If you think the world is coming to an end in two weeks, go to a college campus…it will take at least two years.---Mark Twain
Innovation has touched every aspect of our lives…except education. There is no aspect of the human experience that has been more vacant of innovation than education, especially higher education. Innovation in education offers more opportunity for the advancement of society than any other endeavor that could be pursued by mankind. Colleges and universities continue to deliver their service in the same manner as they have for centuries: A professor stands before a class of students delivers a lecture and students read a text book. This is an archaic system that is on the threshold of a massive transition. Certainly, established institutions will resist the change as they always have throughout history. The concept of efficiency, productivity and efficacy in the delivery of knowledge and skill has had no place in the world of academia. We are now entering an agonizing period whereby the educational delivery system will be completely restructured by innovation and enabling technologies. The landscape in higher education is about to change dramatically.
Today’s education delivery system:
The educational delivery system throughout history has been characterized by:
1. Students show up to classrooms where professors deliver lectures.
2. Students read textbooks
3. All students, fast learners and slow learners are delivered the same instruction.
4. All courses are the same length (a semester or quarter) regardless of the amount or complexity of the content
5. All classes operate on one hour cycles (45 minutes of lecture, 15 minutes to change classes) and are delivered at a specific time and place convenient for the professor and university.
6. Class sizes are limited to 25-30 students and the physical plant is geared to that sizing criteria.
7. Degree programs are structured to graduate students in four, or five, years, assuming class availability and reasonable student progress.
This is the “straight jacket” in which higher education has lived for centuries.
Innovation Transforms Education:
Enabling technologies have emerged that provide the power to transform the delivery of education. While in its infancy, it is clear that we are at the doorstep of enormous changes in higher education, if not indeed in the entire educational delivery system. This is being brought on by the emergence of on-line courses and programs. These were pioneered by for-profit enterprises, but are now rapidly proliferating throughout the non-profit institutional space. Emerging companies, such as Coursera, Udacity and EdX have led the way by providing an infrastructure for the delivery of what are known as MOOCs or Massive Open On-line Courses. But this is just the “tip of the iceberg”.
We can best understand this through an example.
A Stanford professor of mathematics recently posted his course on differential equations on Coursera’s on-line site. He put considerable effort into making the course interesting and an effective learning presentation supplemented by good graphic illustrations, video and other learning materials. He built in student progress assessment mechanisms that permit the course program to triage learners into fast-forward or remedial instruction tracks. In a course, such as differential equations, like majority of others, there is little, or no, benefit to student interaction. 120,000 students took his course. As he puts it, “I have spent many man-hours every semester for years teaching this course to only twenty students at a time. Through the Coursera program I have taught more students in three months than otherwise in my lifetime. It would have taken 1,000 professors six years to teach the course to that many students.” In this example, we have seen a glimpse of the future.
But more is happening…much more.
Most MOOC courses are free and not for credit and therefore do not apply toward a degree. That is beginning to change. The first MOOC courses offered for credit were introduced in January, 2013 and in May, 2013, Georgia Tech launched an entirely MOOC-based Master’s Degree for $7,000. Students anywhere can take this Master’s Degree program without ever setting foot in Georgia. This dramatically expands the market for this Georgia Tech product.
A small university in New Hampshire offers a number of on-line degree programs. These degree programs generated over $130 million in revenue for the university during the last academic year and produced an operating surplus of $29 million. While their brick & mortar campus served 2,750 students, the on-line program enrollment was 25,000. Students on campus paid an average of $112,000 in tuition, plus room, board, books and other expenses for their degree. The cost of the same degree on-line is about $38,000. Only twenty-five faculty members are required to provide the instruction on-line.
This is a tidal wave that is forming and will transform higher education.
There will be vigorous resistance to this change by faculty and administrators. They will argue that there is no substitute for the classroom experience, the interaction between students and the teacher. This is just so much B.S. and will ultimately give way to the power of competition and economics.
While not all courses are well-suited to on-line instruction, a huge portion are and can be delivered more effectively through that modality. They will not be delivered by TAs or average faculty members. Students will learn from the best.
So, what will change?
At the most fundamental level we can expect important transformations in the way education is delivered.
