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Will Innovator's Dilemma Put Your Institution Out of Business?

One of our favorite business books is Clayton Christensen Innovator's Dilemma which relates to today's Insight. The author, Harvard Professor Clayton Christensen, describes how successful companies get pushed aside by newer, cheaper products that will, over time, get better and become a serious threat to the incumbent service provider. Being older and more established, the incumbent is often unable to respond.


A brief sidenote: As Intead Insights takes its ususal summer publishing break, we thought we'd share a few recommendations for your summer reading list. Following our intellectual recharge we will begin publishing Insights again in the first week of September. Not to fear, you can still receive our weekly Intead blog posts all summer long. Please subscribe if you'd like to receive these posts by email.

Now, back to the Innovator's Dilemma: Universities, in their current structure, have been some of the most stable entities in the world. They have expanded in scope and grown in numbers of institutions and numbers of students educated. However, they have not changed structurally in a long time. In fact, it could be argued that they are still proffering their wares in essentially the same format as when they started. (Fun fact: the term "university" appears to have been coined with the launch of the University of Bologna in 1088.)

Source: innovate-educate.org: The new world of education from education to employment. May 2013

We are finding more and more programs that may be attacking the very core of colleges from a new angle. And to your surprise, we are not talking about MOOCs.
We are focusing on the discussion and the efforts around workforce readiness programs. And from the ivy leagues to the community colleges, we all have something to learn from this discussion. It's a competitive market out there and the edge usually goes to the innovators and fast followers.

The work we do here at Intead focuses on international students and how our university clients can position and market their institution and programs most successfully in international markets. We consistently encounter the great appeal and success of co-op programs in international markets since they integrate academic work with valuable on-the job experience. Through co-ops, students participate in professional networking at a younger age than other college graduates. These programs work for domestic and international students alike.

International students often are looking for that U.S.-based professional experience that will improve their marketability back home. Too few colleges and universities have the institutional set up to support an integrated work experience with their academic program. So international students are left on their own to find such opportunities and visa rules don’t make it easier for them. Of course, U.S. students need career support services as well and in the current economy are just as eager to find internships. For all of your students, career readiness programs are becoming a valuable offering and a strong market differentiator.

Interested in exploring this avenue for your institution?

We found two companies with programs worthy of your consideration. We highlight today the work of Innovate+Educate, a non-profit addressing the path from education to workforce. This group focuses on the competitive and disruptive approaches to traditional college education that can lead to more effective and cheaper workforce development. Some of these efforts may be complementary to existing institutional offerings. Others will be disruptive in the sense that they will replace the current education infrastructure. Here is a link to the programs they identify. It is worth a look: http://www.innovate-educate.org/our-work/workforce/.

The chart above highlights employer dissatisfaction with the current state of college graduate's work readiness. innovate+Educate has developed a core set of skills for different job levels that can be acquired independently from a college education to improve students' placement chances.

According to Innovate+educate, skills-based credentialing must be implemented on a national basis: "We are spending $600 billion on education in the U.S. with dismal results for work readiness."

Another group actively involved in how to improve education and career readiness, specifically in the sciences, is Battelle. "The business of innovation" is their telling tagline. This group proves its innovative prowess with one of the largest patent portfolios in the United States. See: http://www.battelle.org/our-work/stem-education.

What will the growth of these alternative programs do to the competitiveness of our educational programs for international and domestic students?

We love to see all of this experimentation in the education sector driven by non-profits foundations and for profit start-ups. What we want to see in the U.S. is a well developed, highly competitive set of companies turning U.S. education services into an export powerhouse industry similar to U.S. technology services. Our current universities' tuition revenue depends on bringing international student's to the U.S.

These new technology services (like Educate+Innovate and Battell) focused on career readiness may not drive students into the U.S., but rather help educate them in their own markets. A reduction in international students studying in the US represents a significant loss of revenue for our existing education institutions. Higher education provides a $20 billion of economic benefit annually, not counting the economic impact generated by hundreds of language programs and private high schools.

Our take-away: Workforce readiness programs are needed to meet employer demands. When done well, they will become a valuable market differentiator for the universities making the effort to implement them. By implementing this type of program with a focus on international students, institutions can stand out above the crowd as they appeal to parents and students seeking to make an investment in a U.S. education. Clayton Christensen's "Innovator's Dilemma" is at play here. Is your institution's culture going to allow you to be the struggling innovator, or the struggling incumbent? We believe you will have to choose one or the other.

Topics: Insights