Secondly, most of higher education has always been protected, particularly in business, where many students don’t want to quit their jobs or move to get a graduate degree. From the very start of education, geographic boundaries protected the local university from competition from national or global rivals with greater resources.
That is no longer true. Technology allows the big brands to leap over those boundaries and compete directly with second- and third-tier institutions. The proliferation of online business-degree programs and free business MOOCs (Massive Open Online Courses) is already hurting the cash cows of every business school: part-time MBA programs, executive MBA programs and open-enrollment executive education courses.
Berkeley’s Lyons believes that over the next five years, five of the top 25 business schools in the U.S. will join Carnegie Mellon, the University of North Carolina and Indiana University in offering online MBA programs. If his forecast comes true, that development alone will hasten the likelihood that many second- and third-tier business schools will lose out to the bigger brands.
Ironically, the most disruption in higher education won’t be caused by new, entrepreneurial outfits. It is coming and will continue to come largely from the educational incumbents who have learned from other industries that they need to move first. That is why schools such as the University of Pennsylvania’s Wharton School has led the way in offering an array of free MOOC courses to students, including what the school calls its “foundation series” of four core offerings in financial accounting, marketing, corporate finance and operations management. Those free core courses have cost the school $250,000 but already have reached 2 million online students.
THE POWER OF THE INCUMBENTS
Indeed, it’s already possible for anyone, anywhere in the world, to cobble together the core and elective curriculum of an entire MBA program for free from many of the best professors at the best business schools. Today any student could mix and match the courses online over a few years, catalog all of them on a résumé, and claim to have the equivalent of a world-class business education obtained for free. An elite business degree is essentially already modular with greatly diminished costs.
Sure, today you wouldn’t get an orderly sequence of classes that build on each other. You wouldn’t get the benefit of forging important friendships that would last a lifetime. You would lose out on the on-campus recruiting from the world’s best organizations. And you would not have the alumni network to support and encourage you over your professional life. But you would have the basic education for free. And in 25 years, you’re likely to have all of it.
So what does all this mean for business students? Like the influx of foreign competition in nearly every business from televisions to autos, it’s great news. It means lower prices, more choice and greater flexibility. It means that you can increasingly get an executive education program from a Harvard, Stanford or other leading educational brand with much more résumé-boosting power rather than settle for a local or regional brand. If you want an MBA, it means that you can get the degree online from a nationally ranked business school, no matter where you are. You don’t have to slog through evening classes after work for years to get the degree from the local college no one has ever heard of.
And If you don’t want to pay the prices set by Harvard, Stanford, Wharton and others for either a program or a degree, it also means there will be plenty of other excellent business schools willing to fill the gap with lower-priced product. Auburn University, a school with an exceptional reputation in the South, has an online MBA that costs around $45,000. It won’t be long before some well-known schools begin to accept some graded MOOC courses taken elsewhere for free so you can shorten your time to get a degree.
For most of the business schools in the world, on the other hand, it means new and brutal competition. Schools that already have strong brands supported by world-class faculty aren’t going to go out of business. But it’s worth noting that the 100 or so top business schools in the world represent not much more than 1 percent of all the institutions handing out graduate degrees in business. So there’s plenty of fallout to occur outside that top 1 percent of the field.
The disruption that will occur over the next 25 years won’t be pretty. But in the end, students will benefit greatly from the turmoil and change—and education will never be the same.
John A. Byrne is the editor-in-chief of C-Change Media, a digital media company focused on higher education. C-Change’s most popular website is PoetsandQuants.com, which covers graduate business education.