1

The Position of Higher Education Institutions in the Global Human Capital Value Chain


Roberto Bonino
Institut futura21, Geneva, Switzerland
Largotec (EA 4388), Universit Paris-Est Crteil, France
Abstract
The educational needs of emerging economies, globalization, the development of mass
Higher Education, the development of the knowledge society and new communication
technologies will affect heavily the delivery of Higher Education worldwide.
Most university governance systems can be positioned within a triangle defined by the
tree dominant forces of university power (Clark 1983) : the state, the academic oligarchy, and
the market forces. New public management doctrines, neoliberal policies and shrinking
availability of public funds to cover the ever-growing cost of education are pushing institutions
to take an entrepreneurial approach(Nelsen 2000), and migrate towards the market corner of
the triangle.
The emergence of the entrepreneur of the self (Foucault 2004) in a labour market
where lifetime employment is a reminiscence of the past, means that students are increasingly
taking a Return on Investment approach in their choices. One can consider that they buy
an increment of their Human Capital, la Becker(Becker 1975), that they will later monetize
and use as a guarantee of employability (See Smith 2010 for the notion of employability). In
this context one could redefine the University, at least as far as the teaching function is
concerned, as analogous to an information based service provider (Karmarkar 2007, p.See for
a discussion of the information service sector) providing Human Capital to its customers. It
may therefore be revealing to confront the Higher Education Sector with the economic
pressures and transformations that other information service industries have been experiencing
and may experience in the future. Universities have been so far shielded from major disruptive
changes by their governance systems and by the fact that technology has not yet substantially
affected their productivity. As mentioned before, however, the governance balance is tilting
towards the market forces, and MOOCs may be offering a real productivity breakthrough, or
at least they carry the promise of doing so as demonstrated by the participation of numerous
elite institutions to ventures like Coursera
I will elaborate on the models outlined above to discuss the socioeconomic pressures
experienced by Higher Education Institutions and their evolution in organisational and
governance terms as key players in the Human Capital value chain.

2

Introduction
Since their inception in the Middle Ages, Universities, and more generally Higher
Education Institutions, evolved over a time span covering almost a millenary during which
they often experienced incremental evolutions and occasional transformational revolutions
(Renaut 1995). Interestingly the early Universities shaped a supranational knowledge network
across Europe, fostering student and faculty mobility and acting almost as precursors of
globalization. The shared academic culture that was created in the early days is still present in
institutions across the world who carry the academic titles and ceremonies established at the
origin (Altbach et al. 2005) and maintain a strong sense of their independent corporate identity.
The modern University emerged from the industrial revolution, to which it actually
contributed only marginally, in the form of the Humboldtian research university charged with
four fundamental raisons d'tre (Barblan et al. 2007) , (Spies 2000) :
search for knowledge,
organization of knowledge,
social order,
social well-being.

The joint effect of globalization and the development of the knowledge society, adding
to political and economic constraints is creating new pressures on the education systems and
the students considered as future employees: this may redefine drastically the mission of Higher
Education.
Until a relatively recent time, Higher Education was a privilege accessible only to the
wealthier sectors of society or to the most promising students completing the secondary cycle.
Following a considerable growth in primary and secondary education, access to the tertiary
cycle in the developed countries has become first a right and then a prerequisite for obtaining
a satisfactory job, resulting in a massive increase in enrolments.
In developed countries that have already reached a high participation rate the limited
demographic evolution will not contribute significantly to the future growth of student
populations. On the other hand, it will not be easy to satisfy the demand of developing and
emerging countries that need to equip themselves with a tertiary education system catering to
a substantial fraction of an age class, which is deemed essential to participate to the knowledge
society. Developed countries, from their side, are eager to attract a part of those students, in
particular because they represent a fees paying population.
In todays rapidly changing professional environments, competences and skills are
increasingly volatile and subject to obsolescence, making lifelong education a growing
necessity. For example, a recent study on adults skills by the OCDE has shown that in many
developed countries, despite very satisfactorily educational attainments, sizeable fractions of
the population do not possess the basic mathematical and linguistic skills expected in the
knowledge society (OCDE 2013).

