335. The Abundant University

The cost and the benefit of investing in a college education have been increasingly questioned outside of the academy. In this episode, Michael D. Smith joins us to discuss whether the traditional college model can survive in a world in which technological change has expanded the possibilities of  alternative education and credentialing mechanisms.

Michael is the J. Erik Jonnson Professor of Information Technology at Carnegie Mellon University’s Heinz College of Public Policy and Management and the author of The Abundant University: Remaking Higher Education for a Digital World. He is also a co-author of Streaming, Sharing, Stealing: Big Data and the Future of Entertainment.

Show Notes


John: The cost and the benefit of investing in a college education have been increasingly questioned outside of the academy. In this episode, we discuss whether the traditional college model can survive in a world in which technological change has expanded the possibilities of alternative education and credentialing mechanisms.


John: Thanks for joining us for Tea for Teaching, an informal discussion of innovative and effective practices in teaching and learning.

Rebecca: This podcast series is hosted by John Kane, an economist…

John: …and Rebecca Mushtare, a graphic designer…

Rebecca: …and features guests doing important research and advocacy work to make higher education more inclusive and supportive of all learners.


Rebecca: Our guest today is Michael D. Smith. Michael is the J. Erik Jonnson Professor of Information Technology at Carnegie Mellon University’s Heinz College of Public Policy and Management and the author of The Abundant University: Remaking Higher Education for a Digital World. He is also a co-author of Streaming, Sharing, Stealing: Big Data and the Future of Entertainment. Welcome, Michael.

Michael: It’s great to be here, John, Rebecca. Thanks for having me so much.

John: We’re really pleased that you could join us. Today’s teas are:… Michael, are you drinking tea?

Michael: I did earlier today, my wife makes this lovely herbal tea that you put in a little strainer. So I still have that in my memory. [LAUGHTER]

Rebecca: I haven’t English breakfast. I was a little bit on the go today. [LAUGHTER]

John: An unusual circumstance that has only happened, I believe, once before… I also have English breakfast. So this is twice so far out of 330 some episodes, I think, that we’ve been drinking the same tea.

Rebecca: It’s rare. We’re not exactly the same, yeah. [LAUGHTER]

Michael: Alright, what are the odds?

John: 100% today? [LAUGHTER]

Rebecca: Yeah. [LAUGHTER] So we invited you here today, Michael,to discuss The Abundant University? You note that the current system of higher education was created in an environment in which educational institutions provided access to scarce educational resources to a privileged few and the perceived quality of colleges and universities was judged primarily by their selectivity. Can you explain the role that scarcity has long played in the structure of higher ed?

Michael: Yeah, so we created a system of higher education in a particular time and with a particular set of technologies. Specifically, you need to sit in my class, if you’re going to hear me, and I think both our expectations about privilege, and our technologies have changed in ways that mean that we desperately need to change how we deliver higher education. So one of the things I talk about in the book is just if you look at what defines power, what defines market power in the university, it comes from being able to control access to the scarce seats in your classroom, being able to control access to the scarce faculty experts, whatever the heck that means. And then being able to control access to who gets the credential, the highly valuable credential, that’s going to help you rise in the work world. I think those things are starting to change in ways that we in higher education ought to wake up to.

John: One example that you use to illustrate the issue of scarcity involves Joyce Carol Oates. Could you describe this example for our listeners?

Michael: Joyce Carol Oates is a great example. She’s an absolute rock star. She’s written 60 different novels, she’s won a National Book Award, O. Henry awards, she’s been nominated for the Pulitzer, all these wonderful things. And so you’d think we’d want to get as many students exposed to Joyce Carol Oates and her knowledge as possible. The problem is within the existing system, to get exposed to Joyce Carol Oates, you’ve got to get admitted to Princeton, which has an acceptance rate of like 4%, then you’ve got to be able to pay the tuition at Princeton, which is without aid, something like $80,000 a year. And then, even if you do those first two things, you’ve got to get up at five in the morning and stand in a long line of students to get access to one of the 10 seats in Joyce Carol Oates’s class. So we’re taking this incredibly valuable resource and we’re making it incredibly scarce. Could we do better? Well, we are in some sense, because Joyce Carol Oates has a class on the streaming service Masterclass, where for 15 bucks a month you can get access to Joyce Carol Oates’s knowledge. Now is it the same as what you get at Princeton? No, but it’s better than nothing. My daughter and I sat and took the class together, and it’s actually quite good. And that’s the contrast between scarcity and abundance I’m trying to draw out in the book. Are there ways we can use technology to make resources that used to be scarce, abundant in ways that could benefit students?

