Is digital disruption coming to the university near you?

XXXX e-‐learning Presenta.on by Ta.ana Zalan, PhD Associate Professor – Management,

American University in Dubai [email protected] Linkedin page 1 March 2016

Is digital disrup.on coming to the university near you?

Presenta.on by Ta.ana Zalan, MA, MBA, PhD, AFAIM Associate Professor – Management,

American University in Dubai [email protected]

1 March 2016, AUD, Dubai

A VERY Short Quiz •  The tradi.onal university will disappear in a decade. True or False?

•  MOOC is an acronym which means….

•  Coursera is …(pick as many as are applicable) A.  A university B.  An online pla[orm C.  A popular management book D.  Same as Blackboard E.  An edtech company F.  None of the above

•  A flipped classroom is …. (pick as many are applicable)

A.  A classroom without the professor B.  A classroom without the students C.  A classroom without the lecture D.  A classroom where students do pre-‐readings before class and discuss the material in class E.  A classroom where the students do not do any work

•  E-‐learning is inferior to face-‐to-‐face learning. True or False?

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My long online journey

•  Started in academia in the early 2000s, on comple.on of my PhD in interna.onal strategy from Flinders University (Australia).

•  Joined the University of Melbourne straight aaer (2003), taught in UG and PG programs.

•  Lea the UoM (2007) to join IGSB, University of South Australia, taught in the MBA program (Strategic Management, Corporate Strategy, Entrepreneurship & Innova.on).

•  Started teaching online at the IGSB in 2008. •  In early 2014 moved to Torrens University Australia, a start-‐up university

owned by Laureate Interna.onal (PBC), the largest private higher ed provider.

•  Was one of the first senior academics and MBA Program Director. TUA runs F2F and fully online degrees.

•  Joined AUD in August 2015. •  Audited several MOOCs, including Learning How to Learn, the largest /

most popular MOOC on Coursera. •  Post regularly on LinkedIn on issues related to e-‐learning. •  Currently researching barriers to, and enablers of e-‐learning adop.on in

the UAE and am generally interested in all things digital and entrepreneurial.

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Agenda

•  What’s wrong with the current higher educa.on system •  Digital disrup.on in the higher educa.on industry •  The benefits of e-‐learning •  Meet the disruptors and incumbents:

– MOOCs –  New entrants –  Incumbents’ response

•  The economics of e-‐learning and MOOCs •  Online MBA •  The future of the university

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•  “The cost disease” (Baumol & Bowen, 1966) => leads to higher costs of educa.on •  A report by HSBC (2014) found the UAE to offer the sixth most expensive

educa.on globally at $30,472, coming ahead of Canada ($29,947) and France ($16,777).

•  Student debt -‐ $1 trillion in the U.S. alone, or $25,000 per

student (more than credit card debt) •  67% of parents in the UAE simply do not have adequate funds to meet

the aspira.ons they have for their children’s higher educa.on (HSBC, 2014) •  More educa.on does not mean bexer job outcomes. •  Poor learning outcomes for students, as a consequence of a lack

of lack personaliza.on and flexibility Sources: Weise & Christensen (2014) (Baumol & Bowen, 1966; Bowen, 2012); (Barber et al., 2013).

The modern higher ed system is plagued with inefficiencies

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The costs of higher educa7on have been rising…

..and are projected to increase even further

Source: hJp://www.wellsfargoadvantagefunds.com Costs based on 2008-‐2009 es.mate of average tui.on and room and board in current dollars for four-‐year public and private universi.es according to the 2008 Trends in College Pricing, published by the College Board. Projected pricing assumes a 6% annual rate of increase in college costs. 7

Clayton christensen institute @christenseninst

What do college students learn?

•  Study of 2,300 undergraduates at two dozen universi.es who took the Collegiate Learning Assessment

•  45% demonstrated no gains in cri.cal thinking, analy.cal reasoning, and wrixen communica.ons during first two years

•  32% did not typically take courses with more than 40 pages of reading per week

•  50% did not take a single course in which they wrote more than 20 pages

The quality of higher educa7on?

Source: Arum & Roksa (2010) quoted in Clayton Christensen InsWtute (n.d.)

CLAYTON CHRISTENSEN INSTITUTE # christenseninst

•  3.6 million job openings for which employers say they can’t find qualified employees

•  49% of US employers struggle to fill vacant jobs because of lack of talent, compared to 34% globally

•  The signaling effect of a college degree appears to be an imprecise encapsula.on of one’s skills for the knowledge economy of the .mes.

