Changing Higher Education
Major changes occurring in the world are redefining the metrics of excellence for higher education.
Potential disruptors in the higher education space. II
In an earlier post, I described some potential disruptors in the higher education space. In this post I would like to add another set - several non-profits that are trying to provide essentially free education : the Khan Academy, the University of the People, and the Saylor Foundation .
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January 28, 2012 in Competition, Disruption and transformation, Price and Cost | Permalink | Comments (1)
Tags: accreditation, cost, degree, disruptors, free, higher education, Khan Academy, Michael Saylor, peer-to-peer, Saylor Foundation, Shai Reshef, University of the People
What will The College of 2020 look like?
Prediction is very difficult, especially about the future
Niels Bohr
(Note: the following was first published as an invited contribution on The College of 2020 in parts 1 and 2. I reproduce it here for the benefit of my readers by permission of the editors of the College of 2020)
What will the College of 2020 look like? It probably will be similar in at least one way to the College of 2011 -there isn't any one archetypical College of 2011 and there won't be any one archetypical College of 2020 either. US higher education consists of about 4,500 accredited colleges of 2011 with an incredible diversity of sizes, approaches, missions, and resources. I would expect the same to be generally true in 2020, with some important caveats: I think there will be significantly fewer accredited colleges in 2020, and the mix of sizes, approaches, missions, and resources will be quite different from today.
These changes will be driven by two forces that push from different directions, but each leading to increasing fiscal constraints on higher education. On the one side, local and national governments are finding it increasingly difficult to support higher education at traditional levels. There a world-wide movement towards decreasing the role of government in providing social goods, and the US reflects that movement. In addition, other governmental costs such as health care, prisons, and retirements are growing rapidly and squeezing out areas such as education. On the other side, all of higher education utilizes a model whose costs over the last 30 years have steadily grown about 3% a year above CPI increase. In the tuition-dependent private sector, tuition has grown apace, i.e. roughly CPI plus 3% every year for the past three decades. The costs of higher education are reaching a point where government, parents, and students are beginning to question if the product is worth the price. The answer is increasingly "no" for private institutions that have lower brand value, but the "no" likely will move upstream in the value ladder over time as costs increase until only a relatively small number of high brand value private institutions are immune. On the public side, the answer is increasingly, "no, not given our fiscal constraints" no matter what the brand value of the institution.
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November 10, 2011 in Competition, Disruption and transformation, Economics, Learning, Price and Cost, Research | Permalink | Comments (9)
Tags: brand, college of 2020, cost, CPI, curricular options, learning, online, pedagogy, physical plant, price, quality, research, surrogates, teaching, tuition, university
Brief update on StraighterLine, one of my potential disruptors
In a recent post, I described several organizations that seemed to me to be potential disruptors on the higher education space. StraighterLine, which focuses on offering introductory college coursework on line, is one of these.
StraighterLine has now issued its first "report card", a survey of their students. The survey looked at such things as student satisfaction, convenience, perception of course rigor, and whether the student was able to obtain credit from a college of their choice for the StraighterLine course. In brief, the students seemed highly pleased with the courses on all parameters. Importantly, over 90% of those who sought college credit for the course were able to obtain it.
The response rate to the survey was modest, and it would have been nice to see some validity discussion in the survey. Nevertheless, the report card indicates that StraighterLine is finding strong student approval of its method of offering an inexpensive way to get college introductory courses online, and that those courses are being recognized and accepted by traditional institutions. Sounds like a good step along the path of disruption!
August 16, 2011 in Competition, Disruption and transformation, For-profit higher education, Price and Cost | Permalink | Comments (2)
Tags: college credit, core subjects, disruptive, disruptor, higher education, innovation, StraighterLine, student
Potential disruptors in the higher education space
As regular readers of this blog know, I have been using Clayton Christensen's concept of disruptive innovation to frame issues in higher education since 2006 (Disruptive technologies: when great universities fail?). Christensen's work describes corporations (and industries) that are considered to be enormously well run and successful, but are essentially destroyed in a relatively short time by some new competitor that brings a new innovative approach to meeting the needs of the customers. The disruptor's new product is less expensive than the traditional product, and has some attributes that are quite different. Initially, the disruptor's product does not meet the customer's needs so well as the established product. Over time, however, the disruptor's product improves, and customers come to find its additional attributes to be very useful. Christensen also differentiates between this disruptive innovation and a sustaining innovation. The latter is used to improve established products. Christensen shows that continual application of sustaining innovation often leads to an established product that is "better" than the customer needs -- or wants to pay for. Thus the very quality of the established product may well be one of its weaknesses. Eventually a tipping point arrives, and customers rapidly migrate to the new product that is both less expensive and has additional useful attributes.
