As a grown man, this is hard for me to admit.

The truth is . . . I am a Lloyd Armstrong groupie. Few, if any, analysts have had more influence on my thinking about the interaction of competition, policy, and commerce on higher education. The following is my interview with Dr. Armstrong.

Q: Your essay “A New Game in Town: Competitive Higher Education” (2001) addressed the rise of for-profit and online universities, and their impact on the sector as a whole. Have traditional universities begun to change how they operate as a result of the changing nature of competition?

In discussing the impact of for-profit and online universities, “traditional universities” obviously should be taken to include both universities and colleges.  I think the impact on the top tier of both has been relatively minimal – they feel in a pretty solid competitive position, and don’t feel challenged by the rise of alternative models.  There is increasing use of online courses and mixed online-classroom courses even in the top tier, but it generally is in the sense of sustaining, rather than disruptive, innovation.   In addition, there are an increasing number of online degree programs being marketed nationally by institutions in the top tier.  Although this penetration into the “territory” of other institutions forms the beginning of a disruptive innovation, these programs remain relatively small and not particularly disruptive at this point.  What we do see from the top tier is an expanded effort on the political scene to keep the alternative models from intruding into their space.  This has occasionally involved real physical space (e.g. efforts to keep Phoenix from entering certain geographic regions), but is perhaps best reflected in the fight over the reauthorization of the Higher Education Act, where early  drafts dropped the distinction between for-profit and non-profit higher education institutions. The lobbying groups of non-profit higher ed charged in to more-than- counterbalance the lobbying groups for the for-profit side, and the traditional distinction remains in the final draft.  Below the top tier, I think more institutions are recognizing that there is a challenge from the new models.  Even here, however, I think there has not been much real change.  Some community college systems have aggressively embraced online learning, and tried to open branches where students are.  However, the recent financial problems that have hit all states have decreased the ability of many of these institutions to respond aggressively to the new competition.  Partially as a consequence of the financial problems, there are an increasing number of cooperative arrangements being made between for-profit institutions and non-profit institutions that are below the top tier.  These cooperative arrangements serve to further validate the new for-profit competitors and their credentialing power, thus increasing their potential to serve as disruptive innovators in the future.

Q: What’s behind the considerable resistance to the implementation of transparent learning outcomes in higher education?

There are obviously real concerns that outcomes measures are measuring the right outcomes.   However, those expressing those concerns seldom are ready to jump in to try to figure out how to measure what they think is important – a position that is ultimately untenable.  Much more important, I believe, than the “right measures” argument is the desire to protect the status quo.  The winners in any game hate to see the rules changed.  At present, the Game of Higher Education is won by relatively resource-rich institutions, most with a long and illustrious history. The winning universities also have huge research enterprises.   The current rules of the game state that the quality of education is strongly positively correlated with the magnitude of wealth, history, and research of the institution.  Learning outcomes risk changing the rules of the game by actually looking at learning itself, rather than using the surrogates of wealth, history, and research.  Since we have considerable data that show that these surrogates do not correlate particularly well with learning outcomes (see e.g. Derek Bok’s Our Underachieving Colleges), this is not a rule change that the winners want to see.  Since most institutions are ranked below some institutions, but above many others, this means almost everyone can worry that they would be worse off if the rules changed.    As Bok pointed out, to improve learning outcomes, the faculty would have to learn to teach in new ways.  Most academic leaders would prefer not to get into a game that would require that kind of change!  In fact, at this point I believe that the real, critical, disruptive innovation in higher education is transparent learning outcomes measures.  Such measures are likely to enable the innovations discussed in the first question to transform from sustaining to disruptive.

Q: You’ve drawn attention to the practice of some colleges of recruiting international students to address budget shortfalls. Is this a sustainable solution?

Recruiting of international students to come to a domestic home campus helps to address budget shortfalls only if an institution has unused capacity, the ability to increase capacity, or can charge international students more than domestic students.   Although each of these situations can provide some budgetary relief, none of them is likely to address the underlying budgetary problems of the institution.  That problem generally is manifested in a need to increase revenues each year faster than the CPI.   Thus the international students are likely to provide a “step” increase in revenue, but not the continuing revenue increases needed for long term stability.  This assumes, of course, that the international students are taken into the regular, high cost programs of the university, and not some low-cost (but perhaps still high price) special “international” program.  In any case, as educational opportunities around the world improve and increase, it will become harder to recruit the needed number of international students who have the appropriate educational foundation.  The risk then is that significant numbers of under qualified students will be admitted, thus harming the institution.

