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Technology, Higher Education, and a Very Foggy Crystal Ball

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Technology, Higher Education, and a Very Foggy Crystal Ball BY BRIAN L. HAWKINS Technology is dramatically transforming the nature of higher education. And yet, the changes that have occurred thus far in higher education—and those that are expected—have little to do directly with the technology itself. The transformation is being driven instead by the new opportunities and means of doing business provided by the communication media and the ubiquity of the technology. As a result of these opportunities, traditional educational institutions now face significant for-profit competitors, enormous new market potentials lead- ing to intensifying competition, and most recently, a form of competition not faced by any other industry—a no-cost competitor.1 College and university ad- ministrators have been confused about how to compete in distributed education, but this newest wrinkle potentially makes competition in this market unique. An- other major factor contributing to the overall uncertainty in higher education is just how flexible institutions can be in responding to these competitors. Higher education, a fairly traditional marketplace, has so far made relatively few adap- tations in the way it conducts business in the new environment. Brian L. Hawkins is President of EDUCAUSE. Illustration by Michael Northrup/Strobophoto November/December 2000M EDUCAUSE review 65 Predictions about the future are nearly impossible to make participation for some, and graduated fee structures will carry because of the discontinuities created by the speed and nature additional incremental barriers. Unfortunately, no one really of the tumultuous changes in technology. Although this is true knows where these price-points are and thus how large the ac- for all industries, higher education may be facing a level of un- tual market may be. certainty experienced by no other type of enterprise or indus- A final limitation on the potential market is course accredi- try segment. However, as murky or foggy as the crystal ball tation. Many in this marketplace are simply seeking the learn- may be, the following ten predictions characterize a view of ing opportunity. Others need a credential. Will credits transfer the future that may emerge. Again, these predictions have little among institutions to enable progress toward a certificate, a to do with the technology itself but instead focus on the degree, or some other end that is perceived to be important for emerging new economics of higher education and the institu- career mobility? Ultimately, the size of the market will depend, tional and organizational manifestations brought about be- in part, on how effectively these needs of customers are met. cause of the new opportunities afforded by the technology and the new communication media. 2. Residential Campuses Will Still Be Significant. In discussions about distributed education, people often draw 1. The New Markets Will Be the erroneous conclusion that residential education is Smaller Than Often Predicted. doomed to a downward spiral. However, significant erosion of Speculation about the size of the potential market for higher residential education is actually quite unlikely, for two rea- education and distributed learning may be exaggerated. Much sons. First, residential education works. It is a highly success- of the analysis regarding the potential size of the ful formative experience, proven in its ability to distributed learning market has been based move late adolescents across the transom to on rather optimistic—and potentially intellectual and emotional maturity. unrealistic—assumptions.2 Assump- Once a “safe haven” available only to tions have been made about the the elite, residential higher educa- amount of retraining needed to tion has become increasingly ac- enable a more information- cessible over the last fifty years. driven society, with those esti- Demand for residential The trend is toward more in- mates then translated into clusion, not away from it, and credit hours and FTEs. Com- education programs at the nation’s this is good. Residential edu- pounding the problem, upper- and middle-tier institutions cation provides young peo- these models have been ap- ple the opportunity to ex- plied to the rest of the in- has been increasing in the last periment and to explore dustrialized world, result- various academic direc- ing in descriptions of decade and is likely to tions. It produces positive enormous potential markets. outcomes in the long run for There is clearly a need and a continue to do so. the students and society. very sizable market for skill- Whereas this argument can be building and career-enhancing applied to nontraditional stu- learning. But how much of this will dents as well, it is particularly ap- occur via the purchase of commer- propriate for the 18-to-22-year-old cial, online instruction or learning is less population. certain. Second, the overall market for higher Some studies have suggested that more than education is expanding, which will mitigate some 128 million new FTEs will be added to the market, in addition of the effects that distributed education may have on residen- to the roughly 4 million additional FTEs entering traditional tial education. To be sure, competitive alternatives will draw forms of higher education. Although these numbers would off a larger percentage of the new student population. How- tempt any entrepreneur, they contain assumptions that may ever, the “net” decrease in total market share will correlate exaggerate the “real” size of the marketplace. For example, directly with how well current residential institutions can part of the 100 million non-U.S.-based potential FTEs will not develop a previously unfound ability to be flexible and to want a curriculum presented in English. While some of the create meaningful and successful partnerships with other subject matter will transcend language, other elements will academic institutions as well as the for-profit players in this not. There also may be significant cultural challenges. How ef- environment. fectively will a U.S.-based curriculum enable residents of India It is important to note that demand for residential education or Africa to master computer skills? programs at the nation’s upper- and middle-tier institutions A further reduction in the potential size of the market will has been increasing in the last decade and is likely to continue occur when the people who desire these new learning oppor- to do so. Many state universities now have capped their admis- tunities decide whether or how much they will be willing to sions. It is also likely that total FTEs at residential campuses will pay for these experiences. Any fees at all will create a barrier to continue to increase as the necessity of a college credential 66 EDUCAUSE reviewMNovember/December 2000 becomes increasingly apparent to larger segments of the popu- 4. Institutions Will Not Effectively lation. Certainly there will be attrition at the margins. Private Participate as Stand-Alone Entities. institutions with high tuition and low selectivity will be par- Many colleges and universities are attempting to develop their ticularly vulnerable to online, lower-cost competitors. There own distributed learning environments. Yet the cost and com- will be casualties. But overall, the picture is quite positive. plexity of such structures—along with an expected difficulty in making them as nimble, flexible, and responsive as they will 3. An Erosion of Traditional Markets Will Occur. need to be—will almost certainly serve as a significant barrier The economic structure of a college or university is highly dif- to individualized solutions. Cooperation among institutions ferentiated. Different academic departments have differing will become increasingly essential. Already we see consortia economies of scale. Some departments may consist of large emerging among institutions aligned as strong competitors in numbers of professors teaching in relatively uncomplicated a given submarket (e.g., business education), and more of facilities with low equipment or support staff needs. Others these will be formed. Initially these efforts are focusing on may have fewer faculty but high collateral needs—programs in professional and continuing education. So far, few entrants the sciences, for example. Some areas may be highly “prof- have attempted to develop a broad-ranging curriculum that itable.” Others may fail to support themselves. How well an in- would qualify as a liberal arts education. For this reason, col- stitution copes with the advent of a distributed lective action and other consortial efforts drawing on fac- learning paradigm depends to a great extent ulty and resources from many institutions will on how well it has mastered its own in- likely be the most successful models. ternal economics. Those in higher education have long as- The most cost-effective de- sumed that not-for-profit educational partments offer large lecture efforts result in a higher-quality prod- courses, have minimal li- uct than commercial efforts. Yet in- brary needs, and use high stitutions need to throw off their numbers of adjunct fac- defensiveness, question this as- ulty. With low overhead, Already we see consortia sumption, and embrace the fact significant net revenues emerging among institutions that combined for-profit and are possible. This para- traditional institutional part- digm is especially aligned as strong competitors nerships may be some of the evident in schools and most successful models for cre- colleges of business, and in a given submarket, and more ating
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