Graduation rates in the US have fallen, and states have slashed funding for higher education. As a result, public universities have raised tuition fees, and many are struggling to stay afloat during the recession. But two authors working in the US higher education sector claim that the academy has a bigger battle on the horizon: the "disruptive innovation" ushered in by online education.

This disruption, they say, will force down costs, lure prospective students away from traditional "core" universities, transform the way academics work, and spell the end for the traditional scholarly calendar based around face-to-face teaching.

Clayton M. Christensen, the Kim B. Clark professor of business administration at Harvard Business School, and Henry J. Eyring, advancement vice-president at Brigham Young University-Idaho, outline their ideas in The Innovative University: Changing the DNA of ³ÉÈËVRÊÓƵ from the Inside Out.

"In almost every market, you can characterise the history of that industry as a set of concentric circles," Christensen says.

³ÉÈËVRÊÓƵ

It is the innermost circle, representing the "customers" who have a lot of money and a lot of skills, that the authors say the higher education sector is currently trying to target.

Online education will bring a shift by opening higher education to a new middle group in the concentric circles, they argue.

³ÉÈËVRÊÓƵ

"We use the word 'disruptive' not because it is a breakthrough improvement for that middle group, but because it transforms the product or service into something that is so much more affordable and simple that a whole new population can afford it and find that it is accessible to them," Christensen says.

The book asserts that until now, unlike other industries, higher education has not had a "disruptive innovation" that has forced the sector to drive down costs. The result, says Christensen, has been "sustained and difficult price increases".

Eyring points to the success of US higher education over the past 100 years as a reason why disruptive innovation has not been seen in the sector before now.

However, he says that rising tuition fees, which he and Christensen argue are the result of smaller colleges trying to emulate the Ivy League's wealthy and long-established institutions, present an opportunity for change.

"A larger and larger fraction of the population is being excluded from higher education, or by participating they are becoming heavily indebted," Eyring says. "That has been a problem for some time and it has been revealed quite painfully in the past few years because of the economic downturn."

New providers may lead the way

Despite the authors' confidence in the transformative possibilities of online learning, they admit that the disruptive potential will not affect all institutions equally.

"Harvard could continue as it is for a very long time because demand is so high and its prestige is so high," Eyring says. "But I don't think it will - it's already making some extraordinary investments [in online education]."

However, even if Harvard is able to transform itself, Christensen says it is unlikely to lead the field in online learning.

³ÉÈËVRÊÓƵ

"Almost invariably, the [established] leaders find it impossible to lead the industry in disruption," he says. "It's not technology per se that keeps them in the middle, but the very fact that it is affordable and accessible makes it almost impossible for the [sector's traditional] leaders to address."

Christensen suggests that instead it will be new institutions and providers that will lead the way in online learning innovations. "What you will see is that online learning will take root in this larger population: people who, either because of the nature of their life or their situation, can't go to a campus but can do it online.

"Online learning gets better and better and customers and applications are sucked out of the core [institutions] into the periphery. If history is a guide, most of the core institutions are going to run into significant challenges."

Critics of Eyring and Christensen have argued that their use of words such as "customer" and "industry" are inappropriate for a sector that they feel should be led by free thinking rather than the free market.

Eyring admits that the distinction between business and scholarship is "delicate", and agrees that societies should provide the necessary resources for research. However, he argues that focusing those resources could result in greater returns.

³ÉÈËVRÊÓƵ

"It comes back to the reality that it has to be paid for," he says. "The assumption has been that there is this birthright, and that the name 'university' means the state will come forward with the money for research. That's not happening any more. It's a competitive reality with limited resources and the need to focus; the best institutions or the best researchers will get more money because of the recognition of the quality of what they do."

Is tenure's time up?

Eyring and Christensen also look at the notion of tenure. The American Association of University Professors argues that tenure is "necessary to protect academic freedom". But Eyring says that the idea of "once and for all" tenure comes from a time when academic freedom was not held in the high regard that it is today.

"There has to be ongoing reassessment of individual productivity," he argues.

"The concerns around tenure are not of the weight that they used to be. We have created a sense of security that may not be healthy, and there needs to be a constant revisitation in the same way there would be if you worked for a law firm or an investment bank."

Eyring adds that a further problem with tenure stems from its origin at Harvard as a strategy to produce more Nobel prizewinners.

"That does not align with the realistic missions of many of the institutions that grant tenure. Tenure needs to be based on the individual university's mission," he says.

If online learning does start to provide a meaningful alternative to the status quo in US higher education, Eyring believes that there will be "wonderful opportunities" for institutions "to do better in what they have done traditionally in the classroom".

In particular, he feels that research-oriented institutions will need to focus more on students and student instruction, along with the scholarship of teaching and learning.

"It won't be tenable for colleges to provide the all-or-nothing choice that they currently do, where you relocate from your home, you take classes face-to-face at hours dictated by faculty members for four years, except for the summer when we expect you to disappear for a bit," he says.

Opportunity to drive down costs

Eyring and Christensen suggest that universities and colleges may need to look at "efficiency measures", such as year-round learning.

The benefits of combining traditional scholarship with online innovation, the pair claim, will be a driving-down of costs, with faculty members able to serve more students.

"The students using this technology can come better prepared and they can consume the traditional lecture much more effectively as they listen to it personally online. We know that when students come very, very prepared you can take the learning experience to a new level and you can do it in larger classes," Eyring says. "You can have fewer face-to-face classes, with more of the work occurring online."

Christensen concedes that the book presents only a theory of what may happen to higher education over the next few years. However, he says, theories are necessary so that universities can continue to develop. To illustrate this, he likens a university to "a ship going across troubled waters".

"Almost always, the meeting is convened on the back deck looking over the wake," Christensen says. "What this means is that, for whatever frustrating reasons, data is only available for what has already happened. So if they take you to the bow of the ship to look out at the future, the problem is that data is only available about the past.

"Most senior leaders, boards and trustees looking into the future cannot tell what's beyond the fog into which they're going. It's very important to be able to use theories because you don't have data for the future."

³ÉÈËVRÊÓƵ

sarah.cunnane@tsleducation.com.