Christensen’s theory of disruption shows how new innovations take root at the low end of the spectrum for consumers whose needs aren’t being met by existing markets. Disruption holds that when you make a product or service affordable, simple and accessible, people use more of it. Sure enough, there is almost limitless demand for online learning.
There are many nonconsumers of higher education – people who cannot take part in the current offerings of traditional universities because of money or time constraints. Online learning is the disruptive technology that allows these nonconsumers entry into the higher education market because it makes it much less expensive and much more flexible.
“The Innovative University” shows how the new economic and social environment means the disruption of the old model of higher education, largely driven by online learning providers, is imminent unless traditional colleges and universities get on board. Health care obligations have squeezed the ability of states to fund higher education. Only deficit spending – which can’t continue at the current rate – has allowed the federal government to sustain its student financial aid and research funding. Simultaneously, risk-free investment rates of return have fallen, creating a funding problem for even well-endowed private schools. On top of that, for-profit educators have the capacity, if they choose, to lower their prices to attract traditional college students in greater numbers.
But while these economic factors present some big sticks for traditional universities, they present even bigger carrots. The need for higher education has never been greater. The bursting of the housing bubble is just one indicator of the vulnerability of the middle class. Cheap credit isn’t enough to raise or even maintain their standard of living in this global competitive environment. America needs to provide much broader access to excellent higher education. The institutions that find ways to serve more students at high quality and affordable cost can control their destiny rather than be disrupted. In the process they may be able to work the kinds of miracles they did in the post-Civil War and World War II eras.