•  McKinsey analysts es.mate that the number of skillsets needed in the workforce has increased rapidly from 178 in September 2009 to 924 in June 2012

The job mismatch paradox


48% of employed U.S. college graduates are in jobs that don’t require a four-‐year degree 42% of visual and performing arts students said college didn’t prep them for employment The average 2013 college graduate will owe $35,200 in debt (and will likely be paying it off in a job they hate) Six .mes as many graduates are working in retail or hospitality as had originally planned – they’re becoming waiters, Gap salespeople and baristas, because it’s the only work they could find 284,000 of college graduates (37,000 of those have advanced degrees like JD’s or PhD’s) will be working minimum wage jobs – like flipping burgers 75% of people say they aren’t living up to their crea.ve poten.al

Source: McKinsey (2012)

And we already know that studies from Gallup and Deloixe show that 70-‐80% of workers are ac.vely disengaged and don’t enjoy the work they do

Voice of the US college graduate

Source: Hirt & WillmoJ (2014) Strategic principles for compeWng in the digital age, McKinsey & Company, May.

But digital disrup7on is eventually coming to higher educa7on…

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12 Time

Perfo

rman

ce

Performance that customers can

utilise and absorb

Range of performance that customers can utilise

1

2

3

3

Disrup.ve innova.ons – New entrants almost always win

Incumbents nearly always win in sustaining innova.ons

hxps://www.youtube.com/watch?v=qDrMAzCHFUU

Sustaining vs disrup7ve innova7ons (Clayton Christensen)

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•  We dis.nguish between –  Sustaining innova,ons – new and improved products aimed at our exis.ng, high-‐margin

customers; –  Disrup,ve innova,ons – innova.ons that are inferior to the current offering, but offer features

that customers value (affordability + flexibility), or are targe.ng non-‐consumers.

•  In every market there is a rate of improvement in performance that customers can u.lize or absorb.

•  In every market there is a dis.nctly different trajectory of improvement that innova.ng companies provide as they introduce new and improved products.

•  The pace of technological progress almost always outstrips the ability of customers in any given .er of the market to use it .

•  Once the disrup.ve product gains a foothold in new or low-‐end markets, the improvement cycle begins: –  The pace of technological progress outstrips customers’ ability to use it… –  The previously not-‐good-‐enough technology eventually improves enough to

intersect with the needs of more demanding customers… –  Disruptors are on a path that will ul.mately crush the incumbents.

•  Disrup.ons paralyze industry leaders as their resource alloca.on processes are geared toward suppor.ng sustaining innova.ons.

How disrup7ve innova7on works


•  Is the innova.on targe.ng people who are non-‐consumers or overserved by exis.ng products?

•  Is the innova.on not as good as exis.ng products as judged by historical measures of performance?

•  Is the innova.on simpler to use, more convenient, and more affordable? •  Is there a technology enabler that can carry the new value proposi.on up-‐

market? •  Is the technology paired with a business model innova.on that allows it to

be sustainable? •  Are exis.ng providers mo.vated to ignore the new innova.on and not

threatened at the outset?

How to spot a disrup7ve innova7on

Source: Clayton Christensen Ins.tute (n.d.)

CLAYTON CHRISTENSEN INSTITUTE @christenseninst

Industries without an upwardly scalable technology are not disrupted

Where does disrup7on not apply?


Subs7tu7on in higher ed is following the S-‐curve of adop7on

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Personaliza7on

Data and Feedback

Factory -‐ the current model based on standardiza7on

Teacher effec7veness

Cost control

Poten7al benefits of e-‐learning

vs



Student achievement in online courses when administered by faculty in core

4.6

Student achievement in tradi.onal classes taught by faculty in core

5.6

Student achievement in online courses when administered by focused online faculty

5.7

Another analysis of over 1000 studies of online-‐course results conducted by US’ Department of Educa.on found that people who complete such courses do bexer on average than students in face-‐to-‐face instruc.on. But: students need to be mo7vated self-‐starters!!!

Sound learning design boosts student outcomes

Sources: Clayton Christensen Ins.tute (n.d.), USDE


Deliver content to students

Tes.ng & assessment

Progress to next grade, subject, or body of

material

Receive results

Fixed-‐7me, variable learning in tradi7onal universi7es



Offer learning experiences to

students

Tes.ng & assessment

Receive real-‐.me interac.ve feedback

Progress to next body of material

Learning is fixed and 7me is variable

The new model -‐ Competency-‐based learning


Meet the disruptors -‐ the avalanche of MOOCs…

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Private equity and venture capital are increasingly inves7ng in higher educa7on …

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And other new kids on the block

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[In April 2015] Linkedin made a surprise purchase of the online learning website Lynda.com for a cool $1.5 billion. While many in the tech industry scratched their heads over the acquisiWon, I want to tell you firsthand why this is not only a smart fit, but a great purchase as well (Owsinski / Forbes)

The Economist Group launched Learning.ly, a catalog of proprietary online courses, on January 12, 2016. The pla[orm offers professional development courses curated by the staff of The Economist and taught by experts from different fields.

