1. Course Introduction:
Disruptive Innovation in Higher Education
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

2. 3 Quotes on Disruptive Innovation in Higher Education
“Thirty years from now the big university
campuses will be relics.”
- Peter Drucker, 1997
“We tend to overestimate the effect of a
technology in the short run and
underestimate the effect in the long run.”
- Amara’s Law (Roy Amara)
“In 15 years from now half of US
universities may be in bankruptcy.”
- Clayton Christensen, 2013
Image Source: Wikimedia

3. Who This Course is For
 Faculty, staff, students and administration at educational
institutions wanting to understand and adapt to the changes to
their industry
 Innovators with an interest in education
 Anyone that wants to know how to prepare for the economy of
the future

4. What: Course Objectives
 Understand the latest concepts driving change in higher education
 Develop strategy for higher education using key concepts of
disruptive innovation and other topics
 Use the material from this course to become a change agent to
bring innovation to their institution
 Use the material from this course in a "flipped classroom"
discussion among students or leaders at your institution

5. What: Course Outline
1. Disruptive Innovation Theory Applied to Higher Education
2. Understanding What’s Driving Change in Traditional Higher
Education
3. Economics of Traditional Online Education
4. Emerging Markets and Courseware Platforms
5. Unbundling and Rebundling Strategies in Higher Education
6. Unbundling and the Changing Role of Faculty
7. Lean Startup for Education
8. Demographic and Economic Trend Analysis
9. College Access & the Race between Technology and Education
10. Change Agents & Diffusion of Innovation

6. How to Use this Course
 Individually
◦ Download to mobile through Udemy or iTunesU or use YouTube Playlist
◦ Listen while exercising or commuting
◦ Go deep with supplemental videos and bibliography
 Flipped Classroom Discussion Groups
◦ Listen to talks in advance
◦ For your students
◦ For leaders and change agents at your institutions
◦ Invite me to Skype in for discussion
 Give feedback in discussion forum
◦ Two way Diffusion of Innovation: Bibliography suggestions, new initiatives

7. How: Media Formats & Links
 Udemy
◦ https://goo.gl/ixlBwn
 iTunes University
◦ https://goo.gl/9pGDAt
 YouTube (videos only)
◦ https://goo.gl/B8kkD2
 Slideshare (slides & video only)

8. “Human history becomes more
and more a race between
education and catastrophe.”
- H.G. Wells
Image from Wikipedia

9. Disruptive Innovation Theory
Applied to Higher Education
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

10. Key Concepts of Disruptive Innovation
 Disruptive Innovation
◦ Definition: process by which a product or service takes root initially in simple
applications at the bottom of a market and then relentlessly moves up
market, eventually displacing established competitors.
◦ Often combines off-the-shelf components in new, simpler ways
◦ Tend to be produced by new entrants
 Sustaining innovations tend to be dominated by incumbents
 Low-end disruption serves current market with a good enough
product
 New-market disruption expands market with better price &
access
Source: Christensen, Clayton. (n.d.). Disruptive Innovation. Retrieved from http://www.claytonchristensen.com/key-concepts/

11. Cell Phones in 1983

12. Smartphones: Disruptive Technology
Diamandis, P. H., & Kotler, S. (2012). Abundance: The future is better than you think. New York: Free
Press. p. 289
“People with a smartphone today can access tools that would have cost thousands a few decades ago.”

13. PCs
Mobile
Disruptive Innovation Theory
Mainframes
10 x
More
Users
1/10th
Cost

14. Traditional
Higher
Education
Disruptive Innovation in Higher Education
Disruptive Innovation Education
for Emerging Markets
Traditional
Online Education
10 x
More
Students
1/10th
Cost
For Profit
Higher
Education
Community
College
Traditional Higher
Ed in Emerging Markets
Global Courseware
Tech Platforms

15. Disruptive Innovation Theory
Image Source: Wikimedia
Online education is here

16. Current Stage
of Online Education
LMS Stage Courseware Platform Stage
Image Source: Wikimedia
Adoption Lifecycle of Online Education

17. Image Source: Wikimedia
Adoption Cycle for Post-Secondary Degrees
US
Average
Global
Average
Top
Income
Quartile
3rd
Income
Quartile
1st & 2nd
Income
Quartile

18. 1: Traditional
Higher Education
2: Traditional
Online Education
3: Courseware Platforms
& Emerging Markets
Mac
iPod
iPhone
Innovation Extensions in Higher Education

19. Environmentally Adaptive
“The Is” or Likely Future
Internally Driven
“The Ought” or Preferred Future
Past Future
Source. Erickson, T. (2004). Do adaptive initiatives erode Christian colleges’ strong mission
orientation. Unpublished Manuscript, Anderson University, Anderson, IN.
http://www.cbfa.org/Erickson.pdf
My Primary Expertise
Your Understanding
Dialogue
A Framework for Discussion
“The Is vs. The Ought”

20. Understanding What’s Driving Change
in Traditional Higher Education
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

21. 1: Traditional
Higher Education
2: Traditional
Online Education
3: Courseware Platforms
& Emerging Markets
Mac
iPod
iPhone
Innovation Extensions in Higher Education

22. Increasing Cost of Higher Education Historically

23. Future Forecast for Private Education Demonstrate Unsustainability
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
2014 2019 2024 2029 2034 2039 2044 2049
7.2% Annual
Tuition Increase
5% Annual
Tuition Increase
2% CPI/Inflation
Inflation Adjusted Tuition = $145,200/year
Inflation Adjusted Tuition
= $68,829/year
7.2% annual tuition increase is CCCU average since 2001
Tuition

24. The Blame Game It’s the
Faculty’s
Fault!
It’s the
Administration's
Fault!
Wait. It’s the
students’ fault!
The Answer is… Yes

25. Baumol’s Cost Disease: Increasing Cost of High Skilled Labor
Source: Archibald, R. B., & Feldman, D. H. (2010). Why Does College Cost So Much? (First Edition edition). Oxford, U.K. ;
New York: Oxford University Press, USA.

26. Baumol’s Cost Disease in Concert Symphonies
Source: Webb, D. (2014, November 3). Baumol’s Cost Disease Is Killing Me! Retrieved from
http://www.clydefitchreport.com/2014/11/cost-disease-opera-labor-arts-inflation/

27. What is Driving Increasing Cost in Higher Education? Part 1
Increased
Productivity in
Other Sectors
Increased Cost of
High Skilled Labor =
Increased Costs of
Faculty & Senior
Administration
Increased
• standardized tests
• large lectures
• teaching
assistants
• administrative staff
• adjuncts
• underpaid faculty
Symptoms to CopeUnderlying Cause 1
Baumol’s Cost Disease
Economics of Superstars
Sources: Archibald, R. B., & Feldman, D. H. (2010). Why Does College Cost So Much? (First Edition edition). Oxford, U.K. ;
New York: Oxford University Press, USA.
Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University
There was a 60 times increase in productivity from 1500-2000.
Higher Education has not seen this much productivity increase.

28. What is Driving Increasing Cost in Higher Education? Part 2
Decreasing Gov’t
Funding of Higher
Education
Sources: Archibald, R. B., & Feldman, D. H. (2010). Why Does College Cost So Much? (First Edition edition). Oxford, U.K. ;
New York: Oxford University Press, USA.
Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University
Creates Prisoners Dilemma / arms race of
increasing expenses to attract full-pay students.

