Author Michael D. Smith discusses his book The Abundant University: Remaking Higher Education for a Digital World, a deep dive into why our current system of higher education is financially and morally unsustainable and how to address the crisis with the creative implementation of digital technologies for enrolling, instructing, and credentialing students—the same technologies that we have seen create abundance in access to resources in industry after industry.

Get the book here: https://goo.gle/3KudbWT.
For more information on Michael, please visit https://www.heinz.cmu.edu/faculty-research/profiles/smith-michaeld.

Moderated by Hal Varian.

And it's a great pleasure to introduce my colleague and friend, Michael Smith.

And he's going to tell us about how to reform the university.

Now, this question of reforming the university has been going on for the last thousand years or so.

So we'll be very interested in hearing what Michael has to say and how we can join the 21st and 22nd century.

And Michael was previously on the Books at Google show.

Talking about his book, which was titled Streaming, Sharing and Stealing.

And was all about the uproar in the content markets brought about by digitization and copyright issues.

So this is a totally new topic, but maybe you can start us into a presentation and afterwards we'll have some questions and answers.

I'll try to spend about 25 minutes giving an overview of the thoughts in this book.

And then, Hal, I look forward to interacting with you and the other folks who are on the call.

The title of the book is The Abundant University Remaking Higher Education for a Digital World.

And what I'm going to try to try to argue in this in this book is I'm going to try to make 3 arguments to my colleagues in higher education.

Number 1 is new digital technologies will change higher education, regardless of what we've heard, I think we're at that point.

Number 2 is, I think if we care even half as much about social justice as we say we do, we should want to embrace this change.

And then number 3 is I think we have a way to embrace this change by rediscovering our mission as educators.

When I say this in faculty audiences, I frequently get eye rolls.

And a lot of the eye rolls say, you know what, we've heard this.

We've heard this ever since Clay Christensen said it in

So this is Clay Christensen, in many ways, the father of disruptive change theory, in 2013, saying higher education is just on the edge of the crevasse.

5 years from now, these enterprises are going to be in real trouble.

It's 10 years from now, nothing's really changed, so clearly higher education doesn't face a threat from disruption.

I'm going to try to argue that's the wrong way of thinking about that and I'm going to argue, respectfully, Clay Christensen's theory is brilliant, but it's not the only theory of how technologies change, change industries.

Why do I say that well I say that because of a lot of the research my colleague Rahul and I did in the book how mentioned a lot of that research was motivated by this and similar quotes we heard from leaders in the entertainment industry.

I had a studio executive who came to Rahul in my class in

and talked about how technology was changing his business.

But during the q&a time Rahul asked him, hey, are you at all worried about the threat that Amazon and Netflix and Google might pose to your to your dominance in the industry.

The same 6 studios have dominated my industry for the last hundred years.

And by implication, that's not gonna change.

And Rahul and I found that very interesting and actually even more interesting because when we tried to apply Professor Christensen's theory, again, respectfully, to entertainment, what we realized is Professor Christensen's theory is based on a single disruptive change.

And the entertainment industry was facing multiple disruptive changes.

And so the theory didn't work all that well to explain what we saw going on.

And so we developed a theory that I'm going to call structural disruption.

And in this theory to think about whether technology is going to change the industry, you need to step back and think about what's defined power.

So the executive was right, the same 6 studios had dominated his industry for the last 100 years.

And it's not like the internet was the first technological shift they'd faced.

They faced massive technological shifts in every aspect of how content was created, distributed and consumed.

And yet none of those shifts had changed the industry.

And what Rahul and I tried to argue was, well, it was because those 6 studios controlled 3 key scarce resources.

They controlled scarcity in the financial and technical resources you needed to make content.

They controlled scarcity and access to the distribution and promotional channels you need to get your content in front of audiences.

And then they were able to use copyright to create an artificial scarcity and how consumers gained access to content.

And none of the technological shifts they'd faced over the last 100 years had changed the importance of any of those sources of scarcity.

But in 2015, what we argue is they were facing a set of simultaneous technological shifts, which were creating abundance in each of these sources of scarcity, while at the same time creating a new scarce resource, let's call it customer attention, that was controlled by, oh, by the way, Amazon, Netflix, and Google.

What the heck does that have to do with education?

At the beginning of the pandemic, I heard the then president of Ohio State, Michael Drake, get asked almost the same question about education.

Basically, does online education threaten the power of traditional universities?

And This is what he actually said, but what I heard him say was, you know what?

