In the same way it revolutionized creative industries, digital technology is revolutionizing higher education, an industry that can be traced back almost a millennium, with the creation of the University of Bologna in 1088. Digital technology has drastically altered the economic balance between the different players, making some models obsolete, allowing others to emerge, enabling economies of scale on one side and leading to additional costs on the other. Destruction, creation: is higher education to enter a Schumpeterian cycle?
The changes brought by digital technology are further amplified by three additional dynamics that have a deep impact on education and that cannot be ignored. First of all, the digital revolution comes at a time of globalization of the educational offer. As explained by economist Jean Pisani-Ferry, “the emergence of a logic of internationalization and therefore, of competition, in a sector traditionally organized on an almost exclusively national basis.”
Second, the digital revolution occurs at a time when higher education is growing at great speed. This entails many challenging consequences in terms of increased costs and economic model, particularly in countries where education is primarily a public service. Bob Goddard, an expert on the subject, estimates that the number of higher education students will reach 262 million by 2025 against 178 million in 2010. The leap in the 2000s is equally impressive since they were already about 100 million in 2000.
Third and last, the digital revolution is concomitant with the increasing privatization of the education sector – a market usually estimated at 2.5 trillion dollars, the second largest market after healthcare. While primary and secondary education are still mainly provided by the public service, higher education is undergoing significant changes, with a decline in public spending and a greater role for the private sector. Studies from the Organisation for Economic Co-operation and Development (OECD) show that this movement, which coincided in developed countries with the financial crisis, will not reverse, despite the fragile economic recovery.
The digital revolution is often compared to that of printing press in the fifteenth century. With one notable difference, pointed out by Joël Boissière, Simon Fau and Francesc Pedro, authors of the book Le numérique, une chance pour l’école (Digital technology, an opportunity for school): “Printing has revolutionized the dissemination of knowledge but not the way it is constructed.” Digital technology on the other hand not only disrupts the dissemination of knowledge, but also its production. This double effect is precisely what disrupts the economic balance of the sector.
The end of the monopoly on knowledge
Digital tools have democratized our access to knowledge. Formerly rare and reserved to a small elite, knowledge has become virtually free and easily accessible. Anyone with a computer and an Internet connection can access vast amounts of knowledge. Of course, everything published on the Internet shouldn’t be taken for granted, far from it: one needs to develop skills in order to search, select and discriminate the collected information. But more and more reliable sources are being made available and can be easily identified as quality material, like several educational online platforms (Khan Academy, edX, Coursera, Udacity, etc.), online encyclopedias, blogs written by recognized experts in their field, etc.
For many incumbents, it’s a real challenge to their monopoly on knowledge. This is particularly true of teachers who see constantly connected students question their teachings and of educational institutions, especially the smallest and least known. Let’s examine the example of MOOCs, these interactive, online, participatory, inclusive and (originally) free courses. Many MOOCs are offered by universities themselves, usually through dedicated platforms. For the most prestigious ones, this can respond to targets in terms of image, marketing and talent identification. But for the less prestigious universities, these free online lessons pose a real threat.
Moody’s (rating agency), Pearson (editor) or Demos (think tank) have suggested a possible disappearance of smaller educational organizations, both public and private. More categorically, academics Clayton Christensen and Michael Horn predict the disappearance of many universities in their country in ten to fifteen years. This scenario seems excessive, especially because MOOCs currently don’t offer a real alternative to universities – because few of them deliver credits and their managers are still struggling to find a viable business model.
Let’s not forget that MOOCs are expensive to produce, between 50,000 and 200,000 dollars according to different estimates. “The idea that MOOCs could be used virtually anywhere as substitutes to the lectures has been gradually abandoned and today, online courses are considered more as supplements. Following this alternative model, which now serves as base to most projects of Coursera and edX, the MOOC no longer claims to fully replace a physical campus and a classroom course”, according to Antoine Compagnon, professor at the Collège de France, in his article titled “Moocs et vaches à lait” (“Moocs and cash cows,” in Le Débat, March 2014).
However, the technology conveyed by MOOCs can be used to design low-cost educational offers. These will no longer be free and therefore can’t be called MOOCs, in the strict sense of the term. This kind of low-cost offer can already be seen, for instance the Master in Computer Science jointly developed by Udacity and the Georgia Institute of Technology, based entirely on online courses and offered for only $7,000. Or else theMinerva University in San Francisco that provides Ivy League-class education for half the cost. This low-cost offer can be particularly attractive in countries where higher education fees are borne by students whose debt is a serious concern, such as the United States.
