The 20th Century University Is Obsolete

Higher education, like the human species itself, is the product of evolutionary forces that produce structures -- the DNA if you will -- that enable one variant to thrive and cause another to falter.

The life form known as higher education was hatched in a monastic cocoon in the 10th century. From this beginning, higher education institutions took shape as an evolving species, changing form and mission in response to external forces. Familiar milestones on this evolutionary journey include secularization, development of academic disciplines, evolution of administrative structures, growth of the research university, and the concepts of academic freedom and tenure.

With the dawn of the Knowledge Age, the evolution of higher education has drastically accelerated so that the pace of change is now measured in years, not centuries. Higher education today is a global commodity with all the competition and product diversification that entails, including the splitting of the production from the distribution of knowledge. This is much like the movie industry, where a few companies make movies and many companies distribute them in theaters, on television, and on DVDs.

Research I universities that produce new knowledge thrive in this new environment, but they are now dependent upon strong financial links with the economic agendas of companies and countries. They are no longer the sole citadels for the production of new knowledge,  but rather just one node on a global network of corporate and national R&D sites.

The transformation of Higher Education Life Forms on the distribution side of knowledge is even more dramatic, evolving a new species that concentrates simply on distribution of currently available knowledge.

This new species features a small core of knowledge engineers who wrap courses into a degree to be distributed in cookie-cutter institutions and delivered by working professionals, not academics. There is no tenured faculty, no academic processes; the sole focus is on bottom-line economic results. These 21st century institutions are not burdened with esoteric pursuits of knowledge; rather, they focus on professional degrees for adults that have a fairly clear market value for a given career path.

The exemplars of this new species are the for-profit universities, which are cutting their teeth on the weakness of the 20th century universities. Though new at the game, in a few years they will be capable of hunting with lethal success. This new species is market-driven. Its key survival mechanism is the ability to rapidly evolve to new environments and to position in the market. Since they do not carry tenured faculty, they can rapidly jettison disciplines of study that do not penetrate market. Since they do not have academic processes, they can rapidly bring to market programs that can capture market share.

Certainly, not all for-profit providers have the core capabilities to compete long term in the market. Some emerge quickly and as quickly become extinct, but others are proving quite adept at drawing strength from this globally competitive market.

As mass, longevity and a voracious need for large quantities of prey (resources) proved lethal to the dinosaurs in the stark environments created by global darkening, so the universities of the early 20th century may face serious thinning or perhaps even extinction in the new globally competitive environment of higher education. Universities rooted in the early 20th century are intrinsically inefficient in today's environment of market valuation and brand identity. Given the current internal structure of tenure and faculty governance, these universities lack the capability to respond to market forces in a timely fashion -- to close out product lines no longer playing in the market and rapidly bring new and more efficient product to market.

Still, these once elegant life forms persevere, but for reasons having nothing to do with innate capability to embrace change. Instead, at the undergraduate level it is the instinctual and perhaps irrational desire of many parents to see their children prosper in a traditional liberal arts environment, and so their willingness to spend inordinate amounts of money for education. At the graduate level, the "brand name" is the driver. The reputation of leading institutions, established in an era before global market competition, is based on a footing much different from that used today to obtain market position, but it still works to sustain the life form, at least among a few elite universities.

In addition, traditional universities have benefited from some serious slack in the evolutionary rope. The Industrial Age required a few knowledge workers and a lot of folks doing heavy lifting, whereas the Knowledge Age requires vast numbers of educated workers. Almost overnight, this has led to a massive spike in global demand for education, with motivated consumers increasing perhaps 100-fold. What was the privilege of a few has become the expectation of all.

But global supply falls far short of meeting demand. With a population of 295 million, the United States has only 15 million active seats in the higher education classroom; China, with a population of 1.2 billion, has 2 million seats available; Brazil, with a population 170 million, has 2.5 million seats available.

This imbalance between supply and demand has creating a robust market for all providers. Suppliers of higher education simply have to dip their nets in the water to catch students. There is not yet the fight-to-the death competition for market share, and inefficient institutions have received a short reprieve from their evolutionary fate. But at some point, as with all markets, a saturation point will be reached, with supply outstripping demand -- perhaps in 5, perhaps in 15 years. When this inversion occurs, those life forms with the required flexibility to quickly adapt to a fiercely competitive environment will survive and the others will fade from memory.

As there is private health care for those who can afford to pay at any price point, so there will continue some form of higher education that will meet the need and the check book of those wealthy enough to afford it. But for most now driven to higher education to meet the requirements of the Knowledge Age, it is value (the ratio of perceived quality over price) that will be the key determinate of what institution they will choose for their tuition dollar. To further stress the current market, state funding is not keeping up with inflation or enrollment growth, forcing higher education institutions to rely more on tuition and donations. Thus higher education is being pushed to stand on its own financial bottom rather than be a subsidized commodity, once again forcing the value proposition.

So what will be demanded of 20th century universities to survive when market supply reaches or exceeds demand? As in every market, those producers that have driven efficiency into their production system and responsiveness into their market positioning have at least a change at surviving. But the challenge is daunting because the 20th century university is trying to play serious catch up in new markets -- adults, women, diversities, the under privileged -- while using the same mentalities that allowed them to attract the 18 to 25 year old male.

As with IBM, which played in the personal computer market, but really lived in the mainframe business market, there is no fire in the belly of 20th century universities for these new markets. These institutions have not changed the way they go about their business to serve these new markets; and if there has been some change, it has been accompanied by the widespread grumbling of the faculty: Why do we have to teach at night? Why do we have to teach at multiple campuses? Why do we have to provide support services in the evening? Why do we have to teach students who aren't educated the way we were? Why do we have to schedule classes so students can maximize their employment opportunities?

Meanwhile, 20th century universities are running average price increases twice the inflation rate and carrying multiple overheads of unproven value to the buying market. Walk into the library of any university today that has ubiquitous connections to the Internet, and you will find the stacks empty of both faculty and students. Is the traditional library a value add or a costly overhead? As with IBM, 20th century universities believe their brand will sustain price increases. "No frill, just degree" competitors are producing product without the high cost of minimalist full-time faculty workloads, large libraries and multiple staff intensive manual processes. As with the personal computer, will the buying market ultimately see any difference between the products except the name on the plastic and the price on the sticker?

What will be the destiny of the current life form we have called the 20th century university? It consumes far too many resources for what it returns to the environment, and though there are vast resources (markets) available, its structures do not let it tap these resources effectively. Its evolutionary tardiness has provided opportunity for a new species to take hold - the profit driven university. As the evolution of the human race has picked up the pace with each passing millennium, a future life form that has little resemblance to current higher education life forms will emerge much sooner than the usual eons it takes for evolution to create the next iteration of life.

The 20th century university is indeed obsolete and faces extinction.