3

Institutions have to face budgetary restrictions affecting both research and teaching,
while at the same time confront rising costs. The growth of educational costs is related to
external causes like the increasing cost of laboratory equipment, but a good fraction can be
associated to what Baumol and Bowen in the 1960s identified as the cost disease. This is an
effect that explains the growth in prices and employment levels observed in sectors of the
economy that experience minor or no productivity improvements (non-progressive sectors)
compared to those that do increment substantially their productivity ( progressive sectors).
(Baumol & Bowen 1965; Baumol 1967). The study was initially done on the performing arts
in an attempt to analyse and understand the financial difficulties of the sector and has been also
used to explain why the cost of education in modern economies tends to grow faster than the
inflation rate.
Skills obsolescence, the volatility of the professional environment and the pressure on
companies to swiftly react to unstable competitive environments, mean that lifelong
employment is giving way to the concept of employability as defined by (Kanter 1995):
Employability security is based on a persons accumulation of human and social capital
skills, reputation, and connections which can be invested in new opportunities that arise
inside and outside the employees current organization. No matter what changes take place,
the theory runs, workers who continually improve their skills and can make their abilities
known through a network of firms are in a better position to find employment with the current
employer, with another one, or on their own.
Foucault in his famous 1978 lectures at College de France, later compiled and published
as a book, in his analysis of neoliberal theories, defined the entrepreneur of himself,
being for himself his own capital, being for himself his own producer, being for
himself the source of [his] earnings (Foucault 2004).
The entrepreneur of himself is prepared to negotiate its own employment in a labour
market where lifetime employment is a reminiscence of the past, and where wages represent
the remuneration of his/her own human capital. All this pushes students to apply a Return on
Investment approach in their educational choices as demonstrated by the relevance of pre
versus post-graduation salary differentials in international rankings, in particular when applied
to business schools.
Budgetary constraints and an entrepreneurial approach also mean a reorientation of
research efforts towards collaboration with the private sector and what has been called mode
2 of research (Gibbons 1994): a production of knowledge oriented towards practical
applications and socially distributed, application-oriented, trans-disciplinary, and subject to
multiple accountabilities (Nowtony et al. 2003). This redefinition of the research objectives
impacts directly on one of the pillars of Higher Education, since commercial considerations
may restrict the dissemination of knowledge (Nelsen 2000) and would require an in-depth
analysis on its own, but in this paper I will address only educational issues.

4

Higher Education and Human Capital
The knowledge society, unlikely the industrial economy, does not rely on mass
processes of production: automated production requires a decreasing number of qualified
operators while mass production is increasingly delocalized towards countries that are still
technologically and economically less advanced. Because of the dominance of knowledge,
information exchanges and the relevance of human capital in innovation and economic growth,
post-industrial society does not consider knowledge a common good, but rather a production
factor to capitalize and commercialize. Universities are invited to abandon their status as
external scientific observers and independent providers of abstract knowledge to become
integral part of the knowledge production and distribution chain.
As we have seen, both Higher Education and the students, as future employees, are
pushed either by government policies or by societal pressures to adopt an Entrepreneurial
attitude. One could define the commercial relationship that is established between them as
a market place where students acquire Human Capital that they will later lease to their
employers in exchange of revenue and use throughout their career as a support of
employability .
Studies have shown that human capital as measured by the cognitive skills of the
population is significantly related to economic growth (Barro 2001). The mere quantity of
education received, however, is not sufficient to explain fully the impact of Human Capital on
economic output and growth, since it does not take into account personality, creativity or other
idiosyncratic characteristics that are often not reflected into school results. Hanushek and
Kimko for example, have estimated the economic value of high quality teachers, showing that
the impact of differences in teacher quality directly translates into differences in achievement
both for the individual earnings and for economic growth (Hanushek & Kimko 2000).
Individuals and employees therefore do not contribute with just their technical
competence and expertise to their professional and social context. They also bring their
creativity, innovation, cultural background and social connections.
Bourdieu introduced the concepts of Cultural Capital and Social Capital to account for
the role of culture in the transmission of social status. Cultural Capital (Bourdieu 1979), like
economic capital, can be shared, acquired, distributed, or exchanged and has three specific
forms. One form is tied to an individual persons knowledge and skills set. Another form is
found in objects, such as books, works of art, or machines. A third form of cultural capital is
the system of academic degrees, or credentials, which gives individuals a specific power or
authority within the social system. Social capital (Bourdieu 1980) is a set of actual or potential
resources linked to the availability of a sustainable network of relationship more or less
institutionalized or, in other terms the fact that one belongs to a group defined as a set of agents
who do not just share common properties but are also linked by permanent and actionable
connections. The notions of Social and Cultural Capital can explain why individuals with
similar skills and benefiting from the same amount of Education may achieve different social
positions.

