The Real Winners of the Coming Revolution in Higher Education

Tim Goral's picture

A revolution is coming to U.S. higher education, one that will sweep away an archaic business model, erase the value of many venerable brands, and enhance the brands of new entrants and nimble incumbents. It will be a tough time for many U.S. colleges and universities but great news for the rest of the world.

In the 1960s the economists William Baumol and William Bowen identified the productivity problem at the root of the rising relative cost of higher education. They identified education as a profession where labor productivity was not amenable to improvement through technological advance. When it comes to teaching, the productivity of a professor in the Middle Ages and that of a professor today are not very different.

This longstanding productivity problem, also known as “Baumol’s cost disease,” is changing dramatically as a bundle of Internet-based technologies involving high-bandwidth communications, content management systems, online courses, e-mentoring platforms, and social and collaborative network software start to take hold in U.S. higher education.

The clearest example of the productivity effect of these technologies is the explosion of massive open online courses, or MOOCs. MOOCs offered by leading university faculty through platforms such as Coursera demonstrate that a single educator can deliver sophisticated content and high quality instruction to thousands if not tens of thousands of students worldwide simultaneously.

This tremendous jump in professional productivity is the most significant advance in the pedagogic part of higher education in a millennium. And therein lies the great news for countries with less developed higher education sectors than the United States.

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