29. Market Changes & Porter’s Five Forces Model
Competitiv
e Rivalry
Threat of
New
Entry
Buyer
Power
Threat of
Substitut
es
Supplier
Power
Decreased by:
• Faculty overcapacity
• “Uberization” of adjuncts
• Unbundling components
• Commoditized content & OER
Increased for:
• Faculty superstars
Increased Alternatives to Campus Education:
• Online, blended & CBE degrees
• Non-degree programs
• Employer analytics
• Overcapacity
• Consolidation
Dramatically Increased by:
• National competition online
• Global competition
• For-profit & mega-universities
Increased by:
• Standardization
• Unbundling degrees

30. Sustaining Innovation Recommendations
1. Out-market using analytics:
◦ “Moneyball” model (Race with the Machine by developing tech
marketing core competency)
◦ Models: Arizona State, Liberty, George Fox
2. Enhance value using innovation, technology & blended
learning
3. Cut costs
4. Provide a more granular approach to balanced P&L by
division
5. Move “up market” into graduate education
6. Expand other revenue streams
◦ Health care, grow endowment, etc.

31. Market Dynamics
of Traditional Online Education
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

32. Economics of Online Education
1. Online marginal cost per student at scale (10,000+ online students) is
likely between $500-3,000/year
2. Online education opens up competition independent of geography
3. Online education is a platform business where you pay “rent” to be
visible (20-30% of revenue)
4. Dominant characteristic of online education is consolidation
13% of students are online only
9% are in for-profit institutions
Sources: Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University
Ambient Insight

33. • Higher education overall: about 222 schools make up one-third of enrollment.
• Top 20 largest online schools account for one-third of online market.
Source: Online Higher Education Market Update - Eduventures. (n.d.). Retrieved March 16, 2015, from
http://www.eduventures.com/insights/online-higher-education-market-update/
Online Education = Consolidation
Online likely to sustain 1/10 of current schools

34. Understanding the For-Profit
Education Business Model
Sources: Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and Regulation. Center for College Affordability and Productivity (NJ1). Retrieved from
http://heartland.org/sites/all/modules/custom/heartland_migration/files/pdfs/29010.pdf and http://www.help.senate.gov/imo/media/for_profit_report/PartII/GrandCanyon.pdf
Marketing
$3,389 35%
Profit $1,848
19%
Instruction
$2,177
22%
Other $2,295
24%
For-Profit Expenses (Grand Canyon)
Private Nonprofit: 32%

35. Comparing Business Models
Source: Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and Regulation. Center for
College Affordability and Productivity (NJ1). Retrieved from http://heartland.org/sites/all/modules/custom/heartland_migration/files/pdfs/29010.pdf
For-Profit Private
Nonprofit
Public
Revenue/Student $11,130 $37,869 $18,922
Instruction 26% budget 33% budget 28% budget
Research 0% budget 12.5% budget 14% budget

36. Recommendations for Online Education
1. Invest in marketing
◦ Facilities expense is replaced by marketing expense
(rent paid to tech ecosystems to be visible = 20-30% revenue)
2. Create an independent skunkworks division
◦ “New wine in new wineskins”
◦ Conduct “lean startup” experiments to determine where to focus
3. Scale to reduce costs
◦ Online marginal cost per student at scale (10,000+ online students)
is likely between $500-3,000/year

37. Disruptive Innovation in Education for
Emerging Markets and Courseware Platforms
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

38. 1: Traditional
Higher Education
2: Traditional
Online Education
3: Courseware Platforms
& Emerging Markets
Mac
iPod
iPhone
Innovation Extensions in Higher Education

39. Global Opportunity
100 Million
Students
in 2000
263 Million
Students
in 2025
(84% of growth in
the developing world)
Sources Karaim, R. (2011). Expanding higher education: should every country have a world-class university. CQ Global Researcher, 5(22), 525–572.
Lutz, W., & KC, S. K. (2013). Demography and Human Development: Education and Population Projections. UNDP-HDRO Occasional Papers,
(2013/04). Retrieved from http://hdr.undp.org/sites/default/files/hdro_1304_lutz_kc.pdf
137 Million New Students Per Year in Developing Countries by 2025

40. New Map of the World

41. Bottom of Pyramid (BoP) Innovation Principles
 Price Performance
 Innovation: Hybrids
 Scale of Operations
 Sustainable Development: Eco-Friendly
 Identifying Functionality
 Process Innovation
 Deskilling Of Work
 Education Of Customers
 Designing for Hostile Infrastructure
 Interfaces
 Distribution: Accessing the Customer
 BOP markets essentially allow us to challenge the conventional wisdom in delivery of
products and services

42. Potential Scenario: 2035-2050
 Global Scenario
◦ 10 times growth in tertiary education globally
◦ 90% of degrees are in non-western countries
◦ Majority of the world receives degrees/credentials that are nearly free
 US Scenario
◦ Loss of government subsidies in public higher education means many state schools are
likely to compete in a non-subsidized competitive market
◦ Private schools experience dramatic increase in market share relative to public higher
education
◦ Private higher education experiences major consolidation
◦ Private schools lose some market share to free services provided on tech platforms (like
LinkedIn, Google, Apple, Amazon & Microsoft)
◦ 70% of Americans receive a degree with growth primarily coming from low-cost providers
Sources: Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University
Ambient Insight

43. Future of Higher Education 2035
 Tier 1: The Elite
◦ Serve top 5-10% students, tuition >$100k/year (in 2015 dollars)
◦ Analogy: New York Times, Economist, Organic Farming, Luxury Watches
 Tier 2: High Quality, Moderate Cost
◦ 50% in bankruptcy or merged, tuition $50-100k/year, high touch
◦ Analogy: Physical Retail, Cable TV, Phone Companies
 Tier 3: Good Enough Quality, Low Cost
◦ 100k+ students or niche, tuition $100-$5,000/year
◦ Analogy: Huffington Post, Netflix, Skype, niche ecommerce
 Tier 4: Courseware Ecosystem Small Businesses
◦ Sell apps, courses, educational content, books, certificates, student services, videos, etc.
◦ Analogy: eBay/Amazon merchants, bloggers, self-publishers, app developers
 Tier 5: Courseware platforms
◦ 100’s of millions or billions of students, LinkedIn/Lynda.com
Source: Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University

44. How to Survive the Coming Storm:
Lessons from Industry Case Studies
1. Innovate, increase operational effectiveness and scale.
◦ Retail & ecommerce, Farming
2. Offer both/and products to compete.
◦ Cable TV’s Video on Demand vs. Netflix
3. Be more like innovators while retaining your strengths.
◦ Journalism & News: New York Times
4. Invest in digital growth not physical growth.
◦ Blockbuster vs. Netflix
Source: Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University

45. Recommendations for Emerging Markets
1. Create an emerging markets skunkworks division within your
online skunkworks division
◦ i.e. College for America, City Vision University, Low-Cost Vocational Qualification
Providers
2. Start with a price that emerging market customers can afford,
then design around that. Price near marginal cost.
3. Use automation, unbundling and scale from emerging markets to
reduce cost in traditional online education.
4. Design for mobile first for content delivery.
5. Disrupt yourself, at lowest levels, but use marketing and pricing
mechanisms to limit cannibalization of your higher priced
products.
6. Use lean startup methods with technology as core competency.

47. City Vision Growth Vision & Decreasing Costs
250 750
2,000
4,000
8,000
16,000
32,000
$3,000
$2,000
$1,750
$1,500
$1,000
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2016 2017 2018 2019 2020 2021 2022
Students
MarginalCostPerStudent
Students
Marginal Cost Per Student
Pricing would be above marginal cost.

48. Unbundling and Rebundling
Strategies in Higher Education
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

49. Modular vs. Interdependent Architectures Over Time
Image Source: Wikimedia

50. Unbundling in the Computer Industry
Source: Only the Paranoid Survive, Andy Grove
Other Examples
• Netflix vs. Cable TV
• iTunes vs. Albums
• Online news vs. Newspapers

51. Components
Packaged
in a Traditional
Degree
Items in italics are added by Andrew Sears. Source: Michael Staton, “Disaggregating the Components of a College Degree,” American Enterprise Institute,
August 2, 2012, http://www.aei.org/files/2012/08/01/-disaggregating-the-components-of-a-college-degree_184521175818.pdf
and http://edumorphology.com/2013/12/unbundling-higher-education-a-doubly-updated-framework/
(Affective)
(Cognitive)
(Psychomotor)
(Metacognition)
Darker blue represents components
that are the easiest to automate/disrupt.

