Financial Times, November 20, 1995


   Endangered species. Modern electronic technology could mean
   that the days of academics at higher-education institutions
   are numbred.

      People pay enormous sums for higher degrees, not because
      they cannot obtain the knowledge elsewhere, but to give
      themselves an edge in hyper-competitive labour markets.
      Higher degrees serve a function akin to that of the
      exotic plumage of birds: they are primarily a means of
      attracting attention, of signalling that you deserve
      special attention.

   By Michael Prowse.


   The future for American professors -- indeed for academics
   everywhere -- looks bleak. I say this with a certain
   sadness because I have the greatest respect for academic
   ideals. But the plain truth is that they are selling a
   product that is ridiculously expensive and ill-suited to
   the needs of a rapidly changing economy.

   You will probably have heard a lot about the unrestrained
   growth of US healthcare costs. Well, academics are putting
   doctors to shame. The cost of college tuition has risen 174
   per cent in the past decade. That is more than three times
   the increase in consumer prices, which rose by 55 per cent.
   The cost of tuition in a top private university is now
   about $20,000 a year. Since 1990, borrowing to pay for
   higher education has doubled and is now running at about
   $25bn a year.

   This cost explosion is outrageous if you recall that prices
   are falling in most other information-based industries. Why
   is academia unable to control costs? Largely because it
   refuses to embrace technological change. Teaching is still
   organised in much the same way as in Plato's day. Thousands
   of lecturers stand in classrooms delivering lectures.
   Millions of students travel hundreds of miles so as to be
   physically present on campuses. Universities are still
   associated with particular buildings, libraries, lecture
   halls and dormitories.

   In the age of the Internet none of this make sense. Most
   education -- I would make an exception for performing arts
   -- can now be enjoyed in the comfort of one's home via the
   computer screen, and at a fraction of the cost at which it
   is sold by the Harvards of this world. One academic can
   prepare and deliver a course to an unlimited number of
   students worldwide. And there is growing evidence that most
   cognitive skills can be learnt more effectively on screen
   than in the lecture hall. With interactive software and
   multimedia technology, courses can be tailored precisely to
   the needs of individuals -- something impossible in the
   classroom.

   Conventional universities seem absurdly outdated in another
   respect. They are still wedded to the idea that learning
   should precede employment, with the length and quality of
   education determining the quality of job subsequently
   enjoyed. This notion has been taken to an extreme in the
   US, where the minimum requirement for a good "professional"
   job is now a bachelor's degree plus a law degree, MBA or
   doctorate. Most able students now spend anything from six
   to 10 years earning paper diplomas before entering the job
   market. The financial burden, given the level of fees, is
   excruciating.

   The notion that education must precede employment is
   vigorously attacked by Mr Lewis Perelman, president of the
   Kanbrain Institute in Washington and author of a visionary
   1992 book, "School's Out" (published by William Morrow, New
   York), which predicts the demise of conventional education.
   The word "kanbrain" is taken from kanban, the Japanese term
   for the "just-in-time" inventory management techniques that
   have revolutionised factory production. Mr Perelman argues
   that modern electronic technology has made just-in-time
   knowledge eminently feasible.

   The old approach was to start life by trying to accumulate
   as large a stockpile of knowledge as possible. Hence the
   years of toil in the groves of academe. But in a rapidly
   changing world this is inefficient. We do not know if what
   we have learnt will be relevant. And in any case our
   knowledge decays over time. The better strategy is to wait
   until we need particular knowledge or skills and then
   obtain them electronically. A switch to "just-in-time"
   learning would transform the pattern of our lives. Talented
   people would not spend years preparing for employment. They
   would begin work early -- perhaps in their mid-teens -- but
   continue learning, on the just-in-time principle,
   throughout their lives.

   In such a world "going to college" would cease to be part
   of the American dream. Electronic college would be
   available for everyone all the time. But the courses would
   probably not be supplied by heavily subsidised, non-profit
   institutions such as today's universities. A true market
   would develop, with commercial "learning companies"
   competing for the custom of people of all ages and talents.
   Electronic education, as Mr Perelman argues, is likely to
   be a highly profitable business for companies in the
   information business -- a far bigger money spinner than,
   say, home banking.

   What is to stop companies such as Microsoft, the Seattle
   software giant, entering the higher education market
   immediately and providing screen-based education at a
   fraction of the current cost? There are two main obstacles.
   The first is that educators form a kind of closed shop: the
   accreditation committees that determine what counts as a
   bona fide university will fight to protect the market of
   existing institutions, just as unions fight to protect jobs
   in declining industries.

   The other obstacle is the attitude of employers. People pay
   enormous sums for higher degrees, not because they cannot
   obtain the knowledge elsewhere, but to give themselves an
   edge in hyper-competitive labour markets. Higher degrees
   serve a function akin to that of the exotic plumage of
   birds: they are primarily a means of attracting attention,
   of signalling that you deserve special attention.

   Yet simple tests of cognitive ability can be administered
   in less than 30 minutes. Such tests, which can be tailored
   to the needs of particular companies, are a better guide to
   job performance than academic degrees. If employers were
   willing to hire on the basis of competence to do a
   particular task, rather than paper credentials, a shift to
   cheaper and more convenient electronic education could
   occur quite rapidly.

   Technology, in the end, has a habit of proving decisive.
   The horse and buggy was a fine means of transport in its
   day. Yet it was swept away by the motor car. In due course,
   just-in-time electronic education, delivered to your living
   room by commercial companies, will undermine the most
   hallowed names in higher education.

   [End]

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