Insights Live: Remaking Higher Education for a Digital World
Welcome everybody. Welcome to the Abundant University remaking education for a digital worlds which is part of the Boston Digital Business leadership forum series. I'm Pete Howard, I'm executive director of the Digital Business Institute at the Boston University Questrom School of Business. And we're the sponsor of this event, along with the Questrom IT department. Digital Business Institute, a little background, serves as an incubator, accelerator, orchestrator for research, executive education and student experiential learning initiative.
The Questrom Business School partnership with our business community. So we're really thrilled to be hosting this event. But let me get this started and we'll introduce our distinguished panel. Michael Smith is DJ Eric Johnson professor of information technology and marketing at Carnegie Mellon's University's Heinz college. He's the Codirector of CM use the initiative for digital entertainment analytics. >> His research analyzes structure and competition in online markets.
He's also the Co author of the book streaming, sharing, stealing big data and the future of entertainment, which is MIT Press 2016. He his wife of two college age kids, and a high school junior. He's lived in Pittsburgh for 20 years. But the connection to Boston is very important. He loves the Boston Red Sox from the day his days at MIT.
Watch the highlights of the 2004 American League Championship Series whenever he needs a pickup. So welcome, Michael. Professor Abraham Avi McCollum segment is the Eric W Lord distinguished faculty scholar of information systems, and an associate Research Director for health analytics and digital health at our digital business Institute. He's a national expert in the areas of digital health and telemedicine and has been leading clinical and economic research in the area these areas for the past 20 years.
Professor segment is the author of over 100 research articles and has over 8000 research citations. Professor Seidmann is consulted and work together with America's foremost pharmaceutical companies and hospital systems. And earlier this year, he was invited to join the New York State Corona Task Force addressing the safe opening policies of the state. So thank you for your efforts there Professor Seidmann.
Prior to joining Boston University Professor Seidmann taught at the University of Rochester Tel Aviv University and green University the Technion and at Yale University. He lives in Newton mass with his wife, Calvin comb Robbie who is an MD. Besides his academic pursuits, he enjoys long distance running outdoors. For me vegan cooking for his children's families, and then many friends too sure. They appreciate that So welcome. Our format today will be a discussion between Professor Stedman and Smith.
And we'll have time at the end for Q&A. So please submit any questions in the Q&A box. With that said, let's get started Professor seven. Thank you, Peter, for your kind introduction.
And I would like to welcome everybody to our inaugural presentation. Our recently established Boston Digital Leadership Forum, which will be run by our information system faculty all together with our digital business institute of the questrom School of Business. The main objective of this form Is to bring together a selected group of old class scientific thought leaders who will outline to us the information system research and it's potential impact on the business models of the future. These thought provoking talks would be edited for web as well as for podcast listening.
We do it as a way to maximize the reach and the impact. Today, I'm really delighted and honored to host our first speaker, Professor Michael Dismayed from Carnegie Mellon University. Michael to begin with, I would like to ask you something as being our first guest opening this distinguished series. The summer you published an article in the Atlantic, which I enjoyed reading, and you compare the market disruption that just occurred in the entertainment industry, hollywood, television, cinema etc. To the market disruption, that you believe is about to occur for higher education. Are we going to go the same way as the long forgotten neighborhood cinema house, the CD or the VCR player? >> Good, great question Avian and let me first say it's It's a pleasure and honor to be here and have an opportunity to kick this off.
I'm really excited to talk about some of these issues. That the motivation for the Atlantic piece was my colleague Rahul and I wrote along and I had done a lot of research on the entertainment industry, and particularly on how technology was changing their business. >> And we regularly saw leaders in the entertainment industry dismiss the threat that new technologies pose to their to their business. So, if you look at the Atlantic piece, you'll see That we quote people saying, Netflix is is just a channel it's it's not a competitor, Amazon studios is in way over their heads. My very favorite is Chase Carey, who was then the chief operating officer of 21st Century Fox. At a Press Junket, was asked about whether he was worried about cord cutting.
And he said people will give up food and a roof over their heads, before they'll give up cable TV. And we all know how that worked out. But there was something that was blinding the executives in the entertainment industry to the change that was about to happen.
