Wednesday, March 25, 2009

Business Model

There is much hub-bub about applying a "business model" to higher education.  While this gives some academics reason to rant, I don't reject the discussion out of hand.  I actually see Higher Education as a business.  We have managed to convince nearly everyone that we have a product they must buy.

I only ask one question.  What is our business ?

Vocational training.  Induction into the life of the mind.  Purveyor of diplomas.  Warehousing the sex crazed, beer swilling part of the population until they mature.  Training league for the Business of Sports.  "Service to the community".  Basic research institute.

Too often I hear people talk about the business model in a sense that indicates that the job of higher education is to send people into the world with diplomas in their hands at the cheapest cost per unit.  Unfortunately, the quality of the product never enters the conversation for most people who decry the cost of higher education.

We need to escape the "units produced" and "cost of production" mentality before we find ourselves with lots of low cost poor quality units that no-one wants or needs.  After all, based on units produced and cost of production the Yugo was a great car.

So to borrow from Bill Maher, this week's New Rule is:  If you are going to argue for a business model for higher education, you must identify what business.  What is the product?  How is quality measured?  How will you ensure that the costs of production are met?  If you can't at least address those questions, you can't participate in the conversation.

Now, we can have a conversation free of bile, which will potentially move us toward resolution of the education business problem.

3 comments:

  1. Quality can be measured by providing more information about a university. Student's overall satisfaction from reviews would be helpful, especially by each department. The reviews must be independently published.

    Each university caters to a different crowd. Some universities are more practical, many students are there to advance financially. Students here would be more likely to comment about their ability to find work that applies to their area of study

    Other institutions offer more frills (recreation areas, frats/sororities, obscure degrees etc.) and some students are attracted to that. They may evaluate quality based on the atmosphere that is present.

    The product a university produces varies a lot because of the student's desires. A City College (CC) student that just needs vocational training might find a UC campus to frivolous, especially with so much general ed. A UC campus student may find a CC to boring and not very broad in terms of the student body and education. All a university can do is cater to their students desires and see if those desires are being found at that campus.

    I'll take out some variables and assume were talking about STEM education.

    I know it's not all about the jobs, but placement rates in a field of study could be the best way to give students an idea about what a university is good at. But the numbers mean different things at PUI vs RO1. RO1 would not beat a PUI in placement rates of it's grad students. Demand for MS scientists is much higher than for PhD, but placement rates might push people to go for the MS fulfilling society's demand, giving universities a more tangible product to produce.

    RO1s would be pushed to produce more MS candidates to compete in placement rates and fulfill demand. They may also be more picky about students since bad ones can ruin their rates. Poorly educated students would not be able to compete in their field, thus reflecting on a university.

    Still this is very simple but it at least involves the economics of educated people and societies demand for them, however cruel that may be.

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  2. Many universities want to be all things to all people, so they avoid being pigeonholed into being "career focused". Being career focused might also cause some to ask why certain courses and degrees are offered at the school.

    Too much career focus takes the university way from the "life of the mind", which some will decry. In my experience since we sold college as the steeping stone to a career, most students are only interested in the college lifestyle and/or career prep.

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  3. Here is an article for you:

    http://chronicle.com/weekly/v55/i30/30a02101.htm

    Food for thought on this issue.

    Business models for education are really difficult to make since it means including the demand for what we produce. Focusing on that causes specialization as is seen with the emerging online schools. Few course offerings and only in areas society has a real (or perceived) demand for.

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