San Jose State University and the New Economics of Higher Education
Public higher education institutions in America are being squeezed with vice-like force unlike anything they’ve experienced before. Legislatures are reducing their funding, for profit and not-for-profit competitors are proliferating and many civic and business leaders are questioning the very value of a college diploma. University presidents and the regents or boards they serve are stuck in an “iron triangle”: on one angle is access, their raison d’être and why their respective legislature chartered them in the first place – educate the people in our state. On the other angle is cost, which using conventional thinking rises when one provides access to the masses. The third angle is quality, which also is thought to be compromised when access – and costs – rises. What’s a university leader to do?
Invest his/her way out of the “iron triangle” and change the economics. This is precisely what President Mohammad “Mo” Qayoumi of San Jose State University (SJSU) is doing.
Faced with the first cap on admissions in the 155-year history of the university, President Mo understands that infrastructure thoughtfully applied can restore balance to his business model. Currently SJSU – like most public higher ed universities – has a traditional business model focused on bricks-and-mortar delivery of instruction, which requires a traditional funding model whereby its legislature pays the lions-share of the cost. While this funding model has shifted over the last 20 years, the delivery model has not, thus creating a grossly misaligned business model.
What has changed dramatically in the last 20 years is information technology (IT), which now enables businesses of all kinds to scale their delivery and business models across geographies and serve new customers. The higher education customer has also changed, as this current class of students has been raised on the internet and IT and expects a different delivery model. Enter President Mo!
“Never before in the history of higher education has technology provided such important challenges and opportunities. We must reinvent teaching, learning and educational delivery systems,” he says. Over the next 18-24 months SJSU will develop a total of 51 next-generation learning spaces with all the equipment needed to enable high-definition recording, indexing and transcription of lectures and classroom experiences, and eleven next-generation learning spaces will be completed in Fall 2012, with the remaining 40 to be completed by the start of fall 2013. SJSU is also supporting faculty in using and applying next-generation technologies to better support students’ learning by partnering with corporate neighbors and other cutting-edge educational efforts such as Harvard-MIT-UC Berkeley’s edX and Carnegie Mellon University’s Open Learning Initiative.
These infrastructure investments will enable President Mo to create a more dynamic “blended” learning environment that is tailored to 21st-century learners. Rather than spending 3-4 days in traditional classrooms on campus they will spend 2-3 days, with the balance being “blended” learning leveraging online tools of many kinds. As the university perfects this model, over time President Mo will be able to increase the number of students under his revised delivery model, thereby increasing revenue disproportionate to cost and increasingquality at the same time. His vision and his urgency for change are attracting attention; check out the recent radio interview by Cisco director Renee Patton regarding SJSU’s effort.
Most universities in America today confront their financial challenges by attacking administrative costs. While admirable, they are trying to solve a larger problem by tacking one-third of their costs – administration. The larger challenge – and cost area – is the other two-thirds: the delivery model. I commend President Mo and his leadership team for understanding the new economics of higher ed, for recognizing that technology changes everything, and for attacking “the big two-thirds.” Very few institutions have been brave, or informed, enough to try such a fix.