52. University
Virtually Integrated University
Knowledge
Acquisition
Access to
Opportunity
Metacognition
& Skills
Transformative
Experience
Paradigm 2. The Unbundled University
University
Unbundled University
Knowledge
Acquisition
Access to
Opportunity
Metacognition
& Skills
Transformative
Experience Univ.
Boot Camps
& Accelerators
Open
Education
Vocational &
Trade Schools
Industry
Certifications
Boot Camps &
Accelerators
Staffing
Agencies
MOOCs
& Apps
Univ.
Univ.
Gap Year Service Learning
Study
Abroad
Univ.
Paid
Courseware
CBE/Prior
Learning
Community
College
Internships
& Externships
Alternative
Credentials
Religious
Service
University
Employer
Networks
Alternative
Ed Providers
Independent
Projects
University Unbundled Competitors to Universities
Unbundling typically shifts producer surplus (university profits)
to consumer surplus (student benefits)

53. Rebundling Examples: Western Governors University
Western Governors’ Rebundled Program
Knowledge
Acquisition
Access to
Opportunity
Metacognition
& Skills
Transformative
Experience
Course Mentors
(SME)
Credit by Exam &
Prior Learning
Degree
Paid
Courseware
Credit by Exam or
Competency Evaluation
Documented
Competencies
Industry
Certifications
No Offering
Student
Mentors
Evaluators
Program
Faculty
Practicum

54. Rebundling Example: LinkedIn
LinkedIn Rebundled Program
Knowledge
Acquisition
Access to
Opportunity
Metacognition
& Skills
Transformative
Experience
Job Placement Service & Coaching
Lynda.com
Competenc
y
Profile
Employer
Analytics
Third Party
Badging
Industry
Certifications
Employment
Social Network
Testing
Services
Universities
No Offering

55. Rebundling Example: Code Academies
Code Academies’ Rebundled Program
Knowledge
Acquisition
Access to
Opportunity
Metacognition
& Skills
Transformative
Experience
Mentored Project-Based Learning
Most Current, Highest Demand Content
from Top Practitioners
Relationships
to Employer
Employment
Guarantees
Brand for Recruiting
Raw Brainpower
No Offering

56. Rebundling Examples: Vocational Qualifications
Vocational Qualifications
Rebundled Program (EQF, RQF, etc.)
Knowledge
Acquisition
Access to
Opportunity
Metacognition
& Skills
Transformative
Experience No Offering
Level
3
Level
4
Top-up Bachelor’s
Degree
Level
8
Level
5
Level
7
Master’s
Prior Learning
Assessment
Doctorate
Vocational
Learning Centers
Internships
& Externships
Employer
Networks
Industry
Certifications
On-the-job
Training

57. Becoming
Commoditized
• Freshman
• Sophomore
• High School
Core Competency
• Grad School
• Senior
• Junior
Strategy:MigrateUp
Race with the machine not against the machine
Strategy
Accelerated education
with automation
Strategy
Double Down
Unbundle/Outsource Lower Tiers of Bloom’s Taxonomy

58. Bloom’sTaxonomyLevel
Low
Level
Bloom’s
High
Level
Bloom’s
Subjectivity of Assessment
Objective
Assessments
Subjective
Assessments
Most Subject to
Commoditization
& Automation
Most Dependent
on People

59. Unbundling and the
Changing Role of Faculty
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

60. Market and Technology Drivers for
Porter’s Five Forces Model for Universities
Competitiv
e Rivalry
Threat of
New
Entry
Buyer
Power
Threat of
Substitut
es
Supplier
Power
Decreased by:
• Faculty overcapacity
• “Uberization” of Adjuncts
• Unbundling components
• Commoditized content & OER
Increased for:
• Faculty superstars
Increased Alternatives to Campus Education:
• Online, blended & CBE degrees
• Non-degree programs
• Employer analytics
• Overcapacity
• Consolidation
Dramatically Increased by:
• National competition online
• Global competition
• For profit & mega-universities
Increased by:
• Standardization
• Unbundling degrees

61. Market and Technology Drivers for
Porter’s Five Forces Model for Universities
Competitiv
e Rivalry
Threat of
New
Entry
Students
Threat of
Substitut
es
Faculty
Technology
Technology
OuchOuch

62. Unbundling and Deskilling Faculty:
Western Governors’ Model
Knowledge
Acquisition
Access to
Opportunity
Metacognition
& Skills
Transformative
Experience
Credit by Exam &
Prior Learning
Degree
Paid
Courseware
Credit by Exam or
Competency Evaluation
CBE
Industry
Certifications
Student
Mentors
Evaluators
Program
Faculty (ID)
Requires critical new skills in tech
& instructional design.
More scalable than department
chair structure.
Deskilled position
with relational
core competency
Core competency
of faculty becomes
standardized,
commoditized &
requires new skills
in online teaching
Lecture & much of content development is outsourced
as course content market becomes like book market
University of Phoenix Employs 29 Instructors to
1 Course Designer(1)
Sources: About Western Governors University | WGU Faculty. (n.d.). Retrieved January 21, 2016, from http://www.wgu.edu/about_WGU/wgu_faculty
(1) American Higher Education in Crisis?: What Everyone Needs to Know®. (2014) (1 edition). Oxford ; New York: Oxford University Press.
Course Mentors
(SME)

63. Porter’s Five Forces Model for Faculty
Competitiv
e Rivalry
Threat of
New
Entry
Buyer
Power
Threat of
Substitut
es
Supplier
Power
• Commoditized Content
• OER & MOOCs
• Paid Courseware
• Student Mentors
• Instructional Designers
• Overcapacity
• Decreasing Wages
Increasing Unemployment
Dramatically Increased by:
• Distance independence of online faculty
• Global market for faculty
• Pre-packaged course publishers
• Glut of graduate education in some fields
Dramatically
Increased by:
• Standardization
• Unbundling faculty
• Online content
Decreased by:
• Open content
• Better research tools
• Increased access to published research

64. Improving Faculty Productivity through Automation

65. Automation and Hollowing Out of the Middle:
In the Future Faculty Will Either be a Superstar or a Factory Worker
Source: Financial Times Graphic. Smith, Y. (2015, December 10). Demise of the US Middle Class Now Official.
Retrieved from http://www.nakedcapitalism.com/2015/12/demise-of-the-us-middle-class-now-official.html

66. Case Study Examples
Journalism
jobs are down 42% from their peak
Sources (listed above or Newsonomics: The halving of America’s daily newsrooms. (n.d.). Retrieved from
http://www.niemanlab.org/2015/07/newsonomics-the-halving-of-americas-daily-newsrooms/
1. How to justly serve faculty facing declining economic prospects?
2. Will much of faculty research go the way of investigative journalism?