John: And that scarcity made a lot of sense when it was one lecturer sitting in a seminar room or in a lecture hall running a class and there was no way of distributing that information more widely. Things have changed a little bit since then, haven’t they?

Michael: They’ve changed a little bit and I talk about in the book, there’s something kind of odd about the way we define expertise in universities and the way we distribute that expertise. So to get tenure, I had to become the world’s recognized expert, whatever that means, in this incredibly narrow part of my discipline. So my value to the university is: I’m a specialist. And that’s great, except when I teach I teach like a generalist. I teach all these different topics where Erik Brynjolfsson is the expert or Catherine Tucker is the expert or Natalia Lavina or Ed McFowland. Wouldn’t it be cool if you could learn that topic from them? We’ve never been able to do that because it’s hard to bring them into the classroom. But now, we can create that sort of experience in ways that I think could really benefit our students. One of the examples I talked about in the book is Anita Elberse at Harvard Business School and I have both studied a particular area and we actually disagree, our conclusions disagree. When I teach it, I’m pretty sure I’m giving short shrift to Anita’s position. Wouldn’t it be cool if you could bring both of us into the classroom and I give my position she gives her position and the students decide for themselves. We’ve never been able to do that. I think we can now.

Rebecca: …really pointing to how technology is offering the opportunity for more inclusion. And that’s certainly been a topic that’s been happening throughout higher ed with Inclusive pedagogy and topics about UDL and digital accessibility and things like this. But you point to a number of structural barriers that impede this from actually happening in higher ed generally. Can you talk about these barriers and what it would take to make them go away?

Michael: Yeah, this was one of the hardest parts about writing this book is sort of taking a cold, honest look at our business model, for lack of a better word. And when I was giving this talk in front of a particular audience, and somebody said, “Mike, all the research shows…” and they were right… “all the research shows that the best way to become wealthy later in life is to get a four-year college degree from an elite school, and so we should be encouraging students to do that.” I’m like, “yes, and no, you’re absolutely right, the best way to become wealthy is to get a four-year college degree from an elite school. The problem is, the best way to get a four-year degree from an elite school is to be wealthy.” And when you add those two things together, we’ve created this terrible feedback loop that just exacerbates social inequality. Now, you might say, “Why do I say being wealthy is key to getting a four-year degree from an elite school?” And in the book, I talk a lot about some of Raj Chetty’s research, which shows that kids born in the top 1% of the income distribution have a one in four chance of getting admitted to an elite school, top 80 school, kids born in the bottom 20% of the income distribution have a one in 300 chance of getting admitted to the same elite school. And so what I say to my friends who are economists is, “Hey, I’m trained as an economist too, I believe in the efficient allocation of scarce resources. If we in higher education genuinely believe that rich kids just happen to be 77 times more likely to be capable of an elite education than the system’s working fine. But if we don’t believe that, and I don’t know anyone who does, then this is a terrible way, a terribly unjust way of allocating access to the scarce resource.” I don’t mean to pick on Princeton, but let me pick on Princeton since we talked about Joyce Carol Oates. Princeton admits more students from the top 0.1% of the income distribution… families making more than $2 million a year… than the combined number of students they admit from the bottom 20% of the income distribution… families making less than $25,000 a year. Is that because Princeton is biased against the poor? I don’t think so. I think it’s because all of our incentives encourage us to make decisions that are highly correlated with wealth. And I could expand on that if you want, but one example I think a lot about and talk in the book about is Georgia State University in 2009, made some very intentional efforts to increase access to their campus, they ended up increasing the number of Pell-eligible students that they admitted from 32% to 60%, which meant they had three times more Pell-eligible students at Georgia State University than the entire Ivy League combined. So great news for access and inclusivity. The only problem is by doing that, they dropped 30 places in the US News and World Report rankings because their SATs scores, their alumni giving, all these other things, fell. The system is rewarding us for doing things that we all know are bad for society. And so a key part of the argument of the book is we’re not going to solve this by tweaking the existing system. We’re going to solve this by creating a new system that rewards people for inclusivity and diversity.