Q: Should the relationship between the research and teaching functions in universities be revisited?

I think there are many reasons to do so. First, the model of the researcher/teacher is very expensive.    The market price of such people is defined almost exclusively by their research capabilities (rather than by teaching), which means that they move in a national or perhaps global market.   Harking back to an earlier question, views of universities are based almost exclusively on the quality of the research of their faculties, thus necessitating costly competition for the best researchers.  In addition, because the researcher/teachers must spend considerable time doing research, they spend relatively little time teaching, thus running up the cost per student greatly. For many institutions, these cost consideration increasingly will be important Second, there is significant evidence that the best researchers do not necessarily make the best teachers (e.g. How People Learn, National Research Council Committee on Learning Research and Educational Practice), thus contributing to the problems described by Bok.  So for both cost reasons, and the likelihood that teaching – through learning outcomes – will become more important, it will become necessary to reconsider the relationship and balance between teaching and research.  We already see this happening in a non-strategic way with the replacement of researcher/teacher tenure slots by teacher adjunct slots, which is driven primarily by immediate cost considerations.  A more strategic view of the relationship between research and teaching functions would look at maximizing both research and learning outcomes while minimizing costs.

Q: Change doesn’t occur uniformly. Where are we most likely to see the greatest levels of innovation in higher education in the next five years?

Change almost never happens at the center, but at the edges.  If we egregiously oversimplify and  imagine the major research universities of North America as being the center of the higher education world, that is where we should expect to see the least change .  Enormously interesting things are happening in the Bologna region that, if they work (a big if), will change the directions of higher education globally. China, with its massive higher education needs, is likely to be pushed to carry out some very valuable experiments.  Many of these are likely to involve non-Chinese institutions, thus helping to push the evolution of globalization of higher education.   Others, however, may involve new approaches and organizational structures within the Chinese higher education establishment itself. We also see for-profit higher education moving in very interesting and innovative directions.  Laureate Education is becoming the world’s first truly global university.  By defining what a global university can be, it may well provide direct competition to the leading non-profits as they seek to globalize.  Domestically, numerous for-profit universities will continue to innovate rapidly in order to improve their models and make further inroads into the traditional non-profit marketplace.  Smaller, lower tier colleges are most threatened by the current financial situation, the for-profits, and changing student preferences.  Those that survive will have to be very innovative, indeed.  Similarly, many lower tier research universities will probably have to come to grips with the failure of their underlying economic models, and reinvent themselves in interesting ways.

Lloyd Armstrong’s blog, Changing Higher Education

Other works by Lloyd Armstrong:

  • Competing in the Global Higher Education Marketplace.  This is a reprint of a chapter accepted for publication in New Directions for Higher Education, copyright 2007 by Wiley Periodicals, Inc. Download article PDF
  • Globalization and Higher Education. The Navigator, VI(I), 1. This is a 2006 publication of the USC Center for Higher Education Policy Analysis. Download Article (PDF)
  • The Creative University in a Flat World: On November 6, 2006, I presented a USC Templeton Lecture on this topic. The video of that lecture can be seen at : This is a slightly extended text version of that talk. Download Article (PDF)
  • Higher Education and the Global Marketplace: Entrepreneurial Activity in a Dynamic Environment with Douglas Becker. 2004 Pullias Lecture, USC Center for Higher Education Policy Analysis. Download Article (PDF)
  • Change and the Research University. This was written as input for the planning process that led to the 2004 Plan for Increasing USC’s Academic Excellence. Download Article (PDF)
  • A New Game in Town: Competitive Higher Education. This was the text of a keynote address at a conference at USC sponsored by the USC Center for Higher Education Policy Analysis. It served as basis for a published article: (2002). A New Game in Town: Competitive Higher Education, in Digital Academe. In Dutton, William H. and Loader, Brian D. (Eds.), The new media and institutions of higher education and learning. Chapter 6. New York: Routledge; also in (2001). Information, Communication & Society, 4, 479. Download Article (DOC)
  • Distance Learning: challenges and questions. This was written to inform USC trustees of issues relating to distance learning. It served as a basis for a published article: (2000). Distance learning: An academic leader’s perspective on a disruptive product. Change, November/December(32), 20. Download Article (PDF)

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