The fountainhead of the modern world, universities, have been severely impacted by the pandemic. But even as they fight to survive, their existential purpose is increasingly being questioned by developments fast-forwarded by the ongoing crisis.
This is the second part of the series ‘The New Terrain In Post-Pandemic Tensions’. Read Part One ‘Tech Firms vs The State’ here.
The best of them have been the cradle of humanity’s brightest, incubating ideas that have changed the world. For at least the last century, universities have been the place to go, for anyone seeking the opportunity to lead a good life. The better the university, the better the opportunities. But rising tuition and ballooning student debt has taken the sheen off the achievements of even the most vaunted of institutions. In their competition to be the best, universities have been blamed for becoming “luxury brands” rather than “public servants”. They have gained the position of being arbiters of success and are increasingly seen to fail in their social responsibility of facilitating social mobility by leveling the playing field.
Despite their perceived social failures, universities continue to be the gatekeepers to a good job and a secure future. Firms, even investors, rely on them to screen candidates and separate the wheat from the chaff.
The lucky ones who get through this screening get a degree that signals their employability. The universities whose degrees are accepted as strong signifiers can then screen even more rigorously, and the cycle perpetuates itself. This process has proven to be remarkably resilient and informs the incentive structure that has universities acting like luxury brands, with exclusivity as its central tenet. While the structural inequities this creates have been well documented, to expect the university system to reform themselves out of the goodness of their hearts would be like expecting Ferrari to produce a low cost, fuel-efficient car because we all want one. The incentives just do not align. There is hope though. Major crises tend to exacerbate existing faultlines and fast-forward institutional evolution, and the ongoing COVID-19 pandemic might force universities to adapt to stay relevant.
Online courses have been around for a while, growing from a curiosity largely restricted to coders to spawning large platforms with hundreds of courses. Many top universities have even joined forces with one or more platforms, further elevating the perceived quality of online education. Even so, online education was at best thought of as being complementary to a mainstream degree. It is only now, with universities not able to offer classroom education, that online is emerging as a legitimate alternative. The recent lockdowns in many parts of the world also facilitated many students and professionals getting on the platforms for the first time, increasing both comfort and familiarity with the medium.
This has created a conundrum for universities: admitting that online classes (that their enrolled students are taking) are not comparable to physical classes might create financial liabilities (payback fees), not admitting it might make cheaper online alternatives more credible in the future.
This may not be such an acute problem for the elite schools, but the ones outside this bracket might face a serious threat. Scott Galloway of NYU (Stern), thinks that many of the less prestigious universities will not survive this crisis. He predicts that top institutions will tie with big technology firms, “MIT and Google, Microsoft and Berkeley” to run the online universities for the masses, with only a few getting the in-class tutoring. But besides the fact that the future of large technology firms is not as certain as it is made out to be, there is a big hurdle that any such online university will have to overcome, attrition rates. Most online platforms have struggled with retaining students despite spending significant resources on developing content and improving engagement. While this does not negate the possibility of such endeavors, it serves to point out that online education works best for highly motivated students. Further, online study programs that enroll hundreds, even thousands of students, do little in terms of providing meaningful signals to future employers.
Watch: How COVID-19 could impact the fate of university education?
Reducing the need for Signals
Standard economic textbooks describe screening and signaling as ways of addressing the problem of information asymmetry: an employer does not know the true skill level of a prospective employee. However, if the employer can develop better and cheaper methods to evaluate the skills of an employee, then the need to rely on signals should reduce. Artificial intelligence and machine learning have already been put to use by many firms to optimize their recruitment processes. New firms have come up with (source of) degree agnostic talent acquisition processes to find the best available talent to match a firm’s needs. All of this has, and will, continue to improve their ability to identify skilled candidates, outside of the small proportion of the population that top universities cater to.
The education that candidates have access to of course determines their skill level, but increasingly that can be accessed online.
These developments fundamentally undermine the signaling value of a university degree. Large brands rarely die overnight and it will take sometime before these systems are used more widely. However, the pandemic seems to have sped up the process of dilution and dispersion.
Jack Dorsey‘s announcement early this year, to decentralize and spread out Twitter’s workforce all around the world was seen as a response to the rising cost of office space in the Bay Area. But with work from home becoming more acceptable across the board, more and more businesses are likely to hire talented individuals irrespective of their geographical location. Instead of being purely cost-driven, this shift will be spurred more by the need to find the best people for the job and to diversify their workforce to better respond to new challenges. But many countries do not have universities that can be easily compared to the top institutions. Hence, this expansion across borders will require hiring to be based more on skill assessment than on the signal from a degree.
What can universities do?
Universities across the world are facing a crisis of unprecedented proportions. The prospect of refunding fees to students who can no longer use the school’s facilities, setting up online classes, figuring out exams and grades have all been the primary concern. But as the semester draws to a close, and the specter of another semester of online classes looms, many are desperately trying to reformulate their admissions and pricing strategies to cope. Student enrollments typically increase in a recession, while that may be the case for the upcoming batch, in the absence of physical classes universities will be unable to charge the same fees. In this light, and the complications that arise from relying on international students, even top universities have had to cut staff salaries to buy themselves some time.
Just the immediate impact seems to have been enough to bring many institutions to their knees, even before the competition from online education and the devaluation of degrees have begun to have a material effect. But any response that only addresses the immediate challenge risks missing the forest for the trees.
Some of the current problems, though debilitating, will pass with the epidemic. But if students can educate themselves and firms can hire candidates without degrees, universities face an existential crisis.
One possible way that universities can re-invent themselves to face up to these new challenges is by focusing on improving the average quality of tertiary education, instead of catering to the smartest, most motivated students. The latter is the group that is most likely to benefit from online programs and they are unlikely to need as much help as the many others who do not meet both the criteria. The resulting reduced focus on exclusivity and putting up price barriers will also have the happy side-effect of aligning a university’s objectives with that of society at large. It will also create a self-selection process to replace the rigorous screening of applicants. Students have to decide which group they are in. For highly motivated and skilled youngsters, the opportunity cost of attending university for 3-4 years will be very high. They could instead take 5 online courses simultaneously to start early on the job market and keep updating their skills over their careers. Many coders already do this. For the rest of the world, the traditional route might be more desirable to discover and develop their personalities and skillsets, aided and abetted by the structure and discipline that brick and mortar universities are in a better position to provide.
Watch: Why e-learning is killing education
All of this will, of course, entail a reimagination of what it means to teach at a university. If the primary task of a traditional university to encourage and regulate, then researchers working at the cutting edge of their fields would be an overkill. Instead, these researchers might have to compete against the best in the cut-throat world of online classes. Most of them will likely not survive, with serious implications for academia and the relationship between research and teaching, another area that is ripe for disruption.
They might not want to, but if no one is buying expensive sports cars, even Ferrari might be forced to consider manufacturing low cost, fuel-efficient cars.
Universities will change, not because they wanted to, but because they have to. In the times to come, the university grounds will still teem with young people full of hopes and aspirations. Hopefully, with the changes that are afoot, their universities will serve them and society better.