Abelard to Apple:
The Fate of American
Colleges andUniversities
Richard DeMillo*
MIT Press, 2011
* Georgia Institute of Technology and Qatar Computing Research Institute1What does the title mean?

Disruptions that do notfavor the current way
Universities work

Peter Abelard (cir 1100)
Apple’s ITunesU (cir 2002)

2

In early November 2009, the University of California at Berkeley -- the number one
ranked public university in the country -- raised its tuition by thirty-two percent,prompting massive student protests of increases that have tripled the cost ofuniversity education over the past decade. For the placard-carrying students, who
think they have been locked out of public education in California because they cannot
afford it, the university experience has changed. The Berkeley laboratories whereNobel Prize winners once conducted research are now dirty and decaying because
budget cuts have made it impossible to properly maintain them. These are images that
prompted the New York Times to write…Among students and faculty alike there is a pervasive sense that the [tuition]
increases and the deep budget cuts are pushing the university into decline

Source: New York Times3Most American colleges and universities -- the two thousand or so institutions that arevirtually anonymous but which enroll eighty percent of the nations college-age
students are under even more intense pressure than prestigious Berkeley.
The future looks very different for these two thousand. India’s twenty-seven thousand
new universities, Apple’s ITunesU™ and the hundreds of virtual universities that offer
online courses are vanguards of a virtual explosion in global higher education, amarket that is desperately trying to keep up with the raised expectations of the half of
the world’s population that has joined the free market economies in the lastgeneration and wants access to education to improve lives and create wealth. Higher
education is, suddenly, a rapidly growing marketplace with many alternatives. Thereare thousands more institutions of higher learning in the United States than can besupported. Many will not be able to compete with cheaper, nimbler, and frequently
more effective alternatives.

4Traditional American universities are nolonger gatekeepers…
• Open Learning• More proprietary
universities (15% growth)• India 27,000 new
universities over the nextten years• Ed-X• $300M in early stage
investments– Coursera– Udacity– Minerva
5Traditional Universities are theincumbents…
•••••••••••••••••

Encyclopedias
Rail transport
Mobile discount operators
Catalog stores
Mainframe computers
Minicomputers
Navigational maps
X-ray imaging
Netscape
Vertically integrated steel mills
Cathode ray tubes
Telegraphy
Sailing ships
Offset printing
Chemical photography
Newspapers
Book selling• Universities

6

The structure of (American) higher
education was decided before we knew
what it was going to do….
16000
14000
12000
10000
Public8000Private

6000

Total Enrollment

4000
2000
1929
1937
1945
1949
1953
1957
1964
1968
1972
1976
1980
1984
1988
1992

0

All the experiments
were done by this time7

Where are the New Experiments inhigher education?
• The United States has not added capacity since 1960 (4x increase instudents)• Lots of past experiments– Dozens in medieval Europe• Peter Abelard (cir 1100)• Jesuits (cir 1600)– Hundreds in colonial America• University of Virginia (cir 1800)• Williams College (1820)– Thousands in post Civil War US• Harvard’s disappearing requirements (1870)• US Land Grant Universities (1860)– Tens of thousands today• Open University, UK• Kahn Academy• India: 35,000 new colleges and universities
8

What are the Implications?
• Elite universities get to hand-pick theirstudents• A few less-selective universities get very large• Everyone else fights over the remainingstudents• Costs go up for everyone

9Three Tiers• Elite (70-75)–––––

1.5-2 million students
High Prestige
Large Endowment
Ability to set its own agenda
Depends on virtuous cycle: Student Professor  Research  Wealth Students• Middle (thousands)– 14 million students– Variable prestige– Follows the Elite• Proprietary (hundreds)–––––

4-5 million students
Low Prestige
Large Endowment
Ability to set its own agenda
Depends on satisfied students
10Differences between American and
Italian Universities
American• Most students firstgeneration to attend• Most students career-driven••••

Multiversity
Many private universities
TuitionDeclining public confidence

Italian• Most students from families
with parents who attended• Most students interestdriven• Single mission• Private universities rare
• Tuition-free• Declining public confidence

11Economic Reality #1: Higher Education
is a Multi-Sided Market
Single Sided Market• A “customer” who is willingto pay for value• A “business” (producer ofgoods and services) whose
costs can be controlled• An optimal price that isdetermined by marginalcost

