It became quickly apparent that the panel’s framing setup – “Which universities will be the world’s top 10 universities in 20 years?” – wasn’t the right question. The issue isn’t who’s best: As Pradeep Khosla of Carnegie Mellon University said, the real question is about effectiveness by higher education overall. “Is every university that we have delivering on its potential… and creating the workforce that… the world needs?” And Bror Saxberg, Chief Learning Officer at Kaplan University, asked the question in another way: “Whom among our higher education institutions offers the greatest growth for their students?”
So what’s keeping universities from delivering the best value? For one, cost. Khosla said that if education and healthcare each continue grow at about 3% each year, in short period of time, education and healthcare care will together become about 25% of Gross Domestic Product. “Common sense tells us… that doesn’t make sense,” said Khosla flatly. Susan Desmond-Hellman of UCSF (and formerly president of Genentech) pointed out the cost from the customer’s perspective: She said that the debt load of the average student emerging from the UC system today is about $100,000.
One way that universities might reduce costs is to embrace online education. Mark Gorenberg of Hummer Winblad Venture Partners asked about how the panelists felt about MIT’s early initiative to put some of its courseware online. “When MIT did it, I thought it was actually a very bold step,” said Khosla. But he felt it wasn’t really as useful as it could have been, because – as one attendee mentioned – it wasn’t connected to the teaching experience: It was actually just pieces of courses. Saxberg pointed to Carnegie Mellon’s online learning, which does structure its online learning more as courses with teacher support.
Speaking of online training: Saxberg said that though most people think of Kaplan as a source of educational testing materials, that’s only a quarter of the company’s $2.6 billion in annual revenue. In fact, $1.5 billion comes from students in post-secondary education. “So, we are a major player in the higher education space.” Half of those students (about 100,000) in Kaplan University, a virtual institution with a range of online courses, and half in brick-and-mortar Kaplan schools, receiving training and certificates. “Our goal at Kaplan is to bring in non-traditional students,” which Saxberg says fits 75% of the people in the higher education system today.
The rest of the discussion ranged across ways that the existing educational system can better meet the requirements of students and society, and ended with some brief thoughts from some of the students in the group – one of whom suggested that cultural integration issues, starting with high school, are probably bigger than some of the adults in the room might think.
So what was missing from the dialog? It’s not clear to me that people within the system understand just how broken it is. There’s a massive disruption coming for higher education. Costs aren’t coming down. The long-term value of many degrees in the marketplace is questionable. And schools aren’t preparing students for frequent career change – which is becoming the norm, not the exception.
In January 2010, I helped to produce a conference on the future of higher education – DGREE – with our partner LENS Ventures, for Lumina Foundation. Traditional higher education institutions, we maintained, are the mainframes of today, as vertically integrated as any siloed system - physical plant (campus), course development, course delivery, and brand all wrapped into one. That’s a market and a mentality ripe for disruption, as companies like Kaplan and University of Phoenix – the latter now the largest educational institution in the U.S. If you want to see some visions of the disrupted higher education future, check out DGREE.org. Or look at what startups like PresenceTelecare.com are doing to deliver educational services over the Internet.
Gary A. Bolles, CEO, Xigi Inc., gary [at] xigi.biz
Endnote: Apologies to Mr. Saxberg for listing his name incorrectly in the original post.