Microcredentials are knocking. Will higher education answer?

Sound clip: You’re listening to a Times Higher Education podcast.

Sound clip: We think that it is fun to learn new things, and these experiments that we do with online learning and MOOCs and MicroMasters and micro-credentials and such are learning experiences for us. And we bring that learning back into the institution for the next thing that we do.

Sound clip: Being wealthy is key to getting access to a four-year degree, particularly a four-year degree from an elite school. And if having a four-year degree is key to wealth, and wealth is key to having a four-year degree, we’ve created a terrible feedback loop that, you know, I would hope that we are in higher education would want to solve. I just don’t see how we solve it from within the existing system.

Sara Custer: Hello, and welcome to the Times Higher Education podcast. I am your host, Sara Custer, and the editor of Campus, Times Higher Education’s best-practice and advice platform. You can find all of that and more at timeshighereducation.com/campus. Employers, policymakers, students and universities mostly all agree that alternative credentials are a good thing for the economy and for expanding access to higher education. But it’s one thing to think it’s a good idea and another to make it actually happen. The truth is, demand remains low among students, business models are patchy and higher education providers haven’t fully embraced the new models. A recent survey from the U.S.’s online and professional education association, the UPCEA, found that 69% of respondents said their institutional leadership embraced alternative credentials, but 71% said they don’t use the same business model. Meanwhile, in the UK, a pilot scheme for the Lifelong Learning Entitlement received such low demand from students that only 17 of the 96 short courses trialled have launched. The educators creating the short courses also reported barriers in gaining institutional approval for developing content. Later in this episode, we’ll be speaking with Michael D. Smith of Carnegie Mellon about how micro-credentials in education can do two things: address the inequities plaguing the current higher education system in the US and offer a sustainable plan for the future of universities and colleges. But first, we will hear from an institution who has managed to get alternative credentialing right in a big way. The University of Edinburgh has been building MOOCs and micro-credentials for over 10 years and now offers 80 online master’s courses drawn from all disciplines and 100 MOOCs and micro-credentials reaching 4.7 million learners around the world. Melissa Highton, the assistant principal of online and open learning at the university, is here to tell us about their strategy behind developing MOOCs, how they remain relevant to millions of learners and how they have found commercial success.

Sara Custer: Hi, Melissa. Thanks for joining us today.

Melissa Highton: Thank you for the invitation.

Sara Custer: Melissa, we’re talking to you today about 10 years of MOOCs, 10 years of massive open online courses at the University of Edinburgh. And your university was one of the first early adopters of this new approach to online teaching and learning back in 2010, I think is whenever. Whenever they first arrived on the scene, you’ve gone from nothing to quite a substantial offering of MOOCs. Do you want to tell us kind of what you’re doing now in the MOOC area?

Melissa Highton: Yes, thank you. We continue to produce MOOCs and they continue to be a very good investment for us. We get a good return on them in terms of global reach for the University of Edinburgh’s research and teaching. So yes, we’re celebrating 10 years of doing MOOCs and 100 MOOCs and nearly 5 million learners from all over the world. So we have learners in every country who take courses from the University of Edinburgh. And we partner with three different large MOOC platforms. We partner with Coursera, FutureLearn and edX. And we have a strategy whereby we choose which of those platforms we will use to reach which markets, thinking about the learners who we know are interested in different things from us and to study in different languages as well.

Sara Custer: I think that’s quite interesting the way that you are producing MOOCs for three of the major platforms, Coursera, edX and FutureLearn, and how you’re being quite strategic in how you are presenting those MOOCs and how you’re developing them. Can you tell us a little bit more about how you make those decisions and how you came to that strategic approach?

Melissa Highton: I think the approach evolved early on in that Edinburgh, we are interested in really doing experiments and exploring and being very much part of online learning and the changes that it was bringing to our business and to the way of delivering our mission, which is to ensure that University of Edinburgh research and teaching is available to people all over the world. So, we have that as a part of our institutional mission as a global institution. And the platforms were evolving 10 years ago, and each of them had slightly different business models and slightly different missions of their own as to who they would be reaching and what kind of courses and material they were looking for. So, our strategic position at Edinburgh was to partner with each of them to try out which was the best fit and which was giving us the best return on investment. And they all continue to do very well for us. And we get great data from them. They’re our technology partners. They give us a lot of really good data, which helps us to understand where our learners are, what they’re enjoying, which of our courses are the most successful. And it’s a great opportunity to test your courses with huge numbers of learners. And sometimes we put them on different platforms, and they actually the learners respond in different ways. So it’s a great way to quality assure and test your teaching and learning at a global scale.

Sara Custer: Yeah, I love that. I love that you will trial a course on one platform and then alter it for another platform based on the feedback of that trial. Does that ever feed into other courses around the institution?

Melissa Highton: Yes, well, the courses, the MOOCs are all made by academics at the University of Edinburgh who also teach on undergraduate or master’s level courses. And so often the MOOCs are a taster or a direct link into possibly studying undergraduate or postgraduate courses with those academics or in their departments. So it’s certainly a way of capturing a large interested audience and then making it possible for us to offer them what we have in our course portfolio for them to follow up and possibly come and join Edinburgh as a student.