And I think one of the interesting quotes we brought into the book was a quote from a president of hundred 10 so a senior executive at one of the major studios came to talk to our class in 2015, about how technology was changing his business. And at at the question answer time Rahul, my colleague asked him Are you not worried about the threat that Amazon and Netflix and Google might pose to your business? And his response was what the same six studios have dominated my industry for the last hundred years. There's a reason for that, and that's not gonna change. And so part of our goal in writing the book was to try to explain why what he said was 100% historically accurate and, and in some ways historically reasonable, that if you'd faced a whole bunch of technological, logical shifts over 100 years and your power in the industry had never changed. Why would the internet be any different and and one of the argument we made in the book is part of the reason the studios were powerful is they controlled the scarce resources you needed to create content, and they control the scarce resources you needed to distribute content.
And all of a sudden the internet made those two scarce resources plentiful and allowed a whole new set of competitors to enter enter this business that they had controlled very tightly. So that was the logic. What I started to get concerned about is that I felt like we in higher education in 2020 look a lot like the entertainment industry did in 2015.
Technology's changing a lot of things, but we've created a whole bunch of and I hope I won't offend anybody here. A whole bunch of quaint stories about why our business isn't going to change, why our business isn't threatened in the way that so many other industries have been threatened by digital technology. And so what I got interested in was trying to understand, it feels like our business is under threat and yet so many people are saying that it's not under threat. What's the argument that it might be under threat? And I sort of came across the fact that I think we in higher education have our own set of scarce resources that universities control. One of those scarce resources, I'll argue, is we maintain a scarcity over access to instruction, right? If you wanna get trained by the best and brightest, you need to get admitted to the schools where the best and brightest are. The other thing we have is scarcity and access to what I'll call certification of job market preparedness.
That if you want to get hired by major firms, you've gotta pay me a lot of money to get a diploma, and only then will you be able to tell those firms how smart you are. And it sure feels to me like those two things are changing. And you could argue that MOOCs today, it's quite obvious that we have abundance in access to instruction in some form. What hasn't changed quite yet is the certification piece, but I'll argue that there are a lot of people out there trying to solve this problem. You look at Google and their public statements that, when we look at the people we hire at Google, what we've discovered is that where you graduated from college, what your grades were, even what your major was, isn't all that predictive of how well you do at Google relative to how well you do on our entrance exam.
Another really interesting story that I stumbled across was a guy in Brazil who worked for the Brazilian state oil company, and had graduated with a petroleum engineering degree from the 13th best Brazilian engineering college, who just so happened in his spare time to enjoy solving data analytics problems and was competing in the Kaggle Data Analytics Challenge. And had risen to the top of the Kaggle leaderboard worldwide, and all of a sudden was fielding job offers from Silicon Valley not because of his work experience, not because of his degree, but solely because they could see that he was pretty darn good at data analytics. And I started to wonder whether we in higher education should should start to think about that. So that was the argument I was making in in June 2012.
Does that make sense, Avi? >> It does make sense, definitely, yeah. And now you keep us in suspense. You kind of published the article in The Atlantic later on, and how was it received? >> This was really interesting. So the first thing I discovered is, when you write an article in The Atlantic, a lot of people reach out to you and that's fun.
And so I get to talk to a lot of people about the article, and there were two very different responses, right? One was, I talked to a lot of students, and parents, and and employers, quite frankly, who felt like the idea was spot on. And I felt a lot of frustration and almost anger from students and parents, that I have to pay this amount of money to get a degree and you're controlling my access to the job market. And also a lot of frustration from employers saying, we end up hiring your graduates and what we discover is they're not all that prepared for the work we want them to do. So the frustration from the market was interesting.
The other thing that was interesting though is the anger and frustration directed at me from a lot of my colleagues in academia, the argument that higher education might be facing the same disruption that other industries do is so clearly wrong. Because, well, the key value of a degree is the on campus experience, and the great in-person education, and online education is inherently interior. And what are you gonna do about about research? And the more of these stories I heard, the more I started to wonder whether we in higher education actually don't want to change. And I I'd love for any of the faculty in the audience to pick on me about that. But I started to wonder whether we're really comfortable with the way things are going. So a quote from Michael Roth that came out in July 2020, and I have no idea whether this was directed at me.
But the quote was, Michael Roth is president of Wesleyan University, and he said, business school professors and technologists declare that college as we know it is over. We've seen this movie before and college has survived it. And that to me sounds a lot like the quote the entertainment executive was making in 2015.