1. Courses will become “productized”. Many courses are commodity-like and can be structured into well-designed instructional “products.” Top professors and universities are developing these on-line format courses in a way that facilitates the learning of the content material and makes it more interesting for students. These courses will not just be videos of “talking heads’, they will be well-designed courses that deliver the material in a compelling, easy-to-learn way.
Examples of well-suited courses include: accounting, chemistry, physics, biology, mathematics (algebra, statistics, calculus, geometry, etc.), psychology, economics, astronomy, language studies and more.
2. Competency-based degree and course credit programs will replace time period based instruction. The empowering character of MOOC, MOOC-variant programs and other on-line technologies will empower the implementation of, and drive the demand for, competency-based education. While largely in an experimental and developmental stage, this approach to education is set to expand rapidly, fueled in part by innovations in the application of technology. Competency-based systems allow all learners to progress at their own pace, yet assure that the student has adequately mastered the subject to merit the award of the course credit and ultimately the degree.3. The pace of learning will become variable; linked to the individual. Fast learners, and those that work harder, will progress through the learning experience at an accelerated pace, not held back by those of average or sub-par learning abilities. Slower learners will progress at a pace geared to their abilities and work ethic.
4. The rigid structure of class periods, semesters and degree timelines will break down. There is no good reason why all courses should take exactly one semester. There is no reason why class cycles should all run one hour. There is no reason why all students should take four years (or more) to graduate.
5. Instruction will cease to be linked to the academic year schedule. There is no good reason why students must begin their classes, all at the same time, in the fall or at the beginning of a semester. They will be able to commence their study at any time of the year.
6. The physical classroom will become obsolete for many/most courses.
Universities will need to rethink the structure and function of their physical plant.
7. Much of the curriculum becomes commoditized. When we examine the typical undergraduate college curriculum we discover that a majority of the courses can be delivered better through well-designed internet-based programs than through the terrestrial classroom format. These courses are basically those that benefit very little by the interaction between a teacher and students or between students.
8. Social Media will play an increasing role in education. The interaction between students and teachers and the interaction between students has long been a vital part of the educational process. Young people coming of age now are much more into interaction through social media. Companies like Piazza are providing an on-line gathering place for students to interact with university faculty and other students in much the same way that they might in a classroom. However, through this platform, interaction is available 24/7, not just during classroom of office hours. Through platforms such as this, students will have social interaction with classmates all over the country and the world. It is a growing new medium for student interaction focused around their learning experience.
9. Textbooks will become obsolete. Courses developed for on-line delivery will increasingly use excellent graphics, audio and video with text presentations and will be programmed like a computer. Tests, or built-in progress assignment mechanisms, will allow fast learners to skip forward while rerouting others into remedial channels. This will be far more powerful than textbooks which are linear in nature and have no way to know how well the student understands what is presented. The on-line course will become the textbook in the future.
10. Degree Programs will be formed from a composite of courses offered by multiple universities. Universities will begin constructing degree programs that select, bring together and bundle courses from other institutions to construct better academic offerings. Through this, a student might take an approved course in mathematics from Stanford or the University of Michigan, and economics course from a prominent faculty member at the University of Chicago, a science class from MIT and a cluster of core courses from the degree-granting university.
11. Prices will come down. For decades, the cost of a college education has been rising. It has been rising faster than any other product or service that consumers purchase (including healthcare). The will soon come to an end. Ferocious competition is arriving at the doorstep of higher education. Historically, universities have competed within fairly narrow market segments, characterized by price, brand, geography, academic offering and other factors. With the onset of course “products” and internet delivery modalities, any university can compete anywhere anytime.
12. Large populations of faculty will become obsolete, unneeded. The transformative in commodity type courses is likely to result in at least half of all faculty positions at universities becoming unnecessary. Because of the tenure system, universities will struggle to reduce their “headcount” consistent with the decline in need for these employees.
13. The Economic Model of Higher Education will change. The amount of labor (faculty and administration time) to deliver on-line instruction is small, especially when spread across a large number of students and multiple years. Up-front there are capital costs to develop the courses, but all the repetitive costs of professor lesson plan preparation and classroom delivery of material will be eliminated. Thus, the costs per student will drop enormously in this business model.
