//Republished from my case study written for Innovation Garage
The following report serves two purposes.
The first is to understand where the future of educational institutions is headed.
The second is to provide the reader with a crystal clear idea of disruptive innovation and enable them to identify disruptive innovations in his field of work.
We as Innovation Garage have a goal of fostering innovation among the minds of students.
Understanding disruptive innovation and being able to construct a value chain model are two very essential skills that are required in this age of Digitalization.
The article explains each aspect of the above-mentioned principles in great detail while drawing parallels with the current competition between MOOCs and Higher education institutions to provide the reader with an immersive experience.
The data that has been cited in this article has been gathered by the survey that has been launched by The Innovation Garage.
Table of content:
Part 1: What is disruptive technology?
Part 2: Understanding the value chain.
Part 3: Analyzing MOOCs.
Part 4: Analysis of the survey.
Part 5: Can the higher educational institutions survive the march of MOOCs?
PART 1: WHAT IS DISRUPTIVE TECHNOLOGY?
Disruptive technology is any innovation that alters the value network of an industry drastically and creates new user behaviors.
What is more important than knowing the meaning of disruptive technology is being able to analyze the market for potentially disruptive technologies.
It is no secret that in the last 20 years many industry giants have fallen due to their inability to spot the disruptive technologies in their industry.
The best example of this would be the downfall of Kodak due to the rise of digital photography.
Every time a disruptive technology has emerged it has always followed a systematic process. This process or the framework of disruption can be identified by using Clayton Christens Disruptive innovation Framework.
According to the framework, every disruptive technology has three important characteristics.
The presence of an over-served market. An overserved market is created when a firm is producing features and modules faster than their consumer’s ability to utilize and absorb them. It could also be created when the company has features that are rarely being used by its consumers. We can take the case of how music CD’s used to be sold with a whole album in them, the users, on the other hand, were only interested in two-three songs of that album. The rise of digital music over the internet allowed consumers to purchase and download single tracks. Sentiments of consumers being ripped off by label companies grew strongly when it became apparent that they could pay 1/12th of the price and listen to the tracks that they liked rather than buying the whole album.
The disruptive technology in its infancy stage is always inferior in quality to its incumbents. Disruptive technologies typically have a feature set that does not cater to the target customer of the incumbents and has lesser margins. Disruptive technologies are of two types, Low-End and New-Market Disruption. Low-End Disruption is when the technology caters to the minority or the end of the long tail retail. Most of the established businesses over time focus on mainstream audiences to maximize profitability. This gives innovators a unique chance to deploy low-cost business models and pick the least attractive segment of the established market. An example of low-end disruption is discount retailing. New-Market Disruption occurs when technology creates a completely new market. Before PC’s came into the market there were Mainframe computers that ruled over the market space. PC’s catered to the left out segments that the incumbents of the industry at that time did not cater to.
Rapid quality increment. Disruptive technologies do not catch up to the incumbents unless they rapidly grow in quality and hence grow in market share very fast. As displayed by the second characteristic due to their inherent lack of quality in comparison to their incumbents the consumers wait until the quality grows to adopt the new technology. Disruptive technologies rapidly increase in quality and as a result, grow their market share. The best example to understand this is the digital camera, the first digital camera had a resolution of 0.01 MP!
When these three qualities are displayed by a product/service it can be called as a disruptive technology.
To visualize the disruptive innovation framework, we can take the help of the following graph.
Part 2: Understanding the value chain
As stated in the first line of the part “what is disruptive technology?”, when a disruptive model arises the value chain of an institution is directly challenged.
Incumbents are backed to a position where they are forced to completely redefine their value chain or become obsolete.
The value chain of any institution has 2 segments namely Primary and Secondary/Support.
The Primary consists of Inbound Logistics, Operations, Outbound Logistics.
Let us try to build the value chain model for a higher education institution.
Primary Value Chain Of HEI:
Inbound Logistics: These are the processes and resources that are involved in gaining students and academic staff.
Operations: In a typical HEI, the processes involve education, research, project development and academic staff education.
Outbound Logistics: Career management of the students and the academic staff.
Support Activities:
Higher Education Institutions indulge in these activities to boost the reputation of their institutions and hence, in turn, improve their quality.
Under this category, all kinds of technology and administrative services that ensure the smooth functioning of the primary category.
Campus life and social activities to promote and improve the lives of students and the generation of funds to provide for all the micro and macro processes of the institute also fall under this category.