Sara Custer: So you’re using it as kind of lead generation to potentially attract new students to your degree programs, but then you also are offering micro-credentials. So you are also partnering with employers or offering credentialized courses that students could then kind of take as their contained one course and then go and hopefully improve their employment prospects or get a promotion.

Melissa Highton: Yes, some of the courses are lead generation, I suppose you could call them that. But actually, as a research institution, actually, what our MOOCs are most is a knowledge exchange channel. So our MOOCs are all based on research that is done at the University of Edinburgh. And so to get the findings of that research to the public as widely as possible, MOOCs are a great vehicle for doing that. They don’t all align to an undergraduate course.

Sara Custer: Okay. I thought it was interesting in a piece that you wrote for Campus recently that I will link to in the notes for this episode. You said that while some say that the markets are hot for data skills and cybersecurity, consistently your most popular course is one on philosophy. Why do you think that is?

Melissa Highton: I think that there are lots of people who are very interested in studying philosophy from the University of Edinburgh, obviously. But we have quite a lot of MOOCs that are in those humanities areas because I think there’s a large group of learners who have a bit more time to spend and are perhaps returning to learning as lifelong learners and spending time studying something like philosophy or history or creative writing. And we actually see quite large numbers onto our courses from those demographics.

Sara Custer: Right. So that would suggest that there are quite a few people who are doing this just for the sake of learning.

Melissa Highton: The love of learning, yes.

Sara Custer: The love of learning. One of the reasons why I wanted to speak with you, Melissa, is just to discuss this wider issue around, not issue, just conversation around micro-credentials and work readiness and the role that universities play in preparing graduates for jobs after they graduate and perhaps where they might or might not be able to answer some of those demands from employers. Another thing that you said about the course, whenever you were setting it up, is you said that the aim of it was to experiment with new ways of teaching online, to research what kinds of learning and courses could be achieved and to have fun. A lot of times what we hear from universities is that offering micro-credentials or responding to employer demands would just cause a total rethink and seismic change in how universities are offering courses and developing courses. That’s quite different to your original approach, which was to experiment and just to have fun. 10 years on now, has there been this seismic change in how you’re offering courses or are you still existing in that kind of experimental fun space?

Melissa Highton: I think we actually managed to do both because obviously the we started the MOOCs with that view of experimenting and finding what worked for us. And we’re continuing to do MOOCs and we’re continuing to change the way we do MOOCs. We have lots of different kinds of MOOCs and we bundle them together into micro-credentials and we offer them in different ways and we make changes to them and offer them in different languages, make them longer and shorter. I think that it’s still fun to do those kinds of experiments and the understanding about micro-credentials is a direct progression from that, which is to think about how these short courses can be, yes, bundled together or assessed and accredited in ways that are useful for different types of people at different times in their lives. And we have done experiments with micro-credentials. And it has been disruptive, you know, in terms of thinking about, well, if we were going to do this as an institution at scale, what are we learning from these experiments? And the experiments that we’ve done, University of Edinburgh is one of the first, the first UK institution to do a MicroMasters with edX, that platform. We learned an enormous amount about what that would mean for our business, what it means for our institutional support systems, for the learner experience, how to manage that kind of at-scale assessment and so on, use of learning analytics, use of chatbots and such for support. So I think that if you think, so I suppose we think that it is fun to learn new things and these experiments that we do with online learning and MOOCs and MicroMasters and micro-credentials and such are learning experiences for us and we bring that learning back into the institution for the next thing that we do.

Sara Custer: And are you out there engaging with employers, students to understand what those micro-credentials in demand are at the moment? And are you responding to that?

Melissa Highton: Yes, well, we have many industry partners for our MOOCs and short courses. And we’re about to launch actually our own short courses platform. And I would expect to see that launch with hundreds of courses that we’ve been developing over the years, and that some of that is to the public and some of it is direct business to business. And we have a number of industry partners who take courses with us for hundreds and hundreds of their staff in-house, but also who will give a seal of approval or kitemark onto some of our courses to say that if people have taken this course from University of Edinburgh as a short course, that that includes the sorts of skills that they, as an employer, would be looking for.

Sara Custer: Melissa, I’m also aware that you have evolved the MOOC model into something else that you’re calling the event MOOC. Tell us about that.

Melissa Highton: Yes, thank you. The event MOOC was, well, our first one was invented for the independence referendum in the Scottish independence referendum. So it was IndyRef MOOC. These are, the event MOOCs run alongside a physical, an actual event, a time-bound event, so a referendum or an election or a large event. So for instance, we have one coming up right now for COP28, and we do it each year for the COP conferences. We bring together a lot of the content from the other MOOCs around learning for sustainability and our various sustainability MOOCs. And also, colleagues and faculty will be at the COP conference events. And they will structure the live at COP MOOC, which will feature live interactions, live sessions with the people who are at the conference, our faculty talking with the various different people who are there and running sessions directly into the MOOC. And so that one’s coming up now. We run a similar event MOOC every year with the Edinburgh Book Festival, Edinburgh International Book Festival, where the authors who are attending the book festival will do live sessions into the MOOC as the festival is on, and all of the participants in the MOOC read together the books that are shortlisted for the James Tait Black Literary Prize, which is awarded at the end of the Edinburgh International Book Festival. So these MOOCs are not MOOCs that are sort of always on that you can join anytime. These are MOOCs that are specifically structured for the university to be able to facilitate online global discussions with citizens around particular issues that an engaged citizenry is what you would hope to have. So, you know, geopolitical events like this, the MOOCs provide us with an opportunity to do that public engagement between the faculty and the public all over the world.