5

Social and Cultural Capital are closely related. Belonging to a family that owns rich
social and cultural capital in terms of social status, wealth, and professional position, facilitates
access to superior education (Coleman 1988). Conversely, a selective university provides
access to exclusive, closed social circles that enhance the cultural capital and control valuable
social and cultural resources and this can greatly benefit members of less favoured classes who,
through channels like merit based scholarships, may gain access to it.
According to a survey conducted by the Institute for Business Value (IBV) (Boynton
2011), a growing number of CEOs identify "creativity" as the most important leadership
competency for the successful enterprise of the future. This indicates an important shift in
attitude compared to when rigor and discipline were the most important characteristics required
and is consistent with the increasing global complexity companies are facing and CEOs
impression that their enterprises are underequipped to deal with it.
The various components of Human Capital that we have mentioned so far may therefore
be insufficient to account for individual differences in term of self-efficacy, performance, self-
satisfaction, self-career management, adaptability and self-actualization at work. The Human,
Social and Cultural Capital overlook the importance of psychological aspects. Largely
developed by Luthans, Youssef and Avolio (2006) Psychological Capital, or PsyCap, is an
often-disregarded human resource defined as:
. . . an individuals positive psychological state of development
characterized by: (1) having condence (efcacy) to take on and put in the
necessary effort to succeed at challenging tasks; (2) making a positive
attribution (optimism) about succeeding now and in the future; (3)
persevering toward goals and, when necessary, redirecting paths to goals
(hope) in order to succeed; and (4) when beset by problems and
adversity, sustaining and bouncing back and even beyond (resilience) to
attain success.
(Luthans et al. 2007).
PsyCap can have a direct effect on employees attitudes and ultimately to the
organizations productivity (Avey et al. 2011), and conversely an organization can have major
impact on its employees psychological state, therefore enhancing or depressing the general
level of PsyCap.
To summarize, one can say that the individuals potential economic value, beyond what
would be the basic labour contribution of an hypothetical and perfectly interchangeable
unskilled worker, is determined by their Human Capital, defined as the aggregation of
Educational, Cultural, Social, and Psychological components. This construct, still to be
defined in an operationalized and measurable way, can be used to evaluate the contribution of
the individual to the professional activity and represent what the entrepreneur of himself
student will seek to acquire or augment from Higher Education institutions. While the
individual components of the Human Capital so defined are hard to measure, the net impact of
an education program can be estimated in terms of increased earnings after the achievement of
a degree, compared to the total costs involved.

6

Governance of Higher Education
Universities extraordinary resilience over the past centuries is due at least in part to
their governance system based, with obvious variations across cultures and political regimes,
on internal consensus, academic freedom and the ability to navigate between competing
powers, initially the Pope and the Emperor and more recently the political and the economic
powers within nations. Most contemporary university governance systems can be positioned
within a triangle defined by the tree dominant forces of university power (Clark 1983) : the state,
the academic oligarchy, and the market forces. New public management doctrines, neoliberal
policies and shrinking availability of public funds to cover the ever-growing cost of education
are encouraging institutions to take an entrepreneurial approach (Nelsen 2000), and migrate
towards the market corner of the triangle. Higher Education Institutions, especially those
involved in the global education market, are also impacted by globalization which exposes
them further to market forces.
Globalization can be defined as a process of increased interdependence of world
economies in which some believe that universities can play a mediating role between states,
global institutions, and civil society (Broks 2003). Actually, it is more likely that University
systems will be themselves more impacted by globalization than they will be able to influence
it and one can already identify some trends of global governance taking shape.
A first approach, that could be defined a neo-liberal, market oriented, is represented by
the liberalization of the international provision of educational services promoted under the
general agreement on trade in services (GATS). This liberalization of the Education market
responds to the growing number of internationally mobile students and provides a fertile
ground for the growth of the private and in particular the for-profit education sectors
worldwide (Altbach et al. 2009). A market based approach is not so much an example of
governance as a lack of it, and is somewhat tempered by the recognition of the necessity of
some form of international transparency concerning cross border provision of education that
resulted in the recommendation to the states by UNESCO and OECD on the adoption of
appropriate procedures (Wong 2011).
Another approach is based on self-regulation by membership associations: recognizing
the need of international standards in international education, in particular in the management
education area, some accrediting bodies like EFMD, AMBA or AACBSP are offering
accreditation services across borders and therefore provide common criteria to establish quality
education worldwide.
A final approach is representedby the ranking established by independent or
commercial operators that are gaining such weight in student choices that institutions and even
governments use them as a normative guide: managerial, operational and national choices are
made with the objective to achieve higher rankings. In other words, rankings rise to a function
of global governance: social expectations of the global market, like salary increases following
an MBA, mediated by the organizations that assemble the ranking, become the criteria by
which the institution is managed, beyond the requirements of national policies.

