Higher Education Strategy Associates

November 25

Can Business Speak Up, Please?

This Thursday, the Canadian Council of Chief Executives (CCCE) CEO, John Manley, is speaking at the Canadian Club in Toronto on the subject of “Strengthening Canada’s Human Capital Advantage”.  Now, you may roll your eyes at this and think, “oh God, not another welders vs. BAs talk”.  But it’s possible that this is going to be a useful, serious event.  Although “everybody knows” that the business community believes there’s a critical skills gap, I don’t think business as yet has actually spoken very much on the subject.

Oh sure, there’s no shortage of people making a case on behalf of business: Jason Kenney, CIBC’s Benjamin Tal, the Conference Board’s Michael Bloom – all of whom, in one way or another, are saying, “more welders, fewer BAs”.  But none of these are actual business people.  We used to have something in Canada called the Corporate Higher Education Forum (CHEF), which served an interlocutor function on education policy, but it died of apathy almost 15 years ago.  Nowadays, you’re a lot more likely to hear policy entrepreneurs like Bloom talking than you are actual business leaders.  And that’s less helpful.

I have no doubt that resource-extraction industries in Western Canada are in dire need of people with a few very specific technical skills, like welding.  But they’re a tiny fraction of business in this country – 2 or 3 per cent at most.  What about small business?  What about manufacturing and services?  Heck, what about government itself?  What skills do they all want, and in what quantities? We have no idea.

We have a pretty good system in Canada for getting employer feedback to individual college and university programs, but no way of co-ordinating that feedback at a provincial or national level so that governments can understand the aggregate needs of the economy as a whole.  At the moment it seems to be that the squeakiest wheel gets the grease, which is a terrible way to develop policy.  So, the fact that CCCE is getting involved in the skills field is almost certainly a good thing, because its members’ human resource needs are broader than the trades, and thus they’re likelier to provide a more balanced picture.

My guess is that if you ask business leaders the right question, they’ll say that the issue isn’t the number of skilled tradespeople, but about skills levels right across the board of all new graduates.  Such an answer, if it is ever forthcoming, would move the conversation from one of welders vs. BAs  to one of learning outcomes in every post-secondary program.  In some ways, it is a more difficult debate.  But it’s far preferable to the infantile discussion we’re having now.

November 22

Higher Education Tax Credits

Last week, CD Howe released a very good paper (available here) written by my colleague, Christine Neill, on the subject of tax credits in higher education.  It’s an important piece, because it not only puts in one place a number of key factual aspects of tax credits (what they cover, how much they’re worth), but it also places them in the context of research on behavioural economics.  Given what we know about behavioural economics, she asks, what should we expect these huge – largely hidden – subsidies to achieve in terms of improving access? (The answer: not much.)

The three key bits for me are: 1) she has a nice, useful breakdown of how the credits are used (current students: 31%; transferred to parents/spouses: 38%; carried forward: 31%), which to my knowledge hasn’t been done before; 2) she has a great finding, showing that 42% of the total value of tax credits go to families in the top income decile; and, 3) she makes a reasonable case that the tax credits would be improved if they were refundable rather than non-refundable.

Christine and I agree on pretty much everything about this subject, so my comments are mostly niggles.  One thing missing is any discussion of the role of federalism in the development of tax credits.  The reason the feds have often preferred credits to student aid as a means to fund education is, simply, that they can do it without faffing around with the provinces.  Throw a couple hundred million at student aid, and its tough to avoid displacing existing provincial aid; throw it in tax credits, and it all gets to its intended recipients.  That’s not a negligible factor in their rise.

A second niggle is that, while I agree that refundable credits are preferable to non-refundable, I’m not sure how it would significantly improve many of the issues Neill raises with respect to behavioural economics. If the problem is that students don’t get the money right away, the fact that they’d get it 9 months after enrolment, instead of 21 or 33 months, doesn’t seem like a huge gain to me.

I’d actually go a bit further: In addition to refundability, focus on transferability.  Currently, transfers are limited to parents, grandparents, and spouses.  But why not include educational institutions on that list?  That way, institutions could prepare T2202As at the time students actually enrol; the student could sign it back to the institution at the time of fee payment, and the institution could provide the student with an instant rebate, and then claim the money back from the government itself.  Then we’d really be cooking with gas.

Food for thought, anyway.

