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Technology-Induced
Conundrums in Higher Education
Vince Kellen, Ph.D.
Senior Vice Provost
Academic Planning, Analytics and Technologies
University of Kentucky




Vince.Kellen@uky.edu
December 20, 2012


This is a living document subject to substantial revision.
Where are we going?
 The current IT trends in higher
   education have led to wild
   prognostications, hyperbole,
   unbridled optimism, denial,
   consternation, fear, rejection and
   withdrawal

 In this noise, very little clear
   strategic thinking has been
   applied

 „Let‟s clear our minds of cant‟




                                        2
Framing concepts

1. Business models versus
   technology models

2. Unbundling

3. The last mile problem

4. Scale versus quality

5. Deep personalization
   technology



                            3
Business models versus IT models
   People are confusing MOOC business models with technology models. MOOC
    business models will spread (diffuse) very differently than MOOC technology

   Information technology represent general purpose tools that will find their way into
    many different business models

   MOOCs are spurring rapid innovation in technology, not so much business
    models. MOOC business models are under stress right now!

   What is good for the goose is good for the gander. Information technology lowers
    barriers to entry, including barriers that traditional higher education institutions
    face in entering MOOC markets

   The interest in MOOCs comes on the heels of disinterest in for-profit business
    models

   The technology innovation that will follow MOOCs is more interesting (IMHO) than
    their emerging business models
     •   This technology can potentially lower significantly the cost of delivering education

                                                                                                4
How will MOOCs make money?
 Publishing
   • Subscription fee to the learner (e.g., $100 per year, $20 per course)

 Badges
   • Charge users for a badge or certificate (e.g., $100 per badge)

 Headhunting
   • Charge potential employers a finder‟s fee for matching the learner to a
     job

 Software licensing
   • Charge universities for using the platform (SaaS licensing, software
     installed locally, revenue share)

 Advertising
   • Sell ads placed within the platform
                                                                             5
Unbundling
   Whether to bundle or unbundle is a recurring problem in many industries. Bundling
    ensures lock-in (e.g., Apple). Unbundling supports scale (e.g., Google)

   What can be bundled together or sold separately?
     •   „Destination resort‟ services, physical facilities, course content, course delivery,
         athletics, degree/certification, accreditation, community management (alumni
         development, etc.), government aid (financial aid, state support)
     •   Institutions have been providing different combinations of bundling/unbundling resulting
         in the mix of providers today
     •   The critical bundle: government aid, degree/certification, accreditation
     •   The critical unbundling questions:
          – What happens if aid can be given for non-degreed or non-accredited education of any kind?


   MOOCs do not present any significant change in overall bundling strategies
    unless public policy changes
     •   Universities can become MOOCs if needed but that radically changes their mission and
         their strategy




                                                                                                        6
Higher education has a ‘last mile’ problem
   Education in any form is struggling to address families and communities with economic and
    other readiness problems

   Free or low-cost educational content does not easily solve readiness problems which have a
    multitude of factors

   For profit models rightfully struggle with „last-mile‟ problems. Public policy matters!




                                                                                                7
Scale/ubiquity versus quality
 In prior versions of IT disruptions, consumers have preferred
  ubiquity and scale/convenience over technical quality (e.g.,
  Internet, cell phones, social media)

 Is this true for eLearning or education in general? It depends on
  how we define quality.

 Let‟s define quality as the ability for the learner to apply what was
  learned in a way that provides them with the advantage or benefit
  they sought

 Would some learners accept inferior educational delivery/outcomes
  to gain ubiquity, ease of access or low cost? (Why are we holding
  this meeting in person?)

 On the other hand…
                                                                          8
What would Abraham Lincoln think of a MOOC?
Abraham Lincoln
   •   Autodidactic
   •   Books, books, books
   •   Became a skilled military strategist
   •   Penchant for poetry, Shakespeare,
       politics and history


My nephew
   • Not an autodidact
   • Good worker, smart kid, but…
   • It takes a village
   • After a few low-security colleges
     and much money borrowed
   • He has found an intellectual home


                                              9
Future job demands
   Middle skill jobs have received
    little wage growth and job growth
    since 1980

   High skilled jobs, especially those
    with advanced degrees, have
    experienced the best wage and
    job growth

   The work force middle is getting
    „hollowed out‟                                  The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market. David
                                                    Autor and David Dorn. NBER Working Paper 15150. http://www.nber.org/papers/w15150


   The recession may have
    accelerated the trend

   The demand for masters level
    and above education is likely to
    increase. MOOCs are likely to
    play a role in filling these gaps
                                          Bill and Melinda Gates Foundation: Is College Worth It?
                                          http://www.scribd.com/doc/113360662/Is-College-Worth-It

