The Iceman Cometh

“Some say the world will end in fire and some in ice,” wrote Robert Frost. His poem comes to mind because many people are warning that new technology is going to destroy higher education as we know it.

If so, how will it happen?

Clayton Christensen gives us a clue. Christensen became rightly famous with his book The Innovator’s Dilemma, a description of how economies progress—an elucidation of Joseph Schumpeter’s concept of “creative destruction.”

Christensen’s unique discovery was that even when existing companies see clearly that a new “disruptive” technology is coming along, they can’t stop it, adopt it, or control it. 

Because they are caught in a web of their own traditions and ongoing business relationships, they cannot incorporate disruptive innovations—even though they are good at the kind of innovations that lead to better performance for their traditional customers. Such companies are often well-managed and much admired, with farsighted leaders who see the technology bearing down on them, but they remain frozen in place and the freight train runs them down.

Christensen has since written about K-12 education in this light, but the lessons are even more apt in higher education. Many colleges and universities are trying to tame the new technology—primarily, online education—but they may not be able to muster the forces to avoid disaster.

Let me take a few minutes to describe the “creative destruction” process that Christensen sees in the commercial economy and then apply it to the world of academia. Two examples of the disruptive technology process are the transistor and the personal computer.

Invented at Bell Labs in 1947, the transistor offered a potential alternative to the bulky and breakable vacuum tubes that had made radios and TVs possible. The nation’s leading producer of radio and televisions, RCA, spent $1 billion  (in today’s dollars) trying to apply the transistor to the company’s existing products, but failed.

Meanwhile, Sony came up with a pocket radio that teenagers loved. While the transistor wasn’t powerful enough for RCA’s products, it could operate devices such as hearing aids and small radios. Once it had a market, the transistor improved over time. Eventually, it put RCA out of business.

The new technology found a niche because it was competing with “nonconsumption.” That is, Sony didn’t have to make a better radio—it just had to make a radio for customers who couldn’t afford a standard one. Once it got that foothold, it gradually improved to the point where it undermined the old companies.

The story of the personal computer has parallels. By the 1970s, companies like Digital Equipment Company (DEC) had figured out how to make efficient computers for businesses. Their products were called minicomputers because they were smaller than the gigantic mainframes, which took up complete rooms, but they still cost over $200,000 and were used only by businesses.

During the height of their success, an alternative idea emerged—that little machines with minute computing power might have their uses. The late Edward Roberts, a hobbyist and tinkerer, brought out his Altair in 1975, and then the “Apple IIe” appeared—a personal computer that Christensen says was originally viewed as a toy for children.

Big firms like DEC kept on doing what they did best—improving their products to meet the needs of their high-powered customers. For them, the Apple IIe was merely a gnat buzzing around them on the back porch, mildly irritating but hardly capable of causing real harm. In the earliest stages, it would have been foolish for them to try to copy Altair or the Apple because the profit margins on those products were infinitesimally small and the markets puny. Furthermore, they would have had to completely change their corporate culture—a culture that was doing beautifully making money by serving big customers. They could not jeopardize their high profits by going after a tiny hobbyist market.

Over a decade, however, personal computing got better and better, and all of a sudden the minicomputer companies’ highly successful business model collapsed, and the companies did, too.

How does Christensen’s “disruptive technology” apply to the university setting? Most people would agree that such a technology is lurking on the Internet in the form of online education, a technology that could revolutionize education. But (shades of fire and ice) we don’t know how it will happen. Here are some ideas.

To begin with, a technology needs a foothold, and for-profit schools such as the University of Phoenix and Kaplan are creating one. Like Sony five decades ago, they discovered an underserved population—nontraditional students. These students are older than the 18-22 cohort, employed, but often with low incomes. Up until the minute they enrolled at for-profits, they were “nonconsumers” of higher education, just as teenagers were nonconsumers of radios until Sony’s pocket radio came along. For-profits created a market that didn’t exist before, exploiting the technology of distance education, and now enroll about 10 percent of all college students.

