Higher Education Strategy Associates

Category Archives: “Great Disruption”

July 30

Overhyped Higher Education Meme, Summer 2012 Edition

I’d be remiss not to mention the latest round of educational techno-fetishist whooping that has accompanied recent announcements from EdX and Coursera. To recap: Berkeley has crashed the Harvard-MIT party at Edx (formerly MITx), a system for providing free online courses. Meanwhile, online education company Coursera has signed up a large number of universities – including the University of Toronto. Coursera and EdX are both providing free, non-credit courses to worldwide audiences; the main difference is that EdX is a university-owned co-op, while Coursera is a massively VC-funded start-up which is providing its platform to a number of carefully chosen, prestigious universities to set up non-credit courses.

These two companies have some big pluses over some of the other online education experiments out there; namely, their courses come entirely from serious, brand-name institutions. That’s a big deal, because brands are almost everything in higher education. No-name start-ups simply aren’t going to be able to compete head-on with established university brands.

The big negative is that there’s still no real business model here. Remember the 100,000 students Sebastian Thrun’s MOOC attracted that got everyone so excited? Turns out almost 85% of them were gawkers – only 13,000 or so actually bothered even opening the final exam. And only about 6,000 actually graduated. That’s still a pretty big number, of course. But is it going to make governments start pushing institutions down the on-line path? Just imagine being the poor schmo writing the Minister’s briefing note explaining why he/she is pushing an education model with a 6% completion rate. Not fun.

To be clear, the lack of a business model doesn’t mean that Coursera and EdX aren’t doing great stuff. Loads of people around the world suddenly have access to great course content, and partner universities are getting some great publicity out of it (“extending their reach” is the preferred phrase, but it amounts to the same thing).

But all of this is for free, non-credit courses. No one knows if there’s any way to monetize this. Presumably, the way this is going to happen is by moving from non-credit to credit courses, to actual degree completion. But this of course is where serious universities – the ones whose names Coursera relies on for volume – draw the line. The only alternative means of monetization seem to rely on sudden, widespread adoption ideas of like Open Badges which seem highly optimistic. As in, Mulcair-mania-comes-to-Calgary optimistic.

If Coursera or EdX can crack the problems of global simultaneous proctoring and invigilation, these businesses have a future. If not, all the educational techno-fetishists will look a lot like Wall Street tech analysts during the Web 1.0 boom.

July 03

This ‘Predicting the Future’ Business

Well, that’s another conference season done.

Whether I am at a conference to mingle, learn or present, I always tend to be in sessions where people are doing the trend-watching, trying to tease out “The Future” for the benefit of conference-goers. The problem with these trend-spotting sessions – and I don’t exclude my own from this criticism, by the way – is that they tend to fall prey to one of the following four mistakes.

Assuming That Because Cool Things Can Happen, They Will Happen. Some presenters riff off a whole bunch of interesting one-off experiments at different institutions and declare them “trends”. At its most frivolous, this veers into Management by Anecdote: because somebody did something cool somewhere, everybody needs to head in that direction RIGHT NOW. But it can also have more serious consequences. It is this line of thinking which is driving the dumbest bits of the “Great Disruption” canard.

Ignoring National Context. There’s a problem in assuming that what matters in one national context is relevant in others. Although we talk about higher education as being increasingly transnational, the fact is that upwards of 95% of the system is rooted in some very national contexts. While there is much interesting stuff going on in the United States right now, a lot of it is very tied to the specific nature of their system, including having large numbers of private institutions, much greater levels of institutional differentiation and a student aid system which is part-genius and part-deranged. Inferring the future of Canadian institutions from current US experiments is… courageous.

Over-Extrapolating from Present Trends. The external environment in which higher education exists is subject to rapid change. Demography is not destiny. Funding patterns may change suddenly (for instance, who in 1995 would have predicted that university funding would increase strongly in the decade to 2005?). Big changes can happen quickly – the best you can do is spot and monitor potential sources of change.

Under-estimating How Conservative People Are About Education. This is a big one. It’s not just that universities are change averse; consumers are, too. Innovations which haven’t been adopted by top universities are always seen as suspect, and people are surprisingly tied to idea of universities as being ancient entities, even when they are not. I heard recently of one relatively new institution which tried to award diplomas on plain paper with sans-serif fonts and ended up with an absolute nightmare of a PR issue with its own graduates.

So, next time you see anyone (including me!) giving a “where will we be in 2020” kind of presentation, and they’re falling prey to one of these four mistakes – give ‘em hell.

June 20

Fall 2012: You’ve Been Warned

As we’re coming to the end of the school year, it’s worth looking ahead a bit to what we can expect next year.  You know, so you can obsess about it all summer before coming home.

