Carol A. Twigg and Robert C. Heterick, Jr.

written for the NLII-SHEEO Seminar
on the Public Policy Implications of the
Information Technology Revolution

November 13 - 14, 1997
Denver, Colorado


I. Introduction
II. Impact of the Information Technology
Revolution on Society and Higher Education

III. The New Learning Environment
IV. Implications for Public Policy
V. Change Strategies: The Role of Incentives
VI. Investment Strategies
VII. Conclusion: Interpolating the Future
List of Participants


Governing and coordinating approaches come in many forms. Over the past four decades a set of structures often called "coordinating boards" or "statewide governing boards" have developed to serve as instruments of public policy toward higher education.

Traditional approaches to program approval and review at the state and system levels fit well with the way in which traditional, campus-based programs have developed. New programs emerge from individual faculty or discrete departments within a single institution. Requests for authorization and funding travel up the hierarchical structure and are eventually evaluated by a state or system board on the basis of their fit with institutional missions, resources and costs, and external demands and political support for the program. Decisions often rest upon "boundaries" which provide institutional franchises for designated geographic or programmatic areas.

Developments in information technology and distance learning, however, challenge many of the assumptions and virtually all of the foundations upon which states and systems of higher education have built their coordinating and governance, program development, and financing policies. New consortia delivering programs at a distance and involving multiple partners which cross traditional role and mission boundaries, as well as state and national boundaries, will certainly challenge the criteria upon which program authorizations have been made in the past. State and system boards also will need to rethink their program development strategies.

Policy makers need assistance in evaluating and facilitating state and multi-campus system investments in technology, which are aimed at increasing both "learning productivity" and cost effectiveness.

In this paper, we first consider the impact of information technology on society and on the environment in which higher education operates. We then outline the key issues which we believe will affect the regulatory, organizational and financial policies governing higher education in the years ahead.


Society's higher education requirements are undergoing a fundamental transformation. A rapidly growing student population is becoming older and increasingly diverse. In addition, the new economy requires a workforce capable of handling an exploding knowledge base. Industries are looking to higher education institutions to provide the necessary education and training. There is financial pressure, too: colleges and universities must control and even reduce costs, as well as manage new competitive dynamics, while responding to growing demands. On their own, each of these factors is significant; collectively they challenge fundamental higher education strategies and practices as we approach the twenty-first century.

Emerging digital technology, especially the Internet, is ideally suited to meet the new learning needs by enabling a digital learning infrastructure. But such an infrastructure offers more than just education-as-usual on the Internet. It offers a set of extraordinary new tools: self-paced, multimedia modules that deliver leading pedagogy; in-depth outcome assessments; and online interaction with fellow students and teachers that facilitates continuous feedback and improvement.

What follows is a set of assumptions about the digital future which will affect the environment in which public policy is created.

Technology Penetration Impact on Society Networks and networked information lead to disintermediation, disaggregation, diffusion and differentiation. Impact on Higher Education:

The Wired Campus

Disaggregation unbundles the instructional process

The Net expands learning opportunities

The Net challenges regulation


Currently, individual colleges and universities bundle a number of functions, including standards setting, accreditation, content creation, and delivery and administration of instructional materials. In the new environment, these functions can be disintermediated, globalized, and carried out more efficiently by separate, specialized entities.

Interactive multimedia and other technologies will change how we think about providers and who we regard as providers. Learning resources that were once only available through educational institutions will appear in retail stores in the form of multimedia software and other computer-based courseware. Consumers will be able to purchase learning products independently and learn at their convenience. Historically underrepresented in the traditional model of education, consumers will collectively and directly spend millions of dollars each year on education. This buying power will have a tremendous impact on who controls learning.

Education will no longer take place within the silos of individual institutions (or even their virtual equivalents), but instead in a dynamic global marketplace of customers and suppliers. This shift will be driven by:

As a result, a student-centric, global learning infrastructure will extend far beyond the individual virtual university to include the new digital marketplace. With its emphasis on creativity and competition, it will enable a wide range of players-universities, media, publishers, content specialists, technology companies-to market, sell and deliver educational services online.

Managing the transition to this new learning environment will require bold leadership and public policies that find new ways to harness market forces and come to terms with emerging social, technological and financial issues. Institutions of higher education and other players must rigorously assess their roles and niche competencies, and form new partnerships in order to contribute and compete.

