Employment, education and back to that new Adidas plant

For many years it has been widely accepted that there is a strong causal connection between additional years of formal education and likely future income.  Simply put, data from around the world showed that, on average, university graduates could be expected to earn significantly more than those who did not proceed to university.

That connection is becoming weaker. At the same time as the actual cost to students of higher education has been rising in many countries, the returns have become less clear cut.  The data from the US are particularly stark: whereas in the latter twentieth century the average wages of university graduates rose significantly, the average wages of those who only completed secondary school were static; however between 2002-14 while the average wages of high school graduates remained almost static, the average wages of college graduates actually declined.

Data of this sort underscores complaints frequently heard in Australia, the United States and many other countries, that universities are failing to prepare graduates adequately for the world of work. Such concerns have come to take on a sharper edge as the actual cost to students (or their families) of attending university has risen sharply.

Recent articles by the The Economist on Learning and earning and Established education providers vs new contenders provide a handy digest of some of the main causal factors at play here and the wider implications for tertiary education.  The central message is that whether one is in higher or lower skilled work, employees need to be continually reskilling themselves over the course of their working lives if they want to remain competitive in the labour market.

How this ongoing education need will be met is a key question, for at the same time universities around the world are being assailed for underperformance in preparing students for employment, employers themselves are funding much less on-the-job training than in the past.

The net effect of this is large scale unment demand from prospective and current employees seeking to enhance their work-related skills. And technology is enabling new and and existing education providers to experiment with new ways of addressing this unment demand.

I’m particularly interested in thinking about the implications of the evolving relationship between education and employment, and the business model of universities.  And this is where my post last week my previous post on a new Adidas plant in Germany may tie in to the changing economics of post-secondary education.

For some years we’ve been talking about digital disruption in higher education, the rise of for-profit providers, the ‘unbundling’ of the university experience and the emergence of micro-credentials and digital badging.  This is playing out in different ways in different countries, depending on the local regulatory context. But a critical common ingredient is the interplay of economic pressures and technological enablement resulting in increased specialisation in the internal operations of educational organizations and greater responsiveness to market demand.

In the for-profit space, the likes of Coursera, Udacity and Lynda.com have received a good deal of attention in recent years. Newer to me at least, is the rapid rise of firms like General Assembly (offering intensive in-class courses in coding) and  Pluralsight (offering intensive online video-based professional courses).

Universities are experimenting too.  Arizona State’s much acclaimed success with online delivery has earned it the US News and World Report’s most innovative university award for two successive years. Here at RMIT, we’re also launching new initiatives – in collaboration with specialist private sector partners – for online masters programs, digital badging of employment-enhancing skills for our current students and industry-specific stackable micro-credentials for workers looking to acquire new skills in response to changing labour market requirements.

Increasingly, a key differentiator for all education providers looking to serve people worried about employment, seems likely to be how quickly and effectively they can respond to the changing needs of particular industries. Just as Adidas is beginning to replace labour-intensive sports factories with 3D printing and robotics driven plants that enable it to be much more responsive to changing customer preferences, so too education providers are likely to focus increasingly on the  responsiveness of their operating models.

The for-profits will be the first movers. The earlier mentioned Pluralsight, for instance, seeks to optimize its catalogue of educational  videos by compensating the subject experts who create them on the basis of the number of subscribers per video. A model of that sort might suit a highly focused start-up educational venture, but what about universities with their wider social mission and dual focus on education and research?

It may not yet be a large scale phenomenon, we are likely to see growing numbers of universities releasing academics from traditional teaching responsibilities and instead asking them just to develop the content for new (hopefully) sought after courses.  Once developed, delivery of this course content will be handled by a different set of online pedagogy specialists – for so long as there is sufficient demand. This would give the academic greater time to specialize in research and the conception of courses.  And it may allow universities (like high-end sports shoe manufacturers) to conceive, design and bring to market new course offerings much more rapidly.

Over time, a model of this sort seems likely to see the number of academics a university needs decline and the number of online pedagogy specialists grow. It’s a model marked by greater specialization of function in which universities – and individuals academics – focus increasingly on only those activities they can perform more effectively than any other provider.  And it’s a model marked by the increasing embeddedness of for-profit practices and specialist sub-contractors in what have core tenured academic functions within traditional universities.

Brave new world.

 

 

 

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