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Disruptive Innovation in Higher Education (full course slides)

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Get the full course for free on Udemy at https://goo.gl/ixlBwn or iTunes University at https://goo.gl/9pGDAt
This course provides the latest expertly curated materials on this topic by a university president focused on disruptive innovation who spent years developing them. I've tried to curate the "best of the best" of materials in this field including: unbundling universities, unbundling faculty, online education, emerging markets, Base of the Pyramid strategy, Lean Startup for education, Blue Ocean Strategy for education, accreditation, for profits and MOOCs and examining implications for specific markets like faith-based/Christian higher education. I provide a summary of "Cliff's Notes" on each topic in a brief video, and have links to the top videos and bibliography on each topic. While most people will take this course individually, this course is designed to also be used by individuals or as a "flipped classroom" discussion among students or leaders at your institution to discuss these materials after reviewing them.

I am the President of City Vision University where we are bringing radically affordable education through a $2,000 associate's degree and a $5,000 bachelor's degree. I previously co-founded MIT's Internet Telephony Consortium with one of the fathers of the Internet (David Clark) focused on disruption in the telecommunications industry. Before spending the past 20 years living with and serving the poor with disruptive educational technologies, I worked as a consultant to Sprint, venture capitalist and internet startups.

I just finished reading tens of thousands of pages and hundreds of articles and videos as a part of my doctoral dissertation. I have literally put thousands of hours of work into the materials in this course just as if I were publishing a book. I am providing it for free because I want to see change happen in this industry.

My hope is that you could use this course materials to be a change agent to bring innovation to your institution.

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Disruptive Innovation in Higher Education (full course slides)