Sara Custer: So, Melissa, obviously, when MOOCs launched back in 2010 and 2012, was the New York Times declared the year of the MOOC. There were hundreds of thousands of people enrolling on these courses, and they got a lot of flack because people would drop out, their participation rates really high, but then their completion rates were drastically low. Clearly, those numbers have changed now. What does it look like for the University of Edinburgh?

Melissa Highton: Our first few MOOCs that we launched did get enormous numbers, but there were fewer MOOCs and there was a lot of hype around them. So, a lot of people signed up to take MOOCs just to see what they were. And so, yes, proportionately, I suppose the numbers who actually completed were low proportionally. But I think in the interim, we’ve learned the institutions have learned a lot about the design of those courses. And now we see quite proportionally high retention rates, not such large starting numbers, but still fairly large, tens of thousands on any course. And then you’re looking at the design of your course to see what will, which are most successful in, uh, retaining learners and getting them through to the end, um, and so the proportional, um, retention of learners and the success rate depends on how you design it. If you design it well, we still see quite large numbers going all the way through to purchasing their certificate, um, and coming back for more. And of course the platforms are interested in these models as well and will bundle them together and offer discounts and such for people who do more than one or several, and you can come back later and do another one. They’re very keen to make sure that you can see lots of different opportunities for more MOOCs that you can take and more ways that you can access that learning and certificates.

Sara Custer: Because that was also the big question was how are we going to monetize this? Yes, this is a wonderful project for the love of learning or increasing access or exposure to higher education to more people. But at the end of the day, there was a question around profitability and return on investment. So how is that? What’s the model for the University of Edinburgh?

Melissa Highton: So part of that, yes, so the sale of certificates supports the running of the MOOCs. They wash their face. But I think that it’s also important to remember that the institution, some of the funding is coming upstream or downstream, whichever way it is. But it’s that the funder of the research that the MOOC is based on will have been interested in making sure that the research reaches a large audience. And so it’s that public engagement and communication of research element that will actually mean that the group of academics who are making the MOOC will have already had some support for making that MOOC and making that research available.

Sara Custer: That’s quite smart. So you’re using research funding as a way this is just part of the impact and communication of that research. Interesting.

Melissa Highton: Yes, particularly publicly funded research should be reaching as many people as possible. And these MOOCs offer us a broadcast channel or an engagement channel, it’s not just broadcast, to actively engage with the people who most need to engage with that research. So the distance, the time from bench to bedside or bench to barnyard, depending on what kind of MOOC you have, is much shortened. This is a very rapid engagement channel.

Sara Custer: And you mentioned the credentials and the way that platforms are helping kind of package these things up and offering discounts to packages. Tell me a little bit about how you are thinking about credentialing, because that’s another big question around this discussion of micro-credentials: is what do students actually get out of this and then what can they actually do with that?

Melissa Highton: Yes, I think you’re right. The important thing about a credential is what is its currency? What does it get you? Where can you take it? What does it unlock for you? And the traditional credentials like degrees and master’s, there’s a general understanding as to what you can access once you’ve gained a degree or a master’s, what doors that opens for you. And I think that those questions about the smaller chunks of learning and the unbundling perhaps of the degrees does require quite detailed thinking about what the utility of the credential is for the learner. So it’s not actually difficult for the institution, I think, to issue these micro-credentials, but thinking about how they can be taken and used, how long their shelf life is, whether they can be merged with other small credentials from other institutions and bundled up by the learner to show some achievement in a particular area and whether that’s credible to an employer will be different in all of the different sectors and perhaps in the different platforms and different universities. So I’ve seen a number of universities making available smaller chunks that you can bundle together within the institution, but the exchanges between institutions, I think, is still being thought about very deeply by many people. What I’ve been doing at the University of Edinburgh, what we’ve been doing is to make sure that we can issue such credentials, and part of that is looking at digital badges and digital credentialing to make sure that we have the infrastructure available for making short course digital badge credentials available from the university that have a quality assurance around them and that they are portable and there are technical standards around digital badging, which means that learners can take the badges they’ve earned and carry them with them.

Sara Custer: Melissa, you’ve been in the field of online teaching and learning for a number of years. Do you think that universities need to change their approach and how they are responding to the needs of workplace skills for their graduate students?

Melissa Highton: I am always impressed at how creative and inventive and innovative the people who work in higher education are. I think there’s lots of examples of universities who are often reviewing how they do such things and trying to think about what the next thing to be useful to society is. And so, certainly, in the groups of people that I speak to, there are many people discussing and thinking about how we can offer our learning and courses to people in all kinds of different shapes and sizes and in different ways. And the use of technology for that is not something that the universities are shying away from at all. There’s a very rich online learning culture emerging in the UK institutions now, I think.