Christensen describes characteristics of traditional companies that have fallen prey to a disruptive innovation. I always felt that higher education fits to a T his picture of an industry that has a high probability of suffering a major disruption. Fortunately, you no longer have to view the issues through the lens of my interpretation of Christensen, because Christensen and co-workers have recently turned their attention higher education. A number of their works have now appeared or will soon appear. I previously did a post on his recent Disrupting College; Christensen and Eyering have a book appearing in August on the Innovative University:Changing the DNA of Higher Education from the Inside Out; and Michael B. Horn, a regular Christensen collaborator, has recently published an excellent paper Beyond Good and Evil:Understanding the Role of For-Profits in Education through the Theories of Disruptive Innovation. All highly recommended.
With all of this, I thought it useful to introduce a blogroll on some companies, institutions, think tanks, etc. that seem to me to be doing interesting things that might well turn out to be disruptive for various aspects higher education, and/or sustaining for others. The blogroll will not seek to be all-inclusive. Rather, it will be indicative of areas in which I find that very interesting things are happening. I will add more sites to the roll from time to time as I see things that attract my interest.
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June 09, 2011 in Competition, Disruption and transformation, For-profit higher education, Globalization, Learning | Permalink | Comments (22)
Tags: Bologna, Christensen, disrupting college, disruptive, higher education, innovation, Laureate, Learning Counts, National Center for Academic Transformation, Open Badges, Open University, p2pu, StraighterLine, University of Phoenix, Western Governors University
Is online education disruptive or not?
Burck Smith, the founder of StraighterLine, has written a very nice piece about Clayton Christensen, et al.'s Disrupting College (see Christensen on disruptive innovation in higher education) for the John William Pope Center for Higher Education Policy. In this article, Smith argues that, in fact, online education is acting as a sustaining, rather than disruptive, innovation at this time:
Yet the effects of disruption—vastly lower prices for consumers, new course providers, struggling old providers, and disaggregation of products—are not evident in higher education. Prices continue to rise and, with the possible exception of for-profit colleges, nobody new has appeared on the education landscape to deliver college courses. In practice, it seems as though online learning is simply a “feature enhancement” (like adding rubber tires to wooden wheels) that allows colleges to make their offerings attractive to more people.
April 01, 2011 in Disruption and transformation, For-profit higher education, Price and Cost | Permalink | Comments (6)
Tags: accreditation, Burck Smith, business model, Clayton Christensen, cost, credence good, disruptive innovation, experience good, higher education, price, price competition
Christensen on disruptive innovation in higher education
Regular readers of this blog know how often I call upon Clayton Christensen's ideas regarding disruptive innovation as described in The Innovators Dilemma. Christensen has now turned his focus to higher education in a superb, must read white paper called Disrupting College:How Disruptive Innovation Can Deliver Qualityand Affordability to Postsecondary Education , published by the Center for American Progress and the Innosight Institute. The report is coauthored with Michael B. Horn, Louis Soares, and Louis Caldera. This white paper does a great job of succinctly describing the challenges and issues facing American higher education today, outlining the concepts of disruptive innovation, and then applying those concepts to higher education.
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March 22, 2011 in Books, Competition, Disruption and transformation, For-profit higher education, Mission, Price and Cost | Permalink | Comments (1)
Tags: business model, Clayton Christensen, disruptive innovation, for profit, for-profit, Harvard, higher education, Laureate, Louis Caldera, Louis Soares, low cost university, low-cost university, Michael B Horn, on-line learning, Phoenix, scalable technology, Walden
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.
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September 15, 2010 in Disruption and transformation, Economics, Market-State | Permalink | Comments (2)
Tags: capitalism, Christensen, disruptive, higher education, massification, McKinsey, mutation, Shoshana Zuboff, transition
The business model for higher education: II. How might it be fixed?
In the previous post,The business model for higher education: I. What doesn't work? , I described some of the approaches used by a fictional corporation, VPI, to create ongoing financial health, and looked at higher education’s use of similar approaches. The mainstay of higher education’s search for financial health thus far has been to increase price faster than CPI, while the use of other common corporate strategies has been quite limited. This post uses the corporate model to suggest several approaches that might be useful in redefining the business model for higher education. In fact, many of the things higher education might chose to do if it could not raise tuitions faster than CPI are things that already have been done at many institutions at a relatively low level, or have been discussed widely. For them to become a major component of the activities of higher education institutions, however, would require major changes in perspective and view of mission.