I don't see technology as a threat, the same six studios have dominated my industry for the last 100 years, there's a reason for that. Here's a college president saying that college as we know has survived it, let's stop listening to business school professors and technologists who tell us otherwise. That got me thinking,though, to all those questions. Particularly, these objections got me thinking about, how well are we serving our customers? So if you've read the Atlantic piece, I deign to call our students customers, which is another source of frustration among a lot of faculty. And should we be disappointed with the level of service we're providing to our customers? So I'm layering another angle on this argument, that I'll call, the first step to recovery is admitting you have a problem.
And I'm gonna argue that the more I look at this, the more I'm concerned that we in higher education have a pretty serious problem not just from technology, but from how well we're serving the market. So a quote from Richard Reeves in the Chronicle of Higher Education, December 2017. Higher education has become a powerful means for perpetuating class divisions. What does he mean by that? What he means by that is, there was a study by Raj Chetty and colleagues in January 2017 that looked at the division of people who get to go to top tier universities by family income.
And what they discovered is that if you look at what they refer to as elite universities, so they define elite universities as the top 80 most selective universities in the United States. So it's not the top 10, it's the top 80. What they found was that if you're born into a family in the top 1% of household income, you have a one in four chance of going to a highly selective university.
If you're born into a family in the bottom 20% of income, the bottom quintile You have a 1 half of 1% chance of going to a highly selective University. One over four of the top 1% of incomes go to highly selective universities. One out of 200 of the of the bottom quintile go to highly selective universities now, I'm an economist, I believe in the efficient allocation of scarce resources. So we can look at this and say that if we believe your ability to contribute to society and do a good job in the workforce. Is highly correlated with your parents income, then this is a great way of allocating the scarce resource of highly selective universities.
But if we don't believe there's a correlation and I don't, then this is a terrible way to allocate access to elite universities. Why do we care about elite universities we care about elite universities because the job market cares about elite universities. You can say, kids from the bottom quintile of income will be able to go someplace.
The problem is the job market doesn't value a highly selective degree the same way it values a degree from a community college. No disrespect to community colleges. >> Okay, can I start? >> Yeah, absolutely. >> I think you're out in the Atlantic magazine that universities in effect pride not on how many people they graduate but on how many people they rejected admission. Can you comment on that? >> Yeah. And in fact, I think this creates a bunch of really shockingly bad incentives for our business model.
So, Imagine a world where you say that, selectivity of a university is a key measure of its success. Imagine another business that would say hey, isn't it great of the hundred people who could have benefited from my service yesterday, I was only able to serve 10 of them. That's the world we live in. The part of the reason that this creates really bad incentives is that there's only two ways to increase the selectivity ratio.
Right, what is decreased the numerator, the other is increased the denominator. So I have a friend I know whose son was applying to college, and his son was getting almost weekly advertisements from the University of Chicago. To, here's what we'll waive the two will waive the application fee.
We really want you to come to Chicago we think you'd be great. And the father looked at the son's grades and test scores and compared them to the University of Chicago's averages and said, my son has no chance getting into Chicago. Why is Chicago recruiting him so heavily? And about a week later, he told me that the wall street Journal came out with an article titled, for Sale: SAT-Takers' names. Colleges buy Student Data to Boost exclusivity.
And they created a fairly compelling argument that elite schools including the University of Chicago. We're buying data from the College Board and targeting students who they knew were going to be admitted just so they can increase their selectivity ratio or decrease their selectivity ratio. That's not good friends. We shouldn't, happy about that, sort of an outcome. Did that answer your question have it? >> That's a spot on and that's that.
Can you compare in general the value chain of our higher education industry without industry does it tell us anything? >> Well, some of the concerns I heard back on the questions were that you can't really compare the value chain of higher education to the value chain of other industries where you were unique and special. And there's some truth to that and I would argue that If you stare at that for a second, we should actually expect more of ourselves than industries in terms of driving equity. So one of the quotes I came across was Jamestones of Adams from his book The Epic of America.
Defines the American dream as a dream of a social order in which each man and each woman shall be able to attain the fullest stature of which they're innately can capable. And we recognized by others for what they are regardless of the fortuitous circumstances of birth or position. Another famous quote by Horace Mann argues that higher education or education in general and I would argue specifically higher education is a key way of fulfilling that American dream. So his quote is Education then beyond all of the divides of human origin is the great equalizer of the conditions of men and, parents. Medically women, the balance wheel of the social machinery.
