amazon won’t destroy college as we know it

I’m really bad at keeping up with the media cycle.

So last Wednesday, Vox put up this cute piece with the catchy title, “How Amazon Could Destroy College as We Know It.” Written in the form of a letter from Jeff Bezos to shareholders in the year 2030, it tells the story of how Amazon came to supplant traditional higher education by developing, and selling at cost, badges that people could earn to demonstrate particular skill sets. As the value of badges became evident, companies became more and more interested in using them in hiring—to the detriment, presumably, of traditional indicators like college degrees.

It’s a clever article, and well-written. It also doesn’t quite make the claim the headline implies—that the rise of Amazon badges would destroy higher education. Nevertheless, although I think that the piece gets at something real that is going on, and that is eventually going to be an important source of change, this is not how I see it going down.

Anyway, Wednesday night I started writing a blog post using a similar Bezos-to-shareholders conceit, but from a 2030 that looked quite different. It just wasn’t quite working, I think because it’s hard to see Amazon pioneering the kind of change I can imagine. Pearson, maybe. But even I can’t name the CEO of Pearson. (Apparently it’s John Fallon.)

So the format wasn’t quite working, but the underlying point still nagged. While badges may become a thing, and perhaps Amazon may even pioneer them, they are not going to be “the” new form of educational currency. The world in which “as many as half of major US employers now consider Amazon badges to be one of their top five criteria when determining whom to hire” will remain a fantasy.

Why Amazon badges aren’t the future

I see zero evidence that Amazon—or anyone else—is on its way to replacing traditional higher ed by virtue of offering something that is truly better. The Vox piece begins by discussing Amazon’s tuition repayment program for employees, including for some classes it offers on-site. Then it moves to its internal certification program for Amazon Web Services engineers as the model for the badges of the future.

But there are at least two problems here. First, only a subset of jobs depend on skills that are relatively straightforward to test for. People have spent a lot of energy trying to design tests of skills needed for certain jobs. The effort hasn’t been a total failure. But it’s hardly what you’d call a complete success.

Second, and more importantly, this is just certifying knowledge that engineers have already gained on the job. There’s a huge jump from certifying an existing skill set or knowledge base to actually teaching someone those skills and that knowledge. And I don’t know if you’ve noticed, but there are an awful lot of people out there who are trying to do that effectively already, and 1) it isn’t easy, 2) doing it well tends not to be very cheap, either, and 3) if it’s happening online, there’s a good chance it’s not going to work for a large subset of the population. There is just no reason to believe that Amazon—or anyone else—is suddenly about to magically crack this code.

Third, this whole scenario depends on other companies finding the Amazon badges so useful in hiring decisions that they begin using them and eventually preferring them to the signal of a degree. If they could somehow crack problems 1 and 2, I think there are a subset of jobs for which this would be the case. But I’m not convinced it’s that large a proportion. And especially at the high end, a lot of hiring is about cultural capital, not about skills. I’d love to see the test that shows whether you’re a good “fit” for McKinsey or Skadden Arps. Even data-driven Google has kind of given up on finding the answer.

Finally, the article is based on the premise that Amazon, with its distaste for government regulation, decides to bypass the financial aid system, instead offering badges at cost. (Which I guess it can do because this.) Now, I agree that it’s hard to see the future of Amazon as finding a way to siphon money out of the financial aid system. But it’s also hard to imagine how any company that really wants to crack the higher education market could ultimately bypass that temptation and still become large.

So basically, I just don’t see that Amazon or anyone else is on its way to this outcome in any way, shape, or form. Heck, Wired is already predicting that the coding boot camp bubble is about to burst, and that barely got started!

What is, then?

1. Variations on an old theme

The future of mass higher education in the U.S.—and I really want to be wrong about this, but this is what I think—will be tied to the further private-sector cooptation of the financial aid system. Financial aid represents a massive pool of money that edutech will, despite its general distaste for government, want to get its hands on. The Education Department is already experimenting with allowing coding boot camps and other nontraditional providers to receive federal aid.

