Traditional Higher Ed Dying

When I talk with college leaders about the challenges they face from online education--innovative new ventures, scorecards, resistance to higher tuition etc.--many are still in denial. They continue to believe that the traditional higher education model – which with bells and whistles has survived for 1,000 years – will never fundamentally change.

Tell that to a newspaper executive or journalist, who has seen his world turned upside down by web news services and the collapse of classified ad revenue. Or to a former travel agent rendered obsolete by Travelocity.

Higher education is quickly becoming engulfed in a similar tsunami of disruptive innovation. I’ve written on the background to this. And the pattern and reaction in higher education is very similar to other transformed industries. For example:

The disruptive innovator first aims at an unserved or underserved market using a new technology or service. So initially it doesn’t seem a big threat. Sony’s 1950s transistor radio was first marketed to teenagers who had never owned a radio. And MOOCs and other innovations are still mainly aimed at non-users of college.

The innovative product is initially not very good. That allows the traditional suppliers to dismiss it as shoddy. That was true of early personal flight reservation systems. Sony’s early products were cheap but crackly – but good enough for listening to rock and roll. Similarly, cutting edge online education has plenty of hiccups and – for now – isn’t a head-on challenge to established colleges with full-time faculty and impressive facilities. But the experience of other industries suggests that improvements will reach a tipping point where it will indeed mount a full-scale “invasion” of the existing market.

The disruptive innovator also experiments with business models that could transform the very nature of the industry, as Steve Jobs did with iTunes. And new models like Western Governors University, or Southern New Hampshire, or UniversityNow, or the next wave of models, pose an existential threat to the 1,000-year-old model.

Sometimes public policy helps trigger disruptive change. Deregulation starting in the late 1970s opened widening cracks in the Ma Bell monopoly and sharply accelerated telecom innovation. If Congress delinks student aid from the moribund accreditation system, and further encourages meaningful quality scorecards, the same will happen in higher ed.

So leaders of traditional colleges need to think differently about the new wave of competition. They can’t defend themselves with a few technology wrinkles. They have to imagine and plan for a very different world:

A world without accreditation and credit hours as the basic units of service, replaced perhaps by competency measures and independently credentialed courses.

A world in which students customize their degrees (or equivalent) from multiple institutions and experiences, with only a relatively short period in a full-service brick-and-mortar institution.

And a world where students want different products at different prices, just as in other industries. Traditional colleges will have to learn about differential pricing for different levels of educational service.

No wonder an innovator might greet a typical college president with the traditional Chinese curse: “May you live in interesting times.”

Posted by: Stuart Butler

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