From Mandarin Class to Market Player: Understanding the Transformation of Higher Education

Abstract of Keynote Presentation

Unstoppable economic and broad social forces are driving the creation and expansion of new markets in higher education. A short list of these forces includes:

• our transformation to a technologically driven society (79% of the GDP is derived from intellectual systems and processes),
• the polynomial financial leverage, and the business advantages accruing thereto, delivered by education in industries wherein the product is pure knowledge or knowhow, or is heavily knowledge-mediated,
• consumer preferences and behaviors of working adults who now dominate higher education—in total numbers and in growth rates—when degree and non-degree activities are combined,
• a diminution of the barriers to market entry associated with the declining relevance of regional accreditation to consumer choice, especially with respect to non-degree education,
• the development of third-generation instructional design to accommodate web-based asynchronous learning,
• the development of an object-oriented approach to the creation of content, dramatically lowering the costs of replication, scaling, revising, refreshing and adapting content,
• the attractiveness of the new markets to new education providers and to newly aggressive old providers, and
• the success of these new and reformed providers in creating, for the first time in higher education, a true market economy which is gradually snuffing out the command economy of the legacy systems.

Also included in this list are deferred retirement, longer work-life spans, and productive post-retirement service and careers. The above forces have been accelerated by the weaknesses of the legacy system of higher education to adapt. These weaknesses include:

• the inability of higher education's legacy systems of academic content production (e.g., deans' councils and faculty senates) to keep pace with the growing need for content (85 percent of course offerings didn't exist 45 years ago),
• similar inabilities of higher education's legacy systems to keep content fresh (the short and still declining half-life of content requires full revisions every 12 to 18 months in some areas),
• the fact that higher education has been governed rather than managed, and
• the reluctance of higher education's governors—an elite professorate (Mandarin class)—to change a system that serves their interests over those of the learners.

Other forces are also driving specific change in the way higher education is developed, marketed, delivered, and managed. These are the forces of the new learners and include:

• expectations for customer service set by the leading service industries,
• expectations for product delivery based on truth in advertising, relevance and applicability,
• the logical consequences of failing to meet service and product expectations in the presence of a true market, as is now developing in higher education, and
• new conceptions of quality that have moved from their historical focus on inputs and learning outcomes (usually narrowly defined as cognitive achievement), to learner-centric notions of process management and workplace-centric notions of impact.

The confluence of these forces has cancelled all conservative bets. The largest and fastest growing university in the nation is a for-profit university that didn't exist 30 years ago. Adult-centered degree programs, continuing education programs and corporate-focused community college programs are the fastest growing and most in-demand programs in the nation. Large state institutions and prestigious private institutions have lost market share to lesser known but more aggressive and adaptable education providers. While still evolving, the pattern is now clear enough for any educational institution that wishes to pay attention. The future belongs to the innovative, market-focused programs, and those traditionalist institutions unwilling to adapt will continue to lose market share and, eventually, credibility.