7

The cross border accreditation processes take their origins in the existing community
of internationally minded Higher Education institutions and are therefore sensitive to the
traditional themes of Higher Education like Academic Freedom for both teaching and research.
The other processes, on the other hand, are definitely more market and efficiency driven and
will probably reinforce the political and budgetary constraints resulting in increased exposure
to market pressures for the Higher Education sector.
Industrialization in the information Services.
One of the major trends in the modern economy, widely recognized since the second
half of the 20th century, is a switch to service economies. Another trend that may impact society
even more is the transition to an information-based economy, also referred to as the quaternary
sector, defined as the sum of all the actions and processes dedicated to design, organize, and
manage the eventual production of services and goods (Karmarkar 2004). This sector includes
those industries, or activities within other providing information services , as computing,
information and communication technologies, consultancies and research.. The recent
evolution of the information based service sector may offer a glimpse of what awaits Higher
Education if, or when, the protection granted by its peculiar governance system is lifted.
For a long time, service productivity has been stagnant, showing none of the gains
observed in manufacturing or in agriculture. Recently, thanks to the technological progress of
networking, telecommunications, and software, and supported by ever-increasing
performances of technologies in information processing and data storage (Jorgenson 2001,
section I The information age), the services and information services sector in particular started
experiencing a similar process of industrialization. The result is a vast process of
standardization of information, facilitated by the fact that a large part of the economic activity
is based on dematerialized artefacts that can be expressed, digitized or communicated via
technology. This means that many elements of the processes involved in the service sector can
be standardized, modularized, and finally transferred to separate sections of the value chain.
The standardization of processes is resulting also in the transformation of business models, the
emergence of very new information based value chains and the convergence of different
industries combining hardware and software capabilities to control the new value chains. Apple
for example, has built a major business in the music sector using the iPhone and iPod hardware
platforms, in association with the Itunes software and network platform. Industrialization in
the service sector is following the same path of manufacturing industrialization with effects
like, automation, off-shoring or outsourcing, but also adopting specific strategies unavailable
to the manufacturing sector, like self-services where a part of the service is delivered by the
customer, as is the case of E-banking.
A set of recurring strategies in the industrialization of information services can be
identified through the analysis of several technology driven reorganizations and
transformations of specific information service value chains (Karmarkar 2007). In activities
such as retail banking, mortgage banking , financial services , film and video distribution,

8

RFID in supply and service chains , and health care delivery, one can identify a number of
recurrent strategies: :
1. Standardization of services and products ,
2. Implementation of on-line information logistics ,
3. Automation,
4. Outsourcing,
5. Off-shoring,
6. Service and product re-design ,
7. Process re-engineering and technology insertion,
8. Globalization of markets and providers ,
9. Self-service.
Obviously not all services providers will adopt all the available options, they will
instead select the most appropriate actions depending on where they position themselves in the
two-axis space formed by the complexity of the processes they have to implement versus the
level of customization they want to offer to their customers (Karmarkar 2004) .
Patterns of industrialization of the HE
As the perception of Higher Education is of just another sector of the economy, it is
likely to be under increasing pressure to improve its productivity, evaluated in monetary terms,
as other information-based sectors before it. The pressures to achieve the same educational
results for less money will operate at all levels: on one hand governments will directly require
higher productivity from heavily subsidized mass institutions and on the other, the market will
require higher productivity in terms of higher salaries earned by graduates for lower
expenditures for the degree.
It is interesting to evaluate to which extent the strategies mentioned before, also apply
to Higher Education.
Standardization of services and products
The adoption of a system of academic credit recognized between institutions is a basic
standardization tool in higher education and greatly facilitates the transfer of credits across
institutions. The credit system was first introduced at Harvard starting in 1872 (Bridges & Flinn
2010) and later adopted nationwide in the US. This initial credit system was not specifically
designed with student mobility in mind, but the more recent European system, the ECTS
(European Commission 2012) and (ECTS 2009) was created with the specific purpose of
facilitating credit transfer for students participating to the ERASMUS program and the creation
of a vast educational space across the continent.
The broadening of the demand for higher education is resulting in a clear diversification
of institutions into different, specialized types. Already in the 70s Martin Trow while analysing
the student population growth, identified three types of institutions (Trow 1973) : Universal,
Mass and Elite. The different types of institution, are differentiated through their research

9

involvement, selectivity in accepting students, cost, participation to international academic and
research network and the amount of personalized tutoring and coaching that student can have
with faculty.
Within the same category, institutions tend to be quite homogeneous in their typology:
for example in the US the oldest, most traditional institutions, are also the most prestigious
ones, and they are overrepresented in the top tier of university classification (Labaree 2012).


2 Implementation of on-line information logistics
While distance learning is not new, it received a tremendous boost with the adoption of
information technology and the Internet in particular and has been particular successful in the
United States, driven essentially by for-profit operators.
Studies show that e-learning can achieve identical learning outcomes as traditional face-
to-face teaching provided sufficient resources are allocated (see
http://www.nosignificantdifference.org/ for a compilation of such studies), but such outcomes
are defined in terms of competences and skills which are at the basic level of the Human
Capital value range defined above. Moreover, cost comparison of online versus face-to-face
delivery of the same educational material, while achieving equivalent learning outcomes in
the context of two years or four years university programs, do not allow to easily conclude that
online delivery is substantially cheaper than face to face (EDUCAUSE 2003; Shaw & Young
2003).
E-learning provides economic advantages in terms of infrastructures since it does not
requires buildings, classrooms, offices, libraries, dormitories or parking lots. It is obvious that
e-learning also offers advantages in terms of flexibility of the delivery allowing new
populations of students to access higher education, such as working adults or people leaving
in rural areas who would not have the opportunity or the time to attend face-to-face classes.
However, this type of improvement is a one-offgain and may not offer sustained productivity
improvements in the long-term. Another area of savings offered by e-learning resides in the
facilitation of transferring the teaching load from highly paid tenure-track professors to adjunct
faculty that is compensated at a much lower level, but this per se in not likely to be quality
neutral in term of educational outcomes.
All said, while online teaching does offer advantages and cost saving, it is not clear
that, at least in the current , labour-intensive implementation, it represents the technological
breakthrough that will provide long term sustainable productivity gains to the sector. We will
see later that MOOCs (Massive Online Open Courses) may open up a different perspective.
Automation
Automation is very limited at the teaching function level, while Higher Education
institutions are massively resorting to automation of administrative and support processes. An
example of automation applied to teaching can be found in plagiarism detection tools that allow
the teacher to validate the original content of the submission through automatic Internet