How incumbents are responding

hxps://www.youtube.com/watch?list=PLl2dezBNo_BkaJhG2IWePTtSA58MF8Xx-‐&v=M2jgSXP0ra4 hxps://www.youtube.com/watch?v=zihmiLx3Xlk&list=PLl2dezBNo_BkaJhG2IWePTtSA58MF8Xx-‐&index=2

Georgia Tech on the Need for OMS

The Georgia Ins7tute of Technology, Udacity and AT&T have teamed up to offer the first accredited Master of Science in Computer Science that students can earn exclusively through the Massive Open Online Course (MOOC) delivery format and for a frac.on of the cost of tradi.onal, on-‐campus programs. This collabora.on—informally dubbed "OMS CS" to account for the new delivery method—brings together leaders in educa.on, MOOCs and industry to apply the disrup.ve power of massively open online teaching to widen the pipeline of high-‐quality, educated talent needed in computer science fields. Accredited. Affordable. Accessible. "I had been searching for the right degree program for years. It's hard to find a high-‐quality master's program that I could do while keeping my full-‐Wme job. The incepWon of OMS CS was like the answer to prayer. It has exceeded my expectaWons." -‐Yeeling Lam, December 2015 graduate of OMS CS

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Is the allure of the F2F full-‐7me MBA diminishing? An MBA from a mid-‐ranking school is no longer the investment it once was. In 2010 the average tui.on fee charged by American ins.tu.ons ranked within our top 100, but outside of the top 15, was $81,911 for the full two years. The average basic salary of those schools’ freshly-‐minted MBAs was $81,178 a year. Five years ago tui.on at the same cohort of schools was nearly $22,000 cheaper—$60,247—while the average salary, $78,442, was barely less than today’s. This price rise comes at a .me when enrolment is falling; for American mid-‐level schools it is down 20% over the decade — “Trouble in The Middle,” The Economist, October 15, 2011

Dr Gino Mar.ni, a senior director with GlaxoSmithKline is studying for an MBA with Liverpool University. Being an excep.onally busy man – he runs a scien.fic support group in the company’s Essex development laboratories and has a family – he cannot spare the .me to axend lectures or summer schools. (The Times, 26 Nov, 2008) U.S. News & World Report had commented that “while the quality of online M.B.A. degrees lea much to be desired during their early days, their axributes have steadily improved over the past few years, as have their pedigrees”. The dean of the Columbia University Business School was quoted as saying, “I think people will look at different formats . . . I think people may want to get an MBA in a slightly different way”.

Source: Driving towards a disrupWon? HBS #9-‐612-‐101


Per

form

ance

Time

Time

Diff

eren

t Mea

sure

of

Per

form

ance

$150,000 !!!

Part-‐.me MBA

Online “Garb

age”

2-‐year MBA

Corporate Uni

versi.es:

Compe.ng against

nonconsump.on

Help me solve this problem Teach me what I need to know to become a great manager Give me the creden.als I need to get the next, more lucra.ve job Help me switch careers

Help me join a pres.gious network •  Brand •  Connec.ons

Harvard Business School is being disrupted!


The economics of e-‐learning – example of HBS’ MBA program

Cost item $$$

Tui.on, not including fees for materials $51,200

Courses / year 10

Sessions / course 28

Hours / session 1.33

Tui.on/class-‐hr/student $137.1

Students / class 90

Tui.on revenues / class/hr $12,342.85

Major costs $$$

Professor ???

Facili.es -‐ really nice ones!!! ???

Admin and support staff (5:1 professor ra.o) ???

27 Source: Driving towards a disrupWon? HBS #9-‐612-‐101

Tradi7onal university costs Need for for physical proximity

Adding students is expensive—they require more buildings and instructors—and so a university’s marginal cost of produc.on is high. That means that even in a compe..ve market, where price converges towards marginal cost, modern educa.on is dear.

Difficult to raise produc7vity University lecturers can teach at most a few hundred students each semester—the maximum that can be squeezed into lecture halls and exam-‐marking rosters. Because it is so labor intensive higher educa.on relies on large numbers of instructors paid rela.vely modest salaries.

E-‐learning /MOOC Classic informa7on goods

High fixed costs of produc.on and rock-‐boxom marginal costs of reproduc.on -‐ teaching addi.onal students is virtually free. ...as prices converge towards marginal cost, there will be lixle scope for undercu�ng the compe..on. Instead MOOCs are likely to compete on quality…Higher produc.on costs are a small price to pay to axract much greater numbers of students.

