It’s Time to Transform Higher Education by Gies College of Business

It’s Time to Transform Higher Education By Jeffrey R. Brown, Dean of the Gies College of Business at the University of Illinois

The Degree The “degree” as the mark of a college education dates back at least to 13th century Europe, making it among the most enduring credentials in existence today. A degree from a college or university is recognized the world over as the primary way to signal one’s mastery of a body of knowledge. It provides tangible evidence that one has reached a significant educational milestone and is prepared to undertake a variety of intellectual and professional pursuits.

Since that era, access to a degree has been restricted primarily to society’s elites. Within this privileged realm, a college degree carried the unmistakable heft of achievement. A diploma, often posted proudly on one’s wall, meant that one had accomplished something important, something substantial. It was an imprimatur of success. When Harvard University was founded in 1636, it set what would become the standard template for a bachelor’s degree: four years of study for a privileged few citizens preceding the launch of their careers. With

the passage of the Morrill Act of 1862, the United States Today, we have students who graduated from leading launched land-grant universities to fuel the expansion business schools six years ago who are already finding of access to education beyond society’s elites. The fourthat the pace of technological change is requiring that year undergraduate degree soon became a fixture of the they learn new skills. Areas such as data analytics, U.S. system of higher education. machine learning, augmented reality, blockchain, As educators, we harnessed this model into a wildly quantum computing, to name a few, are changing jobs, successful business model that by the mid-20th century organizations, and industries at an unprecedented pace. became the envy of the world. U.S. universities became The idea that one can earn a degree at the age of 22 and known the world over for be set for a career has providing best-in-class become as antiquated as program quality, leading to the pocket watch. Despite the incredible longevity of skyrocketing domestic and Even before the higher education institutions and international demand. We pandemic upended responded with a dramatic our world, a number the staying power of the degree expansion of academic of universities were as a credential, like any industry programs, employment, experimenting or profession, we are subject to and facilities. In 1950, with new forms of college enrollments among education, learning, disruptive forces of technological traditional-aged students and credentialing. Most change on a global scale. stood at approximately 2.5 notable among these was million; today we are closer the harnessing of video to 17 million. platforms to produce Despite the incredible longevity of higher education “massive open online courses,” or MOOCs, and the use institutions and the staying power of the degree as of video technologies like Zoom to teach interactive a credential, like any industry or profession, we are online classes to students anywhere around the world. subject to disruptive forces of technological change on Online education can be a powerful tool for a global scale. “To quote Pulitzer Prize-winning author universities and colleges to pursue their missions in a Tom Friedman,” we live in an “age of accelerations.” world in which students demand nimbleness, flexibility, When the College of William and Mary was founded in and accessibility. But to fully embrace our missions, we 1693, the body of knowledge one was expected to learn as educators must think differently about the suite of during college was not so different from that which faced educational “products” that we offer. What makes us the first students at Harvard nearly six decades earlier. think that a degree model designed in medieval Europe,

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and adapted to North America nearly 400 years ago, is Many of our most valuable corporate partners— the right model for the future? those who hire our students, provide philanthropic In essence, the 21st-century version of the Morill support, serve on our advisory boards, and speak to our Act’s expansion of educational access will be rooted in classes—are becoming not only valuable collaborators technology rather than legislation. Billions of dollars but also potential competitors. Tech companies like are being poured into promising new educational Amazon, Apple, Google, and Microsoft are offering their technologies being developed in the private sector. own badges, certificates and credentials. Granted, these Some of these emerging and yet-to-be-developed credentials are often technical and entry-level, but it is technologies and business models will complement likely that many of these companies will move up the the efforts of forward-looking institutions. Others will educational food chain into the space that has long been disrupt our core business models and compete with us. the domain of business education—and to some extent, There will be new forms of content delivery, new ways higher education at large. to assess learning, and new ways to certify that a learner We are already seeing this. In 2018, Northeastern has mastered various concepts and skills. In the future, University announced that students who complete our competition will not Google’s IT Support just come from other Professional Certificate could educational institutions now receive college credit In the future, our competition will in our region. Each of us toward a bachelor’s degree not just come from other educational in information technology. will be competing with colleges and universities This new pathway allows institutions in our region. Each of us on a global basis and with students to shorten their will be competing with colleges and a vast array of alternative time to degree and save universities on a global basis and with money on tuition. It is also credential providers in the private sector. blurring the lines between a vast array of alternative credential The same technological corporate training and higher providers in the private sector. breakthroughs that make education in interesting these new educational ways. approaches possible are also leading to the need In Gies Business, one of our most important corporate for continual updating of skills and knowledge by partners is EY, a global professional services firm with the learners we serve. A number of professions such more than 300,000 employees worldwide. In recent years, as medicine and accounting have had continuing EY has become a disruptor in the education space in education requirements for many years due to the need numerous ways. In 2015, EY in the UK announced they to keep their skills up to date. Now, the need for updated would no longer require a degree, having found “no skills is expanding to nearly every occupation. evidence” that academic performance was correlated We all must innovate and adapt. Those who insist with subsequent professional success. A few years later, on clinging stubbornly to the past will risk becoming they announced a partnership with a purely online, obsolete. private, for-profit business school (Hult) to bundle digital credentials into an “EY Tech MBA” and then followed up with a Master’s in Business Analytics in October 2021, both offered for free to EY employees. EY entered the undergraduate space in August 2021, with Hult providing academic credit for EY internships. This allows students to earn credit toward their CPA licensure requirement Several factors are leading to the change we’re without needing a master’s degree. These innovative seeing in business education. It has become clear programs mean that in addition to EY being a valuable that technological transformation can dramatically partner, collaborator, investor, and employer of our Gies disrupt industries. That level of innovation is moving graduates, they are also now a competitor in the market up the intellectual chain with AI, machine learning, for graduate student talent. robotics, and other areas. Knowledge workers’ jobs are The pandemic brought its own disruption, forcing also changing—and it is happening at an accelerating institutions to confront systemic change in a very short pace.