10

searches. More recently automatic grading systems that automatically assess essays have been
made available (Bousquet 2012), or automated curriculum tracking and student advisement
(Parry 2012).
Outsourcing,
Outsourcing in higher education is taking place mostly in the context of distance
learning. Some US universities and colleges, are now completely outsourcing the creation and
delivery of their online courses (Parry 2010).
Off-shoring,
Many institutions have been setting up campuses abroad, this is however more a form
of educational exports than outsourcing and we will get back on the subject later. Actual
outsourcing of part of the information services elements of the online education delivery would
of course be possible but does not seem to be widely adopted.
Service and product re-design
While the Humboldtian research based university remains the ideal model in both the
European and US systems, the market oriented American environment has generated more
diversified university models with teaching only institutions at one and of the spectrum and
what has been called the super research University at the other end (Baker 2007). The super
research University model, largely financed by private funding, has its meaning in the
excellence of research and exploitation of technological spinoffs [see (Mohrman et al. 2008)
for an analysis of globalization of the SRU model]. Another model, that has MIT as a reference
is the one of the entrepreneurial University (Etzkowitz & Dzisah 2007): in this model the
University, associated to an incubator, provides a bridge between research and
industrial/commercial application and therefore benefits from a growing flow of private funds.
More recently, private operators like the Apollo group have promoted online universities that
heavily leverage the internet in a model based on drawing its curricula input from faculty,
students, and student employers, relying on teacher-practitioners faculty that are contracted on
a course-by-course basis (Ortmann 1997).
Process re-engineering and technology insertion,
Traditional university courses are conceived, designed and delivered by the professor,
with the help of assistants for exercises and practical sessions when appropriate. Online
teaching offers the opportunity of re-engineer the process by unbundling the production and
the delivery of academic material in 3 separate stages (Neely & Tucker 2010):
subject matter experts collect the material,
communication and IT specialist build the online modules
faculty (acting more as facilitators and assessors ) deliver the course.
Paradoxically, this form of industrialization is driving academic organizations to adopt
managerial techniques that other areas have abandoned. For example there is a growth of
"middle managers" who supervise the production and distribution of courses online through
Learning Management Systems (Slaughter 2004, 19), at a time when the rest of the service
sector adopts a flatter, technology and communication based structure.

11

Globalization of markets and providers,
Higher Education Institution have responded to the challenges of globalization by
developing internationalization initiatives including branch campuses, cross-border
collaborative arrangements, programs for international students or establishing English-
medium programs for non-English based institutions (Altbach & Knight 2007). With the
exception of a few operators like Laureate or the Apollo Group that developed a global strategy
by establishing new institutions, purchasing existing ones, and partnering with firms or
educational institutions in other countries, most initiatives have been bilateral, if nothing else
because of the cost and complexity of a full global strategy
A new figure that emerged in the context of the global education market is the one of
educational agents. Agents can be defined as an individual, company, or any other organization
that provide commercial services to help students in the family obtain admission in foreign
education program (Krasoki 2002). They themselves use a variety of title to identify
themselves, including student counselor, educational consulting or representative. Agents play
a double role. On the student side they offer services ranging from orientation to an institution
aligned with the objective and capacities of the student, to the assistance in emigration
procedures and related applications. For institutions they can offer an easy and inexpensive
way to increase recruitment. Agents are therefore remunerated either by students and families
for their advising and support role, or by institutions through the commission on the revenue
generated by them. ,In the US, agents are estimated to channel 15% of the international
students (Choudada et al. 2012, p.2)
Self-service
Self-service is possibly the ultimate productivity strategy since it consists in
transferring part of the delivery of the service to the customer, while still charging for the
remaining part.
MOOC or Massive Online Open Courses are a recent trend in distance learning
education promoted by prestigious research universities in the United States and Europe that
heavily leverages the social networking capabilities of the Internet. MOOCs have been initially
developed on the connectivist theory of education that considers that knowledge, like social
capital, is not only located in individuals but also distributed in a network of people(Siemens
2004).
Learners in a MOOC are allowed a broad choice of where, when, how, with whom and
even what to learn and will engage in diverse readings, discussions and environments with no
clear barriers between what is officially part of the course and what learners want to bring in.
The objective is to support the free flow of information through the network, and stimulate a
culture of sharing that focuses on knowledge creation. (Mackness et al. 2010).
Given the novelty of the it is not possible to draw firm conclusions. Specific research
is needed to validate the pedagogical approach and to assess student outcomes, both from the
educational and social point of view, and from the employers acceptance of degrees,
information that at the moment are not even yet available Still it is noteworthy that MOOCs
carry the promise of keeping the research university at the centre-stage of world education

