Policy Forum: U.S. Higher Education Urged to Embrace ‘Disruptive Innovation’

WASHINGTON, D.C. — At a time when the Obama administration is calling for America to “out-educate” and “out-innovate” the rest of the world, leaders of the country’s colleges and universities were encouraged Tuesday to embrace a concept known as “disruptive innovation” in order to spur productivity and increase quality in the face of tight financial resources.

The concept was touted at a panel discussion at the Center for American Progress, a liberal-leaning  policy and advocacy organization. The Center also released a paper on the subject, “Disrupting College: How Disruptive Innovation Can Deliver Quality and Affordability to Postsecondary Education.”

The paper defines the concept as “the process by which a sector that has previously served only a limited few because its products and services were complicated, expensive, and inaccessible, is transformed into one whose products and services are simple, affordable, and convenient and serves many no matter their wealth or expertise.”

One higher education example of “disruptive innovation” is online learning, which has grown nearly three-fold from 2003 to 2009 in its postsecondary presence and is expected to reach at least 50 percent of all students by 2014, one of the panelists said.

“This exciting growth is an opportunity for us to rethink many of our age-old assumptions about higher education and how it works,” said Michael B. Horn, a co-author of the paper. Horn is also the co-founder and executive director of Education of Innosight Institute, a non-profit think tank that espouses the use of disruptive innovation to solve problems in society.

But online technology must not just be embraced as a tool that brings about greater efficiency and enables more access, but that also improves quality, panelists said.

“Institutions have focused on access, but changing circumstances mandate that we shift the focus of higher education policy away from merely enabling more students to afford higher education, to how to make quality higher education systems affordable to all students and society,” Horn said. “It dictates a new definition of quality from the perspective of students, so (that education) is valuable to them and through it they can improve their own lives.”

Eric D. Fingerhut, a former Ohio Congressman and current chancellor of the Ohio Board of Regents, said disruptive innovation is so critical to improving higher education that it is necessary to reach the Obama administration’s goal of becoming the most college-educated nation in the world by 2020.

“Higher education is clearly ripe for disruptive innovation,” Fingerhut said. He added that state policymakers will play a critical role in using disruptive innovation to transform higher education and must act to remove obstacles. However, panelist Clayton M. Christensen, a Harvard University business professor and author of “Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns,” said colleges should focus on innovating in under-regulated areas, forcing regulation to capitulate to the innovation.

Both panelists agreed that disruptive innovation could bring about radical shifts in established norms, such as requiring a certain number of credit hours for graduation.

That’s what’s being done at Western Governors University, a Salt Lake City-based non-profit online university.

“Higher education says everyone needs 120 credit hours,” said WGU President Robert Mendenhall. But at WGU, students earn a bachelor’s degree in an average of 30 months versus 60 months for most students.

He said the reason is because WGU uses a competency-based model to measure what students need to know in a respective field, not how many credits they’ve taken.

“The net effect of all of that is our tuition is $5,800 for a 12-month year,” Mendenhall said, adding that the university is self-sustaining and does not get state assistance or operating subsidies.

Though WGU’s delivery model is not the norm, Mendenhall touted it as “one example of how higher education could be changed to be more productive and more affordable and expand access to higher education.”

Panelist Martha Laboissiere, the associate principal of McKinsey & Company, said institutions must adopt a number of ideas in order for disruptive innovation to work.

“The first is, if you want more degrees at affordable rates, there has to be an improvement in degree productivity,” she said. “This is basically doing more with the same available funds.”

Although increasing productivity with the same resources may seem like a daunting task, Laboissiere said it is already happening at many institutions. The top quartile of colleges — from community colleges to four-year institutions — are several dozen percentage points more productive than the norm, she said.

“The bottom line is that these new business models and innovations are already brewing inside these institutions,” Laboissiere said. “The question becomes what are they and how do we actually extract them so they can be spread.”