Disruption, intermediation and exponentiality in education

Apart from redefining whole areas of the economy, technology is redefining the role of the organisations and the relevance of their management. Is the same happening in education?

Photo by Kyle Glenn on Unsplash

Technology has been established as an essential component in the redefinition of sectors of economic activity and business models due to the decrease in the last decade in the price of three key elements of the digital phenomenon such as storage, connectivity, and processing. Consequently, it is possible that every organization, in the medium term, is software-intensive, regardless of its core activity. The cheapening of the three elements has radically changed how organisations interact with their interest groups, create value, and manage their critical activities.

This step goes far beyond the superficial change of adopting new ways of selling or communicating. What is at stake is not only how to market or impact audiences, but the raison d’être of the company and the organisation. It implies to decisively reconfigure the intermediation that organisations in general, and particularly business ones, have been performing during much of the 20th century.

Looking into its essence, business organisations represents an arbitration on the cost of information, which implies that when the cost of information increases (non-connected markets, for example), it is more efficient to manage it under the traditional format of organisation. When the cost of information tends to zero (as is currently the case with the democratisation of access to information), intermediation requires another kind of organisation, since value creation shifts from “possession of valuable and privileged information” to “outstanding and customised value propositions”. When conflicts of access to a good or service are eliminated due to abundant information about it, only the genuine and real experience that provides added value remains.

Most of the “digital transformation” efforts flow along this lane: How to reinvent business intermediation when many of the activities that were being developed do not make any more sense when becoming irrelevant in the contribution of value? How to integrate new players and new mentalities into the value chain of a sector?

When we focus on the “training” sector, some constants verified in other sectors appear not to apply here: the activity is still being performed with formats very similar to the historical ones, with incremental improvements but without the emergence of new standards. Is it only a temporary delay as a result of its specificities or are there other more complex causes? Can a disruption in the sector be imagined, similar to that experienced by other activities?

Key distinctions to understand the training process

The first thing that emerges when analysing the specific matter is that we are not talking about a single “education” or “training process”, but about different needs and demands depending, fundamentally, on the status of the apprentice, mediated by their age, previous training processes, etc. This is vital to perform a rational analysis of the possibilities of migrating to digital since the needs and demands are dispersed into tiny fractions and require different value propositions.

The second is that, independently from specific crisis (such as the United States with the debt of its students), the intermediation designed for decades for these different formative stages (preschool, primary, secondary, university, postgraduate, continuing education) has not fallen into crisis yet thanks to digital disruption, as it happened and happens with other activities.

Of course, the great supporter of this reality is the regulatory framework: the possible variants to obtain, for example, a secondary school degree, are minimal and revolve around a single, recognised, and regulated format. However, even in the niches where regulation is more relaxed (business schools or professional training centres), traditional mediation has not changed much: teacher, classroom, content, evaluations.

From this point of view, the “distribution” (although the term may sound very strange in this context) in education has been the focus of public policies for decades, facilitating and expanding access and eliminating conflicts in such process. Despite there is still work to be done, literacy rates in a great part of the developed world account for the success of this deliberate and conscious effort.

Thirdly, the complexities of the training process such as multiplicity of intervening variables, the volitional element that is required in the student, the focus and concentration needed, demand a student involvement that is not verified in the absorption of other contents and the performance of other activities. It is not about an impulsive or circumstantial consumption; but about a time-intensive co-creation between the institution and the participant, where the latter (as in any service) has a strict script to fulfil to achieve the objectives pursued.

All this can indicate to us that, beyond the pressure implied by the arrival of new generations with digital integrated into their habits of entertainment, communication, learning, etc., the arbitrations designed throughout the entire training process during the last decades protect some effectiveness. The mass access to the educational process was performed in analogue times and there the contribution of technology is important, although not as radical as in other industries.

The case of lifelong learning

One of the spaces of greater dynamism and criticality in the training activity of the coming decades will be in the adaptation of the existing workforce to completely different market conditions: the World Economic Forum estimates that in the period 2020–2022 6.1 million new job positions will be generated globally. The process of massive incorporation of technology into the economy in the last 30 years has conceptually and instrumentally changed the scope of work.

Even assuming that all those who enter university for these years complete their studies with the tools and mentality appropriate to a technology-intensive context (improbable case), there are two generations left who must perform the adaptation and strengthening of their labour and professional skills. In this way, the training process stops being a unique instance in life and becomes a semi-permanent presence service: training-as-a-service or university-as-a-service.

It is in this particular space where in recent years new responses and players have emerged that try to provide a solution to an increasingly evident and complex structural problem, such as the efficient articulation between supply and demand in the labour market.

Platforms, the brain of the system

The redefinition of traditional intermediation is already palpable:

  • Music: streaming makes part of traditional intermediation obsolete.
  • Transport: “ride-sharing” applications have a full impact on the historical structure of urban transport.
  • Real estate: the internet forces the redefinition of the traditional real estate business due to the efficiency and scale it can provide.
  • Retail: e-commerce players are rewriting certain industry rules.

It is still less visible (for example) in health and public administration, but in these areas, there are already real schisms in operation that will be massive, relevant, and critical in a short time.

The common denominator for the long term that is beginning to appear in sight, is a greater potential for transparency and customisation at the cost of radical and subtly different intermediation. Information flows more efficiently, the user has more power and the value proposition experiences a relevant change based on business models based on the concept of “platform”, understood as the ability to orchestrate an ecosystem of suppliers and consumers through efficient generation and delivery of value, generally (although not exclusively) mediated by technology.

If traditional intermediation based its value proposition and profitability formula around the scarcity of information, the platform bases it on its customisation, convenience, and certain prominence of the participant/user/client. The platform tries a response to two great topics of our era: convenience (because of its efficiency, customisation, and ease) and a certain sense of belonging and identity, something more related to a philosophical vision of the present than to technology or business.