And if this education should be universal and complete, it would do more than all things else to obliterate fatuous distinctions in society. I honestly don't think we're doing a good job of making higher education universal and complete as it pertains to both the education and the credentials. Person 2: I have a question to you Michael. >> Yes.
>> From one of our participants say Chris Bravo Clay Christensen, our late good friend and Scott Galloway wrote about higher education disruption, and how is your perspective different than theirs? My perspective is different than theirs because number one, I would like for us to get back to our mission. I think we in higher education shouldn't be comfortable. In the same sense that a typical profit driven corporation is with, hey, the money keeps flowing in. I'm keeping close to my customer the business should be should be just fine.
I think we actually should proactively go out and disrupt our own market before we're disrupted. And the way I think we can do that is by getting back to our core mission. Can I talk a little bit more about before I get to that piece of got to talk a little bit more about the profit, like what I think is the problems with the profit motive that we have in higher education today, please. >> Yeah. So again, well known that we've seen a huge increase in tuition.
Well known that we've seen almost a tripling in student loan debt. Over the last 15 years what what I think is very interesting is there was an article published in the New York Times Magazine Titled What College Admission Offices Really Want. The subtitle was elite schools say their looking for academic excellence In diversity, but their thirst for tuition revenue means that wealth trumps all. And a bunch of really frightening quotes in that one in particular, a college admissions officer saying. Admissions for us is not a matter of turning down students we'd like to admit, it's a matter of admitting students who can pay who we'd like to turn down.
In talking about this with some colleagues, they said that they had overheard college presidents answer questions about why it was so expensive to go to their university. And I won't quote the president because these were public meetings but they, I don't have a chance to ask them for permission to quote them. These were over heard from a couple, university presidents and you would know the universities if I said them.
One president answered the question of why their school was so expensive by saying, never underestimate what parents would pay you to remove an 18 year old from their house. Which is kind of funny, until you realise that we're leaving out a lot of kids who can't pay that. The other one was a college president who said, because I can, and he actually used a little bit more flowery language than that, but he then followed that up by saying, hey, every time I raise tuition, we get the same number of applicants, clearly I'm not on the elastic point of the demand curve.
So, why shouldn't I keep raising tuition? And I mentioned this to my wife who has an MBA, so, understands economics every bit as well as anybody on this call, but also runs a nonprofit. And I was like, yeah, I now understand why college tuition prices go up. And says, you guys are a 501C3 Corporation, right? >> Like well.
>> Yeah, said so the government gave you tax exempt status so that you would serve the social good. If you want to behave like a profit maximizing firm, that's fine, but give back your 501C3 status. If you wanna keep your 501C3 status, then start behaving like you care about the social good. I don't know what we think of that in higher education.
But I think that should trouble us a lot. >> Do you see only investigate having the same or different elements in the spectrum of prestige research productivity, kind of segmenting the industry between Community College and the Ivy League and everywhere in between, do you see any different impacts of technology happening with them? >> To be honest, I see some really interesting things going on in the very elite, edX, what Harvard and MIT are doing with edX. I find absolutely thoughts >> In Boston University, yeah. >> What's that? >> And so is Boston University. >> In Boston University. Yeah but I think there are a lot of universities taking a lead on getting the information out there and creating a way for students to gain knowledge.
They're doing it an intentional way so that it doesn't cannibalize their core product. And I think that's fine. What I do think though is without the certification to go along with it, just making the education available, is incomplete. So, what good is it going to do a kid to get information and the knowledge if they can't then communicate their mastery over this subject to the marketplace. And I would love to see us in higher education gets serious about creating a new way for students to certify their knowledge that didn't involve $250,000 and four years of the students time. The other thing, quite frankly, I think is kind of frightening about college admissions and sort of getting back to the notion of rankings is our reliance on standardized test scores.
It's quite stunning to me how few, how much we rely on standardized test scores to sort applicants, and how little standardized tests actually play a role in your ability to succeed in the workforce. The other thing that's troubling to me is if you look at standardized test scores, what they consistently show is that Asian students and white students do much better than Hispanic students and Black students on standardized test scores. The SAT for example, which when I was growing up was the Scholastic Aptitude Test. Aptitude defined by Merriam Webster is a natural ability to do something. Again, if we believe that some races just have a natural scholastic aptitude that is better on average than other races than maybe the SAT is doing just fine. If we don't believe that's true, though, we should really question these numbers and again, we don't as a society believe that's true for good reason.