John: As you’ve just said, part of the issue is that all of the agents there are pursuing what’s rational for them. Their parents from high-income families spend a lot of resources in preparing for that. And we’ll include a link in the show notes to an earlier podcast we issued a few weeks back where we interviewed John Friedman, who is one of Raj Chetty’s co-authors on several of those studies. So we do address some of that in that podcast, and I encourage people to go back and listen to that if you haven’t seen that. But we have a system where it’s currently self-reinforcing, that institutions are doing what’s best for them, faculty are doing what’s best for them, and parents are doing the best they can, given the constraints that they’re facing. How are we going to get past those incentives to move to a more inclusive environment, or that would reward institutions for becoming more inclusive,

Michael: It’s going to be really hard within the existing system, I think there’s two options we’ve got. One is to rely on folks like Paul LeBlanc and Raj Chetty and Zvi Galil at Georgia Tech University, people who are willing to say, I want to create this, and I’m going to do it, even though I know it’s not aligned with my self interests, and I’m going to create a online educational experience, because I’m focused on the needs of my student base, rather than what the market is telling me to do. And I think that’s possible if we rediscover our mission. And the reason I say that is because you mentioned one of my previous books, and a lot of my previous research was about the entertainment industry and how technological change affected the entertainment industry. In looking at that, what I found really interesting is the industry initially opposed technological change, because they saw it, correctly, as a threat to their business model, their way of doing business. At some point, I had this really interesting conversation with a pretty senior creative person at one of the studios. And we were sitting in the lunch room, and he sort of leaned forward and quietly, so none of his colleagues could hear, said, “Mike, a year ago, we sold my show to Netflix, I want you to look at the season of my show that Netflix just put out, and you’re gonna see that it is in every way superior to what we did on the lot. The storytelling is better, the cinematography is better, and I just can’t figure it out.” They told themselves, the technology companies are going to make stuff that’s inferior than what we do, and what they were seeing with their own eyes, and not to mention at the award shows, the technology companies were actually making great entertainment. And I think it was that realization, where they said, “You know what, you’re right. Technology is a threat to my business model. But my mission is different than my model, my mission is creating great entertainment, and getting that entertainment in front of an audience. And my mission is so important to me, that I’m willing to blow up my model to pursue it.” I think that’s exactly what we’ve seen in entertainment. What’s the parallel here? What’s our mission in higher education, friends? if our mission is helping rich kids get a leg up in the job market, everything’s working just fine. But that’s not our mission. Our mission is helping people from all socio-economic backgrounds discover their talents, develop those talents, so they can use those talents to the benefit of society. I think we’re leaving a lot of people behind. And I would love for us to get excited about that mission, so excited that we’re willing to blow up the model.

Rebecca: We’re undergoing strategic planning at our institution. We’ve been having lots of interesting conversations about many of these things, actually, some of which are really inspiring to think about, like, what is the mission? If we’re really thinking about equity-informed student success, what are those metrics? How would we need to change how we’re looking at things to even know that we’ve achieved success? And what I’m hearing you talk about is there’s the difference between the institutional change that needs to happen, and then the broader machine of higher education. But when I think about cultural change, I think about bottom up and top down change. There’s regulation kind of change, but there’s also that grassroots change. And it’s almost like many institutions need to have this discovering independently to make some of that start happening. And force, bigger systematic change.

