Commoditization Drives Institutions to Innovate and Enhance

Commoditization Drives Institutions to Innovate and Enhance
While commoditization in the higher education space might appear to cheapen the product, the enhancements, innovations and adjustments that come as a result of competition can make postsecondary education more accessible and relevant for students in need.

A quick Google search of “the commoditization of higher education” reveals multiple articles with articulate arguments both for and against the idea that higher education has become a commodity. Further Googling finds that a “commodity” is defined as:

  • A primary product or raw material
  • Something useful that has commercial value
  • A mass-produced, unspecialized product
  • A good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors other than price

Of these definitions (thank you, Merriam-Webster), the first fits my image of a commodity — gas, coal, pork bellies. The second certainly is applicable to higher education and a degree, but not in the pejorative sense that many seem to intend in their various laments.

Not until we reach the last two definitions does there seem to be a connection between the concerns expressed and the perspectives of some, relative to the current state of higher education. Yes, there are unimaginative, unspecialized degrees available today. Of these, some — especially online programs — do have a “mass-produced” feel to them.

The final definition reminds me of the higher education options offered to the military. Here, nothing is considered but price. Woe be unto those who think their brand is worth more than the $250 per credit hour that has been the ceiling for tuition assistance for more than six years. Here, one can see the case for viewing higher education as a commodity.

Yet, when critics level the charge that higher education is becoming a commodity, we need to push back and inquire more deeply as to what they mean. As can be seen in the first few pages of the aforementioned Google articles, the basis for criticism is often that the selling of higher education has become too commercial, too akin to the hawking of soap or other “commodities.”

Sympathetic to this view, many faculty have told me over the years it is unseemly to be in the marketplace promoting a particular degree or institution as if it were a consumer product. “Quality higher education needs no such boosterism,” they would maintain. However, at a time when more degrees and modes of delivery are available than ever before, it is a brave — and perhaps foolish — institution that does not differentiate and market itself. What good is the most innovative degree program in the world if no one knows about it?

A question I have for those worried about commoditization is: “Why do you care?”

Is the concern one of lost quality or of lost prestige? As can be seen in many industries, quality offerings can be mass produced (think: Mercedes-Benz). True prestige, however, comes with exclusion and exclusivity.

Thus, when we decry “commoditization,” what is it we are lamenting? Is it that we should not look for less expensive ways to deliver a degree? Is it that we should not reach out and attract new categories of students? Is it that we are less interested in the democratization of higher education than in contributing to the reputation of our particular employer?

What is the concern?

Yes, there are examples of higher education becoming less selective, less prestigious and less expensive than in the past. There are many examples of higher education being aggressively marketed, especially by the for-profit sector. However, there are also many, many institutions and degree programs that have gone counter to the trends. They have not only differentiated themselves relative to the market, they have also maintained their brand image. Excelsior College has done a nationwide survey of employers for the past five years asking about hiring preferences of recent graduates. During this time, it has become clear that brand trumps all other factors. Employers consistently say a degree from a brand institution, regardless of how it is earned, is more important to their hiring and promotion decisions than either the specific degree earned or the means of delivery (in other words, according to them, an online degree from a brand institution is worth more than a classroom-based credential from a lesser-known school.)

If the concern is that “commoditization” means we are facing an explosion of poor quality, mass-produced, minimally-acceptable credentials, the good news is that we are not. Our much-maligned regional accreditation system works hard to prevent this, and to ensure minimum standards of quality are maintained. Now, we need to be sure this remains the case.

In a competitive marketplace, there need to be enhancements (specialty accreditations, unique areas of study or models of delivery) that clearly separate your offerings from those which compete solely on the basis of a lower price. We also need to remember what may be a commodity to one may be a ticket to economic independence for another.

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Readers Comments

Shazia Ahmed 2013/06/03 at 11:42 am

Improving access to higher education does not necessarily result in lowered standards. Ebersole skillfully addresses the false assumptions some in the higher education industry seem to hold by pointing out that with improved access comes greater competition, which can lead to innovations.

Stephen Gotti 2013/06/03 at 3:06 pm

Mass production drives down the value of the commodity, whether we’re talking about an umbrella or an undergraduate degree. In a commoditized higher education environment, institutions begin to shift their focus exclusively to lowering costs and increasing enrolment, at the expense of quality teaching and research. Programming and operations begin to look the same from institution to institution, and graduates of these degree mills also resemble the products that come out of an assembly line. It’s a race to the bottom for higher education. Sad to see so many institutions at the starting line.

Chuck Zahn 2013/06/03 at 3:50 pm

In response to the commenter above, I don’t think the situation is as bleak as you make it out to be. The reality is that even with commoditization, higher education (if not entirely, then at least some components) will remain out of the reach of the majority. What institutions are creating is improved, not unfettered, access. This should be encouraged, as having a more educated population creates real benefits for society.

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