Now the SAT, I think under pressure in part for this rhetorical problem with their test in 94 changed the name of the Scholastic Aptitude Test to be the Scholastic Assessment Test. And then in 97 changed their name to be just a registered trademark acronym and in the public announcement of that change said the acronym doesn't stand for anything. The problem is we're still using it as if it is a test of a student's inherent aptitude. We've changed the name but our use of the test hasn't changed at all. That should be troubling to us. And quite honestly, if you go back to that New York Time magazine article that I mentioned earlier, one of the quotes from that article was, it's hard to feel good about choosing an academically undeserving rich kid over a striving and ambitious poor kid with better high school grades.
But if the rich student you're admitting has a higher SAT score than the poor student you're rejecting, you can tell yourself that your decision was based on quote unquote college readiness rather than ability to pay. Another quote from the executive director of FairTest says the colleges and universities have returned requiring the SAT results after the pandemic will be consciously choosing to rely on tools that they know will reinforce discrimination against most students from historically disenfranchised groups that continue to be denied equal opportunity education, that we can't be comfortable with them. Does that make sense Havy? >> [CROSSTALK]. >> If I send anyone yet? >> We`re not comfortable, the challenge you have and I spent some years in overseeing admission committees.
>> [LAUGH] >> On one hand you want to look somewhat subjective. So, you don't bind into pressure of VIPs calling you saying my son in-law is this and that and the like, okay. It's also some legal implication. Universities have much more than just education or dissemination of data. And on the social aspect, the issue on one hand, you want to equalize society on many dimensions to help with underrepresented segments of the population. On the other hand, there's another facet that you see rarely these days.
Students today study differently than the student ten to 15 years ago. The way they study, the knowledge is different. Everything we teach, more less is on Wikipedia. So what is our role as professors? And The other thing is they expect a lot more when we were students there were no yoga classes on campus and we're no vegan kitchen, today they expect like sushi for lunch, etc. And there's a lot more psychological help giving to students are more fragile because life is different. There's a lot more pressure the rate of change is increasing.
If you look at medicine, the knowledge doubles every 80 days. >> Yep, >> Less than three months. So what is exactly our role when the thing we teach gets outdated very quickly.
So what do you see in your research on those aspects? >> I think our role ought to be so let me jump to that. Right so this was the question you asked me earlier is what can universities do to respond to this threat? And I would go back to what I saw in the entertainment industry. So I think the entertainment industry when they saw technology, they rightly saw it as a threat to their business model. So they rightly said the more people can buy DVDs online, the less they're likely I'm sorry, the more more people can can get movies online, the less likely they are to buy my DVDs. The more entertainment that's available, the less likely people are to go to the theatres.
This is a threat to my business model. And that's where I think they entered this phase of telling themselves convenience stories that nothing was gonna change because they knew that their business model was under intense threat. At some point, I felt like the entertainment industry made this shift. I remember vividly one conversation with a creator at one of the studios, where he was saying that a show that he had been a big part of, that was made by his studio had been sold to Netflix. And he was saying that the season of the show that Netflix just made, was in every way superior to what his studio was doing. It was better storytelling, it was better cinema graphically and he was really quite shocked by the amount of quality that this new upstart was able to, put into their creative content.
And I really feel like the entertainment industry made this pivot from trying to protect their business model to acknowledging the technology was actually allowing new firms to do a better job of creating content and do a better job of getting that content in front of exactly the right customers. And when they looked at that they said that's our business model. Right? Our business models under threat but our mission is actually to create great content and get that content in front of an audience. And I think that pivot was what allowed companies like Disney and Warner Brothers to blow up their business structure and their business model to enter into streaming platforms like Disney Plus and HBO Max. >> If you look at the music industry, which I love, I always think about Rosen's famous paper, the economy of the superstars used to be that every small town had an orchestra because there were no FM radio if you wanted to really listen to good music ,the vinyl record that we're all kind of nostalgia from we're not of good quality and the needles will kind of break apart and you really go to live concert now you can get high quality even in your car while driving. So if there's a lot of what you wrote in the book streaming and stealing ,how do musicians make a living today and is any lessons we can learn for us as university ,are university going to go away? And if I'm university president, what should I be doing the next 10 years? And I ask it because now at Boston University, we're doing a 10 year strategic plan.