November 21

The Canadian Style of University Management

I recently met someone who had just moved to Canada from the UK, to take up a decanal position here.  He mentioned that, since his move, the two things that had most shocked him were: 1) how little power he has in Canada, compared to the UK; and, 2) just how much bureaucracy there is here.  He relayed this to me by explaining the difference in hiring procedures between the two countries, which I reproduce below, in tabular form:
















* Indicates a step where a negative vote or decision can send the process back to an earlier stage.

As he was telling me this, I thought about how much of our university decision-making systems seem to have evolved to prevent things from being managed efficiently.  This can be defended on grounds of co-management or collegial governance – values that many hold dear, and which have often served the system well.  But there’s a cost to it.  Multiply that table hundreds of times every year, and across every institution, and you get a sense of how big that cost is.

It also occurred to me: in Canada, I always hear professors arguing that they’re overburdened with committee work, and deans arguing that they have responsibility, but no power with which to make decisions.  Moving to a more UK-like system would solve both problems.  But, in the end, it’s not clear that professors’ dislike of committee meetings is sufficiently great enough to ever allow that to happen.

November 20

Intelligent Deployment of MOOCs

Since the likelihood is that venture-capital funded MOOCs are going to fade out, and (in one way or another) the format is going to come more closely under the control of universities, it’s worth thinking more about where exactly MOOCs can be of greatest use within higher education systems.

The basic challenge is that MOOCs are individual courses, but what matters for most students is a degree.  The only way MOOCs genuinely make sense as part of a higher education system (as opposed to being a stand-alone edutainment product) is if they can be arranged in such a way as to be part of a larger curriculum.  The key issue, then, is how to integrate MOOCs into such a framework.

I think at the moment there are two settings in which this is both possible and desirable.  The first, which was recently profiled in the Chronicle, is exemplified by a project called Kepler in Rwanda.  The project advises students on how to put together a set of MOOCs in such a way that they can pass challenge exams for competency-based degrees, such as those offered by places like Southern New Hampshire State.  The MOOCs can be from anywhere; the value-added role of the institutions is to create a curriculum out of the many hundreds of MOOCs on offer, and to certify that learning has occurred.  This isn’t a model that would be especially appealing to North American students, but it could work in much of Africa and Asia where the local alternatives are weak.

The second setting is North American Liberal Arts colleges.  Yes, really.  Liberal Arts’ schools’ Achilles heel is scale; when you’ve only got 100-200 faculty, it’s tough to offer anything like a full range of courses.  Now, imagine you really want to offer a course on Renaissance Art, but you simply can’t afford permanent faculty with that degree of specialization.  Well, why not allow a MOOC for credit (assuming there’s already a decent one out there)?  That is, use the MOOC as a base, but have your own instructors (possibly sessionals) run discussion sessions, and also set and grade a test at the end?  In this scenario, the institution’s role would be to guide discussions and, as in Kepler, to certify the learning – but the main content provision would be unbundled and outsourced.  It’s not ideal, perhaps, but this kind of approach would allow small, cash-strapped institutions to maintain or expand their breadth at reasonable cost – and it could preserve the idea that intense discussions are the core of Liberal Arts.

(Why not do this at larger schools, too?  No reason, but by definition if they are larger they probably have more staff to start with, and hence fewer gaps in the curriculum).

The key in both cases, as you can see, is that MOOCs themselves need to be unbundled.  They have (the better ones do anyway) plenty of good qualities as learning tools,  but outside math-based disciplines, where right and wrong answers can be identified by machines, no one thinks MOOC assessment mechanisms are worth a damn.  Putting that part of the learning process back in institutions’ hands is key to making MOOCs fit for purpose.

November 19

The Future of MOOCs: Coursera and EdX

We saw yesterday that Udacity is leaving the higher education field in order to focus more on contract training.  In some ways, this is no surprise.  Udacity was always the weakest of the Big Three MOOC providers because, in addition to being a private platform, it was also trying to develop much of its own programming, which is quite costly.

Coursera, on the other hand, outsources course production to big prestigious institutions – 70-odd of them at last count, including Canada’s Big 3 – and sticks to its knitting as a platform for other people’s content.  That’s a heck of an implicit subsidy: Coursera partners tell me that their costs run in the $50K/course range.  And yet, Coursera seems to be blowing through money relatively quickly.  In mid-2012, it picked up about $22 million in venture-capital (VC) funding; this summer it picked up another $40 million or so from a different set of bankers.  Since, generally speaking, people don’t dilute their own shares unless they really need the money, my best guess is that Coursera’s burn rate is in the neighbourhood of $1.5-$2 million/month.