Part 3: Analysing MOOCs
MOOC stands for Massive Open Online Course, there are two main types of MOOCs. xMOOCS are based on traditional course structures and established teaching principles and methods. cMOOCS rely on connectivity based learning models that utilize active collaboration among students to convey course materials and reinforce the learning. MOOCs are completely reliant on digital communication and the infrastructure of the internet, this drastically reduces the setup costs of a MOOC when compared to starting and a new course in an HEI. Being a digital form of service has opened up MOOCs to target the complete long-chain market of the educational industry. MOOCs are aimed at unlimited participation and do not have an entry requirement. A degree through a higher education institution is not affordable by all the members of the society, this gives MOOCs a unique positioning which they have surely exploited. More companies and firms over the past decade have grown more accepting of MOOCs. Companies value certification from a reputed body of MOOCs equally as a degree from an established educational institution. Before MOOCs, the educational institutions controlled the complete value chain from the input logistics by enforcing eligibility criteria and the operations by designing the course plans and by once again establishing eligibility criteria for students to enter into the output logistic segment. MOOCs have altered the input logistics and the operation of the education segment in the value chain of a traditional higher education institution. Higher educational institutions still hold their firm grip over the output logistics and hence command the demand. MOOCs address the students who have been left out by the educational institutions and also cater to those students who are enrolled in higher educational institutions by enabling them to avail courses from bodies that are more reputed than the one they are currently affiliated with. Part 4: Analysis of the Survey
When we analyze the data we can come to the following conclusions:
Only 30% of the students take MOOCs related to a course that they are going through in their graduate degree.
65% of students feel that their graduate course has modules that are not necessary for them to break into their career
46.7% of the students feel that their graduate course is not in alignment with the career that they want to get into.
51.7% of the students rarely utilize the facilities(auditorium, gym, etc.) present at their institutes
The datasheet of the survey can be accessed by clicking here. What does this imply? The data collected indicates towards the HEI overserving the market with unnecessary features by making students take courses that are not relevant to the industry that they want to break into and with infrastructure that serves no purpose. Majority of students take MOOCs to give them an edge over the others to secure better employment opportunities and enable them to pursue their passion. This growing sentiment among the students is a direct indication that MOOCs over time are gaining more popularity among students and are viewed to be more beneficial than some courses that they have enrolled as part of their graduate program. The results are definitely in favor of MOOCs. But a majority of the MOOCs are being offered by established HEI on the online platforms, this has made a lot of reputed institutions digitalize some modules of their courses. This trend can be found from Harvard to our own IIT’s and NIT’s. Part 5: Can the higher educational institutions survive the march of MOOCs?
To get an answer to that question we first need to understand the transformation that MOOCs are going through.
The output logistics of an institute acting as a platform for career management is being challenged by those very companies and firms for whom educational institutions have acted as an interface in the past.
There is a steep rise in the number of companies and firms offering MOOCs.
Companies are investing in MOOCs because of multiple reasons, some of which are given below:
MOOCs allow a company to instantly produce courses aligned with their needs. It is rather expensive and tedious for HIE and traditional institutions to keep their course updated with the latest industry standards and requirements. MOOCs, on the other hand, can be deployed instantly.
Simulate the interests of potential and current employees across all generations.
Online courses can be repurposed, reused and revamped.
Helps the company establish itself as an icon of that field.
Some of the premier firms and companies such as Google, Microsoft, IBM, Goldman Sachs, Autodesk, Unity, AWS, Cisco have begun to offer MOOCs. This trend is not just limited to the premier firms and companies, Russian internet service providers Yandex and Mail.ru have also jumped on to this boat. For a more prominent example, take the industry of digital marketing a lot of digital marketing agencies offer MOOCs on digital marketing and SEO. Majority of the professionals in digital marketing have acquired the skill by enrolling in a MOOCs. Students who have graduated from a MOOC that is either developed by or funded by a corporate entity have shown a strong desire towards working in that company. This is a huge benefit for corporations as they can eliminate the HEI as middlemen when it comes to recruiting talent. This shows a strong implication that soon the traditional educational institutions will lose their control over their current value chain completely. The value-chain that has been put forward by the MOOCs empowers the students and potential academic recruits, this shift in power dynamic has led to yet another breakthrough in the concept of MOOCs. Adaptive learning is the latest advancement of the MOOC it deploys computer algorithms to produce an optimal learning path for a student, Adaptive learning is highly personalized and addresses the need of students at an individual level. Being able to address the student's need at an individual level is not something the current infrastructure of traditional educational institutions can handle. Adaptive learning has already proven itself to be a strong ally of educators, Harvard deployed adaptive learning and found that students enrolled in an adaptive learning program displayed 19% larger knowledge gain than their peers who were not enrolled in such a program. The change in the value chain is surely noticeable but has progressed rather slowly, the involvement of companies and firms along with the development of highly personalised learning system will surely accelerate this change in power dynamics. The next couple of years would be very interesting as the students would be able to witness educational institutions going through digital transformation to try and match the capabilities of the MOOCs, but one this is for the control that traditional educational institutions have over the value chain is surely coming to an end.
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