A New Vision: A Global Learning Infrastructure

We envisage a "global learning infrastructure"-a student-centric, virtual, global web of educational services-as the foundation for achieving society's learning goals. This contrasts with the bricks-and-mortar, campus-centric university of today; it even goes beyond the paradigm of the virtual university, which remains modeled on individual institutions. The digital global learning infrastructure will encompass a flourishing marketplace of educational services where millions of students interact with a vast array of individual and institutional educational suppliers. It will be delivered through the Internet, by way of broadband cable, XDSL telephony technologies, wireless technologies (both satellite and terrestrial), and other technologies. It is being developed in phases, but will ultimately cross all institutional, state and national borders.

The global learning infrastructure draws its capabilities from digital technology and the Internet. It could not have existed five years ago-but it will be pervasive five years from now. Undoubtedly, individual institutions will exploit these technologies to advance their programs. But without conscious, concerted effort, the results will be a continuation of today's inadequate, piecemeal solutions. The challenge-and extraordinary opportunity-is to develop the integrated digital learning infrastructure to meet the educational needs of the twenty-first century.

At the technology core of the global learning infrastructure are fully interoperable modules and an enabling infrastructure which will:


The digital global learning infrastructure allows anyone to be a student. Millions of new users, especially those from disadvantaged groups and in remote locations, enjoy an access that they could only dream of previously. Students use highly targeted search engines to find courses of interest or surf to see what is available. Consumer directories, credit ratings, and course previews and demos make it easy to make informed choices; recognized interfaces provide easy-to-use purchase and auditing options. Students register, apply for financial aid and receive counseling online. The virtual school is open around the clock and throughout the year, allowing students to work at their own pace and convenience. Many adult students log on in the very late hours, after discharging family or work responsibilities.


No matter where they live, students have access to the best resources from around the world. Students in small towns gain access to the world's leading content and pedagogy. Like the recordings of the country's most celebrated artists, those of the best will drive out those of the merely good. Online text, audio and video interactions provide a rich, diverse context and give students individualized support from instructors and teaching assistants. Teachers, credit granters and students disaggregate and combine modules to personalize learning packages. Gone are the days of "one size fits all" in course delivery. Modules are continually updated and improved since educational providers do not have to accumulate revisions and issue an expensive new book--with limited sales and revenues--every two years.


New quality measures are introduced. Traditional measures such as full-time faculty, number of books in the library, students in a class, amount of contact, or budget size are hardly relevant. Fortunately, the new digital infrastructure enables a wealth of customer data to be collected from student progress (base line assessments, exercises, tests), user on site behavior and feedback. These data variously are made available to students, instructors, accreditors and consumer agencies. Courses and programs organically but efficiently evolve, building on mountains of knowledge about users, and produced via highly templated authoring tools.

Online, interactive multimedia prove to have exceptional educational efficacy for subjects such humanities, politics and psychology, whether it be video clips from Stratford theater or up to date news clips, or mini-documentaries of family life. Online text, audio and video interactions provide a rich, diverse social context and give students individualized support from instructors and teaching assistants.

Though the system offers users considerable control, some subject areas are still highly structured. Parents' concerns as to how teenage freshmen can possibly be placed in full control of their educational experience are addressed by many institutions/degrees which require students to take highly structured, mandatory curricula, and provide stringent proof of competency to move ahead. New consumer reviews and advising services help students (and their parents) effectively participate within the expanded marketplace of opportunity.

The global learning infrastructure does not replace all traditional pedagogy, but rather supplements and transforms it, creating a new blend of face-to-face and electronic interaction. Instead of the death of traditional face-to-face pedagogies, the reverse happens. Just as television brought new focus to radio, digital education brings more attention to wisely using face-to-face contact among instructors and students. Seasoned workplace trainers contribute their experience to designing higher education programs that integrate electronic and face-to-face contact for adult learners.


Virtual publishing drives the costs of reproduction and distribution to almost zero, while admissions limitations-for cost reasons-nearly vanish. Authoring templates reduce the front-end costs for preparing instructional materials, and the ability to make small, continuous incremental changes encourages experimentation and innovation. Initially, major investments are made where payoff is high, e.g., for courses with high enrollment, standardized curriculum, a wide range of user types, demands for continuously updated material, effective measures of progress, and regionally distributed experts.

For instance, approximately, 50% of all community college and 35% of all baccalaureate enrollments are in one of twenty-five five basic courses, e.g., introductory English and mathematics, basic biology, chemistry etc. Today these courses are typically delivered through lecture presentations and weekly groups supported by a graduate student. Enrollment in these courses number in the millions. Revenues/cost savings of even two hundred dollars per student/per year provide a cost-effective basis for investments in the millions of dollars for each of these courses.