Sara Custer: So, now that we’re talking 10 years after the fact of MOOCs, and the conversation around what universities are offering has kind of shifted more to this micro-credential conversation in addition to expanding out online teaching and learning, especially after the pandemic. Do you think Edinburgh has kind of future-proofed yourself a little bit or set yourself up in a much more beneficial way than maybe you had ever imagined back 10 years ago when you decided to take the plunge and start developing MOOCs?

Melissa Highton: Well, we started MOOCs 10 years ago, but we’ve got 20 years of online distance learning master’s-level courses. And it has taken, you know, so we have been doing it for 20 years, and that’s an enormous portfolio now: 80, more than 80 online distance learning master’s, completely distance. And the students are all over the world on those courses. So that took time and investment by so many people across the institution. Again, all of the faculty who teach on those courses and all of the staff who support the faculty who teach on those courses. And the delivery of those courses is a large part of the University of Edinburgh’s business. About 10% of our student body are fully online distance learners at the University of Edinburgh. So I suppose it does leave us in a position where if we choose to expand that portfolio, we can. And during the lockdown, we did have in place the pieces of digital infrastructure that were needed. We just need, well, just, I say, of course, it was difficult, but everybody was focusing on how we scaled that up to meet so many more of our students needing to study in that way.

Sara Custer: And do you feel that you had an advantage there more than other institutions who maybe didn’t have the background and the capabilities already in-house to do that?

Melissa Highton: Possibly, but again, I would say I was so impressed with my peers, the heads of e-learning and the heads of learning technology at every UK institution, I think, did incredibly well to help their institution to understand what technology was in place and how the virtual learning environment and the library catalogue and the various different learning technologies that the institution already had were able to support students. And for many, it was about scaling.

Sara Custer: And I’m just going to ask you to pull out the crystal ball again because I remember whenever MOOCs arrived, everyone said this is the death of the brick and mortar institution and this is the future of higher education and the four-year degree program is dead. Do you think that this is the way that things are going now, at least for some undergraduates, that it will just be a couple of short courses and stacking credentials maybe from a variety of different institutions that then goes onto their LinkedIn profile and that’s enough to get them started on a career?

Melissa Highton: Well, the universities have been around a long time. When you work at an ancient institution, are you talking 900 or 500 years? I think that the higher education models that survive often do that because they are not set in stone and are available, are able to flex and bend and recognize change in society. But I think that the role of institutions and higher education is not necessarily to meet the needs of employers. And so, I think that often when there are discussions about whether higher education should change to meet the needs of employers, that’s not necessarily the kind of changes that drive what universities are all about. But that said, I think that access to higher education is very important and that should be available in lots of different shapes and sizes for people in lots of different ways. And it may take, it may be that studying for only four years in a block is something that so many people can’t, aren’t able to do. And that these access routes and the different shapes and sizes and ways that you might consume higher education, it really does need to change.

Sara Custer: Wonderful. Melissa, thank you so much for your time today. I really appreciate it.

Melissa Highton: Thank you.

Sara Custer: Now, partnering with employers on micro-credentials is an effective way for universities to serve new students and develop new courses. But in 2023, a survey of about 500 employers found that 40% of them had partnerships or relationships with four-year colleges and universities, a drop from nearly 50% the year before. Meanwhile, partnerships between employers and third-party provider LinkedIn Learning rose from 44% in 2022 to 52% in 2023. This is part of the risk to universities that Michael D. Smith identifies in his recent book, The Abundant University. In it, he criticizes universities for capitalizing on scarcity, in access and their model of instruction, and in credentials. He argues that universities have not only a moral obligation to do better, but their very future could be at risk if alternative credentials from third-party providers or even employers themselves beat them at their own game.

Sara Custer: Michael, thanks so much for joining us today on the Times Higher Education podcast. Welcome.

Michael D. Smith: Sara, it’s great to be here. Thanks for having me.

Sara Custer: You have written a book called The Abundant University, and I’m just going to attempt to kind of wrap up your main thesis of the book. So correct me, please, if I get this wrong. Basically, there are oodles and oodles of new technologies available for universities right now, and there’s a great opportunity for them to use these technologies to expand access to higher education, and it’s going to address the inequalities that exist in the current system of higher education.

Michael D. Smith: Yeah, I think that’s a great summary, right? This book started as a book about technological disruption, and I really think it ended as a book about social justice. The basic argument being that what we’re doing today isn’t serving the interest of social justice, and I don’t know how we solve it from within the existing system. Like, every time I look at the problems, they’re systemic, which means we need to create something new if we hope to address those problems.

Sara Custer: You put this argument into context about explaining the current system with an analogy of a factory. Do you want to just explain that a little bit to us to help us understand how you’re viewing what the current system is?