So what should we be able to survive? >> So, the answer to your first question is what musicians do today to to make a living is they they do live performances. So the music industry was able to very effectively pivot. From doing the live performance as a way to promote sales of the CD to giving away the music in many ways as a way to promote the live performance however, what I think the studios are doing.
Is something different where they're actually mediating the market in a different way by by creating this platform. I don't know whether Marshall Van Alsyne's on the line but you know more your colleague Marshall Van Alstyne, who studies two sided platforms. You can think of a lot of these new new platforms as two sided platforms.
I've got creators on one side, I've got consumers on the other. And the role of the platform is to make intelligent connections between those two, to use the data to make intelligent connections. Between the creators and in the consumers. I could imagine a world where universities are able to maintain their position in the market by doing a better job of making those connections. I would argue that the way we turnout students today does not do a good job of planning preparing them for the workforce. And the way we signal students skills to the workforce does not help employers judge a student's capabilities.
I wonder whether we should be changing that. The other response I'd have to your question is, I think we in colleges should get very serious about enabling lifelong learning. As opposed to saying all of your learning needs to occur between the age of 18 to 22. Or in your master's degree if you can come back on campus, which is much easier if you don't have a mortgage and don't have kids. Your statement that knowledge is moving so fast.
Should I think motivate us to get in the to change our business model to do a better job of serving our customers. And like I said, I think part of that is gonna be making information readily available and part of that is gonna be changing the way we credential our students. But go ahead Ali. >> We had the speaker here a while ago Inosina Naral we can walk in hype, the hype machine. And it makes me think that maybe part of the role of the academic community, is that the monasteries in the Middle Ages who are making copies of books by handwritten copying from each other ,we should be like the guardian of the truth in one way or another, that may be an important role. I have a nice question from Bruce Weber, who has been esteemed faculty and also Dean in the business school, University of Delaware.
And he notes that University is a bundle. You get connections from sororities, fraternities, club studies, you meet with this executive, you meet with domain expert ,leading faculty etc. And you get of course, vocational professional education but to also teach you how to think, how to develop critical thinking, how to express yourself and so on. So his question is because of all these disruptive technologies Can we expect somebody to come and just sell a piece of this bundle or to recombine it to a different bundle? What's your perspective on that? >> I think we're in danger in both ways. That I think a lot of the pieces of the bundle could be unbundled.
One of the interesting things that happened during the pandemic is a bunch of startups came up that said, hey, you're studying remotely. For x thousand dollars you can study remotely with a cohort of other people studying remotely in a great city across the United States. So we'll create a cohort of students who you can study remotely with in the Grand Tetons or in Rome or what have you. It sure seems to me like some of the social experiences could be relatively easily unbundled. It sure seems like some of the networking, quite frankly, could be relatively easily unbundled. I had a student in my office who wanted to be a product manager, and we don't have a particular specialization in product management.
And so she was scratching her head about how to certify to the market that she knows product management. She came in a month later having discovered something called Product School online, where product managers who work in the work world come in and give lectures on how to be a good project manager. And you take the school with a cohort of students who also want to be product managers. And then the people who teach the class, they work in product managers, share with you their network and help you get a job.
And she came back to my office a month later saying, yeah, actually Product School was much more helpful at getting me a job in product management. Then, for much less money than the amount of money that I spent on my master's degree. Could we imagine those sorts of networking opportunities come about? I sure think so. Is on-campus residential education the only way to create a network? Not in 2020. And everything I know about, by the way, Bruce, I love you. Everything I know about Bruce says he was setting me up for that answer.
So thank you for asking the question, Bruce. >> Okay. The other question is, would you like to go to see a physician who does not have an academic degree? >> Fascinating question. We need some credentialing, right? We absolutely need some credentialing. But healthcare is a very interesting world. You don't need a degree to be a nurse, for example.
You need to pass the boards. There are other ways to certify quality in a lot of other professional areas. Nursing is a classic one. The law is a classic one.
In California, and in several other states, to be a practicing lawyer you don't have to go to law school you just have to pass the bar. Could we imagine other ways of certifying someone's readiness for the work world? I sure think so. Now, you're probably right. I'm gonna pay attention to someone's credentials, but I have some great doctors that I work with.
