disruptive innovation – Science for Society

April 5, 2015

Innovating forwards and backwards

I am a follower of #innovation, resulting in an all-day parade of tweets about self-driving cars, intelligent robots, business models, CO2-neutral buildings, growing efficiency in solar energy and smart gadgets. I feel at odds with those ‘experts’ who applaud innovation as the Holy Grail for our society’s future without making any difference.

In this post I will introduce a distinction between innovation forwards and innovation backwards. Innovation will become a matter of choice! At first, three different types of innovation will be identified. Each of these types has its technical and social variant.

Technical innovation

Type 1 innovations intend to increase labour productivity: Mechanisation and IT have enabled mass production at low prices by automation of assembly lines, warehouses, administration and bookkeeping. Besides, technical devices are replacing conductors at trains, cashiers in supermarkets et cetera.

Type 2 innovations occur when companies replace products by attractive alternatives in order to escape the downward spiral of price competition and decreasing margins. To be successful, public has to perceive the new products as contributions to the quality of their lives and be willing to pay accordingly: PC’s, iPhones, iPads, digital camera’s, navigation systems et cetera

Type 3 innovations intends to secure life and a decent level of prosperity in the long run and do not result in major financial rewards at short-term: Sustainable energy, bio-based economy, clean-tech, biological farming, reuse of materials et cetera.

Social innovation

Type 1 innovations include huge improvement of labour productivity under humane conditions, based on large-scaled production, task-differentiation, assembly lines and flexible payment, albeit at the cost of the total destruction of craft[1]. During the last century, Frederic Taylor’s principles have been refined by competence management, lean production, ICT and sophisticated planning and control systems, which have extended to medicine, accounting and teaching.

Type 2 innovations are aimed at the restoration of challenging job content. Improvement of labour-productivity is accompanied by an increasing number of low-strain jobs and by disappearing engagement. In the meanwhile, engagement is decisive in knowledge-intensive companies. Consequently, smart companies skip intermediate management levels, introduce servant-like types of management, create flexible work conditions and diminish differences in compensation between managers and professionals. Besides, a growing group of former employees is creating networks of collaborating self-governed and owned companies.

Type 3 innovations partially replace representative by direct democracy. People are taking responsibility for their own neighborhood. Employee ownership and cooperations are reviving. Financial institutions, healthcare, assurance and social care will redevelop bottom-up. Social enterprises will replace not-for-profit bureaucracies. These new ventures will operate from a welfare perspective in the first place. The rebirth of the civil society will partially replace the eroded welfare state. An already uncountable number of initiatives are moving already into this direction in many countries[2].

Innovation forwards and innovation backwards

The distinction between two pairs of three types of innovations each enables me to explain the difference between innovation forwards and innovation backwards

The purpose of innovation forwards is a ‘livable existence for future generations worldwide. Type 3 innovations (technical and social) are its main driver, supported by type 2 and type 1. Innovation forwards does not exclude improving productivity, for instance by deployment of robots, but it will enforce procedures safeguarding autonomous and challenging jobs for all^{^[3]}.

The purpose of innovation backwards is growth of company turnover and shareholder value. Type 1 innovation (technical and social) is its main driver. Types 2 and 3 are supportive. Innovation backwards might include the acceptance of so-called corporate social responsibility, but only if it contributes to profit, reputation and shareholder value.

Currently, innovation backwards dominates innovation forwards. Overall indicators are: the on-going increase of CO2-emissions[4] and the increasing differences in between rich and pour countries and between its inhabitants[5].

At the same time, the power of innovation forwards is increasing. The Deloite report The Big Shift is unveiling global changes during the last decades includes many hope-giving details[6], the following trends particularly:

The connection between technology and information science (Internet of everything);
The distributed character of knowledge and the emergence of the independent knowledge workers and Makers;
The collapse of large multinational organizations, favouring a globalized network economy;
The growing power of self-governance and local autonomy.Societal transition

Societal transition

Publications about societal transition and change are abundant. For instance, in The Netherlands, influent authors like Jan Rotmans and Marga Hoek motivate thousands of change-making groups and individuals and are inspired by them. Here, I will spend a some attention to the new book of the well-known organizational scientist Henry Mintzberg, titled: Rebalancing Society. Radical Renewal Beyond Left, Right and Center [7].

