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.