12

while addressing the challenges of massification and cost efficiency, and this can explain why
prestigious institutions are investing tens of millions of dollars in ventures that bring no
immediate revenue. MOOCs cut right through Trows Elite / Mass / Universal categories and
provide universal access directly to knowledge created by research institutions in a way that is
fundamentally different from the traditional industrialization / modularization / unbundling
approach of distance education that separates knowledge creation and knowledge distribution,
and focuses on the cost effective knowledge distribution.
Conclusion
Elements of all the strategic industrialization options in the information based service
sectors have been adopted within Higher Education Institutions confirming that forms of
industrialized productivity improvements are taking shape within the sector. It would be
interesting to research how different types of institutions adopts different patterns of
productivity gains.
While the notion of a market oriented massively available Higher Education sector
providing knowledge and professional skills to the majority of the world population and
contributing to the global economic development appears as a positive prospect, exactly where
this will lead Higher Education, and whether critical components of the original mission of
Universities may be lost in the process is hard to say.
The impact of deregulation and technology over the last 20 year on the traditional, state
controlled Telecom operators may offer an idea of the possible scope of ta changes that may
be ahead. The parallel is not gratuitous as the size of the two industries in not substantially
different (See UK 2014 for an analysis of the HE sector in the UK economy) and the telecom
industry used to deal with the distribution of information in a heavily regulated environment,
as Higher Education with the distribution of knowledge in a still regulated environment.
A glimpse of what may await the Education Sector in term of disruptive technology
based innovation is offered by socialEDU (Facebook 2014), the recent joint venture in
Rwanda between Facebook, MOOC provider EDX, mobile phone manufacturer Nokia and
local service provider Airtel to deliver free education in Rwanda. As part of the project
Facebook may even consider the deployment of stationary drones to assure internet
connections (Perez & Constine 2014). While the prospect of offering free education to
underdeveloped areas of the world is of course exciting, one should still question what may
happen to Academic Freedom in a purely commercial based, admittedly free, venture. What
will happen if Monsanto offers to sponsor a MOOC on Modern Agricultural Techniques?
An interesting aspect of dematerialized, networked based services is the Metcalfes
law, that states that the value of a network grows with the square of the nodes. Applied to
competing operators, this means that eventually a winner takes all process kicks in. As an
example lets look and internet searches and social networks : there is now basically one search
engine ( Google) one friendship based social network (Facebook) and one for professionals
(LinekdIn), plus a number of niche players based on geography or theme. Could the Higher

13

Education of the future be dominated by few global, technology based player supplemented by
a number of local, elite, research based institutions?
As we have seen (Trow 1973; Labaree 2012) strong market pressure and massification
result in a strong stratification of the types of institutions that will adopt different approaches
in terms of customization of the curriculum, and complexity of the services offered. The
contribution of the different types of institutions to students Human Capital can span over
different levels of increasing value :
1. provide basic competences and skills necessary to work effectively in a given area and
access to artefacts like books, machine tools computers and so on;
2. deliver more prestigious diplomas, and a more direct access to the cultural, and
symbolic representations of a given disciplinary field
3. provide a network of contacts and relationships, including prestigious alumni
associations : possibly the most valuable contribution, at least in terms of financial and
career opportunities, that Elite institutions provide to the lifelong professional and
personal development of their students.


. Brick and mortar institutions where the dominant cultural codes can be learned and a
solid professional network with the elites can be developed are likely to become more valuable
than ever. There is an increased risk of creating an educational divide between demographic
sectors or areas of the world that have only access to mass, professionally oriented education
mostly online, and those that have access to institutions that will be able to promote all aspects
of their students Human Capital (PEW 2012).
Another aspect of stratification is the tendency to homogenization within the same level
of institution types, where Universities belonging to the same category tend to become
indistinguishable and lose their identity. Frcnh philosopher Marc Aug describes places and
non-places ( lieux and non-lieux ) where the latter are interchangeable spaces, without
geographical distinctiveness, like shopping centres carrying the same brands across the world
or global hotel chains with the same rooms and restaurants in Singapore or London. Stephen
Toope, President and Vice-Chancellor of University of British Columbia stressed the risk that
globalization is turning Universities into a non-lieux themselves, undermining
the intellectual diversity needed to produce the catalysis that ignites new ideas, new
discoveries and healthy social, cultural and economic innovation. (Toope 2014).
The overarching concern for the future of the sector is probably the changing balance
in the governance of Universities, especially in the context of a global, market oriented, loosely
regulated international space of Higher Education. Being pushed to respond to a single master,
the market, Institutions may lose their freedom of vision. Drew Faust (President, Harvard
University) in the aftermath of the derivative-linked global financial crisis of 2007-2008
declared:

14

Universities are meant to be producers not just of knowledge but also of (often
inconvenient) doubt.
And concluded

Has the market model become the fundamental and defining identity of higher
education? (Faust 2009)

This question is likely to become ever more relevant in the coming years.




