ALTERNATIVE CREDENTIALS AND PROVIDERS: A SECOND LOOK (2 of 3)
A recent study nicely illustrated the strong bond between higher education, the credentials they offer, and the labour market. It describes how employers have raised the credential requirements for job candidates. As colleges and universities produce more graduates at every level, employers have followed in lockstep by requiring more advanced degrees (from traditional institutions). The degree requirements have increased even though the work doesn’t necessarily call for additional qualifications. (If you’re over 40 years of age, you likely know a few people who would no longer be considered for the jobs they now occupy.) Rather than deviate from higher education, employers move in lock-step as the supply changes. One effect, certainly, is to increase costs to students and society; a second is to increase demand for higher education credentials.
Alternative Providers of education can’t simply begin offering Bachelor degrees. They can’t choose to adopt the properties that define and sustain the monopoly. They may want to offer something healthier than burgers and fries, but they can’t.
But let’s clear: for this essay, what matters is not whether or not this particular system is justified or beneficial to students and society. Rather, the point is that the current arrangement has had the effect of dramatically limiting the value of what alternative providers can offer.
credentials or disruption
This unique arrangement is one of the main reasons why the frequently predicted “disruption” of higher education has yet to materialise. Pundits explain that higher education will suffer the fate of other information-rich, digital-friendly industries, such as bookstores, journalism, and music recording. But unlike other industries, the credential economy ensures that students don’t have access to “substitute goods”. Students need the widely recognised credential that only officially sanctioned institutions can offer. A music fan, though, doesn’t care a great deal about who supplies her music fix. If a new source music files can provide lower prices, better file quality, or superior convenience, consumers will gravitate toward it. Most students need to learn at an accredited institution that offers the widely recognised credentials to ensure that their investment of time and money will have value in the labour market or at other educational institutions (e.g., for admission to graduate studies)*
Given the importance of credentials to higher education as a stalwart against competition, the decision to move into the Alternative Credential space seems odd, at best — especially given that the motivation for this venture is to combat competition. The move places traditional institutions in a market in which it is no longer afforded the protection that the credential economy provides. More importantly and in the long term, the move bestows credibility on a new, largely unfamiliar category of credentials that other organisations can provide. In an attempt to compete with these upstarts, traditional higher ed is providing precisely what these emergent competitors currently lack: legitimacy in the eyes of students looking to build their skills and resumes.
other factors supporting alternative providers & credentials
This indirect and likely unintended validation of alternative credentials (and, by extension, alternative providers) isn’t going to single-handedly enable the upstarts to establish a major foothold in adult education. But several other developments are unfolding in most OECD nations that support the rise of alternative providers and alternative credentials. Together, these developments are beginning to form a new, second education eco-system that will cut into what has become a near “natural” preeminence of traditional higher education for learning skills and competencies. Our next post on this subject looks directly at these developments.
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By Keith Christopher Hampson, PhD
*The credential economy in higher education explains the form that much of the commercial involvement in higher education has taken to date. Businesses that want to sell to higher education, need to focus on sales to institutions of higher education, rather than directly students. Efforts to get around this obstacle include the “online program management” industry, with the likes of 2U, Pearson-Embanet, Bisk, and others. They sell a range of services and resources that institutions need to fund, develop, manage, and market online education programs. Despite the considerable competencies and resources these vendors bring to the table, the actual programs of study must be presented to the public and regulators as strictly by-products of the institution. In other markets, new competitors would inevitably emerge offering comparable products and services — i.e., serving as competitors, not solely suppliers.