The same 62 universities have dominated my industry for the last 500 years.

There's a reason for that, and that's not going to change.

Why have a small number of universities dominated the powerful position and positions in higher education for 500 years.

And what I'm trying to argue in the book is that we in higher education control our own 3 scarce resources, we control access scarce access to the seats in the classroom.

We control scarcity and access to faculty experts, and we control scarcity and access to the valuable credentials you need to succeed in the marketplace.

What happened in 2012 around the time Clay Christensen was saying higher education is going to change is MOOCs and other online learning technologies were creating abundance in access to the classroom seats and access to faculty.

What they weren't changing though, however, I'm gonna argue is scarcity and access to the credentials.

You can take as many MOOC courses as you want.

You can take as many courses on edX as you want.

You can learn as much as you want, but unless you have that credential, it's not gonna get you very far in the marketplace.

And I'm going to argue, I think it already is.

So here's a slide with a bunch of headlines from a bunch of different news articles, all reporting on companies saying, we're deemphasizing our reliance on the college degree in terms of who we hire.

If that domino falls, if we create alternate ways for students to gain access to the professional workforce, I think we're going to face a significant change in the market for higher education.

And so that's kind of how I started the book.

About halfway through writing the book, what I realized is I don't think that's the real story here.

The real story isn't technological change.

The real story is we in higher education should want to embrace this change.

Because 1 of the key missions of higher education is creating abundant access to people, regardless of your socio economic background and this goes all the way back to the Truman Commission's report in 1947.

So this is a quote from the Truman Commission's report, the democratic community cannot tolerate a society based on education for the well-to-do alone.

If college opportunities are restricted to those in the higher income brackets, the way is open to the creation and perpetuation of a class society, which has no place in the American way of life, right?

It's 70 years later, how well are we doing?

And I'm gonna argue we're not doing well at all, right?

So this is a study done by Raj Chetty and his colleagues that found that if you're a child born into a family in the top 1% of the income distribution, you've got a 1 in 4 chance of going to a highly selective college.

If you're a kid born in the bottom 20% of the income distribution, you've got a 1 in 300 chance of going to the same college.

Now, I'm trained as an economist, which means I believe in the efficient allocation of scarce resources.

If we in higher education genuinely believe that rich kids just happen to be 77 times more likely to be capable of an elite education, then we're doing just fine in how we allocate access to the scarce resource of elite higher education.

But if we don't believe that, and I don't know anyone who does, then this is a terrible way of allocating access to the scarce resources, and we ought to be ashamed of ourselves.

We ought to be desperately looking for ways to create more access for kids who just happen to grow up in the wrong zip code.

A lot of my colleagues at this point push back and say, well, Mike, you're only talking about elite schools, right?

Let's talk about the whole of higher education.

The first is that what we know is the elite schools actually give you a whole lot more value in the work market than non-elite schools.

If you graduate from Harvard, your opportunities are a whole lot better than if you graduate from, and I won't mention anyone by name.

The second problem is even if you look across higher education, we're not doing all that well in terms of creating equity.

You know, kids born into wealth are a whole lot more likely to graduate from a four-year school than kids who are born into poverty.

So much of a problem that the press has started to notice.

So this is an article in the New York Times.

The New York Times, titled, Let's Smash the College Admissions Process, that argues that the college admissions process has morphed into 1 of the truly destructive institutions in American society.

That's a big problem and I think something we should want to solve.

And that brings us back to this chart, right?

What I said is, unless employers change their behavior, our business model is gonna be just fine.

The reason I chose these press reports is that in each of these press reports is a quote from someone in a, in a business saying, we're de emphasizing the 4 year degree, because we want to achieve a more diverse workforce.

And we've discovered that we can achieve the diversity we want.

If we continue to rely on four-year degrees in the hiring process.

Just think about that for a second, right?

Evil capitalists saying, I want to create more diversity in my workforce and I can't do that if I continue to rely on the noble people in higher education, I think that ought to wake us up a little bit.

At this point, a lot of my colleagues say, well, this is actually a problem of the government.

If we could get more Democrats elected to public office, then the progressive party will give us as much money as we want and all of our problems will be solved.

And I'm not sure I buy that in large part because President Barack Obama, who if I remember correctly was a Democrat, said in his 2012 State of the Union address, it's not enough for the federal government to increase student aid.

We just, we can't just keep subsidizing skyrocketing tuition.

So let me put colleges and universities on notice.

If you can't stop tuition from going up, the funding you get from taxpayers will go down.

What might need to happen for that to change?

