Welcome back to Intead Insights. We are refreshed by our summer hiatus and eager to share our perspective on an extremely valuable report out of MIT (just a stone’s throw from our Boston office if you have a really good arm).
MIT published an incredibly exciting, insightful and highly promising report about its future plans. The report developed 16 recommendations that are worth reading- even if you choose not to read the 200 pages of appendices. ;-)
Elevator Summary: We will highlight 5 of the 16 recommendations below, which show the spirit of growing a much more expansive footprint for MIT's content, reach and teaching. We applaud this move and encourage other universities to carefully think about the implications of these mega global academic brands growing their customer base.
The challenge to less well-branded institutions is clear. How will you answer the students asking this question: “If I can learn from the 'best,' why should I learn from you?”
The answer: “Learn from us because we offer something the 'best' don’t have.” Now all you, as an academic administrator, have to do is define that “something.” (Hint: It may be your local connections AND an affiliation with the “best” that makes you stand out.)
Critical to making anyone notice a new opportunity, internal or external audience, is your marketing and communications plan. That’s where we come in.
We love the fact that MIT's faculty and administrators continue to focus their intellectual power, brand and resources on how to improve teaching pedagogy, methods, global education all with an eye to how academic institutions can increase the number of students who can benefit from future educational improvements. The authors describe their goal as this:
"MIT will need to extend the pedagogical innovation in residential education to a global audience so that the Institute can reach more people, harness the knowledge of a global community of learners who possess different perspectives, and leverage this expertise in pursuing some of the world’s most challenging problems."
Download the full MIT report here: MIT Future Task Force Report
Detailed Discussion: Let's start with the financial realities, which will show you how different MIT's position is from the other 99.9% of universities. MIT commands a global brand and holds tremendous financial resources in comparison to other institutions. Note that 38% of MIT's $2.2B budget is funded by current gifts and investment income from the endowment. Most college and university presidents (other than Harvard, Stanford and few selected others) can only dream of that kind of revenue stream.
Yet, we also have to recognize the challenge for an institution like MIT that replaced research funding with donor money. Tuition revenue accounts for only 14% of the total budget at MIT. We'll get back to the costs of education at MIT in a moment.
The revenue breakdown highlights why the large majority of academic institutions cannot compete at this level. Sill, MIT does feel the financial pressure as well and the report states "MIT will need to pursue new sources of revenue so that it can continue to invest in its world-class teaching and research infrastructure, and remain competitive in recruiting top talent".
Chart 2 shows the dilemma of selective higher education for our society. More demand is met by greater selectivity and not by greater supply. MIT admitted 1,664 undergraduate students in the early 1970s and 1,550 in 2013 despite a five-fold increase in applications. This is why new digital teaching and distribution methods offer such an exciting opportunity to broaden the reach for MIT.
We should also keep selectivity in perspective. Our selective universities are like artwork. As the group of multi-millionaires and billionaires increases, the price of artwork increases – simply because competition for that rare item becomes more intense and the customers can afford to spend more. The relative cost and value go up. Only 42 universities in the U.S. had an admission rate of below 20% in 2013.
Lastly, Figure 3 from the report shows the net and gross cost of getting educators at MIT. As with many other universities, the gross tuition increases widely exceed the net tuition costs after all scholarships. Fortunately, MIT can afford need-blind admission.
Here are our top 5 picks from the 16 recommendations given. Note that “certification” does not necessarily mean “degree”.
Recommendation 1: The Task Force recommends that MIT establish an Initiative for Educational Innovation to build on the momentum of the Task Force, enable bold experimentation, and realize the future the Task Force has imagined for education on campus and beyond.
Recommendation 7: The Task Force recommends that this commitment to pedagogical innovation for the residential campus be extended to the world to set the tone for a new generation of learners, teachers, and institutions.
Recommendation 8: The Task Force recommends supporting efforts to create a lasting community and knowledge base for MITx learners.
Recommendation 11: The Task Force recommends that MIT move forward to consider the types of certifications that can be supported through MITx and edX, and develop pricing methodologies and revenue-sharing arrangements for agreed-upon certifications.
Recommendation 16: The Task Force recommends that MIT bolster infrastructure for Executive and Professional Education to reduce barriers to offering programs and engage more faculty to broaden program delivery.
What does this mean for all of our colleagues who work for institutions that are not MIT? We hope you see the exciting opportunities deriving from these recommendations as well as the competitive threat.
Those with the institutional will to invest in online education AND define that “something” special that would attract a broader pool of students can certainly compete in this field. The business plan for such a venture, like launching any new service, needs to be well defined answering, at a minimum, these big questions:
- What will be offered that is a true differentiator?
- How big is the pool of interested students (age, geographic area, academic goals, financial position, etc.)?
- How much investment is required to develop the distance learning opportunity AND market it well? (Note that digital marketing is a key advantage with this kind of initiative).
And importantly, how can your plans take advantage of what MIT and others are building? There are opportunities to offer traditional and non-traditional students something extremely exciting and valuable with the right partnership or affiliation with MIT and the other major international academic brands making the bigger investment.
There are thousands of well-trained academic faculty teaching to the MIT content plan, visuals, videos and interactive games training future generations of engineers and more. Any institution has the potential to take advantage of world-class, affordable teaching pedagogy that could be made available via institutions such as MIT. No doubt in our minds, colleges will pay MIT a fee in the future and help them fund their research budget.
We are excited about the bold thoughts and investment plans and the global spread of high-quality education.The inclusion of experimentation on how to improve pedagogy teaching in the future is huge when you consider the analysis possible for a class taught to 10,000 or even 100,000 students at a time.
Bottom line: Create your marketing advantage now since we all know the pace of academic change at your institution will be far too slow. Those institutions moving a bit more quickly, seeing opportunity and building consensus will set themselves apart and take advantage of this trend. And those taking too long to consider options and build consensus before investing will be fighting an uphill (and likely losing) battle for market share for a very long time. Harsh but true.