References

Altbach, P. et al., 2005. The Contexts of American Higher Education. In American higher
education in the twenty-first century: social, political, and economic challenges.
Baltimore: Johns Hopkins University Press, p. 558.
Altbach, P.G. & Knight, J., 2007. The Internationalization of Higher Education: Motivations
and Realities. Journal of Studies in International Education, 11, pp.290305.
Altbach, P.G., Reisberg, L. & Rumbley, L. e., 2009. Trends in Global Higher Education:
Tracking an Academic Revolution, UNESCO.
Avey, J.B. et al., 2011. Meta-analysis of the impact of positive psychological capital on
employee attitudes, behaviors, and performance. Human Resource Development
Quarterly, 22(2), pp.127152.
Baker, D., 2007. Mass Higher Education and the Super Research University. International
Higher Education, (49), pp.910.
Barblan, A., Daxner, M. & Ivosevic, V. eds., 2007. Academic Malpractice Threats and
Temptations, Bononia University Press.
Barro, R.J., 2001. Human Capital and Growth. The American Economic Review, 91(2), pp.12
17.

15

Baumol, W.J., 1967. Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis.
The American Economic Review, 57(3).
Baumol, W.J. & Bowen, W.G., 1965. On the Performing Arts: The Anatomy of Their
Economic Problems. The American Economic Review, 55(1/2), pp.495502.
Becker, G.S., 1975. Human capital: a theoretical and empirical analysis, with special
reference to education, Chicago: University of Chicago press.
Bourdieu, P., 1980. Le capital social. Actes de la recherche en sciences sociales, 31(1), pp.2
3.
Bourdieu, P., 1979. Les trois tats du capital culturel. Actes de la recherche en sciences
sociales, 30(1), pp.36.
Bousquet, M., 2012. Robots Are Grading Your Papers! Chronicle of Higher Education.
Boynton, A., 2011. Thinking Twice About Creativity - Forbes. Available at:
http://www.forbes.com/sites/andyboynton/2011/06/21/thinking-twice-about-
creativity/2/ [Accessed October 14, 2013].
Bridges, P. & Flinn, M. eds., 2010. Making sense of credit and qualification frameworks in the
UK, Derby: University of Derby.
Broks, C.W., 2003. Globalization: a political perspective. In Universities and Globalization.
Private Linkages,Public Trust. Universit Laval.
Choudada, R., Orosz, K. & Chang, L., 2012. Not All International Students Are The Same,
New York: WES Research and Advisory Services. Available at:
http://www.wes.org/ras/downloads/NotAllInternationalStudentsAreTheSame.pdf
[Accessed August 30, 2012].
Clark, B., 1983. The Higher Education System: Academic organization incross national
perspectives,
Coleman, J.S., 1988. Social Capital in the Creation of Human Capital. American Journal of
Sociology, 94, pp.S95S120.
ECTS, 2009. ECTS users guide: Brussels, 6 february 2009, Luxemburgo: Office for Official
Publications of the European Communities.
EDUCAUSE, 2003. Comparing Delivery Costs: Online vs. Face-to-Face Courses |
EDUCAUSE. Available at:
http://www.educause.edu/Resources/ComparingDeliveryCostsOnlinevs/155687
[Accessed January 20, 2012].
Etzkowitz, H. & Dzisah, J., 2007. Professors of Practice and the Entrepreneurial University.
International Higher Education, (49), p.10.
European Commission, 2012. European Credit Transfer and Accumulation System (ECTS).
Available at: http://ec.europa.eu/education/lifelong-learning-policy/ects_en.htm
[Accessed August 24, 2012].