I think what could change that is if taxpayers started to lose their trust in higher education, right?

If voters started to lose their trust in higher education.

And this is a slide arguing that I think that's exactly what's starting to happen.

This is a Gallup poll that came out over the summer that showed that only 36% of Americans have a great deal or quite a lot of confidence in higher education.

And that that number is down by 20 percentage points over the last 8 years.

If we lose the confidence of the taxpayers, I think we're gonna have a real hard time continuing to have the confidence of legislators.

The next thing I typically hear is, well, whatever the solution to this problem, it can't be online education.

And we know that because the online education we delivered during COVID was a complete disaster.

The first 1 is there's a legal problem with that statement.

If you as a faculty member say that publicly and your school is being sued by students for a tuition refund on the inferior education that they received during COVID, you actually are increasing the legal liability for your institution.

So, it always shocks me when faculty say that.

The second problem I have with this is there's a logical problem.

What we're saying is online education won't work.

And we know that because the education we delivered online during coven was a disaster, but the conclusion doesn't follow from the premise, the only way the conclusion follows, The online education we delivered during coven represented the gold standard of what was possible online, and no 1 believes that.

Right, no 1 believes that with more time, more focus more training and better technology, we couldn't do a better job of delivering education online.

Let me start with an example near and dear to my heart, and that is outlier.org.

The reason this example is near and dear to my heart is because my daughter was the president of the Steminist Club in her high school.

So take feminism and combine it with STEM and you've got Steminism, which is just about the coolest thing in the world.

Alright, so my Steminist daughter during her wanted to take AP physics during her senior year, and her high school told her, you can't take AP physics because you don't have a peacock, and you can't take a peacock, because you don't have pre calc, and you can't take pre count because we're not offering it this summer so I'm sorry.

And my wife and I weren't all that thrilled with that answer.

And what I knew from this research is that there's a platform called outlier.org that offers a calculus class that, if you pass it, will give you credit at the University of Pittsburgh.

And so we went back and said, hey, if our daughter passes this class that gives her credit at the University of Pittsburgh, are you really telling us that that's not good enough for your high school calculus?

What we discovered in my daughter taking this class is that there were a bunch of things about this class that were very different than what you'd get in a traditional calculus class.

The first 1 was when it came time to admit students, they didn't ask to see your pre-calculus transcript or even whether you'd taken pre-calculus.

And if you get 70 or better on this short quiz of simple questions around algebra, you're ready to take calculus.

And if there's things that you don't have, we can coach you up to get you to where you need to be, right?

So a whole bunch more abundance in terms of access.

The second thing is that, oh, by the way, if you put in the effort and you don't pass the class, we'll give you a full refund.

And again, I'm going to argue neither of those things are things we can provide in traditional higher education.

We need to know that you've got the pre-reqs and if you don't pass the class you're not getting a refund.

The third thing that we noticed was, unlike most traditional classes, this class was taught by 3 different professors.

Professors, Tim Chartier, Hannah Fry, and John Urschel.

And each of these professors taught exactly the same module of calculus, but they taught it in their own voice, and they taught it using their own examples.

And you could choose whichever of these professors you wanted to take, and in fact, you could mix and match.

So if for whatever reason Tim Chartier's explanation of exponential decay didn't work for you, try Hannah Fry, try John Urschel, see if that works better for you.

That creates a lot of opportunity for students who might not resonate with Professor X to at least try out Professor Y.

Again, something I think that would be really hard for us to do in a traditional classroom.

What I found really interesting about this is my steminist daughter immediately gravitated towards Hannah Frye, right, immediately resonated with Hannah Frye.

And I was mentioning this to a colleague of mine.

And what my colleague said is, oh, Mike, there's plenty of research on this.

There's plenty of research that shows in quantitative classes, in general, men perform better than women.

And that difference goes away when the class is taught by a woman.

And the same thing is true, by the way, in the context of people from a racial minority, racial or ethnic minority.

In general, people from a racial or ethnic minority tend to do worse.

And that difference goes away when the class is taught by someone who looks like them.

This is a class, this article in the American Economic Review.

Again, a wonderful opportunity what the research tells us is that we can do much better by allowing students to choose the professor they resonate with.

The problem is, you know, in a traditional classroom environment, you're stuck with somebody like me.

I can't provide you what the research tells us that we know you need.

Let me give you another example of how online education can create things that we couldn't do in person.

I gave this talk at, let's just say, a top business school.

And I was talking to a faculty member after the talk.