                                                                                                                                                10
The hidden gem: deep personalization technology
   In all this noise about MOOCs, I am seeing a significant trend towards adaptive learning
    technology with different approaches taken by emerging vendors (e.g., Knewton, LoudCloud,
    Udacity)

   Adaptive learning technology matches content to student adjusting to how well the student is
    mastering concepts and skills, responding to questions and tasks

   Other personalization techniques (e.g., text mining, neural networks) and incorporating other
    forms of student data (e.g., demographic, cognitive, non-cognitive, personality tests, other
    surveys) can be brought to bear in this problem of matching educational content and
    interactions to learners (deep personalization technology – DPT)

   The industry is moving towards the use of technology that relies on lots of data about the
    learner and that delivers deeply personalized experiences by altering text, images, pace and
    content so it is matched to individual learner abilities and traits

   When adopted at scale, this kind of technology could have a profound impact on what goes
    in a classroom. Active learning, facilitating, coaching and intellectual community
    management become key activities




                                                                                               11
Volume operations versus complex systems
   Excluding the late 20th century, universities have been largely complex systems, delivering niche and
    customizable interactions F2F settings. Large lectures were added to increase output while reducing costs

   Deep personalization technology and MOOC approaches can begin to handle both high-volume and
    specialty classes




           Geoffrey Moore (2005). Dealing With Darwin
                                                                                                          12
Another perspective

      High
  effectiveness
                                                 MOOC + DPT + F2F

                               Small F2F class



                                                 MOOC + DPT




                                                 Current MOOC approach




                                                 Broadcast class


       Low
  effectiveness

                  Low volume                       High volume

                                                                         13
MOOC threats and opportunities
Threats                                                Opportunities

   Should public policy regarding aid and                MOOC technology can lower barriers to entry for
    accreditation substantially change, all forms of       ALL competitors, providing advantage for
    education that bundle aid/degrees/accreditation        traditional and smaller universities. So far it hasn‟t
    will be at risk
                                                          MOOC technology and business models can help
   Traditional universities and for-profits could         all universities address “high volume” operations.
    master MOOC technology, threatening weaker,            If automated deep personalization approaches
    slower institutions                                    and technology is used, effectiveness can be
                                                           maintained
   A MOOC player might be able to produce a
    sizeable quantity of high-quality learners that       MOOC technology can be used to address the
    industry values and seeks out over higher              “long tail” of educational delivery (large numbers
    education.                                             of niche content/instructors to small numbers of
                                                           leaners). So far, it hasn‟t
   Over time, as employers reliably run across many
    high-quality MOOC badged employees, MOOC              MOOC technology can be used to provide „fast-
    brand value may be significant                         trackers‟ with shorter times to degrees, perhaps
                                                           starting in high school, freeing up financial
                                                           resources for subsequent graduate and
                                                           professional education. So far, it hasn‟t

                                                          MOOC technology might be a way to address
                                                           some college readiness issues in high school. So
                                                           far, it hasn‟t
                                                                                                              14
Chaos and complexity in strategy
 In highly dynamic markets it is not clear what kinds of organizations have
   an advantage. The market may be cooling off just enough to provide us
   some direction within the next year

 As each competitor enters new areas of competition, they are often drawn
   into areas of weakness
    • Can a local brand compete globally against other global brands?
    • Can an elite institution compete in a new market against non-elite institution?
    • Can an online university deliver face-to-face and vice versa?

 Organizations that incrementally and quickly extend their core
   competencies over new adjacent territory have a double advantage
    • There is less to learn. Existing strengths & skills can be more easily applied
    • As orgs learn, they can adjust smaller maneuvers faster and cheaper than
      adjusting big maneuvers, staying in tune with the shifting market

 Speed matters. Can we move quickly here? I think we can
                                                                                       15
What should we do?
 Universities should incrementally extend their core competencies using
   MOOC technology and business approaches, incrementally expanding
   the reach of their mission

 Brand matters! Taking an existing brand into uncharted waters is very
   difficult. Launching a new brand in any water is also very difficult. Treat
   your brand with care. Think through distribution channels (Coursera,
   Udacity, EdX, etc.) and marketing approaches. Test and validate
   frequently

 Encourage iterative and incremental innovation within our universities.
   Facilitate sharing of what works and what doesn‟t quickly across
   universities

 All competitors will eventually have to master deep personalization
   technology and the associated business processes to collect and manage
   the associated data. Start learning how to do this now
                                                                                 16
OMG!
 A nearby state university is launching a MOOC with the following
   • Uses deep personalization technology (DPT) that is automatically configures
     itself depending on learner skills and attributes, reports back on learner
     effectiveness in real-time
   • Includes both large-volume gateway courses and specialty courses
   • Is linking peer tutoring and on-demand 7x24 phone, IM, web conferencing
     support so that any student who is stuck on a concept or task can interact with
     someone or something quickly
   • Incorporates intense F2F sessions for students where needed
   • Lets student choose between certificates and degrees at undergrad and
     graduate levels
   • Has signed corporate partners to recruit students via data from the MOOC
   • Is priced at or below our current tuition levels and operates profitably
   • Is fully accredited and is getting rave reviews from students & faculty
   • Is using the revenue stream to attract star faculty facile in the new technology
   • Appears to be designed to „poach‟ our students

                                                                                   17
18
That competitor does not exist (yet).




