It isn’t often that a report organized in the form of 34 slides impresses me for its breadth versus brevity. Then again, there aren’t many global consulting firms as large as EY. In a report issued in early 2022 titled The Future of Higher Education Report, EY’s consultants set the stage for today’s learner/worker environment and pose a few poignant questions for leaders of higher education institutions as well as policymakers.
In the report’s foreword, its authors point out that there is no going back to business as usual. Three sentences summarize the current environment for higher ed:
“The business reinvention that is taking down giants in media, retail, and energy, is coming for higher education – and it is coming fast. Growing turbulence from demographic shifts, geopolitical challenges, changing workplace demands and high student expectations for a quality digital experience are creating a tsunami of disruption. This will threaten the very existence of those universities that are unable to adapt to the sector’s new realities.”
“It’s time to think about the future differently” heads a section of the report. Globally, the authors point out, digital is driving the emergence of new ecosystems for learning and knowledge creation. In a world of “work from anywhere,” people want to “learn from anywhere.” The higher education landscape exists with a tension between traditionalists (those who believe the current higher education model is secure despite ever-rising prices and shrinking demand) and revolutionaries (those who look at declining demographics, lack of affordability, costs and benefits of digitization, and emerging new competitors to conclude the current model is wrong).
The EY partners/principals who authored the report state that while there is room for traditionalists and revolutionaries to co-exist, the revolutionaries are describing the much larger portion of higher education than the traditionalists. To avoid the fate predicted by Clayton Christensen in 2010, surviving colleges and universities will need to forge closer commercial relationships with industry, disrupt themselves, or create new networks of alliances.
The report’s authors created five plausible scenario questions that they believe every university leader should consider to guide their institution to a thriving future. The questions follow in order of their appearance in the report.
Question 1 – What if the cost of learning is driven down to $0?
Imagine that learning and earning credentials or qualifications in 2030 is as convenient as shopping or banking in 2021 AND is possible to do at a very low cost. Learners can complete course modules or entire degree programs from the world’s best providers at their own pace. By 2030, knowledge service providers (including universities) will have dramatically reduced the marginal cost of delivering learning while enabling almost infinite scale and reach. The content will be far more engaging than having the average instructor lecture live at the front of a class. Students will be able to debate their learning with their peers in real time (I would argue that the latter activity takes place now with the 100+ college clients of YellowDig).
EY’s principals write that unless they reinvent themselves, universities in 2030 risk being like public libraries today – physical places that few visit because information is now available digitally. Universities need to reexamine what is the unique value offered by in-person, campus-based learning, and redesign around that. Universities should evolve into a hybrid model that delivers world-class, flexible, and personalized learning. I believe the report substantially underestimates this risk.
Question 2 – What if learning journeys are entirely flexible and customizable?
“Imagine that accessing educational content in 2030 is like listening to music via Spotify? At the touch of a screen, you can access catalogs of learning content from the best providers in the world to consume” at your own pace from wherever you are in the world. AI matches learning activities with your current knowledge levels and learning goals. As you master fundamental knowledge, more advanced levels are unlocked. You can select learning modes based on your learning preferences.
By 2030, the report’s authors believe that there will be a huge range of flexible, stackable credentials (note – Credential Engine reports that there are 1.076 million credentials with 59,690 credential providers in the U.S. Not all are stackable. Info downloaded on June 4, 2023). By 2030, courses and providers will share an internationally recognized accreditation framework enabling course credits to be transferred between programs, providers, and pathways. It is wishful thinking that there will be an internationally recognized accreditation framework enabling course credits to be transferred between programs, provider, and pathways by 2030. It will be a miracle if we have that framework in the U.S. by 2030. Accreditation is a peer-reviewed process. Most institutional accreditors accredit academic institutions not “providers” like Google and Amazon. Unless the U.S. government separates the role of Title IV gatekeeper from accreditors, the journey for “providers” to be accredited will be lengthy.
Employers can specify highly tailored requirements for jobs and candidates can search for providers to help them fill skill or knowledge gaps. “The endless duplication of generic courses in different locations ceases as students gain access to the best courses.” I could not agree more with this sentence. For years, I have questioned why large state systems have not developed the “perfect” series of online gen ed courses that would be shared by their member institutions. In the past year, the Texas Higher Education Coordinating Board (THECB) announced the funding of online gen ed courses developed by arguably the three most prestigious universities in the state, UT-Austin, Texas A&M-College Station, and Rice University. The courses will be made available as Open Educational Resources (OER) on THECB’s website.
EY writes that reduction of the duplication of generic courses will lead to market consolidation. Yes, it will. Universities will have to offer courses that are distinctive to be selected by learners. Universities will need to engage learners and build a lifelong relationship to provide upskilling and reskilling courses and programs. Those institutions whose offerings are not high quality will fail. If governments (and states) chose to fund learners and not institutions, it could be a game changer.
Question 3 – What if higher education providers are accountable for results?
