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Amazon has drawn praise for announcing last week it will spend $700 million over six years to retrain 100,000 of its employees, for jobs within the company and beyond.

The retail giant’s decision to expand its own postsecondary training and credential programs, largely outside traditional higher education, also is a shot across the bow for colleges and universities.

Driven by a tight labor market and increasing automation that appears likely to eliminate many of its frontline jobs, Amazon’s announcement that it would retrain a third of its U.S. work force was a necessity and not a “feel-good move,” said Michael Horn, head of strategy for the Entangled Group, an education venture firm.

The company has been working to get up to speed quickly on learning design for a broad array of training options, said Horn.

“It’s not clear that academe has that at scale,” he said, adding that Amazon’s decision to go outside higher ed should be “deeply threatening” to community colleges and continuing-education divisions of research universities that are eager to expand their employer partnerships on training and credential programs.

Other major tech corporations have joined Amazon in creating their own postsecondary pathways, perhaps most notably Google and IBM. For example, Google last year created a subsidized online IT support certificate program, which has enrolled 75,000 students.

The tech corporations create the content for these programs, determine the required competencies for students to master and say they are seeking to create standardized skill sets that apply beyond their payrolls, for job seekers across entire occupational fields.

“The future of work is affecting basically every industry. This has become a CEO-level conversation,” said Catherine Ward, managing director of private sector strategies for JFFLabs, a division of the nonprofit group Jobs for the Future. “They are taking action themselves because they are feeling an acute need that, frankly, they feel is not being met by the existing education system.”

Both Google and Amazon are expanding their partnerships with colleges to offer credit-bearing versions of their content and credential programs, the latter largely through its Amazon Web Services division, which features 11 certifications in cloud technology. So are Facebook, Salesforce and other large tech companies.

More than 25 community colleges so far have worked with Google to offer the IT certificate, with additional support and in-person instruction. The company is seeking credit-bearing pathways through partnerships with 100 community colleges within a year or so, according to JFF, which is working to help develop those partnerships. (JFF also is advising large employers on how to best develop their employee recruiting and training systems.)

“We’ve encouraged the companies to start with the credential,” said Kathy Mannes, a vice president at JFF. “Wherever the credential works, it works.”

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Northeastern University has worked to develop “stackable” credential pathways to four-year degrees for employer offerings, including the Google certificate.

“We’re in a stage right now where most of these companies have decided to play nice with higher education,” said Kemi Jona, a computer scientist and associate dean for digital innovation and enterprise learning at Northeastern.

But that could change, Jona said, particularly if big employers like Amazon start offering their postsecondary credentials to the general public, a scenario he said isn’t much of a stretch. “It is cause for worry.”

Resistance by many colleges to adapt to the economy and evolving education and training needs may be a reason why Amazon is building its own credential infrastructure, said Jim Fong, chief research officer for the University Professional and Continuing Education Association.

"The message is really more about core competencies and who can do it better, cheaper and faster and whether colleges and universities can do that anymore," he said via email. But Fong added that the Amazon news "might be the shot in the arm that higher education may need to accelerate what may be a slow and bureaucratic process regarding content and credentials needed in the marketplace."

Credentialism and Employer Training

Many in recent years have criticized major employers for allegedly relying too much on traditional higher education -- and public funding -- to train their own work forces. That argument in turn has contributed to worries about credentialism, specifically that mostly low-income employees and job seekers must pay to earn certificates and degrees that might not be necessary for jobs.

Amazon’s announcement last week is a move in the opposite direction.

The company is one of many that are bulking up employee training and credentialing systems, said Jason Tyszko, vice president of the Center for Education and Workforce at the U.S. Chamber Foundation. He said “enlightened self-interest” is helping to drive this significant trend, specifically the obligation companies feel to prepare their workers to adjust to a rapidly changing job market.

Employers increasingly realize they “need to provide a pathway for folks, even for outside the company,” said Tyszko. “We’re excited to see more companies getting into the game.”

Likewise, some skeptics of the so-called skills gap hope the Amazon news is part of a broader move toward corporations investing more in training their employees, while colleges can focus on educating them.

Yet experts wonder if Amazon can expand on its well-established playbook of successfully developing a service for itself, then selling it on the open market -- in this case to potential students.

The company turned heads around 18 months ago with its high-profile hiring of Candace Thille, a pioneer in learning science and open educational delivery, who took a leave of absence from Stanford University to sign on with Amazon. With Thille and other big hires, many are watching to see what sort of learning management system the company develops.

“I would expect they would turn a lot of their artificial intelligence on to their LMS,” said Jona. “Few companies have that kind of capability.”

Employer University

Amazon touted several of its recently created postsecondary training and credential providers as part of the announcement last week.

Those included Amazon Technical Academy, which seeks to help technical employees of the company get the skills needed to transition to software engineering careers. Likewise, Associate2Tech is aimed at its distribution center employees, with a goal of helping them move into technical roles within the company’s operations center, regardless of their IT experience.

The company also is expanding its recently created Machine Learning University, which is designed for employees with backgrounds in technology and coding to gain skills in machine learning. The provider features more than 30 self-paced digital courses that are offered over six-week modules, includes a certification in machine learning from AWS and is taught by roughly 400 Amazon machine learning scientists.

"As machine learning plays an increasingly important role in customer innovation, MLU helps employees learn core skills to propel their career growth -- skills that are often taught only in higher education," Amazon said last week in a written statement.

Late last year, JFF hosted a meeting between Amazon officials and community college presidents to discuss the expansion of the company’s Career Choice prepaid tuition program, which pays 95 percent of tuition and fees for a certificate program in high-demand fields, including transportation, health care, mechanical and skilled trades, and IT and computer science.

Amazon was interested in collaborating with the two-year colleges at more of a system-like level, said Mannes, rather than on one-off partnerships. The company also was exploring strategies for enrollment management and streamlining payments with partners. And Mannes said the community college leaders discussed how to work with such a large employer.

In its announcement last week, the company said it was creating 60 campus locations at its facilities in the U.S. for employees to conveniently take classes as part of the Career Choice program.

On the AWS certification side, Amazon has partnered with more than 800 postsecondary providers in 35 countries to offer the cloud computing credentials.

“We’ve been highly focused on higher education,” said Maureen Lonergan, AWS’s director of worldwide training and certification.

Yet Jona and other experts said that could change.

“What’s going to prevent them from flipping a switch and making this available” to a much broader range of a potential students, Jona asked. “Are they going to follow Salesforce’s lead and make it free?”

He said the key for traditional colleges to remain relevant in this space is to try to keep up with the demand for training on tech tools from the big companies.

Amazon and Google will hardly be the last companies to forge ahead on their own credentials, said Ward.

“This is not a fluke,” she said. “This is going to be happening more and more.”

David Soo, JFF’s chief of staff, said colleges will need to offer value if they want to partner with companies on these new credential pathways.

“The corporations are driving this conversation,” said Soo, a former official at the U.S. Department of Education.

Employers will continue to play an increasingly large role in postsecondary education and training, said Tyszko. But he said there’s plenty of space for traditional higher education even as credentialing choices expand.

“A lot of the higher education partners are going to benefit from this,” Tyszko said. “It’s higher ed’s opportunity to lose.”

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