Michael D. Smith: Yeah, around the start of the Industrial Revolution, a lot of people looked at redesigning higher education and they looked at it within the context of the existing factory model, the factory model of that day. And what I’m trying to argue in the book is: I think that puts us into a place where there are three key, I don’t know, components of our current system of higher education. One is who gets access, the second is how they get trained, and the third is how they get credentialed for the job market. And each of those in today’s system is based on scarcity. You know, scarce access to the seats, scarce access to the faculty, scarce access to the credential is really what defines power in our current market for higher education. What I’m trying to argue in the book is that we’ve seen this before in a lot of other industries where new digital technologies create abundance. And not only does it change power in the industry, but in a lot of cases, we can point to a setting where it actually creates the abundance, actually creates benefits for the consumers and for the creators. And I’d love to see us at least explore whether that might be possible for those of us in higher education.

Sara Custer: I want to get on to the parallels that we see here with other industries. But one point that I picked up in the book was: you were saying that this factory model that came out of the Industrial Revolution was really a revolution in itself to expand access even at that time from the quite close-knit, what do you call it, small batch style education with the one-on-one tutoring. So it has happened before, even though it was a long time ago, it has happened before within the history of higher education.

Michael D. Smith: It has happened before. What we did in terms of expanding access was great. I’m wondering whether we can do even better, given what we know about the limitations of the existing system and given what we know about the new technologies that are available to us.

Sara Custer: So another argument that you lay out in the book is something called structural disruption. And this is something that you saw in the entertainment industry whenever kind of multiple things aligned, multiple areas of disruption aligned to really bring down the power structures that existed. And it was mostly, yes, around the entertainment industry, streaming, both for music as well as movies and television programs.

Michael D. Smith: Yeah, so, and this is one of the real challenges of talking about this to faculty: is we feel like we were told, you know, 10 years ago by Clay Christensen and many others, you know, Clay Christensen, the father of disruptive change theory, that within the next five years, higher education is going to be massively disrupted, with possibly as many as half of the universities, you know, financially unsustainable. It’s 10 years later, that hasn’t happened. And so I fear that a lot of my colleagues, you know, have a false sense of security around this. What I’m trying to argue in the book is that Clay Christensen’s theory, as brilliant as it is, isn’t the only reason that incumbents suddenly fail when faced with a new technology or incumbents face massive shifts in their market when faced with a new technology. The way that I’m talking about in the book is the way my colleague Rahul Telang and I saw in the entertainment industry. So in 2015, we had the head of home entertainment at one of the big six studios come to our class at Carnegie Mellon and talk about how technology was changing his business. And Rahul, at one point during his talk, asked, Are you at all worried about the threat that Netflix and Amazon and Google might pose to your business? And he said, you know what? My business is different. The same six studios have dominated my business for the last hundred years. There’s a reason for that, and that’s not going to change. And in the book we wrote, we tried to argue, A, that’s true historically, right? He’s 100% right. The same six studios had dominated his business, and it’s not like the internet was the first technological shift they’d faced. So why would today be any different? And what we tried to do in the book is say, here’s why, here are the competitive factors that have allowed six studios to dominate their business. They control scarcity in how content gets made. They control scarcity in how content gets distributed. And they control scarcity in content, how content gets consumed. And none of the shifts they’d faced have changed their power in those areas. And yet, in 2015, they were facing a set of simultaneous technological shifts that were making it easier to make content, easier to distribute content and easier to consume content. And were introducing a new scarcity, let’s call it customer attention, that Netflix, Amazon and Google controlled. They didn’t.

Sara Custer: Is that algorithms that can pick up on your preferences?

Michael D. Smith: It’s yeah, it’s the knowledge of the consumer and the ability to control that interface, right? That, you know, Netflix controls the 16 movies that are recommended to me when I show up at Netflix’s site, and they use data to determine that. So early in the pandemic, I heard the then president of Ohio State University get asked almost the same question about higher education. Are you at all worried about online education changing power of traditional universities? And gave what I heard to be almost the same answer, which is, you know what, the same 82 universities have dominated my industry for the last 500 years. There’s a reason for that. That’s not going to change. That’s not exactly what he heard, what he said. That’s what I heard. And so what I’m trying to develop in the book is: let’s think really hard about why a small number of universities have been powerful. And I think if we look at that, I think what we see is the power came from controlling access to the scarce seats in the classroom. It came from controlling access to the scarce faculty experts. And it came from controlling access to the scarce valuable credentials you needed to demonstrate your skills in the marketplace. And if you buy that framework, then due respect to Clay Christensen, the online education he was talking about in the early 2010s created abundance and access to the seats and access to the instruction.

Sara Custer: In the form of MOOCs and the early days of edX, Udacity, all of that.

Michael D. Smith: Exactly. But it didn’t create abundance in the credential, right? You can take as many MOOCs as you want. You can take as many edX classes as you want. It’s not going to add up to a four-year degree when you go out on the job market. If you buy that, then our business model is hanging on our ability to have a monopoly control over who gets access to the business model. And the question I’m trying to... Yeah, go ahead. Go ahead.

Sara Custer: I was just going to say the big shift in this is really about skills-based hiring and employers redefining what they see as excellence and what they’re looking for in employees.