This shows that digital technology allows the emergence of new players who threaten the survival of incumbents by offering quality training at lower costs, or by combining with them thus changing their role and causing transfers of revenue and costs. As noted by the British weekly Times Higher Education, experts of higher education agree on the fact that the private sector will continue to play an increasingly important role, in order to meet the increasing demand, both in the development of course contents but also in providing back-office services.
In a report titled “What will higher education look like in 2020?,” the Observatory on Borderless Higher Education (OBHE) also believes that universities will have no other choice than gradually relinquish control over contents, which may come from other sources, such as industrial giants, start-ups, museums, libraries, etc. The UK platformFuturelearn already aims at being more than just a MOOCs platform: it imports contents from non-academic partners such as the British Library and the British Museum. For the latter, these are new sources of revenue as well as the opportunity to reinforce their brand among the public.
The emergence of new private actors may tempt governments whose public finances have suffered from the financial crisis, leading them to pull back from the education sector. According to the survey titled “School in 2030,” published ahead of the World Summit for Innovation in Education (WISE) 2014, 70% of 645 international experts believe that governments will no longer be able to ensure the funding of education. They will be replaced by families (43%) or by corporate sponsoring (27%). The tendency to increasingly place the funding of higher education on households is also pointed out by the OECD in this research.
Can we imagine a massive privatization movement leading to a situation where “education and training would be primarily the responsibility of the private sector” as in one of the scenarios of the prospective study on education of 2030Prea2k30? Such a development would lead to “a significant increase in inequality in terms of access to education and training”. Instead of leveling the economic and social inequalities of society, education would be an additional cause for social division. But digital technology, while also revolutionizing the dissemination and assimilation of knowledge can provide an opportunity for the traditional players to do better and cheaper.
A revolution in the dissemination of knowledge
Digital technology causes a dissociation between information and its support. The same information can be conveyed in various forms (ebook, audiobook, podcast, MOOC, serious games, etc.), on different media (computer, tablet, e-reader, smartphone, connected watch, etc.), allowing it to be understood in many different ways and, most importantly, to adapt learning methods to each individual learner. Moreover, knowledge is increasingly open access. This impacts incumbents in the dissemination of knowledge, particularly publishers and libraries.
Traditionally, libraries were the link between scientific publishers and teachers and students. But if open access becomes the norm, they will lose that role in favor of centralized databases such as Scopus, Google Scholar or Mendeley, warns Victor Henning, co-founder of the bibliographic management software Mendeley. According to him, libraries have other roles to play than providing access to knowledge: for instance, disseminating and archiving the research produced by the organizations to which they are attached.
The open access movement has been accelerated by the advent of MOOCs. “While the educational offer is breaking from the degrees, the demand for a cheaper and wider access to textbooks and academic journals will grow” predict the authors of the reportof the OBHE, pointing out something defenders of free access tend to neglect: ultimately, “someone, somewhere, has to pay.” As intermediaries, publishers may find themselves excluded from a more direct process between researchers and their public, e.g. via the databases mentioned above.
For other incumbents, however, the multiplicity of options offered by digital technology regarding the dissemination of knowledge may be a longer-term opportunity. Digital technology is able to “leverage the power of educational systems,” according to the authors of the book Le Numérique, une chance pour l’école (Digital technology, an opportunity for school). According to these, “we expect that, just like in other sectors, the increasing adoption of digital technology in education will result in real savings (…) once the transitional phase and unavoidable costs for additional training, equipment, practices and the redefinition of assessment models is over.”
This is a matter of debate. Antoine Compagnon believes that “the investments required by electronic classrooms in our colleges dwarf those necessary for traditional equipment such as blackboards, chalk sticks and cloth… and yet, they aren’t significantly more effective when it comes to learning division and the rule of three.” This brings us back to the old debate of whether digital technology improves teaching. While technology shouldn’t be considered as the key to all problems, digital tools can help us turn the page of the “industrial model” in education and pave the way to the implementation of long-known methods that had never been used in the past because of their cost: personalization and individualization of learning.
Digital technology also allows for a better use of resources, for example in the case of flipped classrooms where the teacher gets involved in a more productive exchange only once the knowledge has been assimilated online. Blended learning (online and face to face), also seems to be the future. Emmanuel Davidenkoff indicates in his book Le Tsunami numérique (The Digital Tsunami) that some estimates show an increase of nearly 50% in student performance with blended learning. Digital technology could therefore increase efficiency and productivity in education. For developed countries whose public finances are limited by the financial crisis and for emerging countries with soaring demand for higher education, doing better and cheaper is a crucial need. It also represents an alternative to the outright withdrawal of public authorities.
Ultimately, the digital turn is an opportunity for incumbents to generate new resources on developing markets. While life-long training is becoming an imperative in the economies of knowledge, universities could, for example, cover a significant share of the market of distance vocational training, which grows exponentially, with new forms of online education.