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February 23, 2010 in Disruption and transformation, Globalization, Learning, Mission, Price and Cost | Permalink | Comments (1)
Tags: adult learner, budget, costs, higher education, international student, Liverpool, mission, NYU, pedagogy, research, revenues, student, teaching, university
The business model for higher education: I. What doesn’t work?
The economic downturn has led to numerous calls from a wide variety of sources for higher education to make hard choices and to think more strategically about cutting costs. Thus far, there have indeed been many hard choices made in both public and private sectors (see e.g. the recent report by the Association of Public and Land-Grant Universities). These choices almost universally reflect necessary short-term responses to the immediate situation. However, for both good times and bad times, history has shown that the current business model of higher education requires annual net tuition increases that are well in excess of increases in family income or CPI (Perspectives on the elephant of college pricing, Nov 19, 2009). Clearly, such large increases cannot continue indefinitely. Consequently , creative long-term strategies ultimately will have to be devised that lead to a significant re-imagining of the higher education landscape - one that results in a sustainable cost/price model that supports the multiple missions of higher education.
Continue reading "The business model for higher education: I. What doesn’t work?" »
February 17, 2010 in Disruption and transformation, Economics, Mission, Price and Cost | Permalink | Comments (2)
Tags: business model, continuing education, costs, distance learning, for-profit, higher education, productivity, recession, research university, tuition
The breakdown of the price-productivity-cost model of private research universities
I have learned a lot recently participating in a project on Global Higher Education led by Paul Jansen and Debby Bielak of McKinsey &Co. The project is sponsored by the Forum for the Future of Higher Education. Paul and Debby have collected a group of university CFO’s, a college president, and an old provost (me) together to apply a McKinsey sector-wide analysis to higher education. It is fascinating to see what such an analysis tells us about our world.
The team recently made a presentation entitled Higher Education Trends and Risks: Implications for Leading Institutions and Sector Performance at the annual Aspen Symposium of the Forum. My assignment was to talk about trends and risks for private research universities - in 15 minutes. I approached this impossible task by first apologizing to the audience for the egregious simplifications that I would have to make in order to describe the situation in 15 minutes, and then introduced my simple one-parameter model to describe the problems facing the research university. Since this model met with some approval at the Symposium, I thought it might be worth repeating here.
I began by describing what I called our Mission Box. Excellence - as defined by us in a very self-referential way - has become the visible driver of our mission. Our mission, in a very general way, focuses on traditional undergraduate education, graduate and professional education, and research. Focusing on excellence means that if it is worth doing (i.e. one of our mission foci), it is worth doing better. Doing it better costs more money, so at some point the customer can’t, or won’t pay for it, so we lose money. As a consequence, over time, losing money has become our very visible surrogate for excellence (my one parameter model). (Clayton Christensen, who also spoke at the symposium, has pointed out the often catastrophic outcomes of making your product better than the customer wants or needs. See also Disruptive Technologies:when great universities fail? March 3, 2006)
October 26, 2007 in Competition, Disruption and transformation, Globalization, Mission, Price and Cost, Research | Permalink | Comments (0)
Tags: cost, excellence, globalization, higher education, mission, price
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.
March 03, 2006 in Competition, Disruption and transformation, Mission, Research | Permalink | Comments (0)
NAS report on change in the university
A recent report of the National Academy of Sciences concludes that major changes will occur in the relatively near future in almost every aspect of the university. The Fall 2005 issue of Issues in Science and Technology contains a very thought-provoking article Envisioning a Transformed University that summarizes conclusions arising from a series of discussions held with university administrators around the country. These meetings were sponsored by the NAS Forum on Information Technology and Research Universities. The authors of the report, J.J. Duderstadt, Wm.A. Wulf, and R. Zemsky, describe a number of changes in universities that new technologies are likely to produce in the relatively near future. They issue a strong warning against underestimating the magnitude and impact of the changes that technology will enable.
My comments regarding this report were solicited by the editors of Issues in Science and Technology (along with those of several others), and can be found in the Winter 2006 issue.
February 20, 2006 in Disruption and transformation | Permalink | Comments (0)
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