67. Equipping Faculty Entrepreneurs

68. Retraining for a Reimagined Role of Faculty
 Case Studies:
◦ Farming, manufacturing, music industry, journalism, TED
 Find Research Funding or Find your “TED Talk”
◦ Start with your “Idea Worth Spreading”
 Growth of Faculty Entrepreneurs will follow growth of entrepreneurship in
other sectors
 Faculty need to establish a platform across multi-format and multi-channel
revenue sources
◦ Spread ideas horizontally across different media and markets
◦ Teaching, consulting, writing, blogging, podcasts, YouTube, etc.
◦ University is one of many channels

69. Information-Based Business Models
Cost Minimization/
Benefit Acquisition
Public Domain Intrafirm Barter/Sharing
Rights-based
exclusion
(make money by exercising
exclusive rights—licensing or
blocking competition)
Romantic Maximizers
(authors, composers; sell to publishers; sometimes sell
to Mickeys).
Faculty: Commercial
Publishing. Self-publishing.
Mickey
(Disney reuses inventory for derivative works; buy
outputs of Romantic Maximizers).
Faculty course
development. Paid
MOOCs.
RCA
(small number of companies hold blocking
patents; they create patent pools to build
valuable goods).
Faculty: Patents.
Nonexclusion
Market
(make money from information
production but not by exercising
the exclusive rights)
Scholarly Lawyers
(write articles to get clients; other examples include
bands that give music out for free as advertisements for
touring and charge money for performance; software
developers who develop software and make money
from customizing it to a particular client, on-site
management, advice and training, not from licensing).
Faculty Self-Publishing for
their Personal Consulting
Business
Know-How
(firms that have cheaper or better production
processes because of their research, lower their
costs or improve the quality of other goods or
services; lawyer offices that build on existing
forms).
Faculty University
Community; Contracting
for Consulting Firms
Learning Networks
(share information with similar organizations—
make money from early access to information.
For example, newspapers join together to
create a wire service; firms where engineers
and scientists from different firms attend
professional societies to diffuse knowledge).
Research Consortiums.
Academic Societies.
Nonexclusion-
Nonmarket
Joe Einstein
(give away information for free in return for status,
benefits to reputation, value of the innovation to
themselves; wide range of motivations. Includes
members of amateur choirs who perform for free,
academics who write articles for fame, people who write
opeds, contribute to mailing lists; many free software
developers and free software generally for most uses)
Faculty Academic Publishing.
Blogging. Free self-publishing.
Podcasts. Open Education &
Content. YouTube. Free MOOCs.
Los Alamos
(share in-house information, rely on in-house
inputs to produce valuable public goods used to
secure additional government funding and status).
University Research Labs.
Nonprofit or Corporate
Research Labs.
Limited sharing
networks
(release paper to small number of colleagues
to get comments so you can improve it before
publication. Make use of time delay to gain
relative advantage later on using Joe Einstein
strategy. Share one’s information on formal
condition of reciprocity: like “copyleft”
conditions on derivative works for distribution)
Informal Peer Review
Networks
Benkler, Y. (2007). The Wealth of Networks: How Social Production Transforms Markets and Freedom. Yale University Press. pp 43

70. Tech as a Core Competency of Faculty
 Just as in other professions in the future, faculty without tech as a
core competency will not be competitive
◦ Instructional design
◦ Online research and content curation
◦ Online publishing: Blogging, podcasting, YouTube, social media, etc.
◦ If you are faculty under age of 55, this will be essential
 Strongest demand will be for faculty that cross extreme
technology fluency with their field
◦ i.e. Bioinformatics, Big Data/Analytics + Your Field

71. Conclusion
 Role of the university is to enable the faculty’s success in a market
where the university will only be one revenue channel for most
faculty
 Labor laws will need to adjust for blurring line between contractor
and full-time employee
 Some faculty will need to be retrained for other employment
 Millennials are more likely to adjust to a faculty/entrepreneur
market as 60% of millennials consider themselves entrepreneurs
The Power of Millennial Entrepreneurship. (n.d.). Retrieved January 12, 2016, from
http://www.huffingtonpost.com/britt-hysen/the-power-of-millennial-e_b_5801322.html

72. Lean Startup
for Education
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

73. Backwards (Waterfall) Program Design
Audience is Traditional Students
Outcomes for Well-Defined Fields
Assessments Based on Known Outcomes
Instruction with Known Content Available
Feedback
Iteration
Is Years

74. Best Development Methodology
Changes Based on Environment
Development Methodology We know what customers
want
We know how to deliver it
Waterfall √ √
Agile √ ?
Lean Startup ? ?
Problem Solution
Source: http://www.slideshare.net/NatalieHollier/lean-strategymeetup-small/

75. Waterfall vs. Agile vs. Lean Design
Source: http://www.slideshare.net/NatalieHollier/lean-strategymeetup-small/
(Backwards Design/Traditional Assessment Plans)

76. Lean Startup Process
Build
MeasureLearn
Product
(start with minimum viable product)
Data
Pivot
Maximize
Loop
Iteration
Speed
Ries, E. (2011). The Lean Startup: How Today’s Entrepreneurs Use Continuous
Innovation to Create Radically Successful Businesses (First Edition). Crown Business.

77. How Do You Reach 6 Billion People without Access to Higher Education?
Design for 4 Interrelated Uncertainties
Changing
Students
Changing
Goals
Affordable
Content
Availability
Costs
Different students based on different
goals, content and costs.
$1,000 degree vs. $10k degree
What goals are realistic
given the students,
costs and content?
Different costs, goals and students
will present different content options +
content & platforms are rapidly changing.
Different content availability,
goals and students will allow
radically different costs.

78. Demographic and Economic
Trend Analysis for Higher Education
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

79. Demographic Shifts in the US:
The End of the Good Times
Source: Hussar, W. J., & Bailey, T. M. (2014). Projections of Education Statistics to 2022. NCES
2014-051. National Center for Education Statistics.

80. Change High School Graduate by State
Source: Hussar, W. J., & Bailey, T. M. (2014). Projections of Education Statistics to 2022. NCES
2014-051. National Center for Education Statistics.

81. Demographic Shifts: Race/Ethnicity
Source: Hussar, W. J., & Bailey, T. M. (2014). Projections of Education Statistics to 2022. NCES
2014-051. National Center for Education Statistics.

82. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg
Global Education Statistics

83. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg

84. Changing global postsecondary/
tertiary student demographics
>75%
from low or
mid-income
countries
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
28M
177M
>250M
Enrolled tertiary students
Increasing
ratio of woman to men
in higher education
Source: UNESCO via http://www.slideshare.net/BlackboardInc/todays-students-need-more-than-an-lms

85. Source: Malik, K. (2013). Human development report 2013. The rise of the South: Human progress in a diverse world. The Rise of the
South: Human Progress in a Diverse World (March 15, 2013). UNDP-HDRO Human Development Reports. Retrieved from
http://hdr.undp.org/sites/default/files/reports/14/hdr2013_en_complete.pdf
Global Projection on Tertiary Education
(baseline and optimistic)

86. Global Projection on Tertiary Education
(four scenerios)
Lutz, W., & KC, S. K. (2013). Demography and Human Development: Education and Population Projections. UNDP-HDRO Occasional Papers, (2013/04).
Retrieved from http://hdr.undp.org/sites/default/files/hdro_1304_lutz_kc.pdf

87. Growth of Private Education Globally
 Private education globally has a growing market share for
decades: now at 30% of global market
 Regions with highest private education
◦ >70% private: Indonesia, Japan, Philippines, Korea
◦ About 20-30%: South Asia, Latin America, Africa
◦ <15% private: China, Southeast Asia, New Zealand
Source: Private Higher Education: A Global Revolution. (2005). Rotterdam: Sense Publishers.

88. Source: "U.S. Federal Spending-Share of Mandatory vs. Discretionary Spending" by Farcaster - Time series chart created from CBO data plus author computations. Licensed under CC BY-SA 3.0 via Commons -
https://commons.wikimedia.org/wiki/File:U.S._Federal_Spending-Share_of_Mandatory_vs._Discretionary_Spending.png#/media/File:U.S._Federal_Spending-Share_of_Mandatory_vs._Discretionary_Spending.png

89. Expenditures in the United States federal budget. (2016, January 25). In Wikipedia, the free encyclopedia. Retrieved from
https://en.wikipedia.org/w/index.php?title=Expenditures_in_the_United_States_federal_budget&oldid=701618119

90. Summary of Key Trends
Traditional
Higher
Education
Nontraditional
Students
Emerging
Markets
Private
Education
Technology

91. College Access, the Opportunity Divide & the
Race between Technology and Education
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

92. Three Waves of History
Agricultural Industrial
Informatio
n
Primary/Secondary School Higher Education

95. Decline of Farm Jobs
Source: ong depression – azizonomics. (n.d.). Retrieved from http://azizonomics.com/tag/long-depression/

96. 20th Century Challenge: High School Graduation
Goldin, C., & Katz, L. F. (2010). The Race between Education and Technology. Cambridge, Mass.: Belknap Press.