Public finances are only going to get worse.  Most provincial governments made their budget forecasts at a time when it looked like the US economy might be reaching take-off speed; that speed has now been firmly downgraded to “stall.” Throw in the non-negligible possibilities of Spanish bank runs, Italian bond crises, Chinese hard landings, and another budget deadlock in congress, and it’s a near certainty that most provincial governments are going to miss their revenue targets.   Cue more public sector restraint.  Cue hiring freezes.  Cue some seriously unhappy post-docs.

As new money becomes scarce, the disputes over how to spend that money will intensify.  This year, we had the OPSEU strike in Ontario Colleges, the McGill support staff strike, the Brandon University strike – and of course the student strike in Quebec.  Next year won’t be any easier; expect at least one knock-down-drag-‘em-out fight at a major university this year.

Governments outside Quebec aren’t quite desperate enough to annoy the middle class by raising tuition significantly – I think we’ve got another year or two before they head down this route.  But I do think this might be the year that one or two provincial governments finally start to cut tuition tax credits.  Not only are they a dumb use of resources, but they also provide governments with very little in the way of political credit, which will make them easier pickings.  In Nova Scotia, for instance, cutting the provincial tuition and education credits in half would increase provincial revenues by an amount roughly equivalent to an 8% rise in tuition.  It should be a no-brainer.

I also think next year might be the year Canadian universities realize this whole internationalization shtick is a lot tougher than it looks.  We’ve had it easy the last few years with the US, UK and Australia all finding ways to shoo away international students.  Now that all three are getting their game back, we’re going to find it a lot tougher – and would do so even if there we hadn’t had two high-profile homicides of Chinese students (our biggest market) in the last fifteen months.   With budgets getting ever tighter, expect a lot more attention on this file.

My safest prediction: a technology-led Great Disruption in higher education will continue to be notable by its complete absence anywhere other than editorial pages.

My boldest prediction: a merger attempt between two universities in different countries in an attempt to create a global education brand.

Interesting times, to be sure.

April 19

What Students Pay For (II)

As we saw yesterday, the various new digital learning providers face a challenge of competing with traditional providers which have advantages in terms of providing students with i) fuller student experiences, ii) better-known brands and iii) widely-accepted credentials. So what are they doing to try to win this competition?

We can more or less dispense with student experience. Most new providers essentially punt on this; there’s virtually no effort among most to try to provide value in this area. That leaves brands and credentials.

The basic building block of any institutional brand is alumni. Institutions are judged by what their alumni go on to achieve; until you have alumni, nobody can judge your product. That’s true whether your institution is in cyberspace or meatspace – Quest University, for instance, has to deal with this, too. So how can a new digital provider compete? One interesting approach is that taken by Minerva University. This start-up, which recently received $25 million in venture capital funding is trying to position itself as an online Ivy League-equivalent primarily by being highly selective and limiting class sizes. Basically, Minerva is deliberately sacrificing digital education’s biggest perceived strength on both the demand side (openness) and the supply side (economies of scale) – in order to get prestige. When you have to turn your back on your medium’s greatest strengths in order to get prestige, it’s not a good sign for the industry as a whole.

MITx, seems like a good candidate to solve this problem, since in theory it can draw on existing brand equity that start-ups like Minerva can’t. However, for the moment MITx isn’t trying to issue credentials, which is a bit of a problem. And if it eventually does go that route, it won’t be using the MIT name, because – in no uncertain terms – MIT isn’t about to run the risk of having an experimental initiative screw up the stature it has developed over the last 150 years.

Leveraging the reputation of existing institutions into digital space isn’t impossible; it’s just that the risk-reward equation is terrible for top institutions. As a result, real pioneers are likely to come from a tier or two below the top. That’s why the company 2Tor, which is partnering with professional programs at institutions like Georgetown and UNC to extend the classroom experience to a wider audience, is worth watching.

To sum up, quite apart from regulatory issues, student expectations themselves form a major barrier to entry in PSE. To make a go of it, private companies need to partner with existing institutions; on their own, they simply can’t yet offer most students enough of what they’re looking for to be a viable alternative. And that’s not going to change anytime soon.

April 18

What Students Pay For (I)

Anyone who seriously believes in the whole “Great Disruption” meme has to be able to make the case that technologically-driven change of the kinds currently on offer can actually offer an improved value proposition to higher education consumers. No one, to date, has convincingly done so.

Let’s think about this for a minute: what is it students are actually buying when they enrol in a higher education institution? Though the specific combinations will differ from one student to another, all of them to some degree are buying each of the following four benefits:

1. A credential (e.g., a B.A, or an M.Sc.). At the end of the day, people want letters after their name because they perform an important signaling function in the labour market. The letters help young people get a foot in the door in a way that skills alone often don’t.

