Published on 2014/01/06

What the Flattening Industry Means for Higher Education

What the Flattening Industry Means for Higher Education
Partnerships provide institutional leaders with a genuine opportunity to redefine their businesses for a 21st-century student population.
Higher education is getting flattened. Flattening happens “when the impact of the Internet and globalization render an industry unrecognizable, and in many cases, obsolete.”[1] The term is taken from “The World Is Flat,” the seminal book written by Pulitzer Prize-winning author Thomas Friedman.

So, do I think higher education will become obsolete? No. But do I think higher education will become unrecognizable? Absolutely.

In the flattened world, organizations are putting themselves under the microscope, examining every department and function to determine if it’s a cost or a source of income. Is it a core competency, or something that anyone could do — possibly cheaper and better? Higher education is now following a similar path and is breaking down services to the component level to determine the value-add for each function. While many in academia will argue that looking at higher education as a business is wrong, the current model is simply unsustainable. Baumol’s cost disease can only be ignored so long.

Another must-read book on this topic is “A University for the 21st Century,” written in 2000 by James Duderstadt, president emeritus at the University of Michigan. In the last two chapters he explains how higher education may become “unbundled.” He makes two points I think are worth a much closer look:

1. Understanding Competitive Advantage is the First Step

“Higher education is an industry ripe for the unbundling of activities. Universities will have to come to terms with what their true strengths are and how those strengths support their strategies — and then be willing to outsource needed capabilities in areas where they do not have a unique advantage.”[2]

2. Partnerships Keep the Doors Open

“Universities are under increasing pressure to spin off or sell or close down parts of their traditional operations in the face of new competition. They may well find it necessary to unbundle their many functions, ranging from admissions to counseling to instruction and certification.”[3]

While the unbundling of higher education has been underway for quite some time, it has primarily occurred in secondary functions such as information technology, housing, dining and other auxiliary services. Now we are seeing the unbundling of the core academic function of teaching. Historically, teaching a college course followed a vertical model with the faculty member responsible for all aspects of a course (including creating the syllabus, determining the resources to be used, delivering the course, grading the course and evaluating the results). Technology now allows all of these functions to be unbundled, which has the potential to radically change the paradigm of teaching on a college campus.

The advancement of education technology and the move from a vertical to horizontal model raises some interesting questions including:

  • Will technology enable the disintermediation of higher education by enabling world-class faculty to teach courses and provide credentials accepted by employers, all outside the traditional college campus?
  • What happens when colleges and universities no longer have a monopoly on credentialing?
  • What happens when Massive Open Online Courses (MOOCs) are accepted as credit, thus breaking the fundamental business model of higher education?
  • What happens when students no longer take classes at a primary campus but at several institutions?
  • Will the credit hour lose its place as the primary currency of higher education? (In other words, will the content learned become more important than the time served?)
  • What if you were able to create a customized degree from multiple colleges?

Because change in higher education moves at a snail’s pace, minimal innovation is happening on college campuses. Instead, a number of companies have quickly moved into this space and begun challenging the status quo — a fact that remains largely unnoticed by traditional campus leadership and faculty.

While many will argue that pedagogical innovation should occur on campus, I believe the majority of these companies offer considerable expertise and the institutions that will function best are those who effectively partner with vendors to produce the high-quality, affordable education needed by today’s students. A key skill for campus leadership will be to coordinate and manage relationships with a variety of vendors.

As I listen to the conversations about the role of technology in education, too often these discussions are adversarial, as faculty and advocates for educational technology strongly disagree about the best approach to move forward. Instead, what we need is a partnership based on mutual respect and a common goal: to better educate our students.

We are witnessing a major shift in the higher education landscape that is long overdue. The current higher education system was built for a world that no longer exists. The mass education system built for the mass production economy of the 20th century is inadequate for the demands of the 21st century.

While the traditional residential college experience will not disappear, a new paradigm will appear that allows for many paths to many places. We have an opportunity to reshape higher education by using technology to improve teaching and learning, to improve access, to better prepare our children for the 21st century and to do so in a more cost-effective manner.

– – – –

References

[1] Thomas Friedman, The World is Flat: A Brief History of the Twenty-First Century (Farrar, Straus and Giroux: New York, 2005)

[2] James Duderstadt, A University for the 21st Century (University of Michigan Press: Ann Arbor, 2000)

[3] Ibid

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Readers Comments

Tawna Regehr 2014/01/06 at 9:29 am

Greenfield’s six questions touch on the key areas of concern identified for institutions in the coming years. What still works in traditional institutions’ favor is that the culture is supportive of their recognizable brands and long-held reputations. However, as higher education becomes increasingly expensive and thus unaffordable for many, people will turn to alternative credentialing (such as badges) and that will soon come to be accepted as par to traditional credentials. That is why institutions willing to adapt and partner with low-cost providers and other vendors now will benefit in the long run.

Stephen Gotti 2014/01/06 at 4:14 pm

What lies ahead is the complete unbundling of core academic functions, as Greenfield suggests in his piece. This will occur to the detriment of institutions, which will retain the expensive functions (curriculum development and instruction) while private providers take over the cheap functions, such as assessment and credentialing. In order to survive in the future, institutions will have to either fight to retain assessment/credentialing functions (either by partnering with or buying out private providers) or let go of curriculum development and instruction, or offer them at a much lower cost.
I don’t know which option is more beneficial, or whether a magic formula exists to rescue institutions. All I know is that I don’t envy the higher education administrators who have to make these calls.

Ryan Loche 2014/01/06 at 11:14 pm

As institutions reassess their operations and seek to identify their competitive advantage, I believe larger institutions will have a harder time with it. Smaller institutions tend to already limit their focus to what they know they’re good at, and they’re used to having to protect their competitive advantage. Larger institutions have long relied on their reputation, student tuition or federal funding, and other similar factors, to keep them competitive. Now, they’re forced to reassess where they stand and where they’re headed, without the benefit of being highly adaptable.

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