Market Responsiveness

In the global learning infrastructure, the customer is king. Courses are self-paced and adaptable to a wide range of learning styles. Data on student progress (base-line assessments, exercises, tests), onsite behavior and feedback is used to shape courses and programs. Providers easily modify their material in light of this data and competitors' offerings. Within hours, resources are updated; within weeks, a team of experts, artists, programmers and instructional designers develop and deliver substantial course material worldwide.

Driven by knowledge-hungry workplaces, and the potential for national and international markets, new standards are defined. Some of these standards are highly targeted, aimed at competing with or exceeding Harvard and MIT in specialized areas, while others are aimed at mass markets. Although government approval is desirable, it is not necessary. Imagine the compelling attraction of an Advanced Computing Specialization offered and co-branded by IBM, Microsoft, Harvard, and MIT.

A variety of academic and private agencies provide accreditation; similarly, instructional materials are diverse and are produced by a range of content creators. Some are modeled on standard pedagogical components (e.g., demonstrations, tutorials, exercises, tests), while others are more specialized (graphics, text, links, individual demos). Compared to traditional print-based textbooks, the new pedagogy is highly multidisciplinary, requiring attention to design, interactive instructional design, multimedia graphics, and programming.

Delivery providers bring together consumers and suppliers, integrating all aspects of the educational process-accreditation, standards, content, delivery. They include universities, specialized content providers, and publishing and technology companies. In response to low marginal costs of production and distribution and high economies of scale, providers rush to achieve a critical mass of users. A wide variety of pricing, branding and partnering strategies are deployed, to the benefit of the consumer.

New services that benefit users and providers are available. Consumer services help students evaluate educational offerings according to cost, quality, outcome, and satisfaction. Academic credit banks function as trusted intermediaries, enabling students to deposit credits from any source and-when certain requirements have been met-earn an accredited degree. Broker services help the myriad of suppliers exchange information and products and work together.


Today's Environment

Higher education is a highly regulated industry.

These arrangements tend to perpetuate the status quo.

Excessive Regulation Stifles Innovation

Technology Creates a Window of Opportunity for Regulatory Reform

Tomorrow's Environment

As Jim Mingle has noted, the dominant decision-making and allocation paradigm for American higher education is public policy. Whether through direct appropriations from states for public institutions, tax exemption and federal grants for private institutions, or need-based aid for proprietary organizations, public subsidies have long been the lifeblood of higher education. Any change in public support will have a dramatic impact on education's decision-making process and on the ability of many institutions to survive.

The increasing power of the consumer in addition to technology's ability to transcend space, time, and political boundaries is causing a shift in the decision-making process away from public policy and toward market-driven mechanisms. Content and mode of delivery are increasingly defined by external groups: students as well as employers. Communications technologies will contribute to both the increase in the number of providers and the choices for consumers, resulting in a more open higher education marketplace.

Geographic and political boundaries, once the foundation of American higher education, are increasingly less relevant. The power of traditional providers is weakening, thus creating greater opportunity for more customer-responsive institutions and providers to emerge. Policy makers are beginning to believe that good mechanisms to stimulate quality and responsiveness in education may be to increase competition and to redefine certification and regional accreditation.

This vision is compelling to many, both within and outside higher education. It is particularly attractive to those who believe the current system is ossified and unreformable; they view this trend as an important catalyst for change in higher education. Others view technology with alarm, fearing the corporatization of American higher education and the loss of professorial autonomy.

The concept of disaggregation is new to higher education which has long controlled the place, the content, the delivery, and the quality of education. By separating instruction from assessment, teaching from degree granting, content development from content delivery, and service from compliance, traditional roles are redefined and new ones emerge. In a disaggregated model of higher education, how is quality defined and who will determine it?

Challenges for the Future

The competitive environment brought about through global digital networks will transform both educational methods and institutional roles. How should national and regional public policy makers respond? Among the challenges they face are:

Government must help educational institutions, the private sector and the public understand the need for a new learning vision and the critical role that a digital learning infrastructure will play. Deregulating higher education will allow a wide range of providers to develop and deliver content and to set standards. At the same time, accountability to the public and to student consumers needs to be established.

As communications technology increases in its scope and effectiveness, we are knitting the U.S. economy ever more closely together. As these changes take place, state regulation of what is clearly national interest, increases the costs of doing business at every step and seldom return value to that which they regulate. Should local and state regulation be replaced by national and global frameworks in much the same way as we have de-regulated the railroads, airlines, electric power generation, securities exchange, telephonic communication, radio, television and banking? In each of these instances, technologically driven change in the social order created a national market that made state regulation anti-competitive, ineffective and often irrational.