Mintzberg offers ample evidence for the dominance of innovation backwards. From 1980 on, the multinational corporations have increased their global and national power[8]: The economy of free enterprise has become societies of free enterprises. Except for maximization of their own profits and shareholder value, private companies have encouraged consumption[9] and borrowing large amounts op money. They have externalized their costs and evaded paying taxes. The ever-weakening government lost its countervailing power[10]. However, restoration of the power of the state is no option. A repetition of all well-known arguments between social democrats and liberals will occur and will not generate any change. The on-going growth of the plural sector is Mintzberg’s hope for the future. The plural sector has always been of utmost importance, for instance by the emergence of cooperations and associations. In the US, in average, each citizen is a member of two associations. There is a myriad of new initiatives by citizens in every field, varying from health, education, neighbourhood, and environment.

In addition, education, health and transport are parts of the plural sector, although these sectors have been weakened by privatisation. The growing group of social enterprises might be added too[11].

This leaves us with the question what each of us can do to promote innovation forwards. Henry Mintzberg: The place to start confronting the exploiters of this world is in front of our own mirror.

You and I are called on stage. Find your character in the table below

[1]Less humane practices can be found in the apparel, mechanical engines and in construction in emerging countries. These activities are all parts of the supply-chains of western (and Chinese) companies.

[2] See Blessed Unrest by Paul Hawken (2007)

[3] Carl Benedikt Frey and Michael A. Osborne (University Oxford, UK), The future of employment: how susceptible are jobs to computerization (September 2013)

[4] See for details until 2014: http://infographics.pbl.nl/website/globalco2-2014/

[5] See for details Thomas Piketty’s book Capital in the 21e century.

[6] The Big Shift http://goo.gl/QaNXdy is edited by ‘The Edge’, Deloite’s research institute.

[7] An earlier version of this book (2014) can be downloaded here: http://www.mintzberg.org/sites/default/files/rebalancing_society_pamphlet.pdf

[8] Withdrawing by the US of the Bretton Woods Agreement, meaning the decopling of the value of money and gold was a first step in the financialization of capitalism.

[9] With respect to food and beverages: In 2014 two of three adults in the US are overweight or obese (69 percent) and one out of three is obese (36 percent) www.hsph.harvard.edu/nutritionsource/an-epidemic-of-obesity/

[10] In1952, companies paid 32% of all tax incomes in the US. This percentage is decreased to 9% now.

[11] This article unveils the objectives of social enterprises: https://www.se-alliance.org/what-is-social-enterprise It clarifies why this type of enterprises fits into Mintzberg plural group.

[12] Het Defence Advanced Research Project Agency (DARPA) is an excellent example of public support in the development of industry and educational institutions.

[13] The representatives in the US are virtually unable to increase taxes for the rich: Nearly all members of the Senate and most members of the House belong to the 1% top-earners of the US.

January 21, 2015January 21, 2015

Higher education in US is ready for disruption

Changes in higher education in the US are worth looking at, because they will turn up worldwide in due course [1]. Higher education in the US is ready for disruption[2]: During the past 30 years, fees have increased 538%, which is 4 1/2 times more than average. Until recently, the earnings of alumni allowed them to repay their loans. The past five years saw a dramatic change in their prospects. As a consequence, debt has quadrupled in 10 years to $1,1 trillion now.

At the same time, employers complain about alumni’s lack of skills. According to Gallup[3] 95% agreed with the statement Graduates are woefully underprepared. 40% of all vacant jobs cannot be realized.

The number of students who combine study and work is almost 50%. These students prefer programs that are beneficial for their careers and utilize their work experience. They do not fall for the charms of campus life but feel attracted by the flexibility of distance learning.

The problems mentioned above are not new. However, higher education institutions, fearing disruptive innovators, seem more willingly than ever to act.

Higher education policy has always cherished three aims: affordability, accessibility and quality but failed in realizing these aims simultaneously. Exactly this happens right now. Educause, together with Next Generation Learning Challenges launched a call inviting institutions to co-develop bachelor and master programs with fees that do not exceed $5000 a year[4]. Many institutions hurried to redesign their educational offerings, the most prestigious universities of the US among them.

Solutions for the problems and challenges mentioned so far come from four different directions: competency-based learning, flexibility, e-learning and specialization.

Competency-based learning

One of the first institutions that offered competency-based learning in the US is the Western Governors University (WGU) [5]. Its courses of study are based on specified competences and they are preceded by a pre-assessment. This is screening students’ deficiencies resulting in a dedicated offering of materials[6].