Michael: Yeah, I think we need bottom-up change in the sense of, I’m tired of being trapped in a system that forces me to make decisions to exclude people solely because they grew up in the wrong zip code. I think the other thing we need is some top-down change. And there what I talk about in the book is, back in the early 2010s, a lot of really smart, prominent people, including Clay Christensen, who I have a world of respect for, said that in 5 to 10 years colleges are going to be in real trouble, because we have this new technology. It’s 15 years later, that hasn’t happened. So I think a lot of people sort of roll their eyes when they hear technology is going to change our business. In the book, I try to argue, respectfully that I think part of the reason Clay Christensen was wrong, is he wasn’t using the right model of disruption. So his model says this technology comes in, and it’s going to create an inferior product and the incumbents are going to ignore it. What I’m trying to argue is that MOOCs and other online learning, if you think back to those three factors I talked about earlier, scarcity in the classroom scarcity in the experts, and scarcity in the credential. What online learning so far has done is its created abundance in who can get access and abundance to the faculty. What it hasn’t changed is the credential, the credential is still scarce. If you go to a Princeton or Harvard, or let me just eat my own dog food, Carnegie Mellon, people are going to assume you’re smarter than someone who went to a different school. What if we changed the way we did credentials? What if we would change the way we did credentials from this very brand-oriented credential that we have now to something that is closer to the student’s actual capabilities, actual skills? What the heck am I talking about? So the story I’ll tell is on my whiteboard as I was writing this paper, I had “brand” circled with a big question mark next to it. If the university brand name is the brand, how do you change the value of brand names? It’s really hard. So I’m scratching my head about this. And later that day, I was buying a really expensive scanner from a manufacturer I’d never heard of before, solely because it had a 4.9 star rating on Amazon and a bunch of really positive reviews. I was like, “Oh, crap, that’s how you change brand names. You add in objective information about the quality of the product.” I’ll stay in complete strangers’ homes, because they have a good rating on Airbnb, I’ll drive home with complete strangers, because they have a good rating on Uber. We see this in all these areas of society, could we bring that into the academy so that instead of judging people based on the name of their school, we start to judge them based on their actual skills? Wouldn’t that be cool. The other thing I’ll say, just to roll this out a little bit more is one of the things I think we’ve seen in these other areas of the economy is when you didn’t have the brand name, when you were an independent hotel no one had heard of, I’m going to assume you’ve got lousy rooms, and I’m gonna stay at the Hilton instead. Once we created a way to signal your quality, all of a sudden, a whole bunch of people who didn’t have the brand name had the incentives to invest in quality. We’ve got a whole bunch of places that aren’t Hilton, who are investing a lot in creating great room experiences. What’s the parallel? If we were to open up a way for students to signal their true skills, might we create a whole bunch of incentives for students to invest in those skills in ways that they just can’t right now, because I’m going to be judged based on the brand name of my school, instead of my actual knowledge?

John: Going back to the issue of markets, currently markets encourage institutions to maintain the scarcity. But they’re also subject to the Baumol disease of increasing relative costs, which is inherent in anything where labor is a major component of the production of the service. And with rising costs, while that maintains scarcity, it also opens up the market for other alternatives that can provide credentialing as an alternative to the traditional institutions. Could you talk a little bit about the Baumol disease and also perhaps, how that might encourage institutions to start shifting to other less expensive methods of credentialing?

Michael: Let me answer the second question first, and then come back to Baumol. Can we imagine ways that we could have new ways of credentialing students, and the example I used in the book is a guy named Gilberto Titericz. He worked for the Brazilian state oil company graduated from the 12th ranked Brazilian engineering college. And it just so happened in the evening, he liked to play around with Kaggle, which is an online place where you can go and provides awards for people to solve analytics challenges. And he got good enough that he had risen to the top of the worldwide leaderboard. And all of a sudden, Silicon Valley companies were recruiting him not because of his degree, not because of his work experience, not because of the GPA, but solely because they could see an objective signal that this guy’s really smart at analytics. I told this story to a buddy of mine who works in journalism, and he said, “You know what, Mike, I won’t hire anybody unless I can see their substack. I want to see if you can write. I don’t care if you graduated from Columbia’s journalism school, I want to know whether you can write.” And I think we’re seeing a lot of areas where you can have these signals. As an economist, it warms my heart that you would bring up Baumol’s cost disease. What Baumol’s cost disease says is that if every other sector of the economy is increasing productivity and economists define productivity as output divided by input. So you’re creating more output with less input. If you’re in a sector where every other sector is increasing productivity and your productivity isn’t changing, then your costs are naturally going to go up. And that’s very consistent with what we’ve seen in higher education. We’ve seen over the last 60 years, prices in higher education have increased at four times the rate of inflation, Or said another way, if they kept pace with inflation, college would cost 25% of what it is today. How do you change that? How do you improve efficiency? Well, you got to create more output with less input. I don’t see how we do that within the bounds of the existing classroom. We might be able to do that if we intelligently adopt technology in ways that allow us to educate more students with fewer resources than what we’re using today. The problem is, that’s really scary for a lot of my colleagues, and myself, as I’m very transparent in the book that this poses a threat to me too. And I think this brings us to the point where we’ve got to figure out what’s my core value here. One of the quotes I have in the book is a colleague who, a bit tongue in cheek, and I’m going to use it with permission but without attribution, said, “You know what, Mike, the professor has to have an incentive to adopt the technology. I’m a tenured old fart, I can ride out this technological change until I retire. Technological adoption will occur one funeral at a time.” And again, I know he was being cheeky, but I think in the back of our minds, a lot of us are like, “I’m just going to try to hang on to the existing thing for as long as I can.” I’m not sure we’re going to be proud of that decision 15 years from now. Congratulations, you’ve presided over an institution that you know is leaving deserving kids behind solely because they grew up in the wrong zip code. You’ve benefited yourself, are you proud of the outcome? I don’t think we’re gonna be.