Revenue?  Well, as I pointed out back here, despite having a whole bunch of ideas about how to earn revenue in theory, Coursera in fact seems to only have a single source; namely, having people sign up for its Signature Track service.  Total revenue from that source was $1 million in the first 3 quarters of this year.

Think about that: $2M/month burn rate, $100K per month income.  How long can this realistically last?  At the time of the last funding round, CEO Daphne Koller, in a moment of Rob Ford-esque unreality, commented that most internet start-ups “don’t even think about making money for 5 or 6 years”.  Amazing, huh?  And she’s the CEO.  In reality, though, the denouement is much more imminent: unless Signature Track enrolments jump 20-fold, or burn rates fall significantly, or unicorns arrive with magic revenue streams, I figure Coursera has got maybe 15 months before the VCs pull the plug.

That would leave just the Harvard/MIT-owned EdX, which doesn’t face these kinds of pressures because, rather than being run with VC-cash, it’s being run off those two institutions’ combined $43-billion endowment.  And you can bet they will be around to pick up any spare MOOCs that need a home when Coursera implodes, leaving EdX in a near-monopoly position.

This, of course, is worrisome, but still in some ways to the good.  Once we clear the VCs out of the MOOC discussion, we can ask clearer questions about the uses of MOOCs, without getting tied up in ideological debates about whether they are neo-liberal whatsit, and yadda yadda.  And that’s important, because the potential benefits of these tools are worth examining.

More tomorrow.

November 18

Udacity has Left the Building

There was a big story in MOOC-world last week, which the mainstream press has surprisingly yet to pick up on; namely, that Udacity, one of the three big corporate MOOC players, has just left the building.

Udacity, if you recall, was created by one Sebastian Thrun, a computer scientist at Stanford.  It was he who kicked off the current MOOC craze by opening up one of his computer science classes to the world, and then finding out that 160,000 people around the world had signed up.  Thrun left Stanford to start Udacity which, along with Coursera and EdX, has been part of the Holy Trinity of the MOOC revolution.

Last Thursday, Fast Company Magazine put out a story (hagiography?) on Thrun, which contained some staggering statements from the man himself, including:

(on looking at data on drop-outs) “We don’t educate people as others wished, or as I wished. We have a lousy product”.

(on providing remedial education) “These were students from difficult neighborhoods, without good access to computers, and with all kinds of challenges in their lives… it’s a group for which this medium is not a good fit”.

(on the value of Udacity courses) “We’re not doing anything as rich and powerful as what a traditional liberal-arts education would offer you”.

From a guy who cockily said he was on the verge of finding a “magic formula” for education, and that by 2060, thanks to MOOCs, there would only be 10 universities, this is some funny stuff.

There has already been much excellent commentary about this article: Bonnie Stewart, Mike Caulfield, and of course Audrey Watters.  They are all good (read them!), but George Siemens is the one I think who gets closest to the heart of the issue: Udacity’s switch from higher education to corporate training wasn’t due to the realization that their product wasn’t very good, it was caused by the fact that the company wasn’t making any money.

Like everything else, MOOCs need money to survive, and providing them for free is a really bad way to generate income.  The venture capitalists (VCs) supporting Udacity clearly came to the conclusion that the Udacity/Coursera strategy of losing money on every customer, and making it up on volume, wasn’t going to get them anywhere – hence the shift in strategy.

Strangely, no journalists seem yet to have had the cojones to call up various people who bought and amplified the story of MOOC-all-powerfulness for comment.  Nothing from Clayton Christensen, or Clay Shirky, or Tom Friedman, or Don Tapscott, or any of the other techno-fetishist windbags who tried to make us all believe that the VC-funded MOOCs were an unstoppable wave of the future.  This means that the techno-fetishists don’t get held to account (again), and we’ll soon all be chasing some other industry-disrupting deus ex machina.

Sad, no?

November 15

Ten Years of Global University Rankings

Last week, I had the honour of chairing a session at the Conference on World-Class Universities, in Shanghai.  Held on the 10th anniversary of the release of the first global rankings (both the Shanghai rankings and the Times Higher Ed Rankings – then run by QS – appeared for the first time in 2003).  And so it was a time for reflection: what have we learned over the past decade?

The usual well-worn criticisms were aired: international rankings privilege, the measurable (research) over the meaningful (teaching), they exalt the 1% over the 99%, they are a function of money not quality, they distort national priorities… you’ve heard the litany.  And these criticisms are no less true just because they’re old.  But there’s another side to the story.