Education is too important to exist without controls, without licensing, or without credentials. Government's role should be to hold providers accountable for educational results. Means are superfluous: it is results that count. However, defining how to measure and reward the effectiveness of education or to penalize its ineffectiveness will require debate. Another class of intermediaries that may develop in this environment will consist of those who provide information on how well the educational marketplace is functioning-information that is easily understood by prospective students. More than just collecting information, an authorizer's job would be to stimulate this marketplace to work effectively irrespective of who is the provider.

Critical to a successful digital infrastructure--and to truly unleashing market capabilities--is establishing agreed-to standards for telecommunications, file formats, security, and communication that enables high interoperability among instructional materials. Government can facilitate dialogue among colleges, educational publishers, software and telecommunications companies. An important focus should be on developing multimedia capabilities for home-based students. Traditionally, accreditation has ensured a measure of quality by controlling the providers of education. However, accreditation has also served as a barrier to fundamental change because accrediting standards have been input oriented--number of books, number of seats, number of Ph.D.'s and entrance scores of students--and have been created by those with a strong vested interest in preserving the existing system. In a disaggregated higher education environment, new quality-control mechanisms are required. Although the figures vary, some estimate the higher education market is worth between $165 billion and $250 billion a year. New providers are entering the market, and colleges and universities are working to make themselves more attractive to nontraditional students. The result is that shopping for classes, training, certification, or even degrees is becoming a much more complex and confusing task. As higher education moves toward disaggregation, there will be an emerging role for intermediaries who can help both students and providers create order out of potential educational chaos. Without them, trying to choose a suitable educational program from the thousands of options available will be nearly impossible. Institutions that function as intermediaries will assess the quality of programs as the Education Network of Maine did in deciding to import the University of South Carolina's degree in library and information sciences. Those same institutions may also broker those programs without incurring the costs of developing or owning them. Many regard this as an opportunity to expand the depth, breadth, and quality of programs without the concomitant resource commitment. At a time when many institutions-especially smaller, regional colleges-are facing severe budget shortages, this may be the opportunity to decouple revenue from program cost. The digital education revolution is likely to have significant social and even economic impacts, many of them difficult to predict. Government needs to explore such impacts, facilitate public debate and develop appropriate policy. Such issues include:


Educom's National Learning Infrastructure Initiative (NLII) seeks to create new collegiate learning environments that harness the power of information technology to improve the quality of teaching and learning, contain or reduce rising costs, and provide greater access to American higher education. Information technology can provide a cost effective tool to increase access by extending the intellectual resources of our campuses to students wherever they may be; to improve quality by offering greater flexibility in time, place, curriculum and by making the student a more active, independent participant in the learning process; and to reduce spiraling costs by substituting networks for capital facilities and by creating less teacher-dependent methods of teaching and learning.

For us, the central question is, how can we enlist information technology in addressing the three major problems facing higher education as we enter the twenty-first century--cost, access, and quality? How might state policy makers carry out their activities in order to promote rather than impede the adoption of new technologies (e.g., changes in regulatory policy)? What kinds of incentives will support these change strategies?

Many of the problems faced by policy makers cut to the core of a higher education system that until recently has catered to local and regional constituencies. State leaders, accustomed to geographic delineations, are concerned about the impact on higher education institutions that today's changing student demographics and the proliferation of distance-learning technologies may have. We believe that shortsighted efforts to protect an outdated system based primarily on geography may make it impossible for our institutions to compete in a networked marketplace.V Far-sighted state policy makers want traditional institutions to be able to adapt to and compete successfully in the new environment. There is, however, a gap between where institutions are today and where they need to be. Furthermore, it is not entirely clear that current institutions will be able to transform themselves. Public policy makers, therefore, should be wary of putting their entire emphasis on trying to change traditional institutions vs. other strategies that can stimulate a broader postsecondary educational marketplace.

How do we navigate that transition? How do we develop strategies for transitioning higher education institutions to the information age?

Bolt-on vs. Transformational Strategies

Outside the realms of administration and research, most applications of technology in higher education in the United States have been of the "bolt-on" variety--i.e., something bolted-on to assist the teacher in the classroom. In fact, most distance education in the United States has been of the bolt-on variety--e.g., using television to extend the conventional classroom to students at a distance. To this Sir John Daniels of the British Open University has observed, "Such an approach fits nicely with the traditional academic view that technology should be a useful addition to traditional teaching rather than a substitute for it. That, of course, is its fundamental weakness. First, it adds costs rather than reducing them." As economists are fond of noting, when labor costs are high (salaries represent something on the order of 80 percent of the operating budget of most conventional institutions of higher education), there can be value in substituting capital (in the form of technology) for labor. Adding capital in the form of technology without reducing labor costs or increasing throughput cannot be expected to do anything but raise costs.

