Michael Gell and Peter Cochrane scent opportunities in global education business.
The emergence of a new turbulent phase in the global economy is likely to trigger absorption of much of the education sector into a new industry, the experience industry. The experience industry, encompassing other virtualising sectors, such as entertainment and tourism, and relying extensively on tele-service manufacturing, will form the basis of new international markets.
The opportunities which could be created by the birth of the experience industry are immense, with wide-ranging prospects for cooperative forms of global wealth creation. We are witnessing a great event.
Institutions are having to become increasingly fluid, disorganised, agile, and obsessively customer-facing in order to maintain direction and survive the buffeting of the "nanosecond nineties". The growing uncertainty and shortening time scales in the global economy are defeating centralised organisations and structures in all their varied forms - economic, organisational, social, managerial or technological.
In the first few decades of the next century the entire global system will make an almost complete transition into incessant turbulence. It is during this period when the transition from the information society to the experience society will occur and new industries will be born.
In this transitional phase, unstable organisations will melt down and the raw material (people, money and resources) will metamorphose into many smaller organisations - some of which will be virtual. The telecommunications industry is caught up in the initial wave of global meltdown.
The education sector will be typical of organisations caught in the second wave of meltdown. The education sector will no longer be constrained by distance, time or country, and will evolve to be a truly international activity. As a result it will lose its monopolies and will therefore have to restructure and reinvent itself as a new training, learning and creativity sector emerges.
In many technology areas the half life of much of the material in university degrees is already less than three years. Gone are the days of going to school and university, and then, educated for life, finding a job. The ubiquitous MSc, MPhil and MBA are already with us. Company education and training schemes account for spending of Pounds 35 billion in the United Kingdom compared with the entire education sector of Pounds 31 billion.
The developed economies have reached a point where many basic industries are being disrupted by global competition. Numerous "tiger" economies in the developing world are sustaining growth rates which the advanced economies have rarely achieved. They have recognised that a key facility to realise their future is the advanced communication network designed to leapfrog many of the stages which have taken the western economies about 200 years to develop.
New forms of economic activity must offer a competitive advantage over those already present in the global market. If they do not, the highly-connected global market will react within days, hours, minutes, or seconds, and bypass them. The requirement for new forms of activity means that advanced economies must invest new learning skills in their peoples. A super-advanced economy will only work if it is super-creative and able to market and sell its creations rapidly.
Economic activity relying on the deployment of unskilled labour is extremely unlikely to form the basis of healthy and sustainable social structures capable of withstanding the incessant pounding of future global market forces.
The education sector is losing, or may have already lost, its monopoly on knowledge. In the UK for example all of the university research programmes are totally overshadowed and largely outclassed by the industrial sector. Some individual companies already invest more in R&D than the Science and Engineering Research Council. The ratio of industrial to university expenditure and achievement is even greater in Japan, the United States and some European countries .
To appreciate the challenges and opportunities facing the education sector, it is instructive to examine the case of engineering education. As a result of accelerating technological change, engineering education is coming under increasing pressure to be more responsive to the needs of industry and society, while at the same time becoming more cost effective.
In the UK this is posing significant difficulties because there are no universities with sufficient financial and people resources to offer leading-edge engineering education across all fronts. It is not unusual, for example, to find electrical engineering departments consisting of only 20 to 50 staff trying to teach across a rapidly expanding range of topics at levels ranging from first degree through to postgraduate research.
The pressures are now approaching or have exceeded a level that challenges the very existence of these small departments. The key problem is the lack of critical mass that would allow staff to specialise and treat topics in sufficient depth, while at the same time keeping up to date, supervising research students and developing new courses and teaching material.
It is unlikely that critical mass departments will be realised through the collocation or coalescing of existing units across the UK. There is, however, an alternative approach to achieving order-of-magnitude jumps in the efficiency of educational resource utilisation and the stimulation of new creativities. Electronic media and telecommunications can bring students and teachers together for lectures, tutorials and one-to-one interactions. This could revolutionise teaching, training, learning and research.
The distributed university using electronics to teleport students, teachers and experience-explorers to the virtual lecture theatre may increase overall efficiency. The notion that 1,000 students need to be coordinated to meet at the same physical place at the same time to watch one overloaded person copy material from a book on to a blackboard and allow it to be recopied (with all the mistakes) into 1,000 separate notebooks is not cost effective.
However, this is a fact of life for some students in the UK now. Far better that students are treated to individual expert lectures, by specialists in each topic, that are later backed up by local or remote tutors, mentors and counsellors.
The emergence of the global learning enterprise extends the potential customer base of a learning structure from perhaps a few million in the local or national market to many billions in the global market. Global partnerships can be formed to share resources, skills and experience and extend the reach into new cultures and markets.
The creativity enterprise, encompassing a range of virtual sub-enterprises (companies, schools, colleges, universities, workshops, laboratories, theatres, sport arenas, and so on) will integrate with numerous other organisations and communities. As the customer base of a creativity enterprise increases, the timescale for which a typical customer may be engaged may shorten.
The concept of a school or university having a monopoly over a customer for a period of three or four years will come to be viewed as absurd. Busy customers may use the services of a learning company for perhaps one or two hours and then move on to another learning company for another session at some other time convenient to the customer.
Thus, over a lifetime a customer may accumulate thousands of different learning sessions from thousands of different organisations. Under such dynamic conditions the basic concepts of "term-time" and a standardised "qualification", such as a degree, may break down. Standardised qualifications and standardised curricula will have little or no meaning within the 24-hour 365-day experience industry, for which differentiation will be the norm.
These developments, taken together with similar developments in other sectors such as tourism and entertainment, constitute the emergence of a widespread phenomenon within the global economy: the drive to acquire experience. The experience may be work- or play-related and will be delivered by a new industry, the experience industry. The experience industry, implicitly dependent on communications and information technology, will stimulate the formation of new international markets and open wide-ranging possibilities for cooperative wealth creation.
It is because the education sector straddles that traditional middle ground between work and play, and because virtualisation increasingly mixes sectors, that education is likely to serve as the sparking point for a new wave of economic transformations. Michael Gell is senior advisor at BT Laboratories and visiting professor at Stafford University.