16

Facebook, 2014. Internet.org Announces SocialEDU | Facebook Newsroom. Available at:
http://newsroom.fb.com/news/2014/02/internet-org-announces-socialedu/ [Accessed
April 28, 2014].
Faust, D.G., 2009. The Universitys Crisis of Purpose. The New York Times. Available at:
http://www.nytimes.com/2009/09/06/books/review/Faust-t.html [Accessed April 20,
2014].
Foucault, M., 2004. Naissance de la Biopolitique. Cours au College de France1978-79, Paris:
Seuil-Gallimard.
Gibbons, M., 1994. The New Production of Knowledge: The Dynamics of Science and
Research in Contemporary Societies, London: Sage.
Hanushek, E.A. & Kimko, D.D., 2000. Schooling, Labor-Force Quality, and the Growth of
Nations. The American Economic Review, 90(5), pp.11841208.
Jorgenson, D.W., 2001. Information Technology and the U.S. Economy. The American
Economic Review, 91(1), pp.132.
Kanter, R., 1995. Nice Work if You Can Get It: The Software Industry as a Model for
Tomorrows Jobs - Article - Harvard Business School. American Prospect, pp.5258.
Karmarkar, U., 2007. The Global Information Economy and Service Industrialization: The
UCLA BIT Project. UCLA Anderson School of Managemen.
Karmarkar, U., 2004. Will You Survive the Services Revolution. Harvard Business Review.
Krasoki, J., 2002. Developing the UKs International Education Agent Network, The British
Council.
Labaree, D.F., 2012. A System Without a Plan: Emergence of an American System of Higher
Education in the Twentieth Century.
Luthans, F., Youssef, C.M. & Avolio, B.J., 2007. Psychological capital: developing the human
competitive edge, Oxford; New York: Oxford University Press.
Mackness, J., Mak, J. & Williams, R., 2010. The ideals and reality of participating in a MOOC.
In Handbook and abstracts for the seventh International Conference on Networked
Learning 2010: a research based conference on networked learning in higher
education and lifelong learning.
Mohrman, K., Ma, W. & Baker, D., 2008. The Research University in Transition: The
Emerging Global Model. Higher Education Policy, 21(1), pp.527.
Neely, P.W. & Tucker, J.P., 2010. Unbundling faculty roles in online distance education
programs. The International Review of Research in Open and Distance Learning.
Nelsen, L., 2000. The Entrepreneurial University. In 25th Anniversary AAAS Colloquium on
Science and Technology Policy. Washington.

17

Nowtony, H., Scott, P. & Gibbons, M., 2003. Mode 2 revisited: The new Production of
Knowledge. Minerva, (41), pp.179194.
OCDE, 2013. OECD Skills Outlook 2013, Available at:
http://skills.oecd.org/skillsoutlook.html [Accessed October 14, 2013].
Ortmann, A., 1997. How to Survive in Postindustrial Environments: Adam Smiths Advice for
Todays Colleges and Universities. The Journal of Higher Education, 68(5), pp.483
501.
Parry, M., 2012. College Degrees, Designed by the Numbers. The Chronicle of Higher
Education.
Parry, M., 2010. Outsourced Ed: Colleges Hire Companies to Build Their Online Courses. The
Chronicle of Higher Education.
Perez, S. & Constine, J., 2014. Facebook Looking Into Buying Drone Maker Titan Aerospace.
TechCrunch. Available at: http://techcrunch.com/2014/03/03/facebook-in-talks-to-
acquire-drone-maker-titan-aerospace/ [Accessed April 28, 2014].
PEW, 2012. 2012 Survey on The Future of Higher Education, Pew Research Center.
Renaut, A., 1995. Les rvolutions de luniversit. Essai sur la modernisation de la culture,
Paris: Calmann-Lvy.
Shaw, D. & Young, S., 2003. Costs to Instructors in Delivering Equated Online and On-campus
Courses. The Journal of Interactive Online Learning, 1(Number 4), p.8.
Siemens, G., 2004. Connectivism: A Learning Theory for the Digital Age. Available at:
http://www.elearnspace.org/Articles/connectivism.htm [Accessed July 27, 2012].
Smith, V., 2010. Review article: Enhancing employability: Human, cultural, and social capital
in an era of turbulent unpredictability. Human Relations, 63(2), pp.279300.
Spies, P., 2000. University Traditions and the Challenge of Global Transformation. In J. Gidler
& S. Inayatullah, eds. The university in transformation. ergin & Garvey. Westport,
Conn.
Toope, S.J., 2014. Universities in an Era of Non-Lieux. U15 Group of Canadian research
Universities. Available at: http://u15.ca/what-we-are-thinking/universities-era-non-
lieux [Accessed April 20, 2014].
Trow, M., 1973. Problems in the Transition from Elite to Mass Higher Education. Carnegie
Commission on Higher Education.
UK, U., 2014. Universities UK - The impact of universities on the UK economy. Available at:
http://www.universitiesuk.ac.uk/highereducation/Pages/ImpactOfUniversities.aspx#.
U1Qd11eQw34 [Accessed April 20, 2014].
Wong, W.S., 2011. UNESCO-OECD Guidelines for Quality Provision inCross-Border Higher
Education. Available at:
http://www.unescobkk.org/fileadmin/user_upload/apeid/workshops/EAS2011/4._UN

18

ESCO_Guidelines_East_Asia_Summit_Meeting__June_2011.pdf [Accessed July 18,
2012].