   Let‟s become that competitor!

                                        19

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MOOCs and Higher Education

  • 1. Technology-Induced Conundrums in Higher Education Vince Kellen, Ph.D. Senior Vice Provost Academic Planning, Analytics and Technologies University of Kentucky Vince.Kellen@uky.edu December 20, 2012 This is a living document subject to substantial revision.
  • 2. Where are we going?  The current IT trends in higher education have led to wild prognostications, hyperbole, unbridled optimism, denial, consternation, fear, rejection and withdrawal  In this noise, very little clear strategic thinking has been applied  „Let‟s clear our minds of cant‟ 2
  • 3. Framing concepts 1. Business models versus technology models 2. Unbundling 3. The last mile problem 4. Scale versus quality 5. Deep personalization technology 3
  • 4. Business models versus IT models  People are confusing MOOC business models with technology models. MOOC business models will spread (diffuse) very differently than MOOC technology  Information technology represent general purpose tools that will find their way into many different business models  MOOCs are spurring rapid innovation in technology, not so much business models. MOOC business models are under stress right now!  What is good for the goose is good for the gander. Information technology lowers barriers to entry, including barriers that traditional higher education institutions face in entering MOOC markets  The interest in MOOCs comes on the heels of disinterest in for-profit business models  The technology innovation that will follow MOOCs is more interesting (IMHO) than their emerging business models • This technology can potentially lower significantly the cost of delivering education 4
  • 5. How will MOOCs make money?  Publishing • Subscription fee to the learner (e.g., $100 per year, $20 per course)  Badges • Charge users for a badge or certificate (e.g., $100 per badge)  Headhunting • Charge potential employers a finder‟s fee for matching the learner to a job  Software licensing • Charge universities for using the platform (SaaS licensing, software installed locally, revenue share)  Advertising • Sell ads placed within the platform 5
  • 6. Unbundling  Whether to bundle or unbundle is a recurring problem in many industries. Bundling ensures lock-in (e.g., Apple). Unbundling supports scale (e.g., Google)  What can be bundled together or sold separately? • „Destination resort‟ services, physical facilities, course content, course delivery, athletics, degree/certification, accreditation, community management (alumni development, etc.), government aid (financial aid, state support) • Institutions have been providing different combinations of bundling/unbundling resulting in the mix of providers today • The critical bundle: government aid, degree/certification, accreditation • The critical unbundling questions: – What happens if aid can be given for non-degreed or non-accredited education of any kind?  MOOCs do not present any significant change in overall bundling strategies unless public policy changes • Universities can become MOOCs if needed but that radically changes their mission and their strategy 6
  • 7. Higher education has a ‘last mile’ problem  Education in any form is struggling to address families and communities with economic and other readiness problems  Free or low-cost educational content does not easily solve readiness problems which have a multitude of factors  For profit models rightfully struggle with „last-mile‟ problems. Public policy matters! 7
  • 8. Scale/ubiquity versus quality  In prior versions of IT disruptions, consumers have preferred ubiquity and scale/convenience over technical quality (e.g., Internet, cell phones, social media)  Is this true for eLearning or education in general? It depends on how we define quality.  Let‟s define quality as the ability for the learner to apply what was learned in a way that provides them with the advantage or benefit they sought  Would some learners accept inferior educational delivery/outcomes to gain ubiquity, ease of access or low cost? (Why are we holding this meeting in person?)  On the other hand… 8
  • 9. What would Abraham Lincoln think of a MOOC? Abraham Lincoln • Autodidactic • Books, books, books • Became a skilled military strategist • Penchant for poetry, Shakespeare, politics and history My nephew • Not an autodidact • Good worker, smart kid, but… • It takes a village • After a few low-security colleges and much money borrowed • He has found an intellectual home 9
  • 10. Future job demands  Middle skill jobs have received little wage growth and job growth since 1980  High skilled jobs, especially those with advanced degrees, have experienced the best wage and job growth  The work force middle is getting „hollowed out‟ The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market. David Autor and David Dorn. NBER Working Paper 15150. http://www.nber.org/papers/w15150  The recession may have accelerated the trend  The demand for masters level and above education is likely to increase. MOOCs are likely to play a role in filling these gaps Bill and Melinda Gates Foundation: Is College Worth It? http://www.scribd.com/doc/113360662/Is-College-Worth-It 10
