Change Is Coming: What U.S. Colleges Must Do To Survive

Universities and colleges across the nation are getting it wrong.

 So says University of Delaware president Patrick Harker, who has a plan to transform traditional Ivory Tower institutions into student-focused powerhouses that will shatter old educational models and usher in a new era of educational excellence.

 The problem is, he says, it will be painfully difficult and some schools are bound to be left behind. In an interview with Knowledge@Wharton, Harker, who previously worked as the dean of The Wharton School of the University of Pennsylvania, explains his view of the way forward.

 An edited transcript of the conversation appears below.

Knowledge@Wharton: Pat, you’ve written a thought-provoking paper about major challenges facing the education system. Let’s begin our conversation by discussing the soaring cost of higher education. Is a university education a good investment today?

Harker: Yes, it’s still a good investment. But a lot of people are questioning it, especially as we hear about graduates coming out [of college] with $100,000 in debt who cannot find decent jobs. The evidence still says it’s worth it, but it’s understandable why people are questioning the system.

Knowledge@Wharton: What are some of the main factors driving up costs? What have universities done to curb costs?

Harker: The main factor driving up costs is low labor productivity Twitter , as defined by an economist. Let me explain: Economies have sectors that have low labor productivity and high labor productivity. On average, inflation is a mix of those. But the ones that have low labor productivity will always have higher-than-average inflation. It’s not that professors are not productive; it’s just that their productivity hasn’t increased like we’ve seen in other sectors.

Knowledge@Wharton: When we talk about productivity, technology often factors into the picture. Do you have a sense of how innovation and technology have impacted education?

“It’s not that professors are not productive; it’s just that their productivity hasn’t increased like we’ve seen in other sectors.”

Harker: Let’s take a step back. Higher education is not unlike health care because both sectors have used a lot of technology to improve quality. But, until recently, both sectors have not focused on the goal of reducing costs. Educational institutions can put in new projectors, but this does not fundamentally change the way we educate or improve productivity. Ultimately, technology alone is not going to solve the productivity problem.

But technology enables new processes, and those new processes can deliver lower costs and higher quality. For example, massive open online courses (MOOCS) can play a role. We’re also starting to see more interactive, problem-based learning that allows students to learn by doing, which is a positive sign.

In the past, we tried to improve professor productivity by building larger lecture halls for hundreds of students. That improves labor productivity, but it doesn’t improve learning. We need to break this educational model and experiment with new learning modalities, not necessarily new teaching modalities.

Knowledge@Wharton: In your new paper, you write: “There is both hope and fear that IT innovations will end the university as we know it.” Why is that?

Harker: The incumbent institutions — the universities — think everything is fine. Heavily endowed universities will be fine for some time. But for those who are not, there are a lot of forces that are changing the market.

First, there is a demographic shift in the United States where the population of college-aged people is declining. More first-generation lower-income students are coming into higher education, which means universities can’t charge what they used to. The rest of the world is now waking up to higher education: China and India are building new campuses. The flow to U.S. campuses is starting to change. These factors have forced universities to seriously think about how to become more productive.

Knowledge@Wharton: Your paper suggests shifting the emphasis from teaching to learning. How can the design of educational institutions be changed so emphasis is placed on learners instead of teachers?

Harker: I’ll give you a specific example. The University of Delaware opened a new science building last year and all the classrooms are based around the concept of problem-based learning. We have 48-seat classrooms with two 24-seat labs on either side. Students come for two-hour sessions where they learn about a mix of biology and chemistry. They don’t know if it’s biology, they don’t know if it’s chemistry. What they know is there are problems to solve that are related to biology and chemistry. They work out the hypotheses, immediately get out of their seats, go into the laboratory and start to test solutions to the problems that were presented in class.

This is very different and more interactive than the chemistry and biology lessons delivered in old lecture halls, with labs that sometimes made no sense with respect to the lectures.

 Problem-based learning is a more efficient way to teach because it’s learner-centric. The knowledge stays with the students because they discovered it themselves.

Knowledge@Wharton: Do you think universities will be able to use these kinds of techniques so they’re no longer “teaching factories”, as you call them?

Harker: Yes. But the only way to do that is by taking material that can be commoditized and packaged into simple steps. Use other tools, such as MOOCs and textbooks, to allow students to learn on their own and then use class time for more active learning.

Knowledge@Wharton: As we think about the changes that are required in education, are there any lessons to be learned from other service industries?

Harker: Yes. Ultimately, we can’t just trust technology to save us. Sometimes we use technology with no real benefit. We need to understand this and see that it all comes back to changing the processes.

When new technology comes in, we tend to lay technology over old processes in many industries. For example, in banking there were concerns in the past that ATMs and Internet banking would destroy the bank branch. Similarly, in higher education people now say MOOCs will destroy the traditional classroom. But that’s not the case. Technology is simply going to change what we do in the classroom, just like how Internet banking and ATMs changed what people do in the branches.

Knowledge@Wharton: Your paper discusses customer efficiency. Can you please explain this concept and how it will change education?

Harker: Think of the differences between services and manufacturing. With a manufactured car, you buy the car and don’t have to screw in the bolts. But in the services sector, the consumer is part of the production process. For example, if the consumer doesn’t take his or her health seriously, there’s nothing a doctor can do. If a student doesn’t take education seriously, there’s nothing a professor can do. Customer efficiency is about focusing on making the system more efficient for the customer — the student — so that they can be more effective in providing their own education.

Knowledge@Wharton: If technology is just a tool, why have so many educational institutions latched onto it as the be-all-and-end-all of innovation in education?

Harker: If you think outside of education, lots of industries have gone through this transformation. People thought technology would revolutionize everything, it flopped and then they began re-thinking the processes. We’re in the process of this transformation.

