A few years ago when the world began to pay attention to the presentations and documentaries that the former vice president of the United States Al Gore made about the threat of global warming, through some social networks (at that time in its genesis), a video of a young man who made a reflection supported by game theory by Professor Nash, his reflection moved in two conceptual dimensions:
1. Will Global Warming be a reality, or a fantasy caused by paranoia?
2. Is it worth acting against global warming, incurring expenses and investments; knowing that it may be a fantasy?
In this way the young man, (whom I would love to give credit to but I do not know his name, however his explanation can be seen on: Youtube, he proposes four possible scenarios, and for each of them he describes a result, which he orders in a matrix:
The conclusion reached is that although the most favorable scenario in economic and sustainability terms on the planet is 4, and the most expensive but least efficient is 3; Scenario 2, where global warming is a real phenomenon that is due to human activity and we decide to do nothing, is so terrifying that the obvious decision, regardless of economic analysis, is to act.
From a similar perspective, I would like to address the issue of virtual education, its possible impact on traditional higher education and whether or not it is worthwhile for educational institutions to act decisively against this phenomenon.
Some history…
Before going into the subject, I would like to review the case of some industries, in which the traditional paradigm and the metrics of what the market asks for changed abruptly and the entry of new players who understood the situation, and perfected their model, led to the bankruptcy to traditional players.
Let's review the case of airlines:
Although low-cost airlines are the norm today, and we see these companies seeking to operate in the most efficient way to offer the best fares to the market with the highest quality and safety standards, that was not the reality twenty years ago. years, the metrics by which the market valued the service of an airline ranged from the comfort of the chairs, to the quantity and quality of the food served in flight, those over 30 remember and will prove me right.
By the 1970s, the air passenger market in the state of Texas, USA, was dominated by two today defunct airlines: Braniff and Texas Intl; for that decade a third player entered the market called South West Airlines, at the time competitors argued that the market was extremely small for a third player, and all three embarked on a very aggressive and unofficial price war, and I mean unofficial because the airline campaigns still promoted the values that were believed to be sacred to travelers, comfort, class, reservations, food, etc., but at the same time with their reduced fares they planned to fill idle chairs.
However, in Southwest they began to make some accounts and propose intelligent questions, ending by asking the most important question: why did the number of passengers transported between the three operators exceed the size that it was assumed (without question) the passenger market had? The answer was clear: given the low rates resulting from the price war, people who did not consider flying before were doing so; Those who traditionally traveled by bus now flew, business travelers who would think of driving from San Antonio to Houston, now preferred to avoid the wear and tear of the journey and buy a cheap air ticket.
South West's reaction to this reality was to challenge traditional metrics and adapt to the new ones that this previously hidden market required: low rates, security, punctuality, among others, in this way SW stopped obsessing over its rivals and worked to design a Model where it did not offer pre-assigned chairs, nor huge luggage capacities, nor sumptuous meals, it simply offered to transport you from point A to point B for the lowest cost and in a timely manner, any additional requirement was charged.
In principle, this proposal was only thought to attract "non-consumers", that is, those who did not fly before, did not value traditional metrics, and did not have a comparison pattern; however over time SW perfected its model and traditional passengers began to abandon their traditional requirements and adapt to the new service proposal, as a result of this traditional airlines such as Braniff, Texas Intl, and nationwide as Pan Am and TWA they are more than just a memory, while South West is the fifth largest air carrier in the US, at a time when Continental has had to merge, and American Airlines take refuge in bankruptcy law protection.
Many times the traditional media and travelers are inclement with the new low-cost airlines due to their operational trauma and delays, however these travelers have a pattern of comparison with other airlines that have contracted in the past. It is worth asking: will these airlines be measured in the same way as those who have never flown and that their alternative to waiting a delay of two hours is to make a 15-hour bus ride? How long will it take to perfect their operation and given their light cost structure? attack head-on the traditional market owners?