97. Source: (US. Bureau of Labor Statistics, 2014)
47% of employment in America is at high risk of being automated
away over the next decade or two (Frey & Osborne, 2013)
Source: US. Bureau of Labor Statistics. (2014). Percent of Employment in Manufacturing in the United States (DISCONTINUED). Retrieved November 21,
2014, from https://research.stlouisfed.org/fred2/series/USAPEFANA/

98. 21st Century Challenge: College Graduation

99. Figure 10. Educational Attainment by Birth Cohort
Source: Goldin, C., & Katz, L. F. (2010). The Race between Education and Technology. Cambridge, Mass.: Belknap Press.

100. “Human history becomes more
and more a race between
education and catastrophe.”
- H.G. Wells
Image from Wikipedia

101. Who is Winning the Race Between Education & Technology?
-4.00%
-3.00%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
1915-1980 1980-2005
AnnualGrowth
Growth Supply of Degrees Jobs Lost Now Requiring Degrees
Education > Tech Job Loss
Education
Winning
Technology
Winning
Source: Goldin, C., & Katz, L. F. (2010). The Race between Education and Technology. Cambridge, Mass.: Belknap Press.

102. Brynjolfsson, E., & McAfee, A. (2011). Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity,
and Irreversibly Transforming Employment and the Economy. Digital Frontier Press.

103. Changing our Educational Trajectory
Source: Lumina Foundation Vision

104. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2025 2050 2075 2093
Straight Line Projection Growth Degree Attainment (USA)
Access is Dominant Narrative for 21st Century
Author’s Projection Based on Current Growth in College Degree Attainment

105. The Pell Institute for the Study of Opportunity in Higher Education. (2015, January). Indicators of Higher Education
Equity in the United States 45 Year Trend Report. http://www.pellinstitute.org/
College Access Focus: the Bottom Half
37 pt. growth
3 pt. growth
6 pt. growth
19 pt. growth
Traditional
College
Focus
Disruptive
Innovation
Opportunity

106. 0%
20%
40%
60%
80%
100%
120%
2025 2050 2075 2100
Straight Line Projection By Income Quartile
Top Quartile 3nd Quartile 2nd Quartile Bottom Quartile
(Disruptive
Innovation
Opportunity)
Author’s Projection Based on Current Growth in College Degree Attainment

107. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2025 2050 2075 2100
Difference in Projected Educational Attainment
Straight Line Projection
No Change in Growth Rate of Bottom 3 Quartiles
Author’s Projection Based on Current Growth in College Degree Attainment

108. College Entrance, Completion & Persistence by Income Quartile
Source: Percentage of Students Entering and Completing College, and College Persistence, by Income Quartile | Russell Sage Foundation. (n.d.).
Retrieved January 26, 2016, from http://www.russellsage.org/research/chartbook/percentage-students-entering-and-completing-college-and-college-persistence-incom

109. The Problem with Credentialism and Educational Inflation
The 25th percentile for male college graduates has been about $4,000 to $5,000 more
than the median male high school graduate in recent years, whereas among women, the
gap has recently been around $2,000.
Sources: https://en.wikipedia.org/wiki/Credentialism_and_educational_inflation and College May Not Pay Off for Everyone Liberty Street Economics. (n.d.).
Retrieved January 26, 2016, from http://libertystreeteconomics.newyorkfed.org/2014/09/college-may-not-pay-off-for-everyone.html#.VqfMe9Q4G72

110. Debt: Distribution of Total Student Debt by
Level of Household Net Worth
Source: Three Signs That Young Americans Are Getting a Raw Deal | BillMoyers.com. (n.d.).
Retrieved January 26, 2016, from http://billmoyers.com/2015/02/24/three-signs-young-americans-getting-raw-deal/

111. Growth of Jobs Requiring a Degree
Source: Carnevale, A., Smith, N., & Strohl, J. (n.d.). Help Wanted: Projections of Jobs and Education Requirements Through 2018 | Center on
Education and the Workforce. Retrieved April 21, 2014, from http://cew.georgetown.edu/jobs2018

112. The Opportunity Divide:
Mismatch of Jobs & Education
Jobs in
2018
People in
2012 Difference
Less than High
School 10% 12.42% -2.4%
High School
Degree 28% 30.72% -2.7%
Some College 12% 16.97% -5.0%
Associate’s
Degree 17% 9.45% 7.6%
Bachelor’s Degree 23% 19.49% 3.5%
Graduate Degree 10% 10.95% -0.9%Source: Carnevale, A., Smith, N., & Strohl, J. (n.d.). Help Wanted: Projections of Jobs and Education Requirements Through 2018 | Center on
Education and the Workforce. Retrieved April 21, 2014, from http://cew.georgetown.edu/jobs2018

113. Image Source: Wikimedia
Adoption Cycle for Post-Secondary Degrees
US
Average
Global
Average
Top
Income
Quartile
3rd
Income
Quartile
1st & 2nd
Income
Quartile

114. Change Agents & Diffusion of Innovation
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

115. 3 Quotes on Disruptive Innovation in Higher Education
“Thirty years from now the big university
campuses will be relics.”
- Peter Drucker, 1997
“We tend to overestimate the effect of a
technology in the short run and
underestimate the effect in the long run.”
- Amara’s Law (Roy Amara)
“In 15 years from now half of US
universities may be in bankruptcy.”
- Clayton Christensen, 2013
Image Source: Wikimedia

116. What Change Agents & Innovators Should Avoid

117. Disruptive Innovation Theory
Image Source: Wikimedia
We are here
Proven Data Theoretical Projection

118. What Skeptics of Disruptive Innovation Should Avoid

119. Change Agents & Diffusion of Innovation
Change
Agent
Change
Agency
Your
Institution
Source: Rogers, E. M. (2003). Diffusion of Innovations, 5th Edition (5 edition). Free Press.

120. Sequence of Change Agent Roles
1. To help clients see a need for change
2. To establish an information exchange relationship
3. To diagnose problems
4. To create an intent to change in the client
5. To translate intentions into action
6. To stabilize adoption and prevent discontinuance
7. To achieve a terminal relationship with clients
Source: Rogers, E. M. (2003). Diffusion of Innovations, 5th Edition (5 edition). Free Press.

121. Determinants of Success of Change Agents
1. The extent of the change agent’s effort in contacting clients
2. A client orientation rather than a change agency orientation
3. The degree to which the diffusion program is compatible with
clients’ needs
4. The change agent’s empathy with clients
5. His or her homophily with clients
6. Credibility in the clients’ eyes
7. The extent to which he or she works through opinion leaders
8. Increasing clients’ ability to evaluate innovations
Source: Rogers, E. M. (2003). Diffusion of Innovations, 5th Edition (5 edition). Free Press.