Michael D. Smith: Yeah, the real shift here, I think, is about the university brand becoming less important in how employers make decisions. And honestly, when I was thinking about this, I was really scratching my head at one point, you know, how do you reduce the value of the university brand? You know, brand names are these long-lasting, very enduring things. What could possibly change the value of brand? And later that day, I was buying a really expensive scanner from a manufacturer I’d never heard of solely because it had a 4.9 star rating on Amazon and a bunch of really positive reviews. And I was like, oh, that’s how you reduce brand. You add objective information to the transaction, right? I’ll stay at complete strangers’ homes because they have a good rating on Airbnb, and I’ll drive home with complete strangers because they have a good rating on Uber. Could we see something comparable in hiring where I stop judging you based on what university you graduate from because I have objective signals of your actual skills?

Sara Custer: In the form of exams and skills-based assessments during the interview process?

Michael D. Smith: Exactly. Yeah. One of the examples I use is Google. Google’s been very public about the fact that they’ve looked at their data and what they discovered is where you graduated from, what your major was, you know, what your GPA was, isn’t all that predictive of how well you’re going to do at Google relative to how well you do on our entrance tests. The other example I use in the book is a guy named Gilberto Titericz, who sort of lives in Brazil, graduated from a middling Brazilian engineering college, works at the Brazilian state oil company and it just so happens in his evenings he likes to participate in a website called Kaggle, which has data analytics challenges. And he’s gotten good enough that he’s risen to the top of the Kaggle leaderboard in data analytics. And all of a sudden, he’s getting recruited by Silicon Valley companies not because of his major, not because of his grades, not because of his work experience, but solely because they can see this guy knows data analytics because he’s at the top of the leaderboard. Could we imagine that affecting non-tech industries? And I think we could. I was talking to a buddy of mine who’s a journalist, and he basically says, I won’t hire any journalist unless I can see their Substack, right? Unless I can see their portfolio of writing. I don’t care whether you graduated from Columbia’s J-school. I want to know whether you can write or not. And now I actually have signals of that.

Sara Custer: I was going to ask you about that as an English literature major and a journalist, which, I mean, journalism arguably is another skill that is something that you can show. And even before the days of Substack, we had portfolios and clippings and links that we could take to job interviews to prove our skills. There are other jobs, however, where it’s a slightly grayer area where, you know, what they call these soft skills are really what employers are looking for. So, how do you see this type of objective analysis really working for the non-STEM fields or the non-skills-based jobs that are out there?

Michael D. Smith: The correct answer is I don’t know precisely. But I do think we’re seeing, I’ve got a slide in my deck when I talk about this that has a whole, the first build has a whole bunch of headlines from various outlets, both on the right and the left, talking about employers de-emphasizing four-year degrees in their hiring processes. And then the next build of the slide has a quote from each of those articles saying, and they’re doing it because they want a more diverse workforce and they recognize they’re not going to get the socioeconomic diversity that they want if they continue to rely on four-year colleges to certify those people. If you want rich white kids, great. Use four-year colleges. But if you want a socioeconomically diverse group of people, it’s going to be much harder to get that workforce if you rely on four-year degrees. And that’s what all the stats tell us. So I think we’re starting to see more creativity in the workforce and less reliance on the degree. And I think a lot of that comes from internships and apprenticeships and some testing and some in-house training, vertically integrating from relying on other people to do the training to say, oh, no, actually, in a world of abundant training, in a world of abundant information and training, I can do the training myself. And it’s much more specific to what I need as an employer.

Sara Custer: And that’s kind of where we are now in terms of the Googles and the Amazons. They are pairing up with universities. They’re pairing up with higher education providers to create these courses that they need to get people on the pipeline of their careers at their companies. But your book actually makes the case that as soon as they get wise enough or get enough resources to do this on their own, they’re not going to be pairing with higher education institutions anymore. So then there’ll be a whole other different world of hurt, I guess, that universities will find themselves in.

Michael D. Smith: Yeah, and I take no pleasure in that, but looking at the experience of other industries in the context of Amazon and Google and these tech companies, you see a lot of cases where there was an initial partnership, and then once Amazon and Google figured out how to do it themselves, they did it themselves. And you can talk to a lot of people in the publishing industry about what that looks like.

Sara Custer: I know that you said you don’t quite understand how it might work for humanities people like myself, but I want to press you a little bit on kind of how you see this actually working. We’ve talked a lot about micro-credentials. It’s a big topic. It has been a topic for a decade in higher education. It hasn’t quite evolved out for a number of reasons, but I also think that universities work in a very complex ecosystem. It’s not just they can turn on a tap tomorrow and start offering skills-based micro-credentials if they really wanted to. We’ve got accreditors that they’re working with. We’ve got federal funding that’s tied to all that stuff. How is this actually going to work, do you think, for universities to be a big player here, to remain relevant and to address these inequalities that exist in the system?