2. A brand (e.g., a Humber B.A. or a Dalhousie M.Sc.). Education is to some extent a positional good in the way that housing is. Location matters. Older institutions tend to be more prestigious and hence command a higher price.

3. An experience. For some reason, a lot of people tend to overlook this. Being in school, for most people, is a heck of a lot of fun. I know I’d pay good money to be a student again (and do it better this time). Post-secondary education thus isn’t just an investment, it’s a consumption good as well.

4. A set of skills and competencies which are obtained over the course of gaining a credential.

Most of the arguments for a Great Disruption implicitly assume that most of what people want out of post-secondary education are the skills and competencies.  Not coincidentally, of the four benefits listed above, that happens to be the one area where digital learning has the best case to provide better value for money.

Now, presumably there are some students who really only care about the skills. For them, experiments like Sebastian Thrun’s free Stanford class do indeed constitute some kind of Great Disruption. But for everyone else, any reduction in costs provided by these new “disruptive” providers is balanced by a reduction in one or more of the other three sets of benefits. They are simply less able to deliver on credentials, brand and experience than traditional education providers.

Overcoming deficiencies in those three areas is a pretty tall order, and it’s why most of the disruption stuff is vastly overblown. But there are a number of new providers who are in various ways trying to address these gaps. We’ll see how each of them fares tomorrow.


February 10

So, Competency-Based Education, Then

Competency-based education is not rocket science; demonstrate mastery over a particular set of material and you get a credential. This approach is common in informal education: badges for swimming and Guides, belts for martial arts, etc. Red Seal apprenticeships also operate this way.

Formal systems of education are more leery of this approach. In K-12, it is assumed that time served is more important than demonstrated skills in moving students from one level to another. Undergraduate education in North America similarly works on a time basis, with credits being defined in terms of contact hours.

The assumption, of course, is that time spent in the classroom ultimately implies skill acquisition, and hence that time-based education is just competency-based education by approximation. It’s a convenient argument for universities; essentially, it makes their function as certifiers of skills indistinguishable from their function as providers of knowledge/instruction. And by doing so, it gives them monopoly pricing power over instruction.

But what if someone could independently certify a set of knowledge and skills and say “yeah, that’s equivalent to a Bachelor’s degree”? Figuring out how to do that in a reliable way would be a genuine disruption to universities, because it would allow competing routes to credentials. Prior Learning Assessment Recognition (PLAR) – which is widespread in colleges if not universities – uses this same kind of techniques, though usually for advanced placement rather than delivering entire diplomas. So too, as a cautionary example, do many degree mills.

Western Governors University, a public, online university based in Salt Lake City, bases its degrees around “competency-units” rather than merely time-based credits, and it’s managed to convince a number of U.S. regional accreditors of the validity of such an approach. But despite the hype, WGU has its limitations. It has done very well to boost enrolment to 30,000 in under 15 years, but it’s still basically restricted to certain forms of professional certification and upgrading in business, IT, health and education – areas where external norms are easily available as reference points. Nobody has yet worked out how this would work in basic arts or sciences, where the attitude to the very notion of defined competencies verges on hatred.

That’s why things like Tuning, which documents degree-level outcomes, and AHELO, which is attempting to measure outcomes across different universities around the world, are so important. By getting people to focus on outcomes in areas where they haven’t before, they set the stage for a massive expansion of competency-based higher education.

If you’re looking for a “great disruption,” my money’s here. It’s not glamorous, and it won’t happen quickly, if at all. But unlike recently-hyped techno-solutions, it has the virtue of being both rigorous and realistic.

February 09

Why MITx Changes Very Little

Just now, there are a lot of interesting online educational experiments popping up, like Sebastian Thrun’s Udacity, or the Massachusetts Institute of Technology’s MITx project. But there’s a huge barrier to this happening, and that barrier is credentialism.

People who focus on higher education don’t always get this, because they really care about learning. And because of this, they tend to focus on learning content rather than on the pieces of paper one gets at the end of it. But credentials matter. Ask any student – the piece of paper at the end of the road is a big, big reason most of them are there. No “great disruption” in higher education is going to occur unless it either supplants or adopts the existing credentialing system.

Some people are trying the supplanting route. Richard Vedder is touting an approach being developed jointly by StraighterLine, the Educational Testing Service and the Council for the Advancement of Education, as well as another one by the Saylor Foundation, as the most promising possibilities.

I think this is absurdly optimistic. The existing degree structure has a brand legacy going back a thousand years. Employers know what degrees are and trust them as a proxy for skills acquired. A new test, no matter how good, isn’t going to change that. If it could, a good GRE/GMAT/MCAT/LSAT score would have replaced Bachelor’s degrees a long time ago.

