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Business Officer Magazine

Online Learning: A Challenge to Higher Education

"A disruptive innovation transforms something that is complicated and expensive into something that is affordable and simple," said Clayton Christensen, who spoke to the NACUBO prime representatives at a breakfast meeting on Monday. He has identified disruption in the business world, and now he sees it happening in higher education.

A professor in the Harvard Business School, Christensen is widely recognized as an expert on innovation and growth. A bestselling author of five books, he has just completed his latest, The Innovative University: Changing the DNA of Higher Education from the Inside Out (Jossey-Bass, 2011).

Christensen described how disruptive innovation occurred in the computer industry, as technology advanced from mainframe computers (which only the largest companies could afford); to the minicomputer; to the personal computer, laptop, and smart phone (which the general population could afford). Of all the minicomputer companies, only one—IBM—survived into the PC era.

That's because IBM set up a "completely different business model" to make PCs, Christensen said. "It's critical that you set up a new business plan to do the new thing," he said. Otherwise, since a business model doesn't evolve, the new idea will be forced to conform to it and the result might not meet the needs of the marketplace.

Christensen also noted disruptive innovations in other industries: the transistor that displaced the vacuum tube, the hydraulic shovel that won out over the steam shovel, and the minimill in the steel industry that has driven out the massive integrated mill. 

Historically, he said, higher education has been characterized more by replication of and improvement on the traditional model. Until now, there's been no disruption in higher education because there was no technology core—but now, there's online learning, which offers a more affordable option for students who find a traditional campus experience too expensive.

This disruptive technology is gaining adoption, and Christensen expects that by 2019, half of all courses will be offered online. He advises institutions to create a different business model for the revenue-generating innovation of online learning.

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