In the tradition-steeped and degree-focused postsecondary space, transformation and change is generally hard to come by. However, over the past few months increasing numbers of leaders have taken notice of the growing demand and value of innovative and alternative credentials. Building on the work of his new book, The Future of University Credentials, Sean Gallagher outlines his perspective on the shape of the credentialing marketplace today and reflects on what needs to happen in order for innovative credentials to truly fulfill their potential.
The EvoLLLution (Evo): What differentiates the innovative credentials being offered by traditional colleges and universities from the alternative credentials (nanodegrees, etc) being offered by non-institutional education providers like bootcamps?
Sean Gallagher (SG): Appropriately, there is a great deal of interest within and outside of higher education in “alternative” credentials. The word “alternative” itself is key: The discussion is framed by what are alternatives or substitutes to the classic degree (and to some extent the certificate). The interest in this space seems to stem less from any dramatic changes (yet) in the role that degrees are playing in the workforce. I’d call that the “demand” side. The growth is more from the “supply” side: the availability of and experimentation with innovative new offerings. This is driven in great part by policymakers who wish to generate job market outcomes for professionals in a more cost-effective fashion, and technology firms and investors who see disrupting the status quo in higher education or professional learning as a great market opportunity. Of course, there is also the spirit of innovation and experimentation among colleges and universities, especially among institutions focused on lifelong learners. In addition, the growth of alternatives is driven by the need for employers to, in some situations (especially computer science), turn to alternative pipelines of talent in what is truly a very tight job market for knowledge work in the U.S. and other areas around the world.
The exciting new alternative credentialing constructs that we so often read about—nanodegrees, microdegrees, etc.—are most often the products of technology firms providing continuing education and lifelong learning, and not from accredited universities. It’s fascinating. Some of these terms have even been trademarked. Yet, the boundaries are blurring, and that’s perhaps what is most interesting in terms of how this market develops. Many universities are partnering with start-ups to provide content for and issue new forms of credentials. On both sides, institutional providers and non-institutional providers, we are still in a very early, experimental phase of development.
I’d point out that virtually all bootcamps (typically focused on computer science and tech skills) do not actually provide any sort of accredited “credential”—yet we lump them into this discussion because they are an alternative to a traditional college degree in terms of being learning that results in job attainment. What is changing here is that many universities, from Rutgers and the University of North Carolina, to my own institution, Northeastern University, are beginning to enter this space on their own or in partnership with outside firms. In addition, the U.S. Department of Education’s EQUIP experimental sites initiative is a step in the direction of linking non-institutional providers with recognized credentials and Title IV financial aid.
Non-institutional credential programs tend to be highly professionally focused, shorter-term, or “bite-sized”—and as a result, substantially less expensive and more directly connected to job competencies compared to a degree. More often than not, they’re in an online format, and the issuing of certificates or micro credentials is a major part of the second stage of the evolution of the commercial MOOC market. However, generally, they are unlikely to represent a foundational job qualification in the way that degrees or years of experience are traditionally fundamentals in hiring. Most significantly, traditional and innovative university credentials have the backing of accredited institutions and their brand, prestige and quality assurance. They tend to be more substantive, and they certainly have a longer operating history, and history of acceptance and results. There is very little preventing a college or university from stepping into the issuing of microcredentials—many already are, particularly in the form of non-credit certificates, which have been around for decades. I think what we will see is that higher education institutions’ online credential programs will also become more skills-focused (we might even say “competency-based”), short-form, and at a discount to the traditional degree.
So far, it seems that microcredentials do a different job for the customer: They are often about skill acquisition and continuing education, whereas degrees and traditional programs are much more foundational, broader, and more associated with job qualification. This is the dominant current view among employers. Keep in mind in most cases we’re talking about the difference—the vast difference—between an often AI-fueled online experience in a specific technical area that lasts a number of weeks and months, and an instructor-led program that takes many semesters or years to complete and is much broader in its outcomes.
Evo: Why are innovative and alternative credentials gaining so much popularity among both students and employers?
SG: The drivers of demand in the higher education and professional learning market, the trend lines, and all the indicators suggest that indeed, new forms of credentials will grow in popularity. And let me state first that I believe it would be fantastic if the momentum continues, and if we can achieve the promise that these innovations hold. My book is an effort to describe the current ecosystem and the opportunities and challenges associated with getting to this future. That said, I believe strongly that too much of the dialogue in the market has so far been driven by a build-it-and-they-will-come mentality. Institutions, policy groups, and others appropriately and nobly want to create nimbler alternatives to the degree and introduce these as a job qualification to expand economic opportunity. Well funded technology start-ups eager to deliver on their valuation are in search of revenue. Fairly, there is a desire to unbundle and reconstitute the degree, and break the monopoly that college education—which is expensive—has as a principal vehicle in job qualification and career advancement.