Improving the alignment between education and labour market has many other implications. In their book ‘A New culture of learning’ Douglas Thomas and John Seeley Brown introduce entrepreneurial students. They assemble their own curriculum by taking courses from several universities. In addition, they opt for intensive skill trainings like DevBootcamp, Hackbright en General Assembly[7]. The Apollo Education group has developed the program ‘Balloon’ for this kind of students. It offers 15.000 courses, grouped by learning objectives, level, price and type of education. Many universities facilitate this explorative behavior of students and a variety of experiments are set in place[8].

Organizations like Degreed and the Mozilla Open Badge Platform are able to validate students’ extra-curricular activities. They map students’ competences and also how these competences relate to existing grades and diplomas[9].

One of the most fascinating ideas is Stanford’s imaginary Open Loop University. It will enable students to interrupt their program of study with two years of extra-curricular activities that have potential relevance for the core-curriculum, like work, externships, voluntary activities and studying abroad[10].

Competency-based learning, combined with personalization will dismiss the notion of fixed seat-time. This is weighting the workload of a course by the number of class hours. It will even go beyond the system of credit-points that express nominal study load. What counts is the mastery of competencies irrespective of time and effort to realize these.

Flexibility

Flexibility is connected with competency-based learning. Focussing on mastery of specific competencies, students are free in the choice of course materials. Tutors or consultants are available to help them selecting the most appropriate ones[11].

The Western Governors University allows student to start a course of studies nearly each day of the year and to take as much time as they need. Students pay $6000 per year, an amount of money that allows them taking as many courses of study as they want.

e-Learning

e-Learning is seamlessly connected with competency-based learning, and is enabling flexibility and affordability at once. In fact we envisage a second e-learning revolution. The beginning of the 21th century gave birth to the first Internet universities. Though, their programmes were technology-pushed, their supervision was unsatisfactory, they were too expensive and above all, their status was low. Now 15 years later the landscape has changed dramatically.

The initiative came from the well-established universities, like MIT, Harvard and Stanford. They started with Open Educational Resources, useful for teachers in the first place. Then MOOCs showed-up, valuable learning materials, though without credits. But change is ahead. MOOCs become integrated in regular education of both high-end and low-end educational institutions. Most of the first mentioned ones opt for blended-learning. For instance, Harvard is considering one year online learning, resulting in the selection of an elite group of students who will be on campus for two years, followed by a combination of work and study[12].

MIT believes ‘modularization’ will be the solution and plans to disaggregate courses in small packages, which can be combined. MOOCs provided by EdX will help students acquire the basics. In addition, they visit learning villages. Here practicals and other group activities take place[13]. The same applies to Duke University, in cooperation with Coursera.

The prestigious Georgia Tech University is moving into another direction in cooperation with Udacy, another supplier of MOOCs[14]. Together they offer a $7000 master program in Information science that results in the same grade as its $40.000 equivalent on the campus. The university feels that the difference in target groups will prevent cannibalization of the expensive programme by the cheap one. The free courses of Udacy are available too but without additional assignments and credits.

Specialization

Specialization is another strategy to survive. Institutions like WGU are able to offer an affordable programme because they renounce the development of learning materials of its own.

Learning materials like MOOCs are developed by well-known universities and distributed by companies like Udacy, Edx and Coursera. Publishers, like Pearson are developing and delivering e-learning programs too. Google plans with MOOCs.org to become the YouTube for MOOCs.

Many universities in general and community colleges in particular will survive as campus universities only if they deprioritize research and cease competing with Harvard or other high-end institutions. Their niche is training for the local or regional labour market in tight collaboration with local or regional companies.

Lastly, institutions like the Pacific Gas & Electric Power Pathways and the Clemson University International Centre for Automotive Research opt for topical specialization in order to educate dedicated labour force.

The higher education landscape will change fast. Students will build unique portfolio’s combining a diversity of resources. Specialized institutions will validate their competences and probably even reward them. Sometimes, these grades will match with existing programs However, the most distinguishing students will prefer unique profiles that might not be academically recognized but that will be priceless for employers. Guess who is better off!

[1] Comprehensive essay about the development of higher education in the US. It inspired me to write this blogpost. http://dupress.com/articles/reimagining-higher-education/?id=us:2sm:3tw:dup758:eng:fed:111914:du_press:sxswedu

[2] See the publications of Clayton Christensen and colleagues. After ‘The innovator’s dilemma'(1997) and ‘Disrupting College: How Disruptive Innovation Can Deliver Quality and Affordability to Postsecondary'(2011) http://goo.gl/ogr5r is ‘Hire Education: Mastery, Modularization, and the Workforce Revolution’ (2014) a description of ongoing desruptions: http://www.christenseninstitute.org/publications/hire/

[3] See: https://chronicle.com/article/The-Employment-Mismatch/137625/#id=overview

[4] Overview of winning initiatives. http://net.educause.edu/ir/library/pdf/NG1233.pdf

[5] See: http://3jrru23si058xyg03oiyzu9p.wpengine.netdna-cdn.com/wp-content/uploads/2013/04/The-engine-behind-WGU.pdf

[6] See https://www.edsurge.com/dreambox-learning

[7] See http://devbootcamp.com

[8] In particular, universities try to improving labor marked-oriented skills of students in cooperation with companies and other organizations.