122. Environmentally Adaptive
“The Is” or Likely Future
Internally Driven
“The Ought” or Preferred Future
Past Future
Source. Erickson, T. (2004). Do adaptive initiatives erode Christian colleges’ strong mission
orientation. Unpublished Manuscript, Anderson University, Anderson, IN.
http://www.cbfa.org/Erickson.pdf
My Primary Expertise
(change agency)
Your Understanding
(change agent)
Dialogue
A Framework for Discussion
“The Is vs. The Ought”

123. Constraints on Innovation
 Debt/Lack of capital
 Current cost structure
 Commitment to faculty
 Physical plant/sunk cost
 Political realities
 Lack of core competency in innovation
 Missional constraints
 Outdated underlying worldview/myths

124. Mechanisms of Diffusion of Innovation
 Online Courses (this course)
 Conferences, workshops, webinars
 Formal education: degrees, courses, lectures
 Media: books, videos, websites, magazines, software, open
resources
 Employment: Staff training
 Networks: Professional networks & associations, networks of
peers
 Programs, products and their replication
 Personal: Consulting, word of mouth
 Publications: Open source software/open contentWho are the leaders in innovation?

125. Methods
Market
Disruptive Innovation will Change Methods & Market
Mission
Mission Does Not Change!
(unless your mission is
defined by methods & and market)

126. How do you define your mission?
“We are the best plowmen in farming”
Source: File:Winslow Homer - The Plowman (1878).jpg - Wikimedia Commons. (n.d.). Retrieved January 26, 2016, from
https://commons.wikimedia.org/wiki/File:Winslow_Homer_-_The_Plowman_(1878).jpg

127. 1. BOP Strategies
2. Unbundling
3. Cradle to grave education ecosystem
4. Education on demand (Race with the machine)
1. Economics of Online Education
2. Mega-Universities
3. Cultural & Demographic Shifts
4. Increasing Costs
Sustainability Challenges to
Higher Education in the USA
(paradigms)

128. Source. Erickson, T. (2004). Do
adaptive initiatives erode Christian
colleges’ strong mission orientation.
Unpublished Manuscript, Anderson
University, Anderson, IN.
http://www.cbfa.org/Erickson.pdf
Environmental
(adaptive)
vs.
Internally-Driven
(interpretive)
Strategy

129. Using this Course for Discussion Groups
1. Identify those with the power to bring change
2. Have them review this course and other helpful material
3. Organize a discussion group on implications for your institution
4. Develop a strategy to move toward change
5. Develop experiments to move toward change
As educators the primary thing we can do is to
educate those who have the power to bring change.

130. Case Study Lessons for Faculty and
Higher Education Institutions
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

131. Effect of the Long Tail: 80/20 Rule
Becomes the 60/40 Rule
80% of profit comes
from 20% of products
60% of profit comes
from 40% of products

132. Effects of the Long Tail & Higher Education
 Long Tail Increases Diversity of Content
◦ Blockbuster Video: 80% of rentals are recent “blockbusters,” only carries 75
documentaries
◦ Netflix: 30% of rentals are “blockbusters” and carries 1,180 documentaries
◦ Amazon: carries 17,061 documentaries (of a possible 40,000)
 Long Tail of Search Terms (TechMission Websites)
◦ Top 500 search terms provide 19.5% of visitors
◦ 604,916 search terms provide 80.5% of visitors
 Long Tail’s Implications for Diversity and College Access
◦ Non-Western culture voices are almost entirely on the long tail.
◦ The Internet extends the long tail. It decreases the proportion controlled by big media and
traditional universities from 80% to around 60% which gives more room for non-Western
voices.
◦ Open strategy maximizes visibility of non-Western voices.

133. The Chris Anderson Paradox
Content Is King Content Is Commoditized
Best in the World Original
Content Is King
Second Best
Content Is Commoditized

134. Tech Creates Two Tiered Markets with No MiddleWorld’sBestLongTail
Journalism Video Publishing Ideas Courses Credentialing
Disruptive
Competency
Based Education
Traditional
Degree

135. Publishing as a Case Study
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Modeling the Rise of Indie Authorship
1. Trade Books in Print
2. Trade eBooks
3. Indie eBooks
MarketShare
Mark Coker. (2014, March 5). Smashwords: 10 Reasons Indie Authors Will Capture 50% of the Ebook Market by 2020. Retrieved January 27, 2016, from
http://blog.smashwords.com/2014/03/sizing-self-publishing-market-10.html
Trade is
World’s Best
Indie is
Long Tail

136. Publishing as a Case Study: Best vs. Long Tail
0.003% 0.08% 0.40%
2.00% 3.00%
4.50%
8.00%
11.25%
15.00%
19.25%
24.00%
29.25%
35.00%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Modeling the Rise of Indie Authorship
1. Trade Books in Print
2. Trade eBooks
3. Indie eBooks
4. Total Indie Market Share
5. Total Trade Market Share
MarketShare
Mark Coker. (2014, March 5). Smashwords: 10 Reasons Indie Authors Will Capture 50% of the Ebook Market by 2020. Retrieved January 27, 2016, from
http://blog.smashwords.com/2014/03/sizing-self-publishing-market-10.html
Trade is
World’s Best
Indie is
Long Tail

137. As More Students Go Online Will Traditional Higher Education
Follow Market Share Trajectory of Publishing?
Chart from: Allen, I. E., & Seaman, J. (2014). Grade change: Tracking online education in the United States. Babson Survey Research Group and Ouahog Research Group.
Retrieved from www.onlinelearningsurvey.com/reports/gradechange.pdf

138. Journalism & Newspapers as a Case Study
Sources: Mark Perry. (2012, September 6). CARPE DIEM: Free-fall: Adjusted for Inflation, Print Newspaper Advertising Will be Lower This Year Than in 1950. Retrieved from
http://mjperry.blogspot.com/2012/09/freefall-adjusted-for-inflation-print.html
Newsonomics: The halving of America’s daily newsrooms. (n.d.). Retrieved from http://www.niemanlab.org/2015/07/newsonomics-the-halving-of-americas-daily-newsrooms/
Journalism Jobs
down 42%
from their peak
Sources (listed above or

139. Factors that Affect Susceptibility to Disruption
 Is there a technology core that could rapidly innovate?
◦ Yes. Online/digital education
 How much is the industry regulated?
◦ Moderately: Higher education vs. energy or pharmaceuticals (most
regulated)
 Are there new industries requiring incumbent’s core
competencies?
◦ i.e. Landline phone companies becoming mobile operators
◦ i.e. Cable television becoming broadband Internet providers
 Is there very high investment cost to enter market?
◦ i.e. Energy and pharmaceuticals
 Are there only a few competitors?
◦ i.e. Television Networks
Sources:
Rob Perrons. (2013, September). Why the energy technology revolution hasn’t happened: Robert Perrons at TEDxQUT. Presented at the
TEDx Talks, Queensland University of Technology. Retrieved from https://www.youtube.com/watch?time_continue=1&v=FeG0-goXmjA

140. Corporate Strategy Principles from Case Studies
 Best in the world content corporate strategy
◦ Increase scale and market power through consolidation
◦ Develop tech capacity, hybrid solutions and value innovation strategies
◦ Cut costs to prepare for declining market share
◦ Invest in digital growth and diversify into other growth markets
◦ Use regulation to limit competition or to provide increased subsidy
 Long tail corporate strategy
◦ Core competency is technology
◦ Dramatically reduce per-unit cost through crowdsourcing
◦ Work to commoditize long tail content so you capture value as aggregator
◦ Self-regulate to avoid regulation
◦ Leverage strength of long tail in cost, diversity and globalization

141. Personal Strategy Principles from Case Studies
 Best in the world content personal strategy
◦ Find your “idea worth sharing” niche where you can be best in the world
◦ Use multi-channel marketing to develop your brand: books, online, articles,
speaking, presentations, blog, podcasts, videos, university affiliation, etc.
 Long tail personal strategy
◦ Develop efficiency for volume production to make a living in a low per-unit
cost market
◦ Increase revenue by moving upscale by increasing quality
◦ Increase revenue by using multi-channel marketing
◦ Recognize that employers receive 100 times as many resumes, so get your
name out there 100 times a much