Michael D. Smith: Well, there are two answers to that question. One is, you know, you’re absolutely right. Universities are this incredibly complicated set of different processes, different incentives, different stakeholders. One of the points I’m trying to make in the book is that is good for stability as long as your environment doesn’t change. But being a complicated entity with a whole bunch of different stakeholders is actually makes it very difficult to respond to significant changes in your marketplace. And you don’t have to go far to think about, you know, industries that were complicated that were unable to respond to changes. So one answer is it’s going to be really hard for us to adapt to this change, and we’re probably going to see this innovation from outside the system. The other possibility is that we’re going to see some innovative universities adopt this and adopt this early and be successful at it. And there I would point to, you know, Mike Crow at Arizona State University and Paul LeBlanc at Southern New Hampshire University. What I find interesting about that is they were, their innovations were after edX, and I’m sorry, not edX, MITx and HarvardX. Like, MITx and HarvardX rolled this out, and I would argue from a disruption standpoint they had it, you know, they had, you know, new ways of training people that didn’t really hurt their existing on-campus degree program. For a variety of reasons that I talk about in the book, they just weren’t able to move fast enough, and a lot of it was faculty resistance.

Sara Custer: And also probably employers perhaps not being there yet to recognize.

Michael D. Smith: Perhaps employers not being there yet to recognize the value of this. What I find intriguing is that it wasn’t the Harvards and the MITs, it was the Arizona States and Southern New Hampshires of the world who were able to make this transition because they didn’t have the Harvard MIT brand name to protect. And, you know, we’ll see. How does this all play out in the future? It’ll be interesting.

Sara Custer: I also wonder if you think if universities do suddenly decide that they want to do this, is it going to be, are we going to have 4,000 intros to electrical engineering micro-credentials? We’ve already got these. We’ve got the MITx, we’ve got the HarvardX, we’ve got the Coursera courses that are already out there. So, how do you see that playing out in terms of the abundance potentially cannibalizing other courses and micro-credentials that they create?

Michael D. Smith: Yeah, and again, I take no pleasure in saying this, but everything we’ve seen from online markets says that they are much more concentrated than brick-and-mortar markets. You know, that where name name 20 places you can buy books in the physical world, and you could probably name that. Name 20 places you can buy books online. It’s much harder and it’s much more concentrated. I’ve talked to ed tech entrepreneurs, and basically, what they say is the moat that protects my business model is the data I’m generating. Data about how individual people learn, data that I can use to improve the effectiveness of my courses and improve the personalization of my courses for individuals. Now, who’s going to win that? I don’t know. But one of the quotes I have in the book comes from a New York Times article, and it’s a dean asking, how many people do you think we need to teach calculus online? And the answer is, you know, I think three. My colleague thinks five, you know, but it’s not the X tens of thousands that we have today.

Sara Custer: I think it’s also important to say here that in the book, you aren’t calling for the end of brick and mortar institutions. You aren’t sounding the death knell for this at all.

Michael D. Smith: Yeah, it would have been, there was a temptation early on to call this the death of the university, and I didn’t do that because I don’t believe that, right? Harvard, MIT, Stanford, you know, Princeton, they’re going to be just fine. We’re still in the same sense that television didn’t end theater, you know, live theater. We’re not going to end the live, for lack of a better word, in-person education. It’s going to be there. I just think it’s going to be a less central part of how people gain access to the workforce than it is today. And again, with no, saying this with absolutely no joy, I don’t think we’re going to need 4,000 institutions to deliver it.

Sara Custer: It is interesting that you say the ASU, you mentioned about ASU and Southern New Hampshire University being the ones who have kind of pulled ahead on this because they have demonstrably more diverse and socioeconomically diverse student bases than the Harvard and the MIT. So they’re answering a demand there that I’m sure they saw early on.

Michael D. Smith: Yeah, that’s one of the interesting, troubling things about what we’ve got in higher education today. You know, what we know from the economic research is that having a four-year degree, particularly a four-year degree from an elite school, is key to lifetime wealth. And a lot of my colleagues stop there and say, no, no, no, the university is absolutely critical, and we know that from the statistics. What we also know from the statistics, however, and this is where things get really troubling, is that being wealthy is key to getting access to a four-year degree, particularly a four-year degree from an elite school. And if having a four-year degree is key to wealth and wealth is key to having a four-year degree, we’ve created a terrible feedback loop that I would hope that we in higher education would want to solve. I just don’t see how we solve it from within the existing system. All of the incentives are aligned to continue to admit rich kids because they can pay full freight and they’re much more likely to give down the road. And all of that helps your U.S. News & World Report rankings. I don’t know anyone in higher education who is excited about that. Everyone I know in higher education says, no, no, no, we should make the system more diverse and we should make it more open to people from different socioeconomic groups. And yet we can’t do it. And I don’t see how we solve that problem from within the existing system.

Sara Custer: You mentioned public sentiment a bit earlier on. And most people will be aware of the most recent Gallup poll showing that only 36% of Americans have a great deal or quite a lot of confidence in higher education. There was a WIPAL survey from earlier in this year of middle school and high schoolers saying that only 84% plan to go to college, down from 100% in 2019. Do you think that universities changing the system, being able to offer more of having more abundance and offering more access to these credentials, do you think that will help with public sentiment?