Observing that low cost and product differentiation are the keys to competitive advantage, Sir John also has observed, "The tensions generated by pursuing cost leadership and differentiation will be most strongly felt by universities as they try to apply new technologies in support of these strategies." He feels that without some significant reengineering our more conventional institutions of higher education will simply adopt a "bolt-on" strategy in the application of technology and continue to fail to find either of the keys--low cost or differentiation. A cursory examination of the technology adoption policies of most educational institutions in the United States would suggest that he is correct.

Funding formulas which distribute dollars to institutions and students within a system provide powerful incentives to influence student, faculty, and institutional commitment to change. Higher education is a high-tech industry. A major asset of any high-tech business is its high-quality employees. The task in such industries is not to manage smart people but to manage the environment in which they work, to encourage them to work according to what we want and what society needs. But today's higher education allocation systems do not incent its workforce to do what society needs; they need a fundamental rethinking. How should we adjust our funding formulas and allocation systems to gain institutional and faculty commitment? How do we move states and multi-campus systems to a "redesigned delivery system" focused on learning productivity and cost-effectiveness?

A Significant Barrier to Change: FTE Funding Formulas

Can our institutions of higher education increase academic productivity in the context of today's funding paradigms? While governors, legislators and other public policy makers clearly expect us to be more productive, are they creating a strong disincentive by sticking to their traditional FTE (full time equivalent) student enrollment funding formulas? FTE funding is based on a "time on task" (or time in class) concept rather than a learning achievement or outcome model. The challenge before us it to invent new funding paradigms that create the necessary incentives. Those institutions who are able to reinvest savings achieved via new instructional methods, to move dollars back and forth from personnel to technology, to develop investment plans extending beyond an annual budget cycle, etc. are in a far better position to design more productive instructional programs than are those locked into a funding formula based on outmoded assumptions about teaching and learning.

Bolt-on Approaches: A Case Study

Increases in academic productivity are not stimulated by current funding models

FTE funding provides no incentives to improve academic quality

Higher education is comfortable living in an environment where a large of number of students who enter our doors do not leave with any token of achievement. We are satisfied, for example, with such things as:

Provider-driven funding formulas limit access

Standard measures of quality are based on inputs and drive up costs


What is needed are incentives which emphasize and reward outcomes regardless of how they are achieved. What would a new array of incentives that reward successful completion and cost-effectiveness look like? What are their characteristics? How would we make the transition from FTE funding formulas to a new method of public finance for higher education that achieves the outcomes we want?


State governments are taking various approaches to building statewide information infrastructures. Ranging from highly centralized to totally disaggregated, each approach has a unique set of coordination, governance, program development and financing structures that collectively might be called the state "investment strategy."

Recently, new ad hoc structures have emerged specifically to address the issues surrounding the development of telecommunications networks. Several states have created interagency structures, often called "telecommunications councils," to ensure broad planning representation from different sectors of government and industry. Some states have designated a statewide or multicampus system board as the primary decision entity, while others use the state department of education or an executive office of state government to facilitate telecommunications planning. Most states, however, use some combination of several entities to conduct planning for different uses of the information infrastructure. In some instances, states have little or no comprehensive planning for telecommunications, which often results in grassroots efforts by higher education institutions to build their own networks.

Planning in the Digital Economy

In the digital economy, product development cycles are seldom longer than 18 months and more frequently less. This presents a real dilemma for planning processes that require wide vetting, do not involve technologists who are at the leading edge of their field, and must wait for funding until after the processes are completed and debated. The conventional planning processes of governments simply don't work in the information age. The landscape is replete with planning fiascoes attributable to failing to understand the velocity (both the speed and trajectory) of technology such as:

State planning authorities have to ask themselves how they can construct planning processes that are consistent with today's technology cycles and where in the cycle can they add value.

Does this mean we should give up planning? Probably not, but we should at least follow the Hippocratic tradition of "first, do no harm." Most of our current planning processes, at least when focused on or dependent on technology, aren't likely to live up to that tradition. In the fast moving, competitive marketplace for learning environments, poor plans are considerably worse than no plan at all.