Rebecca: It’s really hard to make those choices, of course, when you’re feeling very comfortable, and those choices may make you very uncomfortable. But I think that’s just in terms of the personal impact versus that bigger social impact that I think many of us are really committed to, but then our actions don’t always follow that commitment.

Michael: Yeah. And again, I try to be transparent as possible in the book that I’m as subject to this as anyone, friends. It wasn’t until I started staring at this, that I really had this “Oh, crap” moment of “I’m doing things, we’re doing things that are contrary to our values. Maybe we need to start questioning the structure and thinking more about those values.”

Rebecca: What role do faculty have in starting to initiate these changes?

Michael: It’s a great question, I think we need to start questioning the assumptions. Here’s a good starting point for that. I was talking to another colleague about this. And what she said, and this is going to be close to a direct quote, was, she said, “We train our students to identify and dismantle unjust social structures in every aspect of society, except our own.” I would love for us to start thinking about our own unjust social structure, and how can we change it in a way that creates more justice for students who deserve it. And the only way I’ve been able to come up with ideas about how to do that is by changing the structure. I just don’t see how we do it from within the existing structure where I teach 35 students for 80 minutes at a time twice a week, blah, blah, blah. The cool thing is, I actually think we have a decent number of examples of success, success, not only in creating more equity, but also in creating a viable and sustainable system. If you look at what Paul LeBlanc is doing in Southern New Hampshire University, if you look at what Mike Crow is doing at Arizona State University, if you look at what Zvi Gali did at Georgia Tech with his online master’s in computer science program, I think they’ve all been very successful at increasing equity, and also very successful at creating a sustainable business model.

John: So what should other institutions consider doing to transform their institutions into one which is more sustainable?

Michael: This is where we get into strategy. And, again, I teach technological change and economics and strategy. I honestly think, if you’re looking at this as we want to create mass market four-year degrees, I think Southern New Hampshire and Arizona State have a big lead in the market, and it’s going to be hard to catch up to. But if you’re looking at niches, if you’re looking at specific degree programs, I still think there’s a whole bunch of opportunity out there to say: “Can I create a program that appeals to a specific market engineering, for example, that is delivered online, but it’s delivered online in a very high quality way.” And I’m going to even pause there for a second and say, delivered online is probably too strong. So in my technological change course, I bring in the head of data analytics at the University of Pittsburgh Medical Center to talk to my students about how data is changing health care. And right after the pandemic, he came in and said, “You know what, Mike, we’ve looked at our data and what we’ve discovered is that for most doctor-patient interactions, telehealth yields equivalent health outcomes as you coming into the office. There’s some things you’ve got to come into the office for, but most things, telehealth works just fine.” What’s the parallel? I think there are a lot of things we do in higher education that can be delivered perfectly well remotely. Some things need to be done in person, and I would love for us as educators to think really hard about what are the things that have to be done in person, and what are the things that can be done perfectly well online, maybe even better online? So it’s not 100% in either direction. And then I’ll have people say, well, there’s some things trying to get it more in the in person side. And the example I think of there is I talked to Ara Austin, who’s the professor at Arizona State, who teaches organic chemistry remotely. You say, “How the heck do you teach organic chemistry online? Are you mailing hydrochloric acid to students’ homes, and hoping they have a fume hood somewhere available?” And the answer is, what they did is they looked at their curriculum, and they discovered that 13 weeks of the 14-week semester can work perfectly well online. For the labs, they actually bring students on campus, and they do a one-week intensive organic chemistry lab experience, you do two labs a day for six days. And what they’ve discovered in serving the students is that the online students’ knowledge of organic chemistry is equivalent to the residential students, but they walk out with a higher identity as scientists. There’s something about doing two O-chem labs a day for six days that you walk out and say, “I’m a scientist, I can do this,” that you wouldn’t get if you did those same labs, one lab a week, over the course of a 12-week semester. I think there are a bunch of things out there where I’d love for us to get excited about saying how can we redesign the classroom in a way that might even create better educational outcomes, while also including a whole bunch of students who otherwise would have been excluded.