A Multi Sided Market• Many stakeholders who
have different, often
competing needs• Portfolios of goods andservices with connected
costs and cross-subsidies• A platform

12

Economic Reality #2: Bypass
Economies
Signs that boundaries are being
destroyed••••••Markets find a bypassYour services are desired by many,affordable to few
Trust between you and yourstakeholders has fractured
You have a concentrated businessmodel with high fixed costs that
could be distributed
Your organization can be replacedwith outside networks with hidden
assetsYou don’t have all the assets thatyou needYour stakeholders have needs thatyou haven’t imagined and have toway to learn about13

Economic Reality #3: In a marketplace withmany alternatives, the only way to survive is tohave• An unassailable
brand, or• The best price, or• The best value
proposition• Only the Elite haveglobal brands• The Middle wastesmoney• The Middle has
misjudged its value

14

BRAND15

1910
12345678910111213

Public141516171819201925

2008

Harvard University

University of Chicago

Harvard University, Princeton
University

Princeton University

Harvard University

Yale University

Columbia University

Yale University

University of Penn

University of Wisconsin

California Tech, MIT, Stanford
University , University of Penn

Stanford University

Yale University

Columbia University

Princeton University

Cornell University

Johns Hopkins

Johns Hopkins

University of Mich

University of Chicago

UC Berkeley

UCBerkeley

Cornell UniversityDuke University

University of Michigan

University of Illinois

Dartmouth College

University of Wisconsin

University of Penn

Northwestern , Washington Univ

University of Illinois

University of Minnesota

University of Minnesota

Stanford UniversityJohns Hopkins

NAOhio State UniversityCornell University

NA

University of Iowa

Brown University

NANorthwestern

Emory University , Rice University,
Vanderbilt University

NA

University of NC

NAIndiana University

NANA

Columbia University
University of Chicago

Notre Dame

16

Disconnect

Source:“Is College Worth It? College Presidents, Public Assess Value, Quality andMission of Higher Education,” Pew Research Center: Social and
Demographic Trends, Washington, DC (http://pewsocialtrends.org)

17PRICE18

Cost of Higher Education 1980-2005
Little of thisends up in
theclassroom

19Mission Creep

Source: National Study of Postsecondary Faculty, 1988-2004

20

Faculty classroom productivity

Source: Jay Schalin “A Common-Sense Look at UNC Faculty Workloads”, Pope Center for Higher Education
21

VALUE

22

Grade Inflation

Source: Where A is Ordinary
Stuart Rojstaczer and Christopher Healy
Teachers College Record, 201123

The Value of a Degree• What’s it worth?
• What is being taught?
• What do you learn?

• Payscale.com• WhatDoYouLearn.com• “Academically Adrift”

70%60%50%
A
40%

B
C30%

D20%

F

10%0%
GA

Source: American Council of Trustees and Alumni, 2011

MAIvy LOver 40K

24

About Accreditation• Historical Roots• Factory Model• Scalability• Science• Technology• CostSource: Maria Andersen25
http://prezi.com/irqborz3hmd2/levers-of-change-in-higher-education/

THE “THREADS” EXPERIMENT

26

GEORGIA TECH UNDERGRADUATE CSCURRICULUM IN 2002

…had to do more than tinker

Think horizontally
The Flat World

Remove“The curse of the corecurriculum”

Add student-centrism
a Threaded curriculum

27Reverberation

28 Combinations• Resonates– Parents– Students– Employers• Engages faculty• Influences– Peers– Institute– CRA
28

WHAT IS “SUCCESS” IN THE 21ST
CENTURY?
29

Institutional Envy
• Less prestigious universities
chase more prestigious ones
– Private universities chase
Harvard– Public universities chaseMichigan– Technical universities chaseMIT• How do you get to be moreprestigious?
– How selective are you?
– How much do you spend per
student?
– How predictable are youroutcomes?

30

Who will succeed over the next 100years?

DefiningValueArchitectingFormNot based on institutional
envy

Balance faculty-centrism
and student-centrism

Focus on differentiation

Create the best technology

Establish brandCut costs in half

Recognize weaknesses

Meaningful measures ofsuccess

Embrace opennessSocietal success
31

Some Subversive Ideas• Interchange the roles of lectures andhomework?
• The gameification of education: rewarding“failure” but demanding mastery• Replacing accreditation with….
• Value-based metrics• Financial transparency• Non-core activities pay their own way
32