As time goes on, these proprietary colleges are likely to improve their online technologies, but a caveat is in order. Unlike Sony, for-profits can tap financial support through federal grants and loans. The for-profit sector might not have grown so dramatically in recent years without that subsidization. This financial cushion makes the market more lucrative but may also dampen for-profits’ incentive to innovate.

Traditional colleges and universities are not standing still when it comes to online courses. Public universities are embracing them, and some have even hired for-profit companies to package and market online versions of their usual courses. (For example, Lamar University hired Higher Ed Holdings, a private company, to expand its teacher-education courses online.)

The University of North Carolina has been a leader in offering online courses. But here’s the rub: UNC online courses do not seem to consistently achieve high quality. At least that’s the on-the-ground report from a recent UNC-Chapel Hill graduate. David Koon vividly describes his online courses as having easy assignments, indifferent and even AWOL instructors, and inflated grades. Koon says that the only reason he and his friends took such courses was to make time for more important things (whatever 20-year-olds think of as more important).

It seems obvious that schools with the funds for online education should develop some distance education programs. But—if we can learn from the experience of RCA and DEC—that is more difficult than it seems. Like those long-lost companies, universities have well-entrenched ways of doing things—and, by their lights, higher standards.

In recent decades, universities have been immensely successful by pursuing excellence, going out and finding money to hire and reward the best faculty, not narrowing their goals in the light of cost stringencies. They know that online education is a poor cousin, and most of their top-tier faculty don’t want any part of it. To most faculty, online courses are about as appealing as the Apple IIe was to DEC, and most administrators are averse to cutting costs if they can avoid it.

Furthermore, universities are hog-tied by what Christensen calls their “commercial system,” a term that Christensen adopted from his earlier work. It encompasses the entire network of relationships that surround the production, sale, and distribution of products. These can be just as stifling to innovation as the old technology itself.

For example, RCA and Zenith radios were sold mostly through appliance stores (which made most of their profits by repairing blown-out vacuum tubes). Stores that sold RCA and Zenith radios didn’t want little Sony radios because they couldn’t make money on repairs. Undaunted, Sony marketed the radios through new discount outlets such as Target and Wal-mart. (Thus, the disruptive technologies affected retailers as well as producers.)

Facing such resistance, online education is more likely to grow stealthily, perhaps below the radar of most colleges and perhaps over a long time. The use of online technology by one professor at North Carolina Agricultural & Technical State University, Mark Burkey, reveals how new technologies are subtly permeating higher education. He started “Burkey Academy” on YouTube to help his students better follow his economics and econometrics courses.

His online classes aren’t just repeats of his stand-up lectures (we don’t see Burkey except in one fuzzy photo). Students hear his voice, but they see a screen with something like graph paper that illustrates his words with changing lines and curves. And without any advertising or fanfare, somehow Burkey Academy has caught on in select corners of cyberspace. A group of students in Ohio, whose professor apparently isn’t explaining things too well, are using his tutorials and so, apparently, are econometrics students around the world.

Indeed, there is an entire “industry” (if that’s the proper term for people giving stuff away) called OpenCourseWare. MIT, for example, has posted many courses online—the lecture notes, syllabi, readings, and some audio and video lectures themselves. And the Obama administration is using $500 million to promote an “Online Skills Laboratory” designed to spur this kind of openly available course content.

But I don’t think that the open-course industry is going to pull the trigger on education as we know it, for the reasons suggested above: Higher education is a big, complex, and successful industry, and it is going to side-step change. Utah State University recently downsized its open-course program, citing financial reasons.

Rather, online teaching is going to make inroads in ways that no one fully notices now or can predict for the future. Unconventional students, from homeschoolers to housewives, are already using it. And while everyone notices the big for-profits, lurking in the sidelines are companies like, which started to offer courses much more cheaply than the University of Phoenix but couldn’t get accreditation. Straighterline is working with accredited universities now, but it is undoubtedly poised to sell directly to consumers if the situation is right. 

I’m not ready to make predictions, but I see a lot of behind-the-scenes entrepreneurial activity by both producers and consumers in the education field. The great universities of this country should be on their guard, lest they become the RCAs and DECs of 2020.