers for companies of all sizes worldwide, working intimately with companies to design every aspect of their supply-chain.  In doing so, UPS moved from being a simple shipper of goods on request for corporations, to being a partner with corporations in the production and sales (and repairs) of their products. This partnership enables the corporations to better focus on their core businesses, and has enabled UPS to flourish. (A nice description of the UPS role in the changing world is given by Thomas Friedman in The World is Flat, p 141-150.)

Universities have tended not to ask what business we are in. Or perhaps the answer seemed to be too obvious - " what we are doing now is our business." As we look to the future of universities, however, this obvious answer simply will not enable us to imagine a broad enough spectrum of possible futures. As conditions change, what opportunities should we embrace, which should we ignore? What components of what we do today are to be strengthened, and which might be phased out?

This will be my first take this important question, and is intended to begin exploration of various models rather than provide a proposal for action. The model that I discuss here might be called the “UPS model”, or, more specifically, the Knowledge Chain Manager model.