Michael D. Smith: I’d love for us to dig into that public sentiment. I wrote a piece in 2020 in The Atlantic that was basically arguing that higher education in 2020 looked a lot like the entertainment industry did in 2015. We are fat and happy and so darn pleased with ourselves and completely unprepared for how technology might change our business. What I noticed was the feedback from outside the academy to that piece was overwhelmingly positive and frequently expressed a great deal of anger and frustration towards the current institution of higher education. The feedback from inside the academy was overwhelmingly negative and frequently expressed a great deal of anger and frustration towards anyone who would question the institution. There’s this huge disconnect between how we think the public perceives us and how the public actually perceives us. There are a lot of people taking out second mortgages on their homes so they can put their kids through college who are really frustrated about that.

Sara Custer: Understandably.

Michael D. Smith: Understandably. Yeah. I would love for us to think really hard about where this public frustration is coming from. When I talk to a lot of my colleagues, they tend to dismiss it. And by colleagues, I mean colleagues across higher education, but they tend to say, well, what we know is that the world is very polarized today. This change is coming from Republicans who are wackos and from people who don’t have college degrees who really don’t know what they’re talking about. We’re going to be just fine. I think it’s much more complicated than that.

Sara Custer: Michael, you talk about your kids in the book. So I feel that I’ve got a little bit of a license to ask you this question. Did they go to a four-year degree university?

Michael D. Smith: All three of them did. And that was 100% the right decision given our current economic system. Here’s the other thing I know is, you know, my wife and I have every advantage you could imagine in terms of paying for those degrees. You know, Carnegie Mellon has a great tuition reimbursement program. Our parents were able to give us 529 money, blah, blah, blah. If we didn’t have even, you know, even one or two of those advantages, this would have been an incredibly hard, you know, it’d have been extraordinarily hard. And if we didn’t have any of those advantages, it would have been impossible to pay for the places our kids went. Watching our three kids apply and get admitted to college really showed me how many ways wealth puts its finger on the scale of admissions. You know, I just don’t see how we can sustain that ethically, morally, knowing what happens. Yeah, I could expand on that if you want, but that’s, you know, you’re absolutely right. I’m part of the problem. I’m sending my kids to higher education. I think I’m, you know, to universities. I think I’m doing the right thing as a parent, but as a society, I’m really troubled by what I see. I’ll give you, you know, this is research from Raj Chetty at Harvard. What he shows in his research is that kids born into the top 1% of the income distribution have a one in four chance of going to a top 80 most selective school, one in four. Kids born in the bottom 20% of the income distribution have a one in 300 chance of going to the same school. And what I say to my colleagues is: hey, I’m trained as an economist. That means I believe in the efficient allocation of scarce resources, which include elite colleges. If we genuinely believe that rich kids are 77 times more likely to be capable of an elite education than poor kids, we’re doing fine. But if we don’t believe that, and I don’t know anyone who does, then this is a terrible way to allocate access to the systems we know give you a leg up in the job market.

Sara Custer: With that question, I was also trying to get at the point of the stigma around online education micro-credentials that still exist there. And I think it’s a factor we haven’t quite spoken about right now. And if we took tuition fees out of this equation, and I know that there are other factors included in this in terms of time and caring responsibilities and all that stuff, but if we took tuition fees out of this equation, I think most people probably would send their kids to a four-year degree program because that’s the mindset that people have right now. And I think that’s an advantage that universities are holding on to definitely in terms of their resistance of accepting the leverage that technology has here to improve abundance. But talk to me a little bit about the stigma around not having a four-year degree.

Michael D. Smith: Yeah, stigmas and cultural senses don’t change until they do. Hopefully, this won’t come off as a trivial example, but I’m old enough to remember a day where if you were online dating, you had to be a complete loser, right? Right? You know, isn’t the obvious place that you’re going to find your future mate at a bar and not through some online service, right? And now online dating has a completely different sense associated with it. And in fact, you could ask perfectly reasonable questions about whether you’d expect to, you know, find your life partner at a bar. Could that, so again, could that sense change? One of the things I find really interesting is, you know, a lot of my colleagues say online education doesn’t work because it requires a student who is very self-motivated, self-disciplined to finish. And so one of the things universities offer is the structure that you need to make it through. And that’s true, but it’s also kind of interesting, right? Because a lot of employers are looking for people who are self-disciplined and self-motivated. Could being able to finish an online degree become a signal that not only do you have the knowledge, but you also have the self-discipline and the motivation to follow through on things? Possibly. And it just takes a couple success stories for where people, you know, change their perception of, well, you have an online degree, you must be an idiot, to, well, you have an online degree. Show me you have the knowledge, and I’ll treat you exactly the same as someone who has an in-person degree.

Sara Custer: Michael, thank you so much. Plenty of food for thought there. Thank you so much for joining us today.

Michael D. Smith: My pleasure, Sara. Thanks for having me.

Sara Custer: That’s it for the Times Higher Education podcast. Thanks so much for listening. If you’ve got any ideas for the next episode, get in touch at sara.custer@timeshighereducation.com. We’ll see you next time.

Sound clip: You’re listening to a Times Higher Education podcast.