In my previous column, I argued that our universities need to prepare for radical changes (‘system disruptions’) over the next ten years. We have already seen system outages in many other sectors. They arise when new competitors enter the market, combining traditional services with new technologies. Their offer is therefore innovative and cheaper. Traditional providers often realize this too late. As a result, they can not adjust their strategies and internal processes in time and outcompete.
Reason enough to investigate who these future competitors at our universities are. Roughly speaking, there are three places where a lot is invested in innovative higher education and where new business models are being developed: The Asian universities, the Anglo-Saxon universities and the Online Program Managers are competitors that Dutch universities need to keep an eye on. .
Good universities are not evenly distributed around the world. Three-quarters of the current top 500 universities are located in Europe or America. But only a quarter of future students live there. In other words, three-quarters of future students will have to travel halfway around the world to get an education at a top 500 university.
In the current academic year, more than a quarter of first-year students in the Netherlands come from abroad. This means that international mobility has become an integral part of the business model for Dutch higher education. But is it durable?
It is doubtful if we look at developments in China and India in particular. We are working hard on new ones power centers for higher education. China has invested tens of billions in building elite universities since 1998. Two Chinese universities have topped the rankings since 2020, along with Ivy League universities, Oxford and Cambridge. More are coming. In the next ten years, they are likely to focus on students from Asia, Africa, Latin America and Eastern Europe. And they will do so with more prestigious education at a lower price than Dutch institutions can offer.
Universities in the US, UK and Australia receive less state aid than Dutch universities. This forces them to be more enterprising and innovative. As a result, in recent years they have been working at a high pace on innovations in higher education, which are extremely attractive to students.
A first type of innovation creates new niches. Kings College London is a good example. It co-founded TEDI-London with universities from the United States and Australia. To ensure that the focus on education remains, research is not conducted at TEDI-London. There are no lectures either; all education is interdisciplinary, project-driven and developed together with companies and the social partners. If successful, TEDIs in other countries will follow suit.
The second type of innovation mainly results in economies of scale and availability. Many universities in the United States are working on this. The best known examples are Arizona State University and Georgia Tech. Digitization is being used to radically increase enrollment and radically reduce tuition fees. What these universities are not doing is ‘throwing everything online’. It is: to organize education around the needs of students and study with smart combinations of online and offline. Since 2012, it has led to more than 6 million additional students. In doing so, the universities also emphatically focus on mature students: lifelong learning.
Online Program Managers (OPMs) have emerged in recent years. Well-known OPMs are Coursera, 2U, Kaplan, Pearson Online and Udemy. OPMs have been offering individual online academic courses for several years, but also complete university programs. The implementation and certification is done by universities. The OPMs take care of the marketing and take care of the relationships with the students. They skim 40-65% of the registration fees. OPM’s revenue in 2019 was $ 5.7 billion. It is already higher than what Dutch universities received in budget from The Hague that year. Analysts expect their revenue to grow rapidly to $ 13.3 billion by 2025. OPMs are effectively reducing participating universities with suffocation contracts to “subcontractors”.
There is work to be done! Our future competitors are already making efficient use of digitization and are becoming increasingly attractive to large groups of students with innovative higher education. In addition, money for new investments does not seem to be a problem …
Our universities have repeatedly reinvented themselves over the last 450 years. It resulted in a system that we are rightly proud of. But competitors are currently rewriting the rules of international higher education. If our universities want to face these inevitable disruptions creatively, innovatively and confidently, they will have to reinvent themselves – again. This is not possible without the help of The Hague. Here, too, a well-thought-out vision for the future of Dutch universities must finally be developed.
How? More on that later!
About this column:
In a weekly column, alternately written by Eveline van Zeeland, Derek Jan Fikkers, Eugène Franken, JP Kroeger, Katleen Gabriels, Carina Weijma, Bernd Maier-Lepla, Willemijn Brouwer and Colinda de Beer, Innovation Origins are trying to figure out what the future will look like. These columnists, sometimes supplemented by guest bloggers, all work in their own way with solutions to the problems of our time. Here are all previous sections.