Macro Trends

There are several macro-trends that should help direct statewide investment strategies:

Video Networks vs. Computer Networks

We believe that long-term investment in computer networking for instructional programming has significant advantages over investments in the two predominant teaching and learning environments: the traditional on-campus classroom and the real-time televised class. While real-time televised distance learning is a viable and appropriate short-term solution to meeting instructional demand in an environment of significantly reduced resources, there are many reasons why investments in computer networks provide a forward-looking, cost effective strategy for the long term:

The Last Mile Issue

While campus infrastructure is important, it is both an easier and more obvious problem than community infrastructure. Without deployment of high bandwidth services in communities across the state, most of the potential of asynchronous learning will be missed. Investment strategies need to have some focus on the general upgrading of network access throughout the entire state in addition to individual campuses.

The "last mile" is the critical issue facing most of higher education today. The last mile is generally taken to refer to providing high bandwidth to the home. It is not yet clear what technology will emerge to resolve the high speed access problem in the last mile. Roll out of telco services has historically taken greater than a decade and typically been too little, too late, and generally too expensive. Much of the "smart" money today is placed on the unregulated sectors of the economy as the place from which last mile solutions are most likely to arise. A part of any statewide investment strategy should include research and development partnerships with commercial providers who are likely to develop and deploy technology solutions to the last mile problem. Such partnerships are probably best directed from campuses with significant research interests in telecommunications and a history of providing community-based services.

Programmatic Investments

Statewide investments in the non-technology aspects of a learning infrastructure present a set of difficult decisions, the first of which is placing a bet on where solutions are most likely to arise--in the private or the public sector. Given the general reluctance of the public sector to invest in infrastructure research and development (particularly the non-hardware aspects), it is probably appropriate to hedge this bet by placing some investment in university programs that address statewide needs and offer the potential to scale-up beyond the local classroom and some in the growing commercial marketplace of private software developers and publishers who are beginning to introduce products for high enrollment courses. Several state systems have made a start at the latter by creating partnerships with private courseware providers.

Can Higher Education Develop Technology-Mediated Content on Its Own?

Some public policy makers are encouraging universities to move into technology-based content development: creating, marketing and distributing courses and/or instructional software products. Two reasons lie behind this encouragement: 1) to develop needed instructional software to improve the quality of educational services, and 2) to generate additional revenue streams to supplement current funding. In order to carry out these ideas, institutions would need to raise the necessary capital (through state investment, venture capital, consortial activity, grants, etc.) to develop and market products, and they would need to acquire the necessary operational and knowledge competencies (high quality design expertise, software development expertise, marketing expertise, timely customer service structures, etc.). We believe that higher education institutions are unlikely to be successful in these ventures for the following reasons:

Product development is not mission-critical

Higher education lacks business expertise Attitudinal/cultural issues

Uncompetitive structures Needed: A Robust Commercial Market for College-level Learningware

Higher education needs the direct engagement of those whose business is the development, production, distribution, and marketing of educational products-specifically, the publishing and digital industries.

The proper design and distribution of public and private roles in the innovation process will be debated endlessly. What R&D specialists uniformly agree about, however, is that commercialization is the minimum measure of success. Inventions that cannot ultimately be produced, sold, bought, and adopted in practical use, without coercion, don't count as successful innovations. Within the broad context of innovation is the nitty-gritty process of inventing and introducing new technologies. This process includes basic research, transfer of the discoveries of basic research into the invention and development of new technologies, application of technologies to provide practical solutions to real problems, and the development of efficient production and marketing systems to make the new technologies affordable and accessible. Without the expectation of profit, private investors and entrepreneurs will not make the investments and take the risks that creating and marketing a new technology entails.

The One Percent Solution: Joint Procurement

Maricopa Community College District did an analysis of its undergraduate academic program to find out where students are concentrated. Maricopa, one of the nation's largest institutions of higher education with a student enrollment of 90,000, offers 2,000 distinct courses. Yet they discovered that 44 percent of the student enrollment at Maricopa is concentrated in just 25 courses. Put another way, 1 percent of Maricopa's courses generates nearly half of its total enrollment!

The 25 course titles include introductory studies in English, mathematics, psychology, sociology, economics, accounting, biology, and chemistry. Maricopa's numbers are typical of all community colleges (Dallas Community College and Miami Dade Community College have conducted similar studies: in each case, the percentage of enrollment in the One Percent courses exceeded 50 percent.) Ted Marchese of the American Association of Higher Education reports that the enrollment in One Percent courses in four-year institutions is about 35 percent.

Is there a case for some sort of joint procurement where 10 to 20 large universities or state systems put in $300,000 to $400,000 each? To illustrate the point, consider how many students take remedial math in a year? Pick an average credit hour cost, and you will quickly discover that it costs our institutions about $1 billion a year to do remedial math. By jointly procuring instructional software that significantly improves retention rates, the investment could be amortized in the first two or three months of use. There is no question about the pay-off to higher education; the challenge is to develop a way to collaborate to do these things and then to adopt them.