As the case of South West, there are many more in the business history, IBM, RCA, all succumbed to competitors who perfected their proposal in niches that previously did not consume their products, perfected it and then swept the traditional market, this concept is called a " disruptive innovation ”and has been extensively and masterfully worked by Professor Clayton Christensen of the Harvard University School of Business.
Moving on to Education:
So far we have not touched on the issue of education, nor specifically that of the virtual modality, but we can ask ourselves several questions: does virtual education put the traditional model at risk of disruptive innovation? Is it worth acting?
For years the belief that quality education goes hand in hand with face-to-face has been managed, and the truth is that until today there has been no innovation that conclusively contradicts that argument, however several aspects associated with the virtual model lead us to question that assumption, among others:
-The current generations have radically different preferences than their predecessors, use of mobile devices, social networks, virtual environments, etc., for them they are engraved in their DNA, but for those of us who were born before 1985, they are novelties.
-Virtual education allows you to deliver content in the most friendly way possible, the user can go through a course as many times as they like, choose their schedules, the instructor's diction can be improved, the visual aids, the interaction between conference and activities, They have proven to be a very loyal vehicle for the transmission of knowledge.
This being the situation; it can be thought that the risk for the traditional model exists and that the decision is whether to act or not; But what does it mean to act?
For the players who decide to face this reality in a decisive way, there are difficult but very interesting challenges to attack, probably the university activities of generation and delivery of knowledge can disintegrate.
Traditionally, the university has been dedicated to the entire chain of knowledge delivery:
- Teacher training and hiring. Content creation. Infrastructure. Degree. Research.
The virtual model is likely to lead to a modular approach to education, without this posing a problem for the university, but rather an opportunity. Why not think that in the future there will be players (in fact they already exist, just review coursera or iTunesU), dedicated exclusively to the generation of content? Other players dedicated to "fullfillment" or the development of programs, others dedicated to marketing and distribution, and others to titling ?, although this is an extreme scenario of disintegration, between the current and the proposed model there are many gray areas and the future may be in one of them.
However, in Latin America access to higher education is around 33%, that is, only one in three students who want to access a professional degree has the opportunity to study to obtain it. Those other two unattended students are the perfect breeding ground for disruptive innovation, just as bus riders were for Southwest.
Institutions that have begun to work the virtual model, in its beginnings began enrolling students demographically very different from their face-to-face students: parents, employees, over 30 years old…, for whom virtual was their only option. How long will it be before these players perfect the model and come out with a product that is attractive to face-to-face students?
The opportunities are endless, currently MBA graduates from ivy league universities in the US, enter the labor market costing scandalous figures, so most of them end up working in Wall Street firms, (sometimes creating the equivalent of weapons of mass destruction in finance such as credit default swaps and CDOs that put us in the midst of another great recession in 2008) since the companies that make up the real economy, supplier of tangible goods and services, simply lack of the budget to hire them.
The corporate reaction has been anything but passive, companies like Johnson & Johnson, Intel and Procter & Gamble have created top-tier corporate universities, and right now in the United States there are 8 times as many people learning business skills at corporate universities that in business schools !!, that undoubtedly has to be an alert, who is generating this content for them?, without a doubt, the personnel who are studying within their companies are personnel who could not access a business school, how long Is it going to be before these corporate universities like South West perfect their model and begin to bite into the traditional business school market?Will it be that over time employers will give a better score to a candidate who learned his skills while living the business reality, instead of being immersed in a classroom for 24 months? How much does it cost for a transnational company to move staff and instructors to their new plants?
At the end of the day, each player must answer whether Virtual Education constitutes a risk for traditional education and, if so, design strategies to face this challenge and exploit it as an opportunity, however, the worst thing that can be done is to avoid reality. 1950s respected minds said that people would never spend hours in front of a box that at that time some crazy person called television.
Notes:
1. An inconvenient truth.
2.