John: One of the challenges is that student bodies have become increasingly diverse, but instruction is often aimed at the student in the middle of the distribution. One of the things Carnegie Mellon is known for is the Open Learning Initiative and the development of adaptive learning platforms. Is that something that colleges might be able to leverage to increase the scale of classes to lower the cost per student?

Michael: Yes. And heck, yes. So let me go back to my roots studying the entertainment industry. One of the really interesting things about the rise of streaming platforms is… we’ve actually got a paper coming out showing that we’ve seen an increased diversity in casts on streaming platforms, because you’re not tied to the mass market delivery. When I teach a class, and I talk about this in the book, of 30 students, I’m pretty sure 10% of them are bored, and 10% of them are completely lost. The problem is that, in that delivery modality, I have no time for the 10%. I’m trying to keep the middle 80% of the class happy. Wouldn’t it be cool if I could identify the 10% of students who are bored and say, “Alright, let’s go on to the next topic,” and identify the 10% of the students who are lost and say, “Alright, let’s spend a little bit more time on this topic so that you get it before we go on.” We can’t do that in the traditional delivery model. But we can online. There are a lot of ways to say I’m going to personalize this in the same way that streaming platforms say I’m going to personalize what’s being shown to your preferences and needs. I think we can personalize the way the education is delivered to the preferences and needs of the individual student.

John: And I could see a system where that results in recommendations for students for their next courses. You’ve done well in this, you may want to consider these alternatives for next semester.

Michael: Yeah, I talked to a colleague in the business school who got his degree in electrical engineering. And as I was talking about this, he said, “You know what, I just saw a YouTube video and for the first time understood what a Fourier transform was, and what it was used for.” This is this key concept in electrical engineering and signals. 20 years later, he saw a video, he’s like, “Oh, that’s what it’s for. I can do it mechanically, but I never really understood.” Wouldn’t it be cool if we could have a set of different ways of explaining a concept and match the different ways of explaining to the students to what we think the student is likely to resonate with? The other way of thinking about this is students’ preferences for faculty. Here’s what I mean by that. When my daughter was president of the STEMinest club at her high school, so take feminism and combine it with STEM and you have STEMinism. And when she was going into her senior year, my STEMinest daughter wanted to take AP physics. And the high school said, you can’t take AP physics because you don’t have AP calculus, you can’t take AP Calculus, because you don’t have precalculus. And you can’t take precalculus, because we’re not offering it this summer, I’m sorry. And that didn’t really work for me and my wife. And because of the research I was doing, I knew that there’s a site called Outlier.org that delivers a whole bunch of classes, including calculus. And by the way, if you pass the class, you get credit at the University of Pittsburgh. So my going back position was, “Hey, if my daughter passes this class that gives her credit at the University of Pittsburgh, are you really telling me that’s not good enough for high school calculus?” Anyway, we won that argument. What was really interesting about the way Outlier designed her class is they had three different teachers teaching the same modules in their own voice. So Tim Chartier, a white guy like me, calculus professor at Davidson; John Urschel, African American scholar, who just finished his PhD in math at MIT, and by the way, before he started his PhD, was the starting guard for the Baltimore Ravens. So munch on that for a second; and then Hannah Fry, University College London. And they each teach the same topics in their own voice. And you, as the student, can choose which of these professors do I take? Guess which Professor my STEMinest daughter gravitated towards. She immediately gravitates towards Hannah Fry. And I mentioned this to a colleague, and what my colleague said, “Oh, Mike, there’s a bunch of research that shows that, in general, men do better than women in quant- related classes, and that difference goes away when the class is taught by a woman, and by the way, the same thing is true for underrepresented minorities. In general, lower performance, and that difference goes away when the class is taught by someone who looks like them.” Wouldn’t it be cool if we can allow students to self select into the teaching style or the background of the professor that’s most going to resonate with them? It’s really hard to do that in the traditional environment, but we can online.

Rebecca: Yeah, I think this personalization is something that I’ve also been thinking a lot about, and it’s super possible. We have the technology to do it, just our institutions aren’t keeping up. And as a designer, I am always thinking about audience. And when I’m working with my students, we’re constantly talking about how it’s impossible to design for everybody. Like there’s no such audience as everybody, [LAUGHTER] there are specific people who are in your audience, and the more specific you can get, the better you can design the experience. And that’s exactly what you’re describing.