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Change Is Not Just Coming— It Is Already Here

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In short, we need a new and expanded model, one that educates people throughout their lives when and where they need it.

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period. These changes included substantial enrollment declines at many institutions—especially from international students—staff layoffs and closures of physical facilities. Teaching modalities changed literally overnight. Recruiting and employment practices for our graduates changed substantially. These factors combine to create a world that is transforming the academic model, especially in our world of business education. Add in a public that has become frustrated with skyrocketing tuition costs, and higher education is clearly ripe for disruption. To be clear, degrees will not go away. But the pace of technological change leads to a need for true lifelong learning, something that a degree model is not wellsuited to address on its own. As business schools, we need to broaden the array of educational products and credentials to meet the needs of 21st-century learners. And we need to do so in a way that expands access and makes high-quality learning available on a global scale. In short, we need a new and expanded model, one that educates people throughout their lives when and where they need it.

How to Adapt to This New World Is the higher education sector so invested in its existing way of doing business that it is unable, or unwilling, to nimbly respond to new challenges? Institutional inertia that has sustained colleges and universities for centuries is easily confused with societal permission to continue unchanged in the future. Our commitment to tradition, complex governance structures, and rigid employment

arrangements increasingly stand in the way of innovation. In public universities, innovation is often further stifled by a regulatory environment designed for a different era. Today, only a small fraction of public university budgets come from taxpayer resources, and yet states continue to impose burdensome regulations that are more appropriate for public agencies than for innovative educational institutions operating in a highly competitive market. Around the globe, hundreds of millions of potential learners would benefit from accessible, flexible, highquality education. But most of them do not have the privilege of being able to take years away from the labor force and move to a university town or city to pursue it. And even those who do will need to continually update their skills throughout their lives. An article earlier this year in Eos, in discussing contemporary STEM education, provides the brilliant imagery that the educational journey needs to look less like a structured pipeline and more like a braided river—with multiple entry points, distinct routes that repeatedly join and separate, flowing at different speeds, and ultimately leading to the same place. We must adapt our systems so that people around the globe have multiple streams that can serve as an entry point into the educational river. So that they can weave education with their careers and their lives at a time, place, and pace that suits their complex lives. By combining online education with a wider array of credentials, those who are committed to remaining current with the latest technologies and skills will be able to upskill or reskill as needed and then put those skills immediately to work.

Average Annual Tuition: 4-year US Public Institutions

Outstanding Federal Student Loans

BILLIONS OF DOLLARS

THOUSANDS OF DOLLARS

20k 2B The rationale for this reassessment is all the 15K more powerful when one takes a clear-eyed look at our attitudes toward 10K 1B accessibility, diversity, and inclusivity, and accept that 5K higher education has been far too exclusionary. For 0 0 starters, tuition at four-year 1986 1996 2006 2016 institutions skyrocketed 2006 2011 2016 2021 (Source: National Center for Education Statistics) by 1,200% between 1980 (Source: Federal Reserve) and 2020 after adjusting for inflation. The barrier to entry has been raised to rankings. Yet a university president bragging about an astonishing—and frankly, indefensible—level. It rejecting 90 percent of applicants “is tantamount to the is wholly unaffordable for some, or affordable with head of a homeless shelter bragging about turning away substantial caveats for others. Nearly 15 million nine of ten people who showed up last night,” says New millennials have some level of student loan debt, and York University professor Scott Galloway. they carry an average balance of $38,877 per borrower. These barriers and attitudes have resulted in All told, federal student loan debt in the U.S. has hit appallingly low diversity in business school classrooms, $1.7 trillion. ours included. To cite just one metric, Bloomberg The cost of tuition, fees, and related expenses, Businessweek’s 2021 Diversity Index assessed diversity of course, understate the true cost of an education. in 84 MBA programs in the U.S. and found women had

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And we have manufactured—and celebrated—scarcity by creating an environment that encourages rejection: The percentage of acceptance at Ivy League schools is in the low single digits, and that’s often seen as a badge of honor, including by many influential rankings.