Innovative and alternative credential programs are indeed so far serving tens or hundreds of thousands of students—but this is a drop in the bucket compared to the degree market. Revenue and what students and professionals (“customers”) will actually pay for a credential is one way to normalize the scale and size the market. The degree “business” if you will, generates hundreds of billions in revenue and is growing, albeit slowly for many institutions in certain segments. Today’s alternative credential market is, if we’re generous, perhaps generating $250 million in revenue for various organizations. That’s less than 1/10th of 1 percent of the market for college degrees in the U.S. When the alternative credential market represents 5 or 10 percent of all higher education or lifelong learning, that will be a different discussion entirely. In fact, much of the alternative credentialing business could be better characterized in the training or job placement sector, in which it is having a more disruptive effect. Many have made predictions that as many as half of colleges and universities will be out of business in five to 10 years because degrees are no longer valuable. That’s simply not going to happen.
Does all of this mean that the college business model is perfect, or that degrees are the best construct for job qualification, as affordable as they could be, or as skills-focused as might be ideal, etc.? Absolutely not! But it’s important to distinguish hype from reality. While experimenting with alternative credentials, we—institutions, government, employers, technology firms, others—might also consider directing more of our effort to innovating and evolving the credential constructs we already have, like the bachelor’s degree in particular. This may sound and perhaps is herculean, but there is precedent for it when we look back at how standards, associations, accreditation and the federal financial aid system historically evolved. Most of the transformational innovation we’ve seen over the last decade or two has been in new and more accessible modes through which to earn a traditional credential. See online learning, competency-based education, and so on. That’s where I appreciate the term “innovative” credential more than “alternative.”
I think most are generally aware that employers have complaints about higher education and the skills of its graduates. Yet, they still continue to hire millions of freshly minted graduates each year, and pay them a premium on average to those that don’t have a degree. In my extensive interviewing with employers, they too are excited about the evolution of credentialing and new pipelines for talent—but only a small minority seems to be setting the degree aside in their strategy or hiring process. Indeed, many but not all are experimenting with alternative credentials and pipelines and beginning to compare the results to traditional degreed hires. Well over 15 million job openings in the U.S. over the course of 2015 specifically referenced and preferred a college degree, according to Burning Glass Technologies’ data. You’d be hard pressed to find many references to microcredentials in those job listings. Instead, the job that microcredentialing is doing for the customer and employer seems to be in demonstrating skill acquisition and continuing education.
Evo: What are some of the most promising examples of innovative institutional credentials that you’ve come across?
SG: If we focus on the innovative and alternative credentials offered by universities, we have some early examples at a decent scale such as Georgia Tech’s Online MS in Computer Science and Southern New Hampshire University’s College for America. However, these innovative modes at lower prices and through the progressive use of technology and competency orientation are new ways to earn a traditional credential – an associate, bachelor’s or master’s degree. It’s appears similar with the new “iMBA” offered by the University of Illinois in partnership with Coursera, for example.
When we turn our attention to new credentials—a new construct, a new term—there are a number of experiments worth noting. Harvard (HBX)’s CoRE or “Credential of Readiness” program appears to be successful and growing rapidly, essentially by delivering and certifying competency in the fundamentals of business. MIT’s Micromasters in Supply Chain Management is very interesting. I’m also intrigued to follow the progress of The University Learning Store, which is a collaborative effort between University of Wisconsin-Extension, UC Davis and UC Irvine Extension, and Georgia Tech focused on affordable, online, skills-oriented certificates. In a face-to-face format, NYU’s School of Professional Studies has re-conceived its traditional certificates as market-segmented basic, advanced and professional diplomas. At Northeastern University, we have developed a new skills-focused interdisciplinary professional certificate program that we’ve called the iCert, which is stackable into multiple degree tracks. There are many notable experiments, and we can expect many more.
Evo: What do you think the long-term impact of the growing demand for alternative credentials will be on the postsecondary space—especially with regard to higher education’s unbundling?
SG: What is very exciting is that innovative credentialing constructs are fundamentally challenging some of higher education’s most enduring constructs. Many of the MOOC-driven online offerings do away with the faculty role in instruction and/or give more prominence to the role of faculty as star subject matter experts in design. Others challenge the notion of academic credit and seat time. Some are offered at one-third of the price of a traditional degree. And certainly, there is a joint venturing or outsourcing component where much of this activity is with third-party firms who are seen as nimbler, job-market aligned, or better capitalized and have the needed technology platform. Many, especially traditionalists, would find aspects of these trends worrying. Others find them transformational and needed—and whatever you believe, we can agree it is healthy to have experimentation with new models and approaches. It is critical that we study how these efforts work and what truly is gaining traction. And, it will be difficult for higher education-driven or non-institutional provider-driven offerings to gain traction without cooperation, alignment and cultural change on the employer side of the equation. As higher education institutions, we have collective work to do as a sector in terms of best practice and standards, and that’s also true on the employer side.
The intersection between higher education and employment is a white-hot issue right now, and it is great to see the dialogue and momentum about workforce alignment or meeting the needs of professionals and industry move beyond its traditional vocational sector connotations and onto the front pages and the presidential policy platforms and into the university board rooms.
This interview builds on the ideas Gallagher shares in his new book, The Future of University Credentials, published in September 2016.
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