Are we approaching a mutation in higher education?

As mass consumption gives way to the wants of individuals, a historic transition in capitalism is unfolding.

So begins an interesting article in a recent McKinsey Quarterly written by Shoshana Zuboff.  Zuboff's premise is straightforward:

Every century or so, fundamental changes in the nature of consumption create new demand patterns that existing enterprises can’t meet. When a majority of people want things that remain priced at a premium under the old institutional regime—a condition I call the “premium puzzle”—the ground becomes extremely fertile for wholly new classes of competitors that can fulfill the new demands at an affordable price.  

She argues that we are at such a point now.  Increases in educational and living standards, complexity of society, and longevity have lead to parallel increases in desire for individual self determination, and new interactive technologies provide a means to respond to that desire.  According to Zuboff, this combination will lead to a mutation in capitalism that demands new business models with new purposes, new methods, and new outcomes:

This shift not only changes the basis of competition for companies but also blurs—and even removes—the boundaries between entire industries, along with those that have existed between producers and consumers.... 

Winning mutations—those that create value by offering consumers individualized goods and services at a radically reduced cost—express a convergence of technological capabilities and the values associated with individual self-determination.

The winning mutations that she has studied contain 5 "essential functions":

1) Inversion: starting perspective turns from the corporation to the customer;

2)Rescue: valuable assets (e.g. information) are taken from the old structures and made available to the new;

3)Bypass: going around existing institutional structures to connect individuals to desired assets;

4)Reconfiguration: allows the individual to reconfigure the assets to meet personal needs;

5) Support: provides support to the individual to accomplish his or her goals.

And what are the industries that are most likely to find they are in the middle of a "mutation"? Zuboff describes the circumstances that are most likely to increase the danger:

The products or services you offer are affordable to few but desired by many.

Trust between you and your customer has fractured. The average person’s trust in business has been in steep decline for the past 30 years, and the distance between what today’s businesses can deliver and what individuals want is only growing. This problem makes all consumer-facing industries—especially financial services, health care, insurance, autos, airlines, utilities, media, education, and pharmaceuticals—particularly vulnerable.

Your business model is concentrated, with a high level of fixed costs, a large percentage of which could be distributed, delegated to collaborators, or shifted to the virtual world. Here, too, most existing industries are deeply vulnerable.

Your organizational structures, systems, and activities can be replaced by flexible, responsive, low-cost networks. A neighborhood watch, citizen journalists, online peer support, and peer-to-peer reviews and information sharing are all examples.

There are hidden assets, outside institutional boundaries, that are underutilized but could replace your fixed costs, add capacity, or add new capabilities.

You don’t have all the tangible or intangible assets required to meet your customers’ needs.

 Your end users have needs and desires that you haven’t imagined and have no way to learn about. Unless you make a strategic commitment to explore I-space, you’ll learn about this vulnerability only when your end users migrate elsewhere. This has already been the experience of executives in industries such as recorded music, newspapers, broadcast news, and travel. 

 

As one scans this list, one sees several conditions that describe traditional higher education quite well !

Although I don't find all of Zuboff's case studies completely convincing, the article does provide a very interesting perspective for viewing higher education.  For example, much has been written about the massification of higher education over the last decades. Zuboff perhaps would argue that the driver of much of what we see now e.g.  some of for-profit higher education and online education generally, is not a simple growth of massification, but rather the beginnings of a major sector "mutation" driven by widespread societal desire for an educational product that can be highly individualized. If this is the case, her "essential factors" could then provide guidelines for creating a successful response to this desire. 

Finally, I note that much of what I wrote above could be recast in Christensen's language of  disruptive technologies (see.e.g. Disruptive Technologies: When great universities fail?).  Zuboff's perspective is somewhat different, however, in that she has begun with an emphasis on the societal evolution that has led to a major change in societal desires. This change in desires then invites the growth of a disruptive technology.  Further, she looks at some of the characteristics that the new technology  or approach should have to  become truly disruptive.

Comments

[Joshua's Law]

This was a really insightful and interesting perspective to read, providing a more clear picture of the change in the value of the education and industry.

[Crudbasher]

Bravo! I too have been thinking along similar lines. I'm currently reading Disruptive Class and have been talking about the coming changes in Higher Education.

I think one thing you can add to Zuboff's list is a blinding assumption that because your business model has worked so far, it will keep working. Most of the businesses listed (music, newspapers) are getting creamed because they can't see outside their box of experience. If I might be so bold, I wrote a blog post about this you might be interested in reading: http://educationstormfront.wordpress.com/2010/02/18/what-if-schools-dont-change/

I've added your blog to my reader and look forward to future posts!

Lloyd replies: thanks for your good comments. Your "blinding assumption" addition is certainly on target. Thanks also for your blog link - it is very interesting.