While it is unreasonable to expect a group of colleges and universities to reach consensus on a shrink-wrapped course, it might be possible to aggregate their demand and develop an RFP for a superset of disaggregated instructional modules. The federal government might also have an interest in being one of the participants in the procurement consortium since it currently spends a lot of money on education and training, particularly on the defense side.

Partnerships with the Private Sector

Another approach is to partner with the private sector. This is based on the assumption that both the publishing and higher education communities bring something of value to partnerships and that both stand to gain from them. The advantage of a collaborative model is that each party need not develop competencies brought by the other partner. In order to be successful, however, each party must be clear about what competencies it brings to the effort.

In the current model, the workflow is fairly discrete between higher education institutions and publishers. The publisher works with authors and a product development team, as well as with production and distribution partners, to provide instructional material. Higher education institutions work with instructors and other parts of the institution to attract learners and provide instruction. In a collaborative model, what would this workflow look like? A joint venture? Shared resources?

In addition, a reasonably well established set of criteria underlies each decision made in the current value chain. Publishers have knowledge of a history of market demand including information about curricular areas, geographically based-sales, best selling authors etc. Colleges and universities have made decisions about curricular offerings and degree programs based on information regarding employment trends, student markets, gaps in opportunities etc. What decision criteria make sense for a collaborative development model to yield sufficient return? e.g., Academic areas--business? human service professions? Areas with large demand and little interest from higher education such as remedial work? Areas leading to outside certification such as securities brokers? Areas with significant visual options? Areas with low geographical concentrations of students?

Finally, it is clearly advantageous for producers to have "group buyers." In a collaborative model, publishers' strengths in production are linked with potentially guaranteed use and certification of learning. Can universities guarantee institutional purchases if collaborative development is undertaken?

Differentiated Strategies

The dynamics of the digital economy favor those who carefully hedge their bets in proportion to their own weaknesses or market/technology ignorance. This suggests that technology investments should be distributed among several broad categories:

Not all states will find the same investment strategy to be appropriate. For instance, less populous states will likely have a much greater interest in wireless than do major metropolitan areas; states with a poorly educated populace will have a greater focus on commercial training opportunities; states with minimal competition in their telecommunications marketplace will be more interested in" build" rather than "buy" solutions. The situation might be likened to investing retirement funds and the choices between stocks, bonds, and annuities. The same strategy isn't appropriate for all individuals.

The central questions for state policy makers regarding investments in digital infrastructures are these:


Most states lack a clear mission for the development of a learning infrastructure. There seems to be a notable absence of those kinds of statements that indicate the intention to halve tuition and fee costs, increase access by 50 percent, and effect a general improvement in learning quality as witnessed by improved course completion rates, reduced average time to degree, higher first year retention, etc. Absent a defining mission and specific goals, most efforts seem to be mired in incrementalism and ad hockery. State planning efforts need to avoid simple extrapolations of the status quo and set some aggressive and quantifiable goals for the development of a learning infrastructure.

Our thesis is simple. In times of major upheaval, we must learn to interpolate rather than extrapolate. Extrapolation looks at the past and assumes, in the words of the systems theorist Jerry Weinberg, that the future will be like the past, because in the past, the future was like the past. In most situations confronted by our organizations, this is a reasonable approach. However, when a revolution is brewing, such a focus on the past can be very misleading.

A better approach is to create a scenario of what you believe the operating climate for your organization is likely to be in the future (say 10 years out) and attempt to set a course based upon interpolating between where you are now and that future scenario. Such an interpolation will suggest courses of action that look very different than those derived from extrapolation. Let's consider a few examples of this distinction.

Ten years from now, there will be over 25 million people registered for postsecondary learning experiences in the United States alone. The vast majority of them will not be pursuing a degree program; instead, they will be seeking to update their skills and knowledge base primarily in response to changes in the economy. The percentage of the population seeking the "undergraduate experience" will have decreased over the preceding decade, and the number of degree-granting, residential colleges will have stabilized at a number and size relatively consistent with the number of 18 - 22 year-olds. The non-traditional student will have become the norm and will represent the dog rather than the tail.

Extrapolation would suggest extending our campuses in time (like creating weekend colleges or life-long relationships with our alumni) and space (like building virtual catalogs out of existing degree programs and technology-mediated courses or establishing satellite student service centers.) Interpolation suggests that new services (like on-line examinations to assess various kinds of student learning and credit "banks" that serve as transcript centers for the accumulated--and disaggregated--learning experiences of non-traditional students) will emerge to serve the dominant student population. Interpolation will have us focused on those areas where we have competitive advantage, breaking down arbitrary geographical and political boundaries, retailing and/or wholesaling net-based learning modules in partnership with private industry.