“Heavily endowed universities will be fine for some time. But for those who are not, there are a lot of forces that are changing the market.”

Another major outside force influencing traditional education is the increasing flow of venture capital money into higher education. These investors see an opportunity because the emerging middle classes around the world are demanding an education, but the world can’t build traditional campuses quickly enough to educate in the traditional way. We all need to think about this emerging opportunity.

Knowledge@Wharton: What role does the design of curriculum play in this transformation? To go one step further, should learners play a more central role in designing the curriculum if it’s meant to be learner-centric?

Harker: Curriculum design is critical. But it must be designed with an understanding of the kind of costs we’re talking about for the product we want to deliver. As it stands now, faculty committees come out with ideas, toss them over to the administration, and say, “make it so.” But this is done without any concept of cost. This has to change.

Knowledge@Wharton: What do you mean by ideation, large frame pattern recognition, and complex communication?

Harker: Machines are very good at many things. But humans are better at some things. First, we’re better at ideation, which is truly new creative thinking. It’s thinking outside of the box, not just combining ideas, which a machine can do. Second, we’re good at large frame (or large scale) pattern recognition. While machines can do a lot of pattern recognition, humans can examine the whole picture — including technology, social, political, economic and cultural factors — to find a solution to a problem.

Finally, humans are good at complex communication, which involves non-verbal communication and nuance. Machines are getting better at this, but they still wouldn’t be good at something like high-end sales. Ultimately, these are the things that are important for students to learn about. If you ask yourself, “What percentage of our curricula is devoted to this?” the answer is “Probably not much.” We have to think about redesigning the curriculum for the future.

Knowledge@Wharton: There’s one other part of your paper that I found fascinating. It looks at whether educational institutions should encourage students to dream. Why and how should that happen?

Harker: Universities sometimes become teaching factories, where classes are crunched through and no one mentors students. In this environment, the faculty can’t help students dream. But I had a faculty member mentor me during my university days and that opened up my world and helped me dream. I would not be doing what I do today if it wasn’t for a particular faculty member who took me under his wing.

In my paper, I talk about freeing up faculty time and changing the model so that faculty are spending more time on coaching, mentorship and dreaming with students.

Knowledge@Wharton: There are some very interesting start-ups that are trying to deal with the same issues that the big, established institutions are grappling with. For example, Minerva. Can you tell us a little bit more about the Minerva model and what lessons educational institutions can learn from this start-up?

Harker: Minerva was started by Ben Nelson, a Wharton alum. For the sake of full disclosure, I’m on his advisory board, along with several others, including the former U.S. Treasury Secretary, Larry Summers. Ben has been working with Stephen Kosslyn, the former dean of social sciences at Harvard University, and they have developed a learning platform based on what we know about cognition and learning. The model is based around active, engaged learning.

With Minerva, there are physical campuses where students can live, but their classroom will be on their laptops, with 18 other students. Classes will run for 45 minutes.

Minerva is bringing their pilot class to San Francisco this year and students will need to graduate with competency in two languages other than their native tongue. They’re going to focus on the issues we discussed earlier: ideation, large frame pattern recognition and communication. They’ll explore formal reasoning, empirical reasoning, critical reading and critical writing, among other things. There’s a heavy dose of liberal arts education and it will help students think critically.

Knowledge@Wharton: Will these kinds of start-ups truly succeed in disrupting the existing educational establishment?

Harker: They could. But they won’t only disrupt the system; they could potentially capture and capitalize on the global demand for education. It’s expensive to build a university, but the Minerva model is scalable.

Knowledge@Wharton: Should universities consider outsourcing services to one another? And what implications might that have?

“Ultimately, we can’t just trust technology to save us. Sometimes we use technology with no real benefit. We need to understand this and see that it all comes back to changing the processes.”

Harker: There are various forms of outsourcing. Ultimately, educational institutions have been outsourcing for a long time. Textbook manufacturers still package up PowerPoint slides with their textbooks and give instructors manuals. A MOOC is a modern version of that.

One of our missions, particularly as research universities, is not only to generate knowledge, but also to sustain it, protect it and pass it on to future generations. That can be difficult when general interest in a field is cyclical. For example, if interest wanes in subjects related to Russia, there may not be sufficient faculty at each university to teach a handful of students. But you can use technology to create virtual classrooms and bring together a consortium of universities to teach these select students all together. This allows us to keep our knowledge and research alive. This form of outsourcing is not widespread, but there are places where it’s been done very successfully.

Knowledge@Wharton: There is clearly a huge amount of change that is required in higher education. Who do you expect will be the primary change agents to drive this change?

Harker: The faculty members have to believe in the change.

Knowledge@Wharton: But don’t they have the most to lose?

Harker: That’s a good question. They might, or they also may have the most to gain. It depends on how you look at it.

For example, I know several faculty members who have gotten deeply immersed in MOOCs. I asked one professor, “Why are you doing this?” He said, “This is the future. I want to be ready.” This won’t catch on across the faculty, but there are going to be early adopters. You need these individuals to prove the concept.

Knowledge@Wharton: In five to 10 years, what changes do you expect to see in higher education? Are you optimistic or pessimistic about the future?

Harker: Let’s start with your question about optimism and pessimism. We’re currently seeing Moody’s and S&P downgrading the debt ratings of various small colleges and non-research state universities. They don’t expect these institutions to survive, and that’s a concern.

But for universities that are currently strong and robust, like any industry, it can be a winner-take-all scenario. If these institutions seize the opportunities in front of them and are willing to change, this is critical for their survival. Otherwise, they may join the others in decline. That’s what I worry about.

At the end of the day, the higher education system is a true gem in the United States of America. Higher education is critical to economic development and growth all around the world. We’ve got to get this right.

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