Disruption may be delayed, but forces of change are present.

Australian Financial Review
15 November 2021

Attempts to force adoption of technology usually fail. Disruption and innovation in higher education won’t happen unless people want it.

For many years, commentators have argued that the higher education industry will be disrupted through technological change. They predict that the campus will be a thing of the past as students learn through the online delivery of lectures, tutorials and mentoring.

Student progress will be assessed through machine learning and artificial intelligence.

In reality, not much has happened to disrupt the industry, but what gives us cause to think that this time it may be different?

One lesson from student-free campuses during COVID-19 is that students like the social interaction of learning.

Arguably, the higher education industry has matured and reached peak demand under the existing model.

Mature industries are ripe for disruption. Education is one, but so also is construction. We still await disruption in health, notwithstanding the promise of e-health, robotics and advanced diagnostics. Health costs continue to soar.

Of course, COVID-19 saw a rapid growth in the online delivery of lectures and tutorials. But there is intense pressure for these to be returned to the lecture theatre and seminar room.

Industry economist Michael Porter from Harvard University argues that disruption can be “forced” by five forces: changes in the behaviours of suppliers; changing preferences of buyers; the availability of substitutes; potential for new entrants; and intense rivalry among existing players.

Technology can be an enabler of disruption but will not necessarily drive it. Predictions of disruption based on technological determinism have a poor record in driving change.

There has never been a shortage of ideas, but only a few are adopted, applied and used in industry and society.

There is an emerging recognition that learning is also a social activity.

Economic history tells us that disruptions in past industrial revolutions have been demand-driven. Improvements in public health made the industrial revolution possible. Numerous companies were making mobile phones in the 1990s, but only a few understood there would be a demand for smartphones that could be widely applied and used.

In higher education, technology will also be pulled through. It may be existing technologies that have been around for years, such as the open-source learning management system Moodle, or new technologies made available through recent discoveries and inventions.

But, it will not happen unless people want them. Attempts to force technology adoption usually fail.

Adoption will reflect the combination of forces relating to supplier and buyers, the availability of substitutes, regulations allowing new entrants, competition and the flow-on impact on price.

Disruption may not traverse a whole industry. There are still legacy firms that make SLR cameras, provide traditional taxi rides, and sell in shopping malls and suburban retail strips. People still like to go out for a drink, go to the movies and meet in conventional restaurants. Much of this has to do with a social experience.

Private providers

There will be existing and new providers that commit to online learning either on their own or in collaboration. EdTech companies are attracting enormous amounts of venture capital.

But there is an emerging recognition that learning is also a social activity. Online providers are supplementing their offerings with learning centres providing “spaces” for mentoring and student interaction, many of which are outsourced to community organisations.

Legacy players will continue and prosper by improving the quality of their offerings by playing to their strengths in areas such as research, access to expensive engineering and medical laboratories and equipment, and an on-campus student experience. They may, however, continue or increase their outsourcing of aspects of teaching to private providers.

Higher education can be expected to adjust and rationalise aspects of its business model and look towards diversification and differentiation. But the pressures of path dependency established over many centuries are likely to remain embedded.

Predictions of massive disruption may be premature. But the forces of change are present and will need to be managed if the industry is to survive in its current form.

John Howard is the founder of Howard Partners, a public policy research, strategic management, and communications consulting firm.