In North America, the reaction to the global rankings phenomenon was muted – that’s because, fundamentally, these rankings measure how closely institutions come to aping Harvard and Stanford.  We all had a reasonably good idea of our pecking order.  What shocked Asian and European universities, and higher education ministries, to the core was to discover just how far behind America they were.  The first reactions, predictably, were anger and denial.  But once everyone had worked through these stages, the policy reaction was astonishingly strong.

It’s hard to find many governments in Europe or Asia that didn’t adopt policy initiatives in response to rankings.  Sure, some – like the empty exhortations to get X institutions into the top 20/100/500/whatever – were shallow and jejune.  Others – like institutional mergers in France and Scandinavia, or Kazakhstan setting up its own rankings to spur its institutions to greater heights – might have been of questionable value.

However, as a Dutch colleague of mine pointed out, rankings have pushed higher education to the front of the policy agenda in a way that nothing else – not even the vaunted Bologna Process – has done.  Country after country – Russia, Germany, Japan, Korea, Malaysia, and France, to name but a few – have poured money into excellence initiatives as a result of rankings.  We can quibble about whether the money could have been better spent, of course, but realistically, if that money hadn’t been spent on research, it would have gone to health or defence – not higher education.

But just as important, perhaps, is the fact that higher education quality is now a global discussion.  Prior to rankings, it was possible for universities to claim any kind of nonsense about their relative global pre-eminence (“no, really, Uzbekistan National U is just like Harvard”).  Now, it’s harder to hide.  Everybody has had to focus more on outputs.  Not always the right ones, obviously, but outputs nonetheless.  And that’s worth celebrating.  The sector as a whole, and on the whole, is better for it.

November 14

Canada’s Bologna Moment

If you can cast your mind back all of three weeks, before the Ford video(s) and Mike Duffy going kamikaze on the Prime Minister, there was some big news out of Ottawa about how a Canada-Europe Comprehensive Economic Trade Agreement (CETA) had finally been reached. The finer details of the deal are still unavailable, but one thing that has been promised all along is that this deal will permit the free movement of labour between Canada and Europe.  And that’s a reason for the higher education sector to pay attention.

Freedom of movement is pretty great, when it works.  But the problem with inter-jurisdictional freedom of movement is that it’s easier to achieve in theory than in practice.  Language barriers crop up, for one thing (even within Canada, lots of anglos who would like to move to Montreal don’t because their language skills aren’t good enough for the local labour market).  There’s idiotic regulatory barriers regarding credentials, for another.  But even where a trade agreement gets rid of credential-based regulatory barriers, there’s still the problem of whether employers actually recognize what a credential means, and can hire and pay people accordingly.

This was a problem in Europe back in the 1990s before there was a standard system of degrees, as there were a riot of different credentials on offer across the continent.  A German Diplom was a five-year technical credential, a French Diplome was a 2-year intermediate academic credential on the way to an undergraduate degree, an Armenian Diplom was a secondary school credential – what employer could keep all that straight?  Far easier just to hire a local, whose credential you understand.  So, even though the principle of free movement of labour existed in the European Union, the problem of general credential recognition meant that it was limited in practice.

This problem was a big reason why Europe’s governments got behind the Bologna Process.  Only by standardizing the structure of their higher education systems could they turn de jure mobility rights into a de facto mobility reality.  And so the question for Canada now, is: will this free-labour movement actually mean anything if our higher education systems aren’t aligned with Europe’s?  Canada can’t actually become part of the Bologna Process – that’s reserved for countries which are part of the Council of Europe – but there’s nothing saying we can’t harmonize our system with Bologna Processes.

There’s no guarantee, of course, that the benefits of a big shift like Bologna harmonization are in fact worth the hassle.  But there’s also no doubt that the signing of CETA means that the time to ask ourselves the big questions about Bologna, and its benefits, is now.

November 13

Using PIAAC to Measure Value-Added in Higher Ed: US Good, Australia Abysmal

A few weeks ago, when commenting on the PIAAC release, I noted that one could use the results to come up with a very rough-and-ready measure of “value added” in higher education.  PIAAC contains two relevant pieces of data for this: national mean literacy scores for students aged 16-19 completing upper-secondary education, and national mean literacy scores for students aged 16-29 who have completed Tertiary A.  Simply by subtracting the former from the latter, one arrives at a measure of “value added”, which I reproduce below in Figure 1 (the y-axis is difference in PIAAC scores; PIAAC is scored on a 500-point scale, where 7 points are considered to be equal to roughly 1 year of schooling).