142. Unbundling, Innovation and the Changing
Landscape of Accreditation and Regulation
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

143. Regulation & the Changing Role of Workers & Consumers
Source: KPCB Internet Trends 2015, Mary Meeker

144. Regulation & the Changing Role of Workers & Consumers
KPCB Internet Trends 2015, Mary Meeker

145. From Faculty Centric to Student Centric
Unbundling and Sharing Economy (Uber) Helps Students but Hurts Faculty
Regulators
InnovatorsIncumbents
Students
Faculty
Unbundling typically shifts producer surplus (university profits & faculty salaries)
to consumer surplus (lower tuition and increased student benefits)

146. Porter’s Five Forces Model, Accreditation & Regulation
Competitiv
e Rivalry
Threat of
New
Entry
Buyer
Power
Threat of
Substitut
es
Supplier
Power
(faculty)
Faculty Power Increased by
• Faculty-driven accreditation
requirements (ratios, PhDs)
Faculty Power Decreased by:
• Lax laws for contractors
• Requirements for financial solvency
Regulation for Efficient Market:
• Credit portability
• Course-based accreditation (ACE)
Protective Strategy:
• Exclusivity of regional accreditation
Protective Strategy:
• Increased regulation (of for profit schools)
• Increased accreditation requirements
• State authorization requirements
Regulation for Efficient Market:
• College Scorecard
• RoI/Cost/Performance Pressures
Protective Strategy:
• Information Asymmetry
• Differentiation & Increased Tuition
Protective Strategy:
• Government bailout

147. Lean Startup, Innovation & the Problem with the Current
Assessment Model for Accreditation
Source: http://www.slideshare.net/NatalieHollier/lean-strategymeetup-small/
(Backwards Design/Traditional Assessment Plans)

148. Blue Ocean Strategy, Value Innovation and the Problem with
Current Accreditation Metrics

149. Modular vs. Interdependent Architectures Over Time
Image Source: Wikimedia

150.  Output vs. input

151. Recommendations
 Support more modular accreditation (course level and unit level)
◦ ACE Credit Recommendation

152. For Profit Higher Education

153. Current Stage
of Online Education
1st Wave For Profit 2nd Wave (Courseware Tech Ecosystems)
Image Source: Wikimedia
Adoption Lifecycle of Online Education

154. 3. Growth of For-Profits
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

155. Growth of For-Profit Education
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

156. For-Profits Dominate Age 22 and above
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

157. For-Profits Dominate Black & Latino Students
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

158. For-Profits Serve Disproportionately Female Students
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

159. Average Revenue per Student
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

160. Average Spending Per Student
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

161. For-Profits Get Disproportionally High Federal Aid
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

162. For-Profits Have Highest Load Debt Per Student
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

163. Instructional Spending by Type
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

164. University of Phoenix (2010)
Enrollment = 600,000

165. University of Phoenix (2015)
Enrollment = 215,000

166. Disruptive Innovation in Christian Higher
Education

167. Source. Erickson, T. (2004). Do
adaptive initiatives erode Christian
colleges’ strong mission orientation.
Unpublished Manuscript, Anderson
University, Anderson, IN.
http://www.cbfa.org/Erickson.pdf
Environmental
(adaptive)
vs.
Internally-Driven
(interpretive)
Strategy

168. Disruptive Innovation & the Is-Ought Distinction
God, grant me the serenity to
accept the things I cannot change,
The courage to change the things I can,
And the wisdom to know the difference.
Just because something is happening
does not mean it should happen.

169. A Best Guess on Wisdom
Things I cannot change
 Massive consolidation in higher education
 Western education eclipsed by “the rest”
 Future dominance of technology in education
 Baumol’s cost disease
 Changing roles of faculty
 Future growth of traditional Western Christian
higher education
Thing I can change
 Pursue strategies to achieve scale
 Develop business models for BoP
 Embrace tech as core competency
 Cut cost, automate and unbundle for
efficiency
 Retrain faculty for economic future
 Invest in new growth markets

170. Three Visions for Future Growth of HE
1. Government
◦ Universal Community College, Nationalized Higher Education:
Obamacare for Higher Education
◦ Government mega-universities: 1 million+ students
◦ Challenge: increases secularizing influence of government education
2. Global Educational Conglomerate
◦ 50% of “degrees” globally by 2050 may come from 3-4 tech
companies offering free education with a small payment for the
credential
◦ Challenge: Likely to follow same secularizing tendency as media
conglomerates
3. Disruptive Innovation in Christian Higher Education
◦ Innovators learn to build modularly on 1 & 2 to expand Christian
market share in post-secondary education
Source: Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University

171. -
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
2,000,000,000
1800 1900 1970 2000 2007 2025
Christian Membership by Region
West South
Status of Global Mission 2014, Todd Johnson
http://www.gordonconwell.edu/resources/documents/statusofglobalmission.pdf

172. 1900 1970 2000 2007 2025
South 21% 59% 86% 91% 99%
West 79% 41% 14% 9% 1%
21%
59%
86%
91%
99%
79%
41%
14%
9%
1%
0%
20%
40%
60%
80%
100%
120%
Growth of Christianity by Region
Status of Global Mission 2014, Todd Johnson
http://www.gordonconwell.edu/resources/documents/statusofglobalmission.pdf

173. Christian Mega-universities & Growth
Liberty U
43%
Grand Canyon U
39%
All of CCCU
18%
Estimated Growth Since 2005
Total Growth:
175,808 students
Sources: Grand Canyon & Liberty U self-reporting, CCCU Enrollment Report.

174. Methods
Market
Disruptive Innovation will Change Methods & Market
Mission
Mission Does Not Change!
(unless your includes
methods and market)

175. Essential Elements of Christian Education
1. Christian worldview
2. Christian community
3. Christian content
4. Christian care for stakeholders

176. Process for Modular Christian Education
Theology &
Christian Worldview
Audience, Pedagogy
& Goals
Christian Community, Transformative
Experience & Metacognitive Education
Christian
Courses
Theology
Courses
Secular
Courseware
Secular MOOCs
& Open
Education
ResourcesSubjects

177. Components
Packaged
in a Traditional
Degree
Items in italics are added by Andrew Sears. Source: Michael Staton, “Disaggregating the Components of a College Degree,” American Enterprise Institute,
August 2, 2012, http://www.aei.org/files/2012/08/01/-disaggregating-the-components-of-a-college-degree_184521175818.pdf
and http://edumorphology.com/2013/12/unbundling-higher-education-a-doubly-updated-framework/
The Core Competencies
of Christian Education
are the Hardest to Replace
(Life Transformation &
Metacognition)
(Affective)
(Cognitive)
(Psychomotor)
(Metacognition)

178. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg

179. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg

180. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg

181. Rebundling Example:
Online Christian Education
Knowledge
Acquisition
Access to
Opportunity
Metacognition
& Skills
Transformative
Experience
Workplace
Mentoring
Online Education
Degree
Internship/
Practicum
Pastoral
Mentoring
Service
Learning
Discipleship
Program
International
or Urban
Immersion

182. View Christian education as a cradle to grave
ecosystem.
Nearly Free
Content
& Innovation
Christian College
(Life Transformation)
+
Better
Than
Government Subsidized
State University
In a platform world, how do we make the entire
Christian education ecosystem/platform more competitive?
Innovation + Life Transformation Has Growing
Competitive Advantage over Government Subsidy

183. Traditional Higher Education
Traditional Monastery
Higher Education Model
Local Christian
Community
Practical Work
ExperienceStudents “Close” to Instructor
Distant From
Students

184. Re-bundling Online Education with
Church Study Groups & Internships
Local Discipleship &
Study Groups
Practical Work
Experience
Distant From
Students
Instructor

185. What business has the most locations in the USA?
14,146
25,900
Sources: http://hirr.hartsem.edu/research/fastfacts/fast_facts.html
http://www.usatoday.com/story/money/business/2014/05/04/24-7-wall-st-most-popular-stores/8614949/
314,000
What institution has the most locations in the USA?

