Technology has the ability to radically disrupt any industry’s value chain - including education. Harold Jarche (a fellow Canadian) on his Learning and Work on the Web blog comments:
.. the dominant education business model may suffer the same fate as the manufacturing industry - commoditization.
I would take a slightly different view and argue a better term would be ‘optimization’. Standardization in manufacturing has been removing inefficiencies in manufacturing value chains - namely sourcing search costs - and has resulted in Walmarts packed full of low-cost goods. Maybe bad for US workers, but great for US consumers (and people who want to offshore manufacturing pollution; my poor China-stained lungs!).
The same holds true for education. By breaking down the value chain in education into discreet value-adding activities, technology can be used to optimize the process resulting in more student convenience and inevitably lower prices as the inefficiencies get shaken out of the system and competition pushes prices down.
This is exactly what we have been trying to do with our LanguagePod’s. By breaking down the language learning value chain for adult students here in Shanghai, we believe we can smartly apply technology where it is appropriate providing a service that is not only more convenient and more personalized, but with a reduced cost structure as well. This is how we see the emerging value chain for language training breaking down:
More market-sensitive education products (e.g. adult learning) are likely to be the first to shift to student-centered learning. With a huge chunk of adult English training here in Shanghai served by private schools, one would expect a large amount of innovation to occur as entrepreneurs try to solve problems in innovative ways.
One other example. The Economist has an interesting article this week entitled ‘Financial Exams‘ which discusses the rising popularity of the CFA exam. It seems to me a good example of Jarche’s point in a previous article:
At a certain point in time (2008?) the cost-benefits of a university education will be put in question. How expensive does it have to be before the majority opt out or look for “good enough” options? Once a certification body gets recognized by enough employers, it could become the de facto as well as the de jure standard.
If I am an aspiring investment banker looking at making an investment in either an MBA or the CFA, why would I stop work for up to 2 years and pay significantly more in tuition for an MBA only to have future employers value a level III CFA certification more?
