At OIT’s Lunch ‘n Learn on October 25, Kevin Guthrie ‘84 discussed the new forces and organizations emerging from today’s rapidly evolving networked economy that pose new challenges for the academic enterprise and for our scholarly projects. He highlighted some of the major forces from the commercial information economy that are “colliding” with the prevailing approaches of the scholarly community. The collision of the world of networked digitized information, with its new methods of access and formats of communication, introduces challenging questions of scale, scope and control for the academy.
Guthrie is the president of Ithaka, a not-for-profit organization committed to helping accelerate the adoption of productive and efficient uses of information technology for the benefit of the worldwide higher education community. Ithaka is affiliated with JSTOR and ARTstor.
He began by noting that the academy is notable for its long-lived stable institutions and its enduring values and modes of operation. Costs have increased, but with little fundamental change in the basic mode of instruction. To their credit, institutions of higher education have nurtured independent knowledge creation and support important society objectives. They are, however, also notable for their lack of innovation, lack of accountability, and lack of progress in educational outcomes.
By contrast, the networked information economy has spawned entirely new, hugely impactful organizations, growing and innovating at an unprecedented pace. Hotmail had 12 million subscribers in 18 months. Google grew from two guys in a garage to $1 Billion (and now much more) in revenue in just 6 years. Other examples include Linux, Wikipedia, and YouTube. Entirely new industries (online auctions, online retailing, and social networking sites) are being created in a span of just a few years. Within this environment, there are also dramatic falls, and the fall can be as rapid as the rise. On the rise during the 1990s, AOL recently announced