Winner-‐take-‐all dynamic The best pla[orms axract the most customers and profit handsomely as a result. See more at: hxp://marginalrevolu.on.com/marginalrevolu.on/2014/02/the-‐economics-‐of-‐online-‐educa.on.html#sthash.HkYJK37w.dpuf

The rise of e-‐learning may upend the economics of higher educa7on

28 What will ensue is moun7ng price compe77on!

Bifurca7on of higher educa7on… and ensuing price compe77on

Two quotes by Clayton Christensen: “Some [universi.es] will survive. Most will evolve hybrid models, in which universi.es licence some courses from an online provider like Coursera but then provide more specialized courses in person. Hybrids are actually a principle regardless of industry. If you want to use a new technology in a mainstream exis.ng market, it has to be a hybrid.” hxp://www.businessinsider.com.au/clay-‐christensen-‐higher-‐educa.on-‐on-‐the-‐edge-‐2013-‐2 “Historically there has never been compe..on on the basis of price. For online universi.es, like Liverpool and the University of Phoenix, if prices drop by 60% they s.ll make money. But for the vast majority of tradi.onal universi.es, if the prices fall by 10% they are bankrupt; they have no wriggle room. So I'd be very surprised if in ten years we don't see hundreds of universi.es in bankruptcy”. hxp://www.economist.com/whichmba/clayton-‐christensen-‐s.ll-‐disrup.ve

Buy

er v

alue

Relative cost

High

Low

Low High

University of Phoenix

Harvard University

A tradi.onal university

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Is this good enough? – You judge! (see Christensen’s lecture on innova.on at U of Phoenix) hxps://www.youtube.com/watch?v=VmbSpTJXozk Percep.ons of online degrees has changed as top-‐ranked schools have started offering more distance educa.on op.ons and MOOCs.

New avenues and associated credenWals will conWnue to open up… When MOOCs burst onto the scene, companies were skepWcal. Now, they are accepted by employers from Accenture to Amazon to Google and Goldman Sachs. Companies are re-‐examining their hiring pracWces. Anant Agarwal, edX CEO and professor at MIT

In the past couple of years schools like MIT, Stanford, Duke and Johns Hopkins have joined the online educaWon landscape. It elevates the concept of online higher ed. Just by their parWcipaWon the category is liled.

Cullen, managing director at Infinia DC (brand consultant for colleges and universi.es)

Employers are embracing e-‐learning degrees

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Imagine if you aJended your next finance class in a virtual reality through 3D goggles. Or if you networked with alumni through an avatar of your likeness projected onto your laptop. Or if your strategy professor beamed live feedback to your tablet device during a heated case study.

•  Some of these innova.ons may seem outlandish to MBAs who have spent their semesters learning around bricks rather than clicks. But as the world’s top business schools begin to harness the power of innova.on, such whizzy technologies are closer to becoming a reality.

•  Top schools are inves.ng heavily in in-‐house learning technologies and some are compe.ng with the likes of Coursera, edX or Udacity.

•  But now schools are exploring eccentric tech tools such as Second Life, robo.cs and ar.ficial intelligence.

Exo7c technologies are becoming a reality in e-‐learning…

31 Source: BusinessBecause, 2016

•  The future of higher educa.on is blended learning. •  Likewise, the future of MBA / b-‐school programs is blended

learning, flexibility and customiza.on. •  Learning is life-‐long, with MOOCs and the like filling in the gap

for short, on-‐demand, just-‐in-‐.me, inexpensive courses. •  Universi.es will need to carve unique strategic posi.ons. •  “Me too” ins.tu.ons will be displaced by MOOCs (and similar

pla[orms) which are close subs.tutes. •  Top universi.es will survive the disrup.on, and their best bet

might be to preserve exclusivity – but they, too, will need to change and embrace the disrup.on! Harvard, Wharton and GeorgiaTech are prime examples that this is feasible.

The Future of higher educa7on and learning

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Unit of accredita.on: The ins.tu.on

Unit of accredita.on: the course

A different type of university

Standards: thru course acceptance

How future universi7es may look like



Benefits of blended learning for teachers

1.  Eager students 2.  Bexer informa.on 3.  Team teaching 4.  Extended .me with students 5.  Individualized PD plans 6.  Mo.vate hard to reach kids 7.  More leadership roles 8.  More earning power 9.  Focus on deeper learning 10.  New op.ons to teach at

home

Source: Digital Learning Now!

And what’s in there for professors?

Thank you! Ques.ons?

Is digital disruption coming to the university near you?

Education

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