186. Strategic Implications of Prospect of Faith-Based
Institutions Losing Federal Aid
Bottom Half Strategy
 Job prep/RoI focus
 Increase automation
 Christian ecosystem
 More international focus
 Focus on scale
 Could benefit from CBE
 More focus on the poor
Lose Federal Aid Strategy
 Job prep/RoI Focus
 Increase automation
 Christian ecosystem
 More international focus
 Focus on scale
 CBE likely to allow CHE
 More focus on the rich
Developing a bottom-half strategy also
prepares for a world without federal aid.

187. Possible Christian Models of Disruptive Innovation
 Christian Mega-universities
◦ Liberty, Grand Canyon
 Competency Based Education
◦ Lipscomb University, DePaul University, Antioch School of Church Planting
 Radically New Education Models
◦ Logos Mobile Ed, Right Now Media, City Vision
 Christian Open Education (next slide)
 Investment and Outsourcing Companies
◦ Significant Systems, Capital Education Group, Bisk Education
 Global Innovators
◦ Global University
 Course Vendors & Clearinghouses
◦ Knowledge Elements, Bible Mesh, Learning House

188. Christian(Jesus) Community Colleges
MOOCs & Open Ed
Udemy, Coursera, EdX, Futurelearn
Open2study, Udemy, Khan Academy,
Alison, YouTube, iTunesU, Open Learn, OLI
Christian Mega Universities
Liberty, Grand Canyon
Affordable Tech Sector
Christian
Innovation Sector
Affordable
Christian SectorKey: Black Accredited. Orange Content Provider Green Community Partners
Competency Based
Western Governors
College for America
State Colleges
Christian Universities
in Developing Countries
daystar.ac.ke
Paid Courseware
Pearson, Mcgraw-Hill, Lynda.com,
Skillshare, Pluralsight
Affordable Bible Colleges
ABHE Schools
Online Christian Universities
ACE Credit
Straighterline, Saylor, Ed4Online
EdX, JumpCourse, Pearson, Sofia
UC Irvine Extension, Dream Degree
Christian Open Ed
ChristianCourses.com, Open Biola, Covenant Seminary,
Regent Luxvera, Christian Leaders Institute, Openseminary.com
BiblicalTraining.org, Harvestime.org, http://thirdmill.org,
Christian CEU Providers
insight.org/CEU, lifepointemedia.com, lifeway.com/ceu,
livingontheedge.org/home/acsi/, precept.org/ceu, sampsonresources.com,
www.sampson.ed.com, www.walkthru.org/ceu,
www.answersingenesis.or/cec/courses,
www.bsfinternational.org/studies, hristiancounselingceu.com
Paid Christian Wholesale Course Providers
Knowledge Elements, Logos Mobile Ed, Right Now Media, Bible Mesh,
connect.ligonier.org, onlinesbs.org/esbs/
Bible Institutes
TUMI, NYDS
Open Textbooks
saylor.org/books, openstaxcollege.org,
courses.candelalearning.com/catalog/lumen
collegeopentextbooks.org,
open.umn.edu/opentextbooks/
Missions/Ministry Training
Mission Year, YWAM U Nations, IHOP U
Developing Country Tech
Kepler.org, Avu.edu, elearningafrica.com,
Coursera Learning Hub, MIT Ulabs,
U of People, Pearson Affordable Learning
Training Centers
Qualifications Providers
Industry Map
Higher Ed in Developing Countries
Christian Employers
Employer Paid Tuition Partners
Internship Sites
70+ Ministries
Discipleship Study Centers
(in churches and ministries)

189. Source: Our Kids, Robert Putnam
5 pt. decline
10 pt. decline
Gap Doubles
to 10 points
5 point
gap
Is a shortage of pastoral leadership among
the poor affecting their church attendance?

190. Free, Low-Cost Christian Courses
 Free or Open Christian Content Providers
◦ Open Biola, Covenant Seminary, Regent Luxvera, christianuniversity.org , Christian Leaders Institute,
BiblicalTraining.org, harvestime.org
 Aggregators of Christian Course Content:
◦ iTunes, Udemy, Alison.com, YouTube, Vimeo
 Low Cost Christian CEU Providers
◦ www.insight.org/CEU, www.lifepointemedia.com, www.lifeway.com/ceu, livingontheedge.org/home/acsi/,
www.precept.org/ceu, www.sampsonresources.com, www.sampson.ed.com, www.walkthru.org/ceu,
www.answersingenesis.or/cec/courses, www.bsfinternational.org/studies , christiancounselingceu.com
 Paid Course Material Wholesale Providers
◦ Knowledge Elements, Logos Mobile Ed, Right Now Media, Bible Mesh, connect.ligonier.org, CUGN.org

192. Create Matrix Map of Divisions
Zimmerman, S., & Bell, J. (2014). The Sustainability Mindset: Using the Matrix Map to Make
Strategic Decisions (1 edition). San Francisco, CA: Jossey-Bass.

193. Example Matrix Map
Source: Zimmerman, S., & Bell, J. (2014). The Sustainability Mindset: Using the Matrix Map to Make Strategic Decisions (1 edition). San Francisco, CA: Jossey-Bass.
Matrix Map is similar to Growth Share Matrix used in Business Strategy. See: https://en.wikipedia.org/w/index.php?title=Growth%E2%80%93share_matrix&oldid=695752726

194. Who Has Jobs by Education?
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Less Than High School
Diploma
High School Graduate Some College or
Associate's
Bachelor's Degree
Source: StLouisFed FRED. May 2015

195. Expected Lifetime Earnings by Education

196. Does Technology Hurt or Help the Poor?

197. Ability of Institutional Models to Cross the Chasm and Serve
the Unreached Bottom Half
Radically
Accessib
le
Radically
Affordabl
e
Tech
Innovato
r
Cultura
l Match
Remedia
l
Educatio
n
Disruptive Christian
College
    
Community College
& Mega-universities
 Somewhat  
For-Profit College   Varies
High-Priced Online   Varies
Traditional Christian
College
State SchoolsCity Vision serves the bottom half socioeconomically
(bottom 75% in graduate programs)

198. Blue Ocean Strategy and New Value
Innovation Business Models
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

199. Blue Ocean Strategy Canvas for Southwest Airlines

200. Overview of Blue Ocean Strategy and Value Innovation

201. Adaptive Learning and Competency
Based Education
Dr. Andrew Sears
President, City Vision University
www.cityvision.edu
andrew@cityvision.edu

202. Tech Creates Two Tiered Markets with No MiddleWorld’sBestLongTail
Journalism Video Publishing Expertise Courses Credentialing
Disruptive
Competency
Based Education
Traditional
Degree

203. ScalabilityLow-TechHigh-Touch
Pace of PersonalizationMore Static Continuously Adaptive
High-Tech,Low-Touch
Face-to-Face Tutoring
Differentiated
Instruction
Correspondence
Courses
Static
MOOCs
Computer-Based
Instruction
Online
Courses
Mastery Learning CBE
(Western Governors)
Adaptive
CBE
PLA Portfolio
Blended
Adaptive
(Khan Academy)
Credit
By Exam
Classroom
Instruction
High-Fixed Cost
Low-Per Student Cost
Low-Fixed Cost
High-Per Student Cost
Mapping Modes of Education
Source: Initial Chart idea from Brian Flemming. (2015, May). Adaptive Learning: The Breakthrough Innovation Impacting Education Today. Eduventures Online Webinar. Retrieved
from bit.ly/1HGerOS. Andrew Sears made many additions and changes to chart.