  • 11. The hidden gem: deep personalization technology  In all this noise about MOOCs, I am seeing a significant trend towards adaptive learning technology with different approaches taken by emerging vendors (e.g., Knewton, LoudCloud, Udacity)  Adaptive learning technology matches content to student adjusting to how well the student is mastering concepts and skills, responding to questions and tasks  Other personalization techniques (e.g., text mining, neural networks) and incorporating other forms of student data (e.g., demographic, cognitive, non-cognitive, personality tests, other surveys) can be brought to bear in this problem of matching educational content and interactions to learners (deep personalization technology – DPT)  The industry is moving towards the use of technology that relies on lots of data about the learner and that delivers deeply personalized experiences by altering text, images, pace and content so it is matched to individual learner abilities and traits  When adopted at scale, this kind of technology could have a profound impact on what goes in a classroom. Active learning, facilitating, coaching and intellectual community management become key activities 11
  • 12. Volume operations versus complex systems  Excluding the late 20th century, universities have been largely complex systems, delivering niche and customizable interactions F2F settings. Large lectures were added to increase output while reducing costs  Deep personalization technology and MOOC approaches can begin to handle both high-volume and specialty classes Geoffrey Moore (2005). Dealing With Darwin 12
  • 13. Another perspective High effectiveness MOOC + DPT + F2F Small F2F class MOOC + DPT Current MOOC approach Broadcast class Low effectiveness Low volume High volume 13
  • 14. MOOC threats and opportunities Threats Opportunities  Should public policy regarding aid and  MOOC technology can lower barriers to entry for accreditation substantially change, all forms of ALL competitors, providing advantage for education that bundle aid/degrees/accreditation traditional and smaller universities. So far it hasn‟t will be at risk  MOOC technology and business models can help  Traditional universities and for-profits could all universities address “high volume” operations. master MOOC technology, threatening weaker, If automated deep personalization approaches slower institutions and technology is used, effectiveness can be maintained  A MOOC player might be able to produce a sizeable quantity of high-quality learners that  MOOC technology can be used to address the industry values and seeks out over higher “long tail” of educational delivery (large numbers education. of niche content/instructors to small numbers of leaners). So far, it hasn‟t  Over time, as employers reliably run across many high-quality MOOC badged employees, MOOC  MOOC technology can be used to provide „fast- brand value may be significant trackers‟ with shorter times to degrees, perhaps starting in high school, freeing up financial resources for subsequent graduate and professional education. So far, it hasn‟t  MOOC technology might be a way to address some college readiness issues in high school. So far, it hasn‟t 14
  • 15. Chaos and complexity in strategy  In highly dynamic markets it is not clear what kinds of organizations have an advantage. The market may be cooling off just enough to provide us some direction within the next year  As each competitor enters new areas of competition, they are often drawn into areas of weakness • Can a local brand compete globally against other global brands? • Can an elite institution compete in a new market against non-elite institution? • Can an online university deliver face-to-face and vice versa?  Organizations that incrementally and quickly extend their core competencies over new adjacent territory have a double advantage • There is less to learn. Existing strengths & skills can be more easily applied • As orgs learn, they can adjust smaller maneuvers faster and cheaper than adjusting big maneuvers, staying in tune with the shifting market  Speed matters. Can we move quickly here? I think we can 15
  • 16. What should we do?  Universities should incrementally extend their core competencies using MOOC technology and business approaches, incrementally expanding the reach of their mission  Brand matters! Taking an existing brand into uncharted waters is very difficult. Launching a new brand in any water is also very difficult. Treat your brand with care. Think through distribution channels (Coursera, Udacity, EdX, etc.) and marketing approaches. Test and validate frequently  Encourage iterative and incremental innovation within our universities. Facilitate sharing of what works and what doesn‟t quickly across universities  All competitors will eventually have to master deep personalization technology and the associated business processes to collect and manage the associated data. Start learning how to do this now 16
  • 17. OMG!  A nearby state university is launching a MOOC with the following • Uses deep personalization technology (DPT) that is automatically configures itself depending on learner skills and attributes, reports back on learner effectiveness in real-time • Includes both large-volume gateway courses and specialty courses • Is linking peer tutoring and on-demand 7x24 phone, IM, web conferencing support so that any student who is stuck on a concept or task can interact with someone or something quickly • Incorporates intense F2F sessions for students where needed • Lets student choose between certificates and degrees at undergrad and graduate levels • Has signed corporate partners to recruit students via data from the MOOC • Is priced at or below our current tuition levels and operates profitably • Is fully accredited and is getting rave reviews from students & faculty • Is using the revenue stream to attract star faculty facile in the new technology • Appears to be designed to „poach‟ our students 17
  • 18. 18
  • 19. That competitor does not exist (yet). Let‟s become that competitor! 19