Education Unbundling in A Pandemic Era

Bundling is a situation where the seller combines different items into one package and sells you the whole bunch even if you only wanted one or two items.

Bundling has been part and parcel of the university system over the years. Institutions of higher learning provide a wide range of educational products and services bundled into a single package and offer to prospective students. The bundle may include offering courseware and providing certification after fulfilling certain course requirements or meeting the required credit hours. In return, universities charge tuition for the bundled product and services.

Bundling is not limited to higher education. The music industry is a good example of product bundling. Music that consumers want is often bundled with the music that they don’t want (the rest of the album). That meant the music industry made money it wouldn’t have made without the bundle.

The emergence of digital technology is changing the way educational institutions and other industries provide their products. We are seeing a transition from service bundling to unbundling of products and services. For example, in the music industry, consumers can now purchase only the products (albums) they want.

In the television industry, with the emergence of Netflix and others, viewers can now watch individual shows, rather than channels or networks. Viewers are given a mechanism for paying only for the shows they watch rather than the thousands they don’t.

Another industrial example is Uber. Its market share is about $40 billion. Currently, it owns no vehicle but it has been able to alter consumer behavior with their unbundled service model. Take Airbnb with its market cap of  $10 billion. It owns no hotel rooms but it is able to provide accommodation services through its unbundled approach to business.

The software industry is being driven by service unbundling. Years back, a big-ticket item company had to customize and implement and then every couple of years upgrade to a new version. Enter the era of Software-as-a-Service (SaaS). This changed the business. Today, businesses now “rent” software per user per month, and vendors have unbundled their offering into component parts so that customers only need to buy what they need.

Over the past couple of years, “Just-In-Time” (JIT) education has emerged as an equivalent to SaaS. With this trend, people looking to upgrade their skills acquire only what they need, when they need it, and go for additional knowledge or skills when they need more. A good example of a JIT organization is YearUp, a Boston-based not-for-profit that provides JIT pathways to a professional career for underprivileged students in several functional areas (e.g, IT, operations and finance, sales and marketing, customer service, etc.), combined with internship at employer partners.

We are seeing a similar trend in higher education. In his “College Disrupted: The Great Unbundling of Higher Education”, author Ryan Craig, managing director of University Ventures explores how education is trending away from the swollen bundled beast, and is fast becoming a multi-faceted, online-friendly market of educational options that will meet potential students wherever they are willing to pay. His book is a vision of the future that resonates with those who are truly in the business of higher education.

He notes that the rankings race of every college trying to be the next Harvard are betraying their strength. According to him, colleges have traditionally used the “the four R’s … Rankings, Research, Real Estate, Rah (sports) in their ranking. This has contributed  to rising costs—rather than curricular workplace relevance. Due to this focus, higher education is risking a “dystopian counterfactual” valuation of degrees as hollow representations of bureaucratic endurance rather than employability.

The gist of Craig’s argument is that consumers are pushing education towards greater convenience, portability, versatility, and lower cost, creating a collective market pressure that challenges traditional colleges to change or die.

As the founding director of Bridgepoint Education, one of the largest online universities in the United States, he argues that schools that are slow to adapt to online education will drown in the current of this mounting storm, those that remain ahead of the curve will ride the waves to success.

Craig sees the future of higher education in online degrees that unbundle course offerings to offer a true bottom line return for the majority of students in terms of graduation, employment, and wages. His book provides details that the United States higher education will undergo. Prominent among the changes is the transformation from packaged courses and degrees to  unbundled course offerings.

What then is the Next Big Thing that will save higher education once and for all.  Craig sees educational unbundling where degrees are broken down into bite-sized competencies that can be identified and consumed for a given job without any unwanted leftovers, a just-in-time education warehouse hosted on an online platform that can make efficient bridges between almost-qualified candidates and the jobs of their dreams. and the role of technology in higher education.

The Chronicle of Higher Education also listed unbundling as a trend , describing it as “education á la carte”.

The unbundling of higher education will mean many changes for college programmes, institutions, faculty and – students. In an era of unbundling, when colleges and universities need to move from selling degrees to selling EaaS subscriptions, the winners will be those that can turn their students into “students for life”—providing the right educational programmes and experiences at the right time, he notes.

Given contemporary trends, there is the need for colleges to begin paying serious attention to the value proposition of what students get when they pay. This becomes possible when individuals own their competencies and allow institutions to manage their profiles.

Osei K. Darkwa, Ph.D.
Visiting Professor, University of Illinois-Chicago

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