[9] See: https://degreed.com/about

[10] See: http://natalie-whearley-a9si.squarespace.com/open-loop-university

[11] Short video about Flexpath: http://youtu.be/A4GMc71RGHg

[12] interview with director Edx Anant Agarwal https://www.insidehighered.com/news/2013/11/25/massachusetts-institute-technology-names-edx-key-component-educational-strategy

[13] See: http://web.mit.edu/future-report/TaskForceOnFutureOfMITEducation_PrelimReport.pdf

[14] Massive (but not open): The motives behind the new online program of Georgia Tech: https://www.insidehighered.com/news/2013/05/14/georgia-tech-and-udacity-roll-out-massive-new-low-cost-degree-program

April 15, 2013April 16, 2013

MOOCs: The announcement of the wrong revolution

A litany of recent complaints shows that something is wrong with higher education: Cost are rising with 10% every year (US), content has lost track with the explosive development of new knowledge, alumni’s competences do not match with the requirements of the labour market, teachers deliver lectures in the same way as their predecessors did for centuries, revenues for society are unclear. 40% of all students are leaving without a grade. Universities are inside looking, fixed at ratings, complacent and self-confident and so do not consider any reason for change.

According to Christensen[1], universities are on the eve of disruptive innovation. Disruptive innovation is the fast acceptance by the public of affordable new products and services, which were disregarded by established companies and are mostly offered by new entrants.

Less than one year ago, the first MOOCs (massive online open course) were launched. Their pros and cons are discussed in an uncountable number of blogs; presumably, papers in academic journals are still in the peer review stage. The appearance of MOOCs is pleasing me. Not because they are free of charge or massive, but because they open the gates towards uncountable sources of knowledge, which will allow students to customize their need for information. I am confident that MOOCs will displace lecture-based teaching at short notice

However, this is the wrong revolution.

The exchange of lectures for MOOCs does not question the dominance of the acquisition of knowledge in higher education. Yet broad agreement exist that higher education in the first place has to develop ‘readiness for society’. The attainment of this goal is encompassing three learning processes: (1) the acquaintance of relevant knowledge, (2) the application of knowledge and (3) and the exchange between codified and practical (or tacit) knowledge. The best way by far to organize these learning processes is by merging them.

A critical assessment of mainstream of higher education reveals that universities spent most energy on delivery of knowledge. Application of knowledge is dominated by ‘near transfer’, which means that students learn to give practical examples of theoretical concepts. ‘Far transfer’ originates from the analysis and solving of real problems, without prior exposure to cues about relevant knowledge. It occurs in Schools that deploy problem or project-based learning. Exchange of codified and practical knowledge is absent in general. It might take place during internships, but projects outside the university are better and moreover, they offer opportunity for integration with other learning processes.

A balanced and integrated approach of the three learning processes mentioned above is occurring in only few universities. Elsewhere, students learn (and forget) lots of knowledge, have only limited experience with the application of knowledge and are ignorant of the clash between codified and practical knowledge. Consequently, the majority of our universities are disavowing their main goal, the development of ‘readiness for society’. It is this verdict that justifies a revolution in higher education.

Who will smash the first tomato and start the right revolution?

I guess, nobody will, and this brings me back to the topic of disruptive innovation. Corporate universities have the best chance to take over higher education for adults at short notice. They are in a perfect place to organize projects and to exchange codified and practical knowledge. Until now, they are incompetent to organize the delivery of knowledge. Still, the breakthrough of MOOCs will make the difference. Deploying MOOCs will enable corporate academies to organize the three educational processes mentioned above in an integrated fashion at relatively low-cost. This will enable companies to scale up their learning programs and to improve the level of competence of their employees, which is badly needed in face of our society’s need for innovation.

[1] Clayton M. Christensen, Michael B. Horn, Louis Caldera, and Louis Soares: Disrupting College: How Disruptive Innovation Can Deliver Quality and Affordability to Postsecondary Education February 2011 http://goo.gl/ogr5r