I have no idea where they graduated from and I have no idea what their grades were. I do know they're board certified, but I really don't know much about their resume. >> But if you have to go to see somebody out of town, and I do a lot of research on telemedicine, you rely a lot more on paperwork, Yelp, whatever, to figure out who am I going to see and what's the downside? >> That's the one that I think actually highlights the threat that we face quite frankly. If you go back to Michael Spence's classic paper, Job Market Signaling. What he's saying is more or less that the economics of the diploma are very similar to the economics to the brand. It is a proxy for missing information about the product bundle.
And honestly, I was scratching my head one day going, well, how else are you going to certify quality in a student if not for the brand of the diploma. And later that day I was ordering something on the Internet, an expensive piece of hardware from a company I'd never heard of before, solely because they had a 4.9 star rating on Amazon. And it sort of hit me that, wow. And in a world with plentiful information, there are a whole bunch of new ways that you can signal quality that don't have to rely on the brands that we always use.
Could that happen in education? There sure are a lot of employers who are saying, we don't require a college degree anymore. What we wanna know is how well you do on our entrance tests. I think that ought to trouble us. >> Do you hear anything from the students where you teach at Carnegie Mellon University? Do they share any concerns about those things? >> I've been running this as a case for the past four years.
Will technology disrupt higher education in the same way that it's disrupted the other industries we studied this semester? And I've seen a non-trivial shift toward the notion of not only will you be disrupted, but you deserve to be disrupted. A decent amount of frustration from master's students about the state of play in higher education today. Like I say, I'm worried that we in the academy aren't listening to the stories out there of how satisfied our customers are. I'll give you a specific example. Before COVID started, I was talking to a group of faculty about this and the pushback on the notion of disruption was, again, this notion that no, no, no. In-person residential education is the key part of the college experience.
That's why people are paying for our degrees, and you can't replicate that online. What's interesting is that when we've kicked our students off campus for the last two semesters, we haven't given them any discount on tuition, right? If a key part of the value of the college education is the on-campus experience, then we ought to be giving students a discount when they can't experience that. By not giving them a discount, we're implicitly saying we actually don't think the on-campus experience is the key part of what you're paying for. What you're paying for is the degree.
I personally think the education we're giving to students online is actually as good, if not, in some cases better than what they got in the classrooms. So I'm not advocating that we necessarily owe our students a refund, I'm just saying that the argument that the on-campus is the only way to do it. Is inconsistent with our decision not to give tuition refunds.
We can't have it both ways. >> A lot of what you get is the value of the brand, and the value of the brand pretty much at least in the short run stays the same. >> That's X. >> Is a university X and you pay for for what we do most of our time, which is research and building reputation for the campus and things of that nature. >> I recall if that's true, right, and I agree with you, I think I think what we're selling is the brand, what we're selling is the reputation, the certification, the credential. If that's true, then that means any other way of certifying someone is a direct threat to our business model.
And there are a lot of other ways out there to certify someone as smart. >> We're a few minutes left, Michael. I recall the last few years you started doing research on the mission and vision statements of the university universe, can you share with us some of those perspectives? I think it would be very interesting.
>> Yeah, and let me give credit where credit's due. This is not my research. This is actually Kristin Yeager, who is the program officer for our research center and has become my key researcher on this topic. So I asked Kristen, if she would go out and look at the mission statements for the top 10 universities in US News and World Report.
And what she came back with was a list of mission statements where the average number of words in the mission statement was 87. And when you looked at the actual mission statement, it was almost completely impenetrable. You could read it and still not know what the university's mission actually was. And as an exercise to the class, I'll ask you to go look up your own university's mission statement, read it and see if you can figure out what the mission of your university is.
Then the next thing Kristin did was she went out and looked at the mission statements of the top 10 most valuable brands. And what she came back with were mission statements that average 30 words not 87. And we're very clear and crisp. So Google, our mission is to organize the world's information and make it universally accessible and useful. That's a very clear mission statement. And again, as business school professors, we know that mission statements are important because it gives guidance to the overall organization.
>> Next thing Kristin did was go out and pull the mission statements for the top 10 online educational platforms and when she came back with were mission statements that average 23 words. And again, we're very crisp and clear. So Khan Academy, our mission is to provide a free world class education for anyone, anywhere. That's a clear and actionable mission statement.