MITx’s founders actually have the good sense to recognize this, and are much less sensationalistic about their product than some of their boosters. When asked by the Chronicle whether MITx certificates might put some institutions out of business, Rafael Reif said:

First of all this is not a degree, this is a certificate that MITx is providing… (I)t’s a completely different educational environment… I think that for a while MITx or activities like MITx… will augment the education students get in college today. It’s not intended to replace it.

In my personal view, I think the best education that can be provided is that in a college environment. There are many things that you cannot teach very well online…. for instance… ethics and integrity and things like that.


So what’s left as an option for “disruption” is to use these technologies within the existing framework of courses and degrees. But that’s essentially what the Athabasca University already does (and, somewhat less salubriously, the University of Phoenix as well). All credit to Athabasca’s fine work, but it’s been around 40 years and it would be an exaggeration to call its impact “disruptive.”

Where there’s a sliver of hope for a disruptive model – maybe – is Western Governors University and its competency-based learning approach. More on that tomorrow.

February 08

No Disruption Here, Folks

Dear God, save us from Margaret Wente. Someone handed her a copy of Clayton Christensen’s new book and the rest of us got this ludicrous piece of nonsense in our Saturday paper.

This has to be the worst meme in higher education this year. I know I’ve gone off on this before, but just to re-iterate:

There. Is. No. Great. Disruption. Coming. In. Higher. Education.


Yes, there are some very interesting educational experiments going on out there. But does any of this amount to a serious challenge to universities? Does any of it make it more likely that 18- to 24-year-olds will abandon schools to go take courses online? No, because apart from some marginal techno-freaks, everyone thinks education is a social activity, which requires a much richer set of interactions than is possible online. Does it pose any challenge to research-based graduate education? No, because again, the creation of human capital involves rubbing elbows.

The new technology does make certain types of education – essentially continuing education and certain types of professional development – less costly and more convenient. And to a certain clientele (but not 18- to 24-year-olds) this matters. But this clientele is pretty marginal at most universities, so it’s hard to see why institutions would face some kind of disruptions. In fact, since this kind of education is relatively low-prestige, you can even see where some universities would be happy to punt this clientele and leave it to massive outside organizations using economies of scale to pursue a Wal-Mart education strategy.

Ask yourself this – since automation and computers do best in situations where products are generic rather than highly customized, why would anyone expect this technology to have a greater effect on the highly idiosyncratic PSE market than it does on highly standardized K-12? Outside second language learning and some intro math/stats classes, it’s hard to see which bits of traditional undergraduate degrees are standardizable and hence susceptible to this approach.

There’s one more reason this whole disruption idea is bogus. It’s because most people, at the end of the day, want credentials at least as much as they want any skills and knowledge gained from participating in education. Until these new education providers work out how to actually deliver degrees on a mass scale, I’d argue they are more of a threat to the Learning Annex than to universities.

But doesn’t MITx do that, I hear you say? No, it doesn’t. And I’ll explain why tomorrow.

October 13

Why the “Great Disruption” is Bogus

So apparently Inigral CEO Michael Staton – who by and large is a sensible guy – has been talking up this idea about higher education being about to undergo a “Great Disruption.” Why he thinks this is the case isn’t clear – he spends most of his Inside Higher Ed article explaining why higher education isn’t, contra some of higher education’s weirder critics, in a bubble, but he does think everyone needs to spend a lot of money adapting to it right now.

This is what’s known as “talking your own book.” We consultants all do it to some degree, but that doesn’t mean we’re always right. And in this case, I happen to think Staton’s dead wrong.
The best analogy I can think of here is the frenzy over the “Death of Distance” in the mid-1990s. You may recall that there was briefly an intellectual fad for thinking that the “information superhighway” (younger readers: yes, some people really called it that) would render place irrelevant, allow people to work and collaborate from wherever they were and render large urban conglomerations ever less relevant.

Some of that occurred, of course, but as it turned out place started to matter more than ever. We like talking to people all over the world on the Internet, but we like physically working with and learning from others in the flesh.

And so it is for higher education. Obviously, technological change is having a very big effect on the way we store, use and relate to information. At the margin, we can improve undergraduate learning outcomes using technology, though as we pointed out in a study a few weeks ago, we need to get a lot better at integrating the technology.

But is this stuff going to replace a traditional undergraduate degree for the 18-24 crowd (which is, after all, still the core business of just about every university in the world)? Absolutely not. Students and their parents think it’s as important as ever to get their education in the flesh. There is no reason at all to think that this is going to change, and every reason to believe that parents will continue to pay top dollar for a developmental experience which is deeply based in intensive human contact.

As I noted last week, one university business line (adult professional education) is vulnerable to new technologies. Everything else, for the foreseeable future, is going to be remarkably insensitive to technological change. Period.