And what she said is, our business school has an exec ed program.

It's an in-person residential exec ed program.

We bring executives from across the country to our campus for 7 weeks.

And we've always thought it needed to be in person because of the unique in-person residential experience.

The only thing wrong with this exec ed program is that female executives aren't showing up in anywhere near the numbers we know they exist in the marketplace.

During COVID, we took this residential executive education program online, and female executives showed up in the proportions you'd expect.

And if my steminist daughter were here, she would say rightly that because of a series of processes that she would refer to as the patriarchy, that male executives can take 7 weeks away from their families in ways that aren't open to female executives.

Think about all the ways that by requiring education to be held exclusively on a residential campus, we're excluding people who could really benefit from our educational opportunities.

The last thing I wanna say here is I'm not arguing that education has to be purely online.

And the example I wanna mention here is Arizona State University and their online organic chemistry class right and you hear that and you say, how the heck can you teach organic chemistry online, how do you do the labs.

What are Austin and her colleagues realized is that most of the organic chemistry material works perfectly well online.

And to do the labs what they do is they bring the students on campus for a 1 week intensive organic chemistry lab experience where they do 2 labs a day 1 in the morning 1 in the evening, all week.

And what they've discovered in surveying the students is that the online students have the same knowledge of organic chemistry, equivalent knowledge of organic chemistry as the residential students, But the online students have a stronger identity as scientists.

The online students walk out of that 1 week intensive experience saying, no, I'm a scientist now.

In a way that you wouldn't get if you did those same labs spread out over 14 weeks, 1 lab a day, 1 lab a week, excuse me.

That ought to inspire us, I think, to think really creatively about how we can use these new technologies to create abundance where previously there was scarcity.

And that brings me to the last point in the book.

I think we have a way to embrace this change.

And this again goes back to what my colleague Rahul and I saw in the context of the entertainment industry.

When the entertainment industry originally saw technological change, They opposed it because it rightly posed a threat to their business model.

They rightly saw this is going to be a threat to my business model.

And at some point, we saw them recognize that there's a difference between my model and my mission.

I remember pretty vividly sitting down with a pretty senior creative person at a studio in the executive dining room.

And he sort of leaned forward to me and quietly so that nobody else could hear, said, Mike, a year ago, we sold my show to Netflix.

I want you to look at the season of my show that Netflix just put out, and you're going to see that it is in every way superior to what we did on the lot.

Cinematography is better, the storytelling is better, and I just can't figure it out.

And I think around the time Netflix and Amazon and Google started to take home a lot of the big prestigious awards, the studio started to realize, my mission isn't selling shiny plastic discs for 20 bucks a pop.

My mission is creating great entertainment and getting that entertainment in front of an audience.

And I think it was that realization that allowed them to stop opposing technological change as a threat to their model and start embracing it as a way to advance their mission.

And I think we've seen that in a whole bunch of really innovative platforms that the traditional Big 6 have created.

I'm worried that a lot of my colleagues in higher education are stuck in this first mode.

We're opposing technological change because it poses a threat to our way of delivering education.

I would love to see us shift over to embracing technological change as an opportunity to advance our mission.

If our mission is to help rich kids get a leg up in the job market, we're doing great.

But if our mission is helping kids from all backgrounds learn their unique talents, develop those talents so they can use those talents to the benefit of society, I think we can do a lot better.

And I think doing a lot better is going to require us to embrace technology.

And Hal, With that, I will close and would love to interact with you on these questions.

And we see it all the time in universities.

I remember a few years ago we were trying to get people through the economics major more quickly than we had been and after looking at where the slowdowns were, it turns out it was 1 classroom that was big enough to hold all the students.

Now, 1 classroom should not be a constraint to anything nowadays because we have these other capabilities.

But I've told this story to many people and they say, yes, in our case, it was chemistry, or in our case, it was this or that.

We shouldn't think of those as constraints.

I'd love for us to do the hard work of thinking about, how do we break down those constraints and rethink the whole process in the context of technology.

So 1 thing you didn't mention in your talk, but I think is going to be more and more important as time goes on, And that's the role of demography.

You know, we're baby boomers, they're all retiring, but it's the children of baby boomers that are going to college, and then maybe it's to college, maybe it's to more advanced degrees.

And a lot of small colleges are having trouble surviving now because they're not able to tap into that same flow of students that they were, they were to before.

This is, I mean, this is the hardest part of writing this book.

You know, I take absolutely no pleasure in that.

And the demographic cliff is absolutely a real thing.

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