Figure 1: Tertiary A value-added: Mean Tertiary A PIAAC Score Minus Mean Upper Secondary PIAAC Score













This is a bit crude, though; to be genuinely comparable, one needs to control for the proportion of upper-secondary graduates that actually go on to higher education.  Imagine two countries, both of which had the same mean score among upper secondary students, but country X enrols 20% of their upper secondary graduates in Tertiary A, and country Y enrols 40%.  One would expect a larger gap between mean high school and mean Tertiary A scores in country X than in country Y because, comparatively, it’s cherry-picking “better” students.  So we need some way to correct for that.

Fortunately, the OECD’s Education at a Glance provides data both on upper secondary graduation rates, and on tertiary attainment rates by age 30 (indicators A1.2a and A3.1b, if you’re following at home).  From those two figures one can calculate the proportion of upper secondary graduates who go to university.  Since PIAAC publishes not just means, but also scores for the 25th and 75th percentiles, one can now estimate the relevant threshold PIAAC score for getting into a Tertiary program (i.e. if 37.5% of your students get a degree, then the threshold secondary score will be halfway between the mean score and the 75th percentile score).  To get a value-added figure for Tertiary A, one can take the mean score for Tertiary A and subtract this threshold secondary score, rather than the mean secondary score.  The results look like this:

Figure 2: Tertiary A Value-Added: Mean Tertiary A PIAAC Score (16-29 yr.olds) Minus Threshold Upper Secondary PIAAC Score (16-19 yr-olds)













This change in methodology only slightly changes the results: absolute scores are smaller, reflecting the fact that the baseline is now higher, but the rank order of countries is similar.  The US looks pretty good, indicating that its higher education system may compensate for a weak K-12 system; Australia’s result, somehow, is negative, meaning that average PIAAC scores for Tertiary A graduates are lower than the threshold score for secondary graduates heading to university.  Which is a bit mind-boggling, to be honest.

I’m looking for feedback here, folks.  What do you think?  Does this work as a model for calculating tertiary value-added?  How could it be improved?  I’m all ears.

November 12

Jason Kenney, Liberal?

If you’re among the unhappy few in the habit of reading press releases from the Minster of Employment and Social Development Canada (ESDC, formerly HRSDC, formerly HRDC, etc., etc.), there’s one question that will almost certainly be on your mind these days: what exactly is Minister Jason Kenney up to?

After a period of quiet following the July re-shuffle, where he obtained the post, Kenney seems to have settled into a pattern of giving speeches which harp on the following themes:

  • Skills shortages.  Ignoring his own department’s official projections on the subject, he has been going on the usual (incorrect) rant about national crisis, more skilled trades, etc., etc.
  • Apprenticeships.  If only we had more of them, the skills shortage problem wouldn’t be so bad.  As such, he feels justified in hectoring provinces and telling them to smarten up, and to be more like Germany (see yesterday’s One Thought for more on why that’s a waste of time).
  • Education – Labour market misalignment.  If only our high schools taught trades; if only we didn’t funnel people towards universities where the teaching isn’t job-related, etc., etc.

What’s puzzling about all of this isn’t so much that it’s wrong as a diagnosis, but that it’s a wrongness that leads a long way into provincial jurisdiction.  Understandable if you’re a Liberal, perhaps.  But this is a Conservative government that came to office holding certain views about “watertight federalism”.  A government led by a Prime Minister who has only held one first ministers’ meeting in seven years; a PM who seems to believe quite sincerely in letting the provinces do what they want in areas of provincial jurisdiction.

So what is Kenney playing at?

The cynical view is that he’s trying to avoid talking about the Canada Jobs Grant (CJG), the hot mess the government announced in the last budget with no consultation, and which looks increasingly like dying an ignominious death because the provinces won’t play ball.  If he can get a symbolic win or two on some vaguely related fronts (maybe get the provinces to do something on apprenticeship training) then he can claim a win on skills shortages (which is the problem the CJG was ostensibly created to solve) before letting the CJG fade away.

But there’s another, altogether more interesting possibility, which is that the Tories are coming around to the historically Liberal position that advanced education has national economic implications too big for a responsible federal government to ignore.  On balance, that’s probably a good thing.  But Kenney will have to learn that as far as education systems are concerned the provinces have a combined 1289 more years of experience than Ottawa does in running them.  A little humility in approaching the subject wouldn’t go amiss.

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