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Hundreds of millions of highly intelligent and motivated people around the world also do not have the luxury of leaving a job to pursue a residential degree. Many do not have access to high-quality universities within commuting distance of their homes. Not only do these barriers limit who pursues a degree, they also limit students’ abilities to stay the course and finish. While enrollments have continued to grow since 1990, the rate of degree attainment in the U.S. by those aged 25 to 34 has fallen from second in the world to 12th among developed nations. And we have manufactured—and celebrated— scarcity by creating an environment that encourages rejection: The percentage of acceptance at Ivy League schools is in the low single digits, and that’s often seen as a badge of honor, including by many influential

achieved parity at only five of those schools. Fewer than two dozen schools had enough Black and Hispanic students to equal their respective shares of the broader population, and seven MBA programs failed to attract even one Black student. (Four programs showed the same absence of Hispanic students.) Many of these business schools struggle to attract MBA students, in part, because they require the GMAT, an entrance exam where Black and Hispanic students are significantly underrepresented. Too many in our profession have confused the relationship between excellence and access, allowing people to create a false choice between quality or excellence on the one hand, and access on the other. As business educators, we can—and should— challenge and change this. After all, the reason for

educational disparities is not due to underlying this same technology allows us to operate at scale, differences in intellect or ability but rather due to a host which means we can provide valuable educational of financial, geographic and lifestyle barriers that inhibit opportunities to students at a much lower cost. access. This is how we change the world. We can—and should—make education more affordable while maintaining educational rigor. At Gies, our online MBA, known as the iMBA, costs less than $23,000, a small fraction of the cost of a typical MBA. What is stopping us from taking this dramatic As long as students have access to a good internet step forward? We are. connection and a smartphone, tablet, or PC, they can As institutions, we have been too slow to embrace participate in our program from anywhere in the world. the opportunities being created by the disruptive Our program’s built-in flexibility allows them to pursue economic and social forces that technological a highly engaging education, taught by leaders in their breakthroughs have accelerated. fields, without quitting their job or moving their families At Gies College of Business at the University of halfway around the world. I don’t think it’s hyperbolic to Illinois, we have adapted to this new reality and say the iMBA has disrupted the entire MBA market. embraced these changes and opportunities in ways The world’s top research institutions—those with few of our peers have. In addition to our iMBA, we have stringent research expectations and tenure criteria, also launched two more online degree programs—a highly selective Ph.D. programs, and world-class Master of Science in Accountancy (iMSA) and a Master facilities—can also provide access to high-quality, of Science in Management (iMSM). Gies was the first affordable education to hundreds of millions of students of the top-ranked accountancy programs to offer a across the globe. Indeed, many of our very best research degree completely online—a degree designed for faculty at Gies enjoy teaching in our online programs professionals looking because it provides a to refresh their skills global stage on which and for those wanting one can both generate to change careers. The and disseminate new degree in management research ideas. pairs with any kind There are three of undergraduate universities in the major and is designed University of Illinois for early-career system, who collectively professionals who want educate more than to add a foundation of 90,000 students business skills but don’t each year. This is an yet have extensive work impressive contribution experience. to societal well-being. But why should we settle for educating Recently, we received But why should we settle approval from the 90,000 students when there are hundreds for educating 90,000 Illinois Board of Higher students when there are of millions of people around the globe who Education to launch a hundreds of millions are perfectly capable of succeeding, but who series of online graduate of people around the currently lack access? certificates. These are globe who are perfectly for-credit credentials capable of succeeding, that are not degrees but but who currently lack access? are recognized by the university. We’re offering eight of Technology has made geography irrelevant. Through these graduate certificates in areas such as Accounting our online programs, we can provide a high-quality Data Analytics, Digital Marketing, Entrepreneurship & education to a student in Germany or India as easily Strategic Innovation, Financial Management, Global as we can to a student from California or Illinois. And

Eliminating the Barriers

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Gies has been rewarded with exponential enrollment growth in our iMBA “program—from 114 students in 2016 to more than 4,200 students in Fall 2021—and a 98 percent student satisfaction rate. ” Challenges in Business, Managerial Economics & Business Analysis, Strategic Leadership & Management, and Value Chain Management. Each certificate consists of 12 credit hours of coursework with the same rigor as our degree courses, and they are designed to be completed in four to 12 months for as little as $3,500. Not only will these options serve learners seeking short, standalone credentials, but they also provide an option to stack those credentials into a degree program. A student can complete one 12-credithour certificate, and then if they decide to pursue a Gies MBA, they can stack that credential into the MBA without having to repeat the courses or pay unnecessary tuition. And because these are forcredit, students may be eligible for loans or tuition reimbursement from their employer.