What's, what's the mission of the university? I'm still not sure. The last thing I was struck by is that Kristin went out and looked look broader than just the top 10 universities. And what she came back with was the only university mission statements that she found that mentioned the individual needs of students were Western Governors University, which has 120,000 online students and Southern New Hampshire University which has 140,000 online students. Both of those online universities say. Part of our mission is to serve the individual needs of our unique students that oughta trouble us.
Right that you know on one hand, we're saying you can't do a good job of personalizing education online. And on the other hand, the two largest online universities are saying that's a key part of our of our mission. I think we're underselling the possibility that that online education could use data to do a much better job of personalizing the experience than what are the either you or I or Bruce could do in a in a classroom environment. I think that's I think that's a weakness for us.
So, what should our mission statement be? The mission statement I articulated in the Atlantic piece was we strive to create opportunities for as many students as possible to develop and discover their unique talents and use those talents to make a difference in the world. That's a 30 word mission statement. And I think is actionable. And I sure would like for us to embrace that sort of a mission and to see whether technology might help us fulfill that sort of my mission. >> Any last minute question? His is a tour de force journey.
Kind of a bit scary, I must say but thought provoking, if any, no other questions, so let me thank you, Professor Smith for taking the time for presenting a call for action. Speaker 1 And now hopefully we are in business 20 years from now to steam. Thank you for your wake up call. So please give a big hand. And thank you very much for coming in the Speaker 2 Army. Thanks so much.
It's my pleasure. I really do a good job. We continue to do a great job of serving our students and use technology to the fullest in in pursuit of that goal. You are one of my role models and I follow your book. Is a new book coming, by the way? >> I'm playing around with it, yeah. I've got a proposal out there, so yeah.
>> [INAUDIBLE] the title? >> I'm not sure, I'm playing around. Are we still live? Yes. >> I'm playing around with with some different titles. I'm trying to stay away from the death of the university's genre, just because I really would like for I think this is an opportunity for universities to to succeed, to embrace our mission and do a better job of fulfilling that mission.
So I don't wanna write another death of the university piece. What I'd like to write is something optimistic. >> Yeah, my experience has been the institution which are known for profit, like churches, hospitals, universities tend to last centuries far, far longer than for profit organization. Remember I came from Rochester that the media destroyed Eastman Kodak almost within five, six years.
I saw it in Miami. It was unbelievable. Yeah. When I was first talking with it, or what are you talking about, I mean, 4 million pixels. It's something which is impossible to meet the amount of pixel we have in the 35 millimeter film. Now any cheap camera is like four or five, six times as many pixels and you just get it for free bundle in your telephone.
Okay? So it's amazing the speed at which the chat technology destroys industries, and not just there has been an innocent victim of it. Xerox is another business next door. That, its business was making marks on paper, as they call themself, printing, copying. >> Yeah. >> And, they are slowly evaporating for the same reason, people less and less want to get a cable TV or telephone bill coming on print, rather than by email.
And their business which is primarily printing bill for credit card, etc, utilities it's kind of evaporating as well. So I've seen it in Miami, and it's not an easy outcome and I take, [CROSSTALK] but they need to change. I agree. >> Yeah, like I said, I think and I think you're right that nonprofit institutions are able to hold on longer than for profit institutions. What I'm hoping to argue is that I don't think we should be comfortable with that.
I think we could hang on to our current business model as long as possible even though our students are holding $1.6 trillion in debt. And even though that we know that we're systematically denying kids access to elite universities solely because of the zip code they grew up in. My hope is we won't do that. My hope is we'll aggressively try to change our business to create more equity and also to create a better education environment. So like I say, I think we in higher education have a choice. We either do what you know, do what our incentives tell us to do and try to hang on to our institution the way it's always been, or we're aggressive about trying to change it.
I hope we choose the aggressive route. >> I think though no way to survive. It's my personal opinion.
Now we have to lead the change and the rate of change is increasing. Pete, you want to say any final word please? >> Just thank you very much. Fantastic, interesting talk, and thank you both for a great session and thanks to our audience for listening. With that, I think we'll close it out and stay tuned for our next session. You'll be getting invites for that coming up next month. And have a great day.
>> Thank you so much. Bye-bye.