Factors supporting the rise of alternative providers and credentials

What follows is the third post on alternative credentials and providers and the relationship with higher education.

No. 1: It's the Credential Economy, Stupid: Alternative Credentials, Competition, and Higher Education

No. 2: Alternative Credentials and Providers: A Second Look

I suggested previously that the provision of alternative credentials by accredited colleges and universities may, in the long run, act to amplify - rather than diminish, as intended - the rise of alternative providers of education: 

"Given the importance of credentials to higher education as a stalwart against competition, the decision to move into the Alternative Credential space seems odd, at best - especially given that the motivation for this venture is to combat competition. The move places traditional institutions in a market in which it is no longer afforded the protection that the credential economy provides. More importantly and in the long term, the move bestows credibility on a new, largely unfamiliar category of credentials that other organisations can provide. In an attempt to compete with these upstarts, traditional higher ed is providing precisely what these emergent competitors currently lack: legitimacy in the eyes of students looking to build their skills and resumes." (Keith Hampson)

A move into alternative credential provision by higher education won’t, on its own, redraw the boundaries between traditional higher education and alternatives. Change of such magnitude requires movement on several fronts, maybe nowhere more than in higher education. The institution is one component of a larger eco-system of institutions, social practices, and processes that includes student loans, regulatory bodies, employers and others. Each component contributes to the eco-system by supporting the overall value-proposition of higher education. Student loan systems, act as the essential source of revenue; accreditation helps legitimise for the institutions. But these interdependencies also make change more difficult. Efforts to change one part of the eco-system is beholden to other parts.  

Developments that may help alternative providers and alternative credentials play a considerable role in adult education in the coming decade, include the following: 

Making Room

Governments and regulators are making room for alternative providers and credentials. Examples include: 
- The US Department of Education EQUIP initiative was designed to facilitate partnerships between traditional higher education and alternative providers. 
- The province of Ontario (40% of all higher education enrolment in Canada) introduced a policy change that allows students attending boot camps (e.g. BrainStation.io, Red Academy) to be eligible for the province’s robust loan programs.
- In the UK, the New Higher Education Act makes it easier for private institutions (organisations that don’t receive public funding) to receive accreditation. 

Tit-for-Tat

Alternative credentials and alternative providers have a mutually supportive relationship; gains in popularity and legitimacy for one support the popularity and legitimacy of the other. The growth of registrations in boot camps is notable in this context: 

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Platforms

The means by which individuals seek employment and how employers find them will increase the diversity of educational experiences. Platforms like LinkedIn make it easier and more likely that Job hunters will use a wider variety of evidence to draw the attention of employers - far beyond higher education credentials. Vendors and institutions are developing tools and services designed to complement a job applicants credentials from traditional higher education. LinkedIn’s acquisition of Lynda.com is one of the more referenced initiatives. The Vice-Chancellor of Open University (UK), Peter Horrocks noted: 

“I can imagine LinkedIn, with its unparalleled data about the qualifications and employment records of graduate professionals, or Facebook, also with its vast data on education and employment, teaming up with innovative universities to offer global collaborative provision. The brands of any UK university would be puny in comparison . . .” (Times Higher Education)

Demand

Growing demand for higher levels and further education and a willingness to pay for it, among some groups. Graduates of colleges and universities are, by and large, finding employment. But as much as half of them are under-employed - that is, holding jobs that don’t require such high levels of education. Students have little choice, though. So, they are seeking out career focussed education and training. (The CEO/owner of a set of private school focused on design and technology recently told me that - to the best of his knowledge - ALL of the students in one of his schools are graduates of colleges or universities.) 

Many parents appear willing to pay whatever is needed to help their children get established in the job market. A recent study by the Brookings Institute found that upper-middle-class parents were spending 300% more on education than twenty years ago (1996-2016). As the cost of education increase, the potential to further exacerbate social class differences is significant. 

Employer Evaluate

Employers may be becoming less inclined to rely as heavily on credentials from traditional higher education as a signal that the job applicant will flourish in the role. Google and Deloitte have made their dissatisfaction known and relying on assessments they run themselves. Several start-ups are working on developing better tools to make these assessments. 

Cost of Higher Ed

The cost of higher education has increased, on average, faster than inflation for several decades. In some jurisdictions, this trend is hidden by increased public funding, more robust student loans, or both. But the cost of running the institution is tightly bound to the cost of specialised labour, which tends to increase. 

Using different business models that are better suited to leveraging the cost-saving capacity of technology, alternative providers will find new ways to reduce costs - at least for certain types of programs. Udemy uses crowd-sourced programming and scale to offer 40-hour long, always accessible courses for as little as $10.  (It’s important to remember that emergent competitors in established industries tend to focus on the most profitable segments of the market.) 

Each of these developments is still in the early development stage. But in time, we anticipate that they have the effect of making it easier for alternative providers and alternative credentials to become a more significant and influential component of the adult education market. 

 

Keith Christopher Hampson, PhD


 

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