In our experience, this shift hasn’t been easy. To increase our digital offerings, we invested in state-ofthe-art production studios and hired a team of more than 70 experts in instructional design, technology, and videography. We de-emphasized GMAT testing within our acceptance criteria because it biases the applicant pool and perpetuates our industry’s lack of diversity. In addition, this shift has required more collaboration, time, resources, and flexibility not only within the business school, but across our entire University system. We’ve worked with the University of Illinois’ registrar, bursar, and other offices to make institutional changes that align with our innovative model. For instance, we now have five annual intakes, while a typical university enrolls students just once or twice a year. And Gies operates on a pay-as-you-go model, which differs greatly from the standard tuition model.

An Uncertain—But Exhilarating— Future

All of this work has helped us move toward our five strategic priorities for the future of Gies College of Business: • expanding access; • creating a diverse and inclusive community; • fostering excellence in research and teaching; • establishing lifelong engagement among our students and alumni; and • ensuring Gies is the most innovative business school in the world.

Societal and technological changes create uncertainty, risk, and opportunity. Business

school leaders and scholars before me have predicted large-scale failures, including the late Clayton Christensen’s prediction that 50 percent of colleges and universities would close or go bankrupt in the next few decades. I won’t add my own quantitative prediction, but I do believe we are at the front end of a dramatic transformation of One can imagine a day in which, if enough the business education landscape. Schools business schools follow into the sub-degree that experiment, adapt, and innovate in their credential space, it will be possible for a student educational programs have an opportunity to shape a future in which they will thrive. Those to create their own “degree” by combining the that do not may help Christensen’s prediction best offerings from multiple institutions. come true. Too many universities have a mentality of “if we did not teach it ourselves, the students cannot possibly have learned it.” This provincial view often Our efforts have paid off in other, more tangible inhibits creative solutions and may contribute to the rise ways, as well. Gies has been rewarded with exponential of third-party credentials to meet this market demand. enrollment growth in our iMBA program—from 114 One can imagine a day in which, if enough business students in 2016 to more than 4,200 students in Fall schools follow into the sub-degree credential space, 2021—and a 98 percent student satisfaction rate. The it will be possible for a student to create their own revenue generated by our online offerings has allowed “degree” by combining the best offerings from multiple us to grow our faculty by nearly 60 percent in just institutions. Rather than earning an MBA from a six years, fueling our research output as well as our particular business school, someone’s resume might programmatic innovation.

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Personally, I find this picture of the future exciting, exhilarating, and full of possibilities for democratizing education. Others find it scary. But here’s the bottom line: it is inevitable.

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sport a “self-made MBA” comprised of recognized credentials from half a dozen top institutions. It is not difficult to imagine a third-party business model emerging that certifies that the person has earned the equivalent of a degree. All of these are scenarios that we, as a profession, must explore. We owe it to our students and many generations still to come. The degree is no longer a onesize-fits-all credential, as it may have been in medieval Europe. Just as knowledge can be delivered in a wide variety of formats and modalities, so too can the public signal that one has mastered that knowledge. By rightsizing the role the “degree” plays in the educational journey of our students, we can open the door to a new world of possible ways we can adapt to meet their changing needs. Personally, I find this picture of the future exciting, exhilarating, and full of possibilities for democratizing education. Others find it scary. But here’s the bottom line: it is inevitable. Most of the necessary building

blocks are already in place, just waiting to be pieced together in compelling ways. As business school leaders, we can choose to lead and embrace this change, and intentionally guide it in a manner that ensures high academic rigor along with relevance. Or we can cling to our existing business models and stand watching from the sidelines as new institutions emerge to meet the needs of today’s learners while we slide inexorably into irrelevance. This is a time when energy, creativity, and experimentation can thrive. Leaders who create environments where disruptive thinking is encouraged will find new, more effective ways to deliver on the core missions of their institutions. We know that the ways business schools pursue their educational missions are changing. In that case, we owe it to our many stakeholders to lead our organizations into an era of unprecedented agility and innovation. And believe me, it can be done.