Much of this change will be attributable to the nearly complete transition from an infrastructure based on analog technology to one rooted in silicon, based on the microprocessor, fiber optics and end-to-end digital networks. The ubiquity of networked information appliances coupled with broadband communications channels reaching nearly every home and business in the country will have made interaction with rich multi-media commonplace and ordinary.

Moore's Law--microprocessors will double in power and halve in costs every 18 months--will continue to hold through the next decade. The entry level information appliance of a decade from now will be 20 to 100 times more powerful than our current desktop personal computers, will cost about $500, and will connect to a network populated with hundreds of millions of other computational devices used daily by nearly a billion people around the world.

Extrapolation might suggest creating the virtual university by building on the successes of faculty-delivered, analog-TV-based, distance education supplemented by computer-based conferencing and email. Interpolation will convince us that network-delivered, computer-mediated, learning experiences will dominate postsecondary learning in the decades ahead. An interpolation view would have our institutions linking their on-campus digital infrastructure to the commercial Internet, creating new learning partnerships with strategic industry partners, and at least in the early stages, creating a market presence and market share in areas of natural competitive advantage.

Will most of the action in this domain come from new, private enterprises who will move aggressively to fill the void left as a consequence of higher education's choice not to, or inability to, redefine itself? Will higher education content itself with doing pretty much as it always has and restrict itself to the niche of residential instruction? Or will it seize the initiative and develop realizable long term goals for a learning infrastructure and use those goals as a basis for making investment decisions?

While interpolation runs some risk of overestimating the rate at which the future will arrive, it is a strategy that will bridge the chasm. Extrapolation will be a failed strategy because, in the words of an old Chinese proverb, it is impossible to cross a chasm with a thousand small steps. Tinkering at the margins is a strategy focusing on the past that is guaranteed to miss the sea change that is about to wash over higher education.


Section I. Introduction

The introductory material framing the issues draws on materials written by Jim Mingle for various NLII meetings.

Section II. Impact of the Information Technology Revolution on Society and Higher Education

Material is this section is from Carol A. Twigg and Diana G. Oblinger, The Virtual University, published by Educom in 1997; Carol A. Twigg, Academic Productivity: The Case for Instructional Software, published by Educom in 1996; Robert W. Tucker and John Sperling, "Time for Nationally Authorized Universities," published by Educom in the Fall/Winter 1997 issue of The NLII Viewpoint.; and Carol A. Twigg and Michael Miloff, "The Global Learning Infrastructure," a chapter in Don Tapscott's Blueprint for a Digital Economy to be published by McGraw-Hill at the end of 1997.

Section III. The New Learning Environment

Material is this section is from Twigg and Miloff, "The Global Learning Infrastructure."

Section IV. Implications for Public Policy

Material in "Today's Environment" is from Tucker and Sperling. Material in "Tomorrow's Environment" is from Twigg and Oblinger, The Virtual University. Material in "Challenges for the Future" is from The Virtual University and "The Global Learning Infrastructure."

Section V. Change Strategies: The Role of Incentives

The reference to Sir John Daniels is from his book, Mega-Universities and Knowledge Media: Technology Strategies for Higher Education published by Kogan Page Limited in 1996. The case study is taken from an article written by Bob Koob for the Fall 1996 NLII Viewpoint about the experiences of California Polytechnic University at Pomona. Other material is from Academic Productivity: The Case for Instructional Software, "Time for Nationally Authorized Universities," and Carol A. Twigg, Notes for the June 4 - 5, 1997 NLII-ITP Symposium on Creating and Delivering Collegiate Learning Materials in a Distributed (Networked) Learning Environment: A Business Model for University-Corporate Collaboration published by Educom on its WWW site (

Section VI. Investment Strategies

The introductory material framing the issues is from materials written by Jim Mingle for various NLII meetings. The material on "Video Networks vs. Computer Networks" is from an article by Lowell H. Roberts, The Network as Strategic Asset: The Path to Learning Productivity, published by Educom in the Fall 1996 issue of the NLII Viewpoint. Material on "Programmatic Investment" is drawn from Academic Productivity: The Case for Instructional Software and the Notes for the June 4 - 5, 1997 NLII-ITP Symposium.

Section VII. Conclusion: Interpolating the Future

Material is this section is from Robert C. Heterick, Jr. and Carol A. Twigg, "Interpolating the Future," published in Educom Review, Vol. 32, No. 1, January/February 1997, p. 60.
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