14. Competition will intensify…significantly. The ability of any university or professor to deliver courses anywhere, any time at a competitive price (not burdened by labor or facilities costs) will transform the markets for higher education. A university in New England will go after students in the “backyard’ of a university in California (and vice versa). With gross margins near 90 percent in the on-line offerings, price competition will flourish. Universities with strong programs and strong brand equity in certain academic specialties will do well in diverse geographic markets, while those without distinction will struggle. Universities will need to learn how to become effective at marketing. They can learn a great deal from the for-profit sector regarding those strategies. The days of charging big tuition prices will come to an end.
15. An opportunity to improve educational efficacy. When we look on the bright side of what technology and innovation will bring to education, the picture is exciting, but challenging. It offers to free educators from the “mundane” instruction that they deliver in the traditional format of today’s system. That will be empowered to focus on more valuable learning experiences for students. There is much that technology cannot do well. Many areas benefit from interaction with the teacher and other students. Communication and thinking skills are among these. The social and philosophic development of young people also requires beneficial interactivity. How do you teach critical thinking, analytical processes, and problem solving? How do you teach a student to persuasively convey his or her ideas? How do they harness the power of interrogative means to get to the bottom of an issue? In the new world, educators will be challenged to step up to the full intellectual and personal development of the whole person.
Innovations enabled by technology need not spell the demise of (all) universities. But certainly big adjustments must be made. With compellingly more efficient, more effective, less costly means to deliver a large part of college education coming soon, it is imperative that academic leaders rethink their business models and their strategy.
University leaders always put down for profit education companies, yet they are soon to enter their domain. For-profits education companies have advantages. They do not carry the heavy costs of athletic programs, bloated bureaucracies and expensive facilities. They also focus on delivering customer value, i.e. education and placement instead of “research”. They have also developed a core competency in marketing; in recruiting customers (students). They are unburdened with the baggage of tenure and are free to hire the best faculty and get rid of weak performers. Non-profits are wise to learn from these competitors.
In pursuit of the provision of value
All goods and services are measured by consumers by the value they deliver (i.e. what one procures, divided by its cost). Strangely, neither producers nor consumers of higher education have focused on this concept. The title wave of intense competition that is coming will change that. Universities have benefited, especially recently, from the strong demand for their services, giving them the opportunity to increase prices aggressively, in lock-step. This has been fueled by a weak job market. High school graduates cannot find employment, so they opt to go to college. Also, college education promises better jobs when they graduate, a promise that many are finding vacant. Also, fueling this demand is the excessive availability of student loans with lenient borrowing standards. This is another factor driving prices up at an unsustainable and unreasonable rate. Because of the unwise public policy making such loans easily available, many young people will ultimately suffer under the burden of the ill-advised acquisition of debt they accumulated to get their education. A huge portion of young people pursue academic majors that offer little prospect of gainful employment. They simply have a good time in college studying fun subjects that interest them, but have little value in preparing them for a viable career or for any meaningful employment. They graduate with a mountain of debt, but without the economic ability to live independently. This is just plain wrong.
Educators must change this equation. The concepts of educational productivity and efficacy must become imperatives in their profession. They must embrace the idea of delivering more educational efficacy through innovation and enabling technologies. They must be willing to let go of the old ways of doing things and aggressively look at new modalities for the delivery of education. They must focus on the comprehensive intellectual and personal development of students. Moreover, priority must be given to providing young people with the skills and knowledge to become employed as productive members of society.
Evolution and Revolution
Early adopters/innovators will benefit from the massive transitions that are beginning. Like the progressive university in New Hampshire, incremental revenue and operating surplus can be generated from the extension of their business model into cyberspace. Such offerings will dramatically extend their market reach. On-line programs will also expand the market to include “customers” that are geographically “challenged” such as those in military service or others in families employed overseas where access to college education is limited. American Public Education (APEI) has made a very successful business serving this market and has current enrollment of 130,000 students. Working adults have always been a good market for these programs, but there is no reason that they need to be limited to the adult education market. Soon the lines will become blurred between adult and traditional campus programs offered to high school graduates.
However, while initially the market will expand and first movers will prosper, the advent of elevated competition, price pressure and the conversion of campus-based enrollment to on-line will pose a very serious challenge for most universities. Traditional, high-tuition-paying enrollment will drop significantly as students increasingly choose a less costly and better educational experience on a cyber-campus. For those laggard institutions that do not seize the moment to transform their operating models, revenues will decline sharply and many universities will face extinction.
Within 15 years, half of the universities in America will become insolvent.