  1. 1. Course Introduction: Disruptive Innovation in Higher Education Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  2. 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. 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. 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. 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. 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. 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. 8. “Human history becomes more and more a race between education and catastrophe.” - H.G. Wells Image from Wikipedia
  9. 9. Disruptive Innovation Theory Applied to Higher Education Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  10. 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. 11. Cell Phones in 1983
  12. 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. 13. PCs Mobile Disruptive Innovation Theory Mainframes 10 x More Users 1/10th Cost
  14. 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. 15. Disruptive Innovation Theory Image Source: Wikimedia Online education is here
  16. 16. Current Stage of Online Education LMS Stage Courseware Platform Stage Image Source: Wikimedia Adoption Lifecycle of Online Education
  17. 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. 18. 1: Traditional Higher Education 2: Traditional Online Education 3: Courseware Platforms & Emerging Markets Mac iPod iPhone Innovation Extensions in Higher Education
  19. 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. 20. Understanding What’s Driving Change in Traditional Higher Education Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  21. 21. 1: Traditional Higher Education 2: Traditional Online Education 3: Courseware Platforms & Emerging Markets Mac iPod iPhone Innovation Extensions in Higher Education
  22. 22. Increasing Cost of Higher Education Historically
  23. 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. 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. 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. 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. 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. 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. 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. 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. 31. Market Dynamics of Traditional Online Education Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  32. 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. 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. 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. 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. 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. 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. 38. 1: Traditional Higher Education 2: Traditional Online Education 3: Courseware Platforms & Emerging Markets Mac iPod iPhone Innovation Extensions in Higher Education
  39. 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. 40. New Map of the World
  41. 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. 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. 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. 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. 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.
  46. 46. 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.
  47. 47. Unbundling and Rebundling Strategies in Higher Education Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  48. 48. Modular vs. Interdependent Architectures Over Time Image Source: Wikimedia
  49. 49. 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
  50. 50. 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.
  51. 51. 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)
  52. 52. 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
  53. 53. 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
  54. 54. 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
  55. 55. 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
  56. 56. 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
  57. 57. 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
  58. 58. Unbundling and the Changing Role of Faculty Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  59. 59. 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
  60. 60. 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
  61. 61. 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)
  62. 62. 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
  63. 63. Improving Faculty Productivity through Automation
  64. 64. 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
  65. 65. 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?
  66. 66. Equipping Faculty Entrepreneurs
  67. 67. 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
  68. 68. 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
  69. 69. 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
  70. 70. 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
  71. 71. Lean Startup for Education Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  72. 72. 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
  73. 73. 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/
  74. 74. Waterfall vs. Agile vs. Lean Design Source: http://www.slideshare.net/NatalieHollier/lean-strategymeetup-small/ (Backwards Design/Traditional Assessment Plans)
  75. 75. 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.
  76. 76. 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.
  77. 77. Demographic and Economic Trend Analysis for Higher Education Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  78. 78. 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.
  79. 79. 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.
  80. 80. 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.
  81. 81. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg Global Education Statistics
  82. 82. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg
  83. 83. 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
  84. 84. 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)
  85. 85. 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
  86. 86. 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.
  87. 87. 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
  88. 88. 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
  89. 89. Summary of Key Trends Traditional Higher Education Nontraditional Students Emerging Markets Private Education Technology
  90. 90. College Access, the Opportunity Divide & the Race between Technology and Education Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  91. 91. Three Waves of History Agricultural Industrial Informatio n Primary/Secondary School Higher Education
  92. 92. Decline of Farm Jobs Source: ong depression – azizonomics. (n.d.). Retrieved from http://azizonomics.com/tag/long-depression/
  93. 93. 20th Century Challenge: High School Graduation Goldin, C., & Katz, L. F. (2010). The Race between Education and Technology. Cambridge, Mass.: Belknap Press.
  94. 94. 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/
  95. 95. 21st Century Challenge: College Graduation
  96. 96. Figure 10. Educational Attainment by Birth Cohort Source: Goldin, C., & Katz, L. F. (2010). The Race between Education and Technology. Cambridge, Mass.: Belknap Press.
  97. 97. “Human history becomes more and more a race between education and catastrophe.” - H.G. Wells Image from Wikipedia
  98. 98. 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.
  99. 99. 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.
  100. 100. Changing our Educational Trajectory Source: Lumina Foundation Vision
  101. 101. 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
  102. 102. 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
  103. 103. 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
  104. 104. 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
  105. 105. 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
  106. 106. 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
  107. 107. 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/
  108. 108. 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
  109. 109. 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
  110. 110. Image Source: Wikimedia Adoption Cycle for Post-Secondary Degrees US Average Global Average Top Income Quartile 3rd Income Quartile 1st & 2nd Income Quartile
  111. 111. Change Agents & Diffusion of Innovation Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  112. 112. 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
  113. 113. What Change Agents & Innovators Should Avoid
  114. 114. Disruptive Innovation Theory Image Source: Wikimedia We are here Proven Data Theoretical Projection
  115. 115. What Skeptics of Disruptive Innovation Should Avoid
  116. 116. 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.
  117. 117. 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.
  118. 118. 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.
  119. 119. 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”
  120. 120. 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
  121. 121. 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?
  122. 122. Methods Market Disruptive Innovation will Change Methods & Market Mission Mission Does Not Change! (unless your mission is defined by methods & and market)
  123. 123. 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
  124. 124. 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)
  125. 125. 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
  126. 126. 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.
  127. 127. Case Study Lessons for Faculty and Higher Education Institutions Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  128. 128. 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
  129. 129. 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.
  130. 130. The Chris Anderson Paradox Content Is King Content Is Commoditized Best in the World Original Content Is King Second Best Content Is Commoditized
  131. 131. Tech Creates Two Tiered Markets with No MiddleWorld’sBestLongTail Journalism Video Publishing Ideas Courses Credentialing Disruptive Competency Based Education Traditional Degree
  132. 132. 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
  133. 133. 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
  134. 134. 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
  135. 135. 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
  136. 136. 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
  137. 137. 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
  138. 138. 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
  139. 139. Unbundling, Innovation and the Changing Landscape of Accreditation and Regulation Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  140. 140. Regulation & the Changing Role of Workers & Consumers Source: KPCB Internet Trends 2015, Mary Meeker
  141. 141. Regulation & the Changing Role of Workers & Consumers KPCB Internet Trends 2015, Mary Meeker
  142. 142. 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)
  143. 143. 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
  144. 144. 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)
  145. 145. Blue Ocean Strategy, Value Innovation and the Problem with Current Accreditation Metrics
  146. 146. Modular vs. Interdependent Architectures Over Time Image Source: Wikimedia
  147. 147.  Output vs. input
  148. 148. Recommendations  Support more modular accreditation (course level and unit level) ◦ ACE Credit Recommendation
  149. 149. For Profit Higher Education
  150. 150. Current Stage of Online Education 1st Wave For Profit 2nd Wave (Courseware Tech Ecosystems) Image Source: Wikimedia Adoption Lifecycle of Online Education
  151. 151. 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).
  152. 152. 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).
  153. 153. 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).
  154. 154. 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).
  155. 155. 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).
  156. 156. 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).
  157. 157. 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).
  158. 158. 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).
  159. 159. 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).
  160. 160. 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).
  161. 161. University of Phoenix (2010) Enrollment = 600,000
  162. 162. University of Phoenix (2015) Enrollment = 215,000
  163. 163. Disruptive Innovation in Christian Higher Education
  164. 164. 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
  165. 165. 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.
  166. 166. 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
  167. 167. 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
  168. 168. - 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
  169. 169. 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
  170. 170. 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.
  171. 171. Methods Market Disruptive Innovation will Change Methods & Market Mission Mission Does Not Change! (unless your includes methods and market)
  172. 172. Essential Elements of Christian Education 1. Christian worldview 2. Christian community 3. Christian content 4. Christian care for stakeholders
  173. 173. 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
  174. 174. 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)
  175. 175. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg
  176. 176. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg
  177. 177. Source: http://www.gmi.org/infographics/missiographic-ChristianHigherEdInternationally.jpg
  178. 178. 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
  179. 179. 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
  180. 180. Traditional Higher Education Traditional Monastery Higher Education Model Local Christian Community Practical Work ExperienceStudents “Close” to Instructor Distant From Students
  181. 181. Re-bundling Online Education with Church Study Groups & Internships Local Discipleship & Study Groups Practical Work Experience Distant From Students Instructor
  182. 182. 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?
  183. 183. 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.
  184. 184. 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
  185. 185. 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)
  186. 186. 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?
  187. 187. 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
  188. 188. 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.
  189. 189. 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
  190. 190. 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
  191. 191. Expected Lifetime Earnings by Education
  192. 192. Does Technology Hurt or Help the Poor?
  193. 193. 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)
  194. 194. Blue Ocean Strategy and New Value Innovation Business Models Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  195. 195. Blue Ocean Strategy Canvas for Southwest Airlines
  196. 196. Overview of Blue Ocean Strategy and Value Innovation
  197. 197. Adaptive Learning and Competency Based Education Dr. Andrew Sears President, City Vision University www.cityvision.edu andrew@cityvision.edu
  198. 198. Tech Creates Two Tiered Markets with No MiddleWorld’sBestLongTail Journalism Video Publishing Expertise Courses Credentialing Disruptive Competency Based Education Traditional Degree
  199. 199. 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.

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