If—when—this crack in the door is opened wider, companies will figure out how to create and sell badges to aid-bearing students. But if they succeed—and they may, from a bottom line perspective—it won’t be because they have figured out how to equip students with much-needed skills and then verify that they have those skills. It will be because they’ve figured out a variation on the for-profit story that we have long seen in this country, which as we know has generally turned out super-well for students.

So that’s a scenario where you just have a new type of organization providing a slightly different product (badges, or code academies) but that basically operates on the old for-profit college model.

2. The nexus-of-contracts university

The other scenario I see playing out is one in which the for-profit/nonprofit line becomes increasingly blurry. Universities have already moved pretty far toward viewing students as revenue streams to be managed, rather than people to be educated. And the organization has already unbundled a lot of its activities to the private sector—starting with food services and student housing before expanding to enrollment management, course management systems, and more. There have even been moves around the edges to outsource faculty hiring.

We might call this the nexus-of-contracts university. The corporate body technically remains—and benefits from its nonprofit status—but more and more of the actual work of the organization is carried out by for-profit companies. Private-sector innovation will be around finding new ways to partner with nonprofit schools to provide services closer and closer to the technical core. (Let’s throw in all the org theories!).

You can see this already with the Pearson-Arizona State partnership, or the much less successful Pearson-University of Florida contract. Or the Rutgers-Academic Analytics deal. There are lots of examples.

These organizations probably see themselves as disruptors, or innovators, or at the very least as good businesses helping to open up new markets. But they’re there because of the rents. And the incentives in higher ed are already pretty screwed up. Mixing in a bunch of companies whose purpose is basically to find new ways to siphon money out of the already-dysfunctional system is not going to help.

Colleges will become increasingly efficient—but at figuring out how to allure student customers, not at educating them. The whole system will become further and further removed from an honest attempt at education, while simultaneously failing to control costs yet remaining largely indispensable for a shot at the middle class.

I really, truly, hope I’m wrong, and that either colleges value real education more deeply than I give them credit for, or that innovative alternatives will actually figure out how to provide a good alternative to traditional higher ed. Because after writing all that out, I’m just feeling depressed.

Written by epopp

February 1, 2016 at 1:20 pm

2 Responses

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  1. Thank you for your thoughts! I have been looking forward to reading them. A program already exists for badges and other technical certifications, but those things are done through low-status and low-profit margin community colleges. Becoming a certified auto mechanic, electrician, plumber, or health tech are all done through the community college system.

    As I think about the problems in higher ed more and more, I think that boosting the community college system should be the first step in any solution. Heavily subsidize community college operating costs and tie federal financial aid receipt at four-year institutions to their acceptance of community-college transfer credits (and state universities should develop automatic acceptance/enrollment programs — which could be expanded to private universities through long-term contractual agreements).

    And I think that any talk of tax policy in this country should, after eliminating the home mortgage interest deduction, eliminate the tax deduction on gifts to endowments or non-profits over a certain size (or just eliminate them entirely). I had never thought of the ways that for-profit companies reap the rewards of non-profit universities, but after you lay it out here, it makes so much sense and adds one more reason to eliminate the deduction.



    February 1, 2016 at 6:21 pm

  2. Thanks, Mike. My gut instinct is also that community college is the place to invest. Although community colleges also have some problems — for example, they (like MOOCs) have very low completion rates, although not everyone attending is there for a degree. And one could argue, a la Brint and Karabel, that they are basically stratification mechanisms. Still, they provide low-cost broad access, and there are places (like CUNY: that have developed successful models to deal with the completion problem.

    I don’t know what the answer for nonprofits is. Eliminating tax deductibility for gifts to endowments over X times operating costs) sounds reasonable, though I haven’t thought it through. There have also been demands to force universities to spend down their endowments, but I’m not sure how much it helps to make Harvard spend more money each year on Harvard students.

    Maybe we need a return to Selznick.



    February 2, 2016 at 3:23 am

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