By 2030, the report’s authors predict that independent career platforms will exist to provide expert advice on which accredited programs link most strongly to employability and career goals of the learner. Individuals will be able to select the best provider to help them reach their goals. The platform will also hold a learner’s portfolio of certificates that can be shared with employers (LinkedIn can do this now). Course credits are transferable and stackable (don’t count on all of them being that way in 2030).
The authors of the report write that the proliferation of degree and nondegree credentials has led to a need for greater regulation and accreditation of providers to help prospective students and employers evaluate the relative value of credentials. There is currently no accreditation structure for the lifelong learning sector. As I wrote earlier, don’t expect this to happen soon unless Congress indicates a willingness to expand eligibility for Title IV funding to microcredentials and other learning modules shorter than the minimum 15 credit hour certificate.
It’s likely that governments will introduce performance-based funding requiring universities to focus on quality and effectiveness of teaching as well as learning inputs. Universities will have to focus on their return on investment and will utilize data analytics to measure student engagement and learning progress. Faculty will make ongoing changes to curriculum to improve learning outcomes. Using blockchain technology, learnings could build an unchangeable record of learning attainment.
Question 4 – What if commercialized research pays for itself?
The EY report’s authors ask the reader to imagine that revenue from commercialized research is sufficient to allow research to pay for itself. Governments would support opening research at universities to private companies and would provide financial incentives for them to do so.
This is a future prediction that I don’t see happening. If you read Stanford’s Artificial Intelligence Index Report, you find that industry took over significant machine learning models in 2014 and the gap in research funding between industry and academia has widened since then. I believe the same is true for any area of research where there is an obvious return on investment. University research departments are too slow and too expensive for most industries. The overhead charge that most universities tack on to a research grant exceeds what typical companies maintain as their overhead percentage.
It is possible that some campuses will be able to increase the percentage of their commercial research, particularly if governments allow them to charge different overhead percentages to companies that refuse to pay the overhead rate charged to government. However, until universities understand the imperative of speed to market that is required for corporate initiatives, it will be difficult for universities to dominate in this research area.
Question 5 – What if technology could solve the global supply-demand mismatch?
The supply demand mismatch specifically refers to the United Nations’ Sustainable Development Goal 4 – Quality Education. With advances in technology, specifically online learning, it’s more than possible that Western colleges and universities can provide education to emerging economies at costs comparable to what their countries can afford. However, there will be few universities that will achieve the scale needed to offer their courses and programs at prices equivalent to the local economies without receiving subsidies from foundations or governments. Will some universities succeed? I think the answer is yes. It just won’t be a significant growth opportunity for most colleges and universities.
The EY report concludes with a section on how to repeat the thought experiment for what is coming that was conducted by EY’s consultants for a university. EY recommends four steps:
- Be clear about your long-term purpose.
- Ask “how will my institution be relevant in one or two decades?”
- Build new value with new capabilities including putting humans at the center, driving innovation at scale, and deploying technology at speed.
- Invest across the three time horizons – Now (50%), Next (40%), and Beyond (10%).
The report also provides a self-diagnostic tool on how well institutions deploy technology at speed as they reinvent themselves for the knowledge services future. For each of these eight questions, EY recommends an institution rank themselves on a five-point scale: five equals excellent, four equals good, three equals average, two equals poor, and one equals no action).
- Can you convert your LMS into a next-generation system that provides adaptive or personalized learning opportunities for individual students?
- Can you implement a career platform that connects students to industry and provides career advice, planning and placements?
- Can you enable executive decision-making via a unified data platform that provides a 360-degree view of students, staff, faculty, and operations?
- Can you use learning analytics to predict student performance challenges and provide targeted improvements to courses?
- Can you create smart processes and workflows using intelligent automation to digitally schedule classes, and interact with students, staff and faculty, in a timely and personalized way?
- Can you exploit AI and machine learning to assist teaching and support activities, ranging from grading and tutoring to performance monitoring?
- Can you leverage digital credentialing technology to authenticate skills and knowledge to help students publish their achievements for their professional lives?
- Can you use cybersecurity to protect all sensitive and personal information in the university ecosystem, as your institution becomes more digital?
I think all these questions are reasonable. I also think that there isn’t a question that doesn’t represent a capability that is already available through a software or edtech vendor. All the large online colleges that I’m aware of would score well using this analysis. It’s up to the institution to decide how important a given question/area is to its future.
Many years ago, I began my professional career as a consultant with Price Waterhouse, now PwC. All the major consulting firms have talented individuals who can brainstorm ways in which companies or universities can transform themselves to deal with future changes, particularly those driven by changes in technology. The advice from EY in this report is solid and it is free.
Most of the higher ed institutions that need to go through a scenario planning exercise like this will find it difficult to do so without outside assistance. If they can’t afford a large consulting practice like EY, using an outside facilitator with a background in higher ed and technology may be their next best choice. While Bob Dylan’s The Times They Are A-Changin’ was written to describe the social changes occurring at the time, the lines “and you better start swimmin’ or you’ll sink like a stone for the times they are a-changin’” are very appropriate to what’s happening to higher ed as the knowledge services sector is impacted by technology.
