Home > Business Model, Innovation, Strategy > The Real Higher Education Challenge

The Real Higher Education Challenge

Recently, there has been a lot of discussion around Higher education and how this is creating student debt at an alarming rate. There are estimates which out student debt in US alone at more than a trillion dollars. The common thinking seems to be to look at ways to reduce the overall cost of delivery of education. MOOC’s seem to be the flavor of the season as they can obviously reduce the cost of delivery by leveraging technology.

However, in my opinion, we are trying to address a symptom and not the root cause. I think that the root cause of the education problem is the reducing relevancy of the education provided in this course, that leads to lack of employment to all.

So, if we really want to disrupt the higher education industry and solve the challenge, we need to find a way to address this issue of relevance to businesses, that without burdening the students with debt and at the same time leverage the current institutions.

My suggestion to solve this would be following:

Higher education needs to be offered in two streams:

  • Full time courses as offered now but with a slight change. Instead of just offering the course, the universities help set up businesses that are being run by the students. The businesses get passed on to every batch of students as the current set of students graduate. This coupled with the classes that they attend in the university can not only prepare them well for their subsequent future in corporates and at the same time provide them an option and experience of starting and running their own businesses. The students can then choose their path as per their individual choices.
  • Offer life long memberships to students, who instead of paying their annual fee and studying, agree to pay a small amount monthly or annually in return of being able to come and attend a short term course (4 to 6 weeks) whenever they want to. This way, the college will continue to get funds to run the university and at the same time people will get to learn whatever is relevant and whenever they need it. This solves all the current set of challenges: Student debt (which will not pile on as the students pay a small fee over long periods of time), funds for universities (as the universities will be able to get the fee from a lot of students who are still not in the college) and the students get to learn what they want to, when they want to, so that their learning is relevant.

Once universities are able to do both of these options in place, they will start to become relevant again. Of course, they can continue to work on reducing the cost of delivery of the courses by using MOOC’s and other technologies as well. These will improve the efficiency of the universities thereby allowing them to survive with lower cash flow than otherwise.

Of course, these are just a couple of ideas. I am sure that if we agree that the most critical area where disruption is sorely needed in the current higher education is in its relevance, then we can come up with a lot more ideas which could be used to solve this challenge.

Whatever we do, we must hurry as I think that time is running out and we need to find a way to address this at the earliest or we might risk loosing some of the most important institutions in the world.

What do you think? Please do share your opinions so that we can continue the discussion.

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PS: Dr. Clayton Christensen discusses disruption in higher education


  1. common
    November 25, 2013 at 10:24 pm

    You wrote: “reducing relevancy of the education provided in this course, that leads to lack of employment to all.”

    Actually, this is not what is going on in my industry- programming. I know first hand that what employers want above all else is not some particular skill set , but a certain “kind” of employee first, then technical skills a far second. Sorry, what I am going to tell is represents an extremely regressive mind set on the part of management, but this is how it really is.

    What they’re really looking for is someone who will work all hours for low pay who also has reasonably high skills. The reason there are no jobs for American graduates is because companies believe they can find what they’re looking for by either 1) going overseas. or 2) hiring an H1B visa holder and force him / her to work constantly in exchange for an employer-sponsored green card.

    H1Bs are incredibly “loyal” if I can use that term because should they quit their jobs , their green card application – which can take 7 years to complete- has to be started from scratch with their new employer.

    What employers hated during the 90s was programmers’ ability to switch jobs easily. They would quit for higher wages at the drop of a hat and it became a bidding war. Of course, this is how it’s SUPPOSED to work in a free market and what I just described is how middle class wages were raised during the Clinton years.

    Don’t kid yourself, the companies fought back in Washington. Their weapons included all kinds of free trade agreements, raising the number of H1Bs permitted (which they are doing again this time they want to 10x the number), and fighting against other legislation, for instance legislation which would give everyone brought here on an H1B a green card and or would give j1 visa holders (college students) a green card upon graduation .

    When you look at what goes on in employment and business , you can’t afford to maintain a naive and ahistorical viewpoint if you also want to be right. Business weapon’s of choice is legislation and Congress. They get laws passed that favor their position, This is how it’s always been and this is how it still is. It’s not a market forced through supply and demand for talent or skills. It’s much more complicated than that.

    There is some signs that some companies are realizing that outsourcing results in poorer products and less revenue / greater losses. But that is a minority viewpoint within only some industries. Sneaker-making isn’t coming back and neither is help desk nor a lot of programming. In fact, outsourcing is still in Gen 1 and getting its kinks worked out. Further technological progress favors even greater numbers of jobs going overseas.

    The fact is, while Gates et al may love to squak about how Americans lack higher education and that’s where the employment problem is coming form, they’re simply liars. Gates while at Microsoft led the way with outsourcing and “insourcing” (H1B abuse) lobbied Congress for increases in H1Bs, classified employees as “contract labor” for years to avoid having to pay benefits to them etc etc. Microsoft is a good example of a disingenuous corporation breaking all kinds of laws, not to mentions the social contract , in order to maximize profits. One only has to read judge Jackson Penfield’s decision on Microsoft’s anti-trust case to understand just what criminally inclined, sleazy and manipulative liars they were and in fact continue to be- the “contract employee” lawsuit and decision came years after their anti-trust case ended.

    The market is not a “free market” and never will be because in a free market, from the POV of business owners too much of their profits end up in the worker’s hands and not their own.

    Closing example. The company I worked for paid me going wages for programmers in the early 2000s about 86k. The CEO of my company made, literally, 1000 times that amount. Every time I made a dollar, he made 1000 dollars. This company was
    and is stuffed to the gills with H1Bs and they lobbied hard to raise the cap each year. The actual head count of US born programmers to H1B visa holders had to be 1 to 5 at best. It was clearly majority visa holders. The only reason I got a job was because I was R and D and had a skillset they needed .

    I have never lacked for skills, but inevitably in interviews I am interrogated by a parade of H1Bs with thinly veiled contempt for you because while the US may have the melting pot ethos, believe me India doesn’t. They prefer to keep it in the family as it were.

    I agree with everything you’re saying about education- it’s on it’s last legs. But if your goal is to know the world as it is so you can recommend courses of action to yourself and others and obtain societally beneficial results, you have to dig down past the rhetoric and high level hand waving that passes for analysis and understand the details because that’s where devils are.

    • November 26, 2013 at 7:41 am

      First things first. Big thank you for taking the time and effort to clarify your position on this topic. While I agree to your point-of-view about the situation in the US, the higher education challenge that we are facing is not just specific to the US.

      The same challenge exists across all markets and my attempt through the blog was to provide a few thoughts for the universities to enable them to stay relevant in the near and distant future.

      The interplay and use of politics (& hence policies) with businesses has been around since the time either of them have existed together and will continue to stay on as well. What is more important is for universities and more importantly the students to realize and understand the situation and skill themselves in a way that they are much more likely to get employed or become employers. If you see, it was a deliberate attempt on my part to also include the ability or skill or running an organization as a core skill in the universities curriculam, precisely to ensure that if you become much more valuable to any business that employs you or you decide to start off on your own.

      It is my strong belief that we are getting into an era where small businesses shall thrive and create more employment than the large corporations.

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