Specifically, in the educational sector and the niche of continuous learning, up to now it is possible to identify 2 major types of structured responses that have attempted to pivot on the concept described above:

  • Peer-to-peer (P2P) platforms: players that provide technological intermediation so that experts from the most diverse disciplines can place their contents, and from the platform support processes such as marketing, collection and certification are executed (Udemy is, maybe, the best-known example). Different analyses have been performed on the potential and limits of this mode of intermediation, identifying three problems of complex resolution: certification: who validates the acquired skills? curation: who reviews the contents? and effectiveness: the completion rates of the proposed journey are still very low.
  • Massive Online Open Courses (MOOC): in this case, the platform performs similarly to the previous point, but it partially solves some of the problems identified above: these players (Coursera and EdX, possibly the best-known) take content from the universities or world-renowned experts. Nevertheless, different analyses estimate that only 4% manage to finish the programs, indicating the relevance of the commitment and will to perform the proposed academic journeys and the necessary role of the teacher or facilitator, something that this form of intermediation does not manage to solve, given its exclusive focus on accessibility and massiveness.

Together with these two central forms, many projects of diverse nature coexist (totally online, blend modality, boot camps, etc.) and origin (academic, technological, etc.) that represent the most global attempts to provide a solution to a world problem. However, despite education being one of the biggest sectors of activity in the world (almost U$10Tn in total) the impact and results achieved are different from what can be seen in other activities, as if the enormous potential that technology shows to create genuine value would vanish upon reaching this space.

Does this mean that education will not experience the radical technology-intensive changes that other sectors have gone through?

Without exponentiality in education?

The technology that drives and supports this new form of intermediation allows increasing portions of the value chain of all sectors to be digitized and thus facilitates “automating” operations (just to mention examples where execution falls on software routines: collections, music playlists, content suggestions, personalised offers, logistics dispatches, etc.). This produces another characteristic effect of these times: exponentiality, understood as an exceptional acceleration in the evolution of organizations and the accomplishment of key variables such as growth and operating volumes in very short periods and with noticeable cost efficiency, always comparing with the recent history.

Regardless of the country of origin and the sector, a company can be genuinely global at a fraction of the cost and time that would have taken it, for example, 30 years ago, thanks to the availability of abundant, standardized and cheap technology, which includes growing portions of the world population.

This concept allows visualising the immense opportunity to achieve objectives at unusual speeds and costs: from simple commercial actions with efficient global scope to the generation of approaches to complex and global social problems. It is a formidable and powerful resource, which Salim Ismail (one of the most recognized communicators of this idea) exemplifies: “as Archimedes once said: Give me a lever long enough and I will move the world. To say it simply, humanity has never had a lever of this size.”

The radical transformation of intermediation implies a phenomenal challenge for management. In a context where the value of information tends to zero, the organisational structures and key figures become less crucial, and the creation and administration of value begin to be dominated by elements that were foreign to traditional management: algorithms, API (rules that software applications use to communicate with each other), management of communities and ecosystems, social technologies, etc.

In the case of education, highly special challenges arise for a not even remotely similar process. It is complex to imagine that the disruption has characteristics similar to that of other sectors given the particular value chain of the activity, the active and committed involvement of the participant to achieve the results, how key and essential the curation is, and how high and categorical the final objective of the entire process is, both for the participant and for the society in which it is inserted.

It could be foreseen that the disruption will be generated in layers, which will operate as a new infrastructure for the existing actors, who manage to bring, through successive iterations, the full potential of the technology closer to the different components of the training process and its support activities. In this way, global players can be expected to provide essential components in these layers of the new educational infrastructure.

No doubt blockchain and artificial intelligence (just to mention two phenomena in vogue) will have their decisive impact on the different stages and activities of the training process, but as components of a larger and more complex picture; a clear example of this dynamic is the case of Yuanfudao. Recently, this company held the largest financing round ever conducted for a new company dedicated to the education sector ($1Bn, valued at $7.5Bn). The focus of the company is courses and support for primary students, powered by artificial intelligence, that is to say, adding efficiency to the existing process, with fully digital distribution.

In the case of lifelong learning, for example, the real disruption seems to be directed behind players who combine technology, content, and services, with an extensive range of skills. The latter ones, complement (and by sections, compete) the universities in achieving effectiveness in this dynamic segment (the niche is called “OPM” and details can be seen here).

This means that the scenario can be oriented towards a transformation of the existing actors (continuing with the current “bundling”) through the appearance of several different global players, with a high level of speciality, totally based on technology, horizontal to the whole sector (making the current scenario more fragmented, through an “unbundling”). Due to the characteristics of the activity and its complexities, the chances are more in favour of an adjustment of the current intermediation that keeps the experience integrated, rather than an abrupt change in it.

It is possible to foresee that the fundamental change (and quite possibly the exponentiality) in the activity will come from other areas different to technology, more linked to decoding, at a level of brain processing, which are the most effective learning strategies, the most powerful instruments and those that have a greater impact on the learner and their context (in the style of the recent work of neuroscientist Stanislas Dehaene). The advances that transform education radically, without any doubts, relying on the remarkable potential of technology for its dissemination and adoption could emerge from there.

The disruption takes the form of a slow agony of what worked and a slow, though inexorable, consolidation of the new. There is no abrupt replacement, but a complex coexistence, at times sordid and uncomfortable, in which familiar and safe formulas rub shoulders with new and unexplored ones. Organizations will debate between “cynicism about the new” and “technological solutionism”, within the framework of an economic transformation that is as historical as complex.

Martín Sola

LinkedIn / Twitter

Improving lives through learning experiences. Delivering a transformative and effective learning experience, everywhere.

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