Michael: Exactly. Yeah. And it’s gonna be really hard if we take the existing 30 person twice a week delivery model as a given. But if you relax that assumption, there’s a whole bunch of really cool things you can do.

John: Changing the focus a little bit, you talk about how faculty perceive the role that we play in preparing students for their future careers in education. But you also present some evidence on how employers and the public and students perceive the way in which we prepare students for their futures. Could you talk a little bit about that?

Michael: Yeah, there’s this huge disconnect, respectfully to my colleagues, between how we perceive ourselves and how the outside world perceives us. In 2020, I wrote a piece in The Atlantic, basically saying that higher education in 2020 looks a lot like the entertainment industry did in 2015. We are fat and happy and completely unaware that technology is about to change how we deliver our product, for lack of a better word. What was really interesting is the feedback on that piece from outside the academy was overwhelmingly positive, and frequently expressed a great deal of anger and frustration towards the institution of higher education. The feedback from within the academy was overwhelmingly negative and frequently expressed a great deal of anger and frustration towards anyone who would question the institution of higher education. Like there’s this enormous disconnect. It almost reminds me of early in the demise of the cable subscriptions. So there’s a guy named Chase Carey, he was the COO of 21st Century Fox, and in 2013, he was asked at an investor’s conference, “Are you at all worried about people canceling their cable subscriptions?” And he said, “Not at all. People will give up food and a roof over their head before they give up cable television.” And my guess is he said that because he had surveys showing that people will get behind on their mortgage and behind on the credit card payment, beforer they get behind on their cable bill. But it wasn’t because they loved cable, it was because they had no other alternatives. I think we, in higher education, look at “people keep showing up. People keep showing up and paying my high prices, they must love my product.” I think there’s another way to interpret that data and it is they have no other options than to paying us a whole bunch of money. The smart thing for us to do from the perspective of the business model is to eliminate any other options for students. But I think the right thing for us to do from the perspective of society and our own moral standards, is to want to create other ways for students to get the knowledge they need so they can just demonstrate that knowledge in the workforce. That’s the change that I think needs to happen in how we look at these things.

John: That’s a message I think that we all need to hear a bit more often, because it’s really easy to become complacent with where you are and what you’re doing and just assuming that it’s serving everyone’s needs, and we don’t want to be in the position of the cable companies or the traditional print newspapers and so forth in response to a changing environment that may make us obsolete unless we adapt.

Michael: That’s the hard part. What’s interesting to me is how hard it is for market leaders to identify and respond to change. And when I teach this in class, if you teach it really well, disruption is an incredibly depressing topic because the last slide in every good disruption story is “and the incumbent died.” Blockbuster, dead; BlackBerry, dead; Britannica, dead. And if you teach it really well, there’s some kid in the back of the class who’s gonna go: “Can you get any example of an industry that responded well to technological change?” And for a long time, I sort of mumbled that answer, but now I’m starting to say “the entertainment industry.” If you look at what Bob Iger did at Disney, he blew up their organizational structure to go after this new opportunity. I’ve got this really interesting quote of Bob Iger saying, “When I launched streaming and Disney plus, I looked at my organizational structure, and I realized that it didn’t make sense anymore.” And if you sort of dig down, every entertainment company has a president of home entertainment, president of television, president of theatrical, president of international and all those peoples’ jobs is to protect the old way of doing business. Bob Iger blew that up and created an organizational structure that looked a lot like Netflix. What’s the parallel here? I think we need to think really hard about our incentives and our organizational structure, if you will. I was talking to Zvi Galil at Georgia Tech, and what he said is, “I got the faculty to adopt this online teaching method by changing their incentives and making it in their financial interests to teach online.” I think, leaders at the top, if we want to adopt this, you’re gonna have to think really hard about what’s my existing incentives, and how can I change those incentives in a way that encourages faculty to adopt this new innovation?

Rebecca: In your book, you have an interesting story about a president who gave a talk about why it cost $60,000 to attend my university. Can you share that story with us?

Michael: Love to. I’ve given this talk at a bunch of different universities, and when you give this talk, you have these interesting side conversations with people and one of those side conversations was someone who had heard their President give a talk to a local community group titled “Why does it cost $60,000 to attend university X?” and the President said, three reasons. Number one, technology doesn’t lower my cost, it actually increases it because I still have to maintain all the big buildings and now I have to invest in new technological systems. Number two reason that it cost $60,000 to attend my university is because I got to keep up with the Joneses. If all of my competitors are building big, beautiful dorms and big, beautiful buildings, I’ve got to build those same buildings if I want to remain competitive, and the number three reason because I f’ing can, although he didn’t use f’ing, he used the actual word… because I f’ing can. And he went on to say, “Every year I raise my prices, and every year I get the same number of students, if not more.” And while he didn’t use those words, what he’s saying is, I’m not on the elastic point in the demand curve, my market is inelastic to price increases, why shouldn’t I increase my prices? And so I came home and shared this story with my wife, which I found pretty compelling. And my wife who has an MBA and a Master’s of Public Policy, she doesn’t leave me to mansplain price elasticity to her. She listens patiently and nods. And then at the end, she says, “So, let me see if I’ve got this straight.” And after 30 years of marriage, what I’ve realized is, “let me see if I’ve got this straight” is shorthand for I’m about to destroy you rhetorically. “So this university is a 501-C3 nonprofit.” “Yeah.” “So that means they’ve taken tax-exempt status from the government in exchange for an agreement to act in a way that is consistent with the public good.” “Oh… yeah.” And she said, “I’m fine if they want to behave like a profit-maximizing monopolist, just give back the tax-exempt status.” I don’t mean to pick on any university presidents. They’re doing what their incentives tell them to do. I would love for us to come back and say, “What’s my mission?” If my mission is to increase my prices, because I’m not on the elastic point of the demand curve then go for it, but give back the tax-exempt status. The tax-exempt status implies that my mission ought to be bigger than that, ought to be doing what’s right for society. And I think that’s going to require a lot of change.

Rebecca: Thank you just underscored our call to action for this episode.[LAUGHTER]

Michael: I hope so.

Rebecca: Perhaps this is a great moment then to switch to our last question, which is: “What’s next?”

Michael: What’s next?, I think what’s next Inside colleges, is for us to get more excited about our mission, and then changing our model to best support that mission. And like I said, I think that’s going to require a lot more technological adoption than what we’re seeing today. Honestly, I think what’s next outside of higher education is for employers to start to adopt more hiring practices that, frankly, de-emphasize the four-year degree in favor of emphasizing skills. “Do you have the skill? I don’t care where you got it from.” I think we’re starting to see that. And when I give this presentation, I’ve got a slide in the presentation that has a bunch of headlines from press outlets saying this or that company is de-emphasizing the four-year degree in their hiring practices. The next build of that slide is a quote from each of those articles saying, “and they’re doing it because they want a more diverse workforce. And they’ve recognized that I can’t get that diversity if I continue to rely on elite colleges.” A, I think that means employers are starting to pick up on the fact that colleges aren’t delivering the students that I want , but B, I think that ought to be a call to action for us in higher education. Because if you think about it, what it means is that the evil capitalists in the business market are further along than we are in terms of embracing diversity. Maybe now’s the time for us to try to catch up.

Rebecca: Well, thank you for such a great conversation and many things for us to be thinking about as perpetuators [LAUGHTER] of the higher ed system as it exists. So I think there’s a lot of room for us to each, individually, make small moves to start shifting things.

Michael: And I want to put a big caveat on a lot of what I’ve said here, I don’t know anybody in higher education who would say “I’m excited about excluding people,” I genuinely think we’re all on the same page. I just think we’ve gotten into this world where we assume that what we’ve always done in the past is the right thing to continue to do. And I’d like for us to question those assumptions.

John: Well, thank you. You’ve made a lot of really good arguments about the need for change. And I’m hoping that we all start thinking about ways in which we can adapt to create a more inclusive educational environment, and perhaps slow down that cost increase or find alternative routes to training our students to become productive members of society.

Michael: Thanks, John and Rebecca, it was wonderful being here with you and I really appreciate you having me on the show.


John: If you’ve enjoyed this podcast, please subscribe and leave a review on iTunes or your favorite podcast service. To continue the conversation, join us on our Tea for Teaching Facebook page.

Rebecca: You can find show notes, transcripts and other materials on teaforteaching.com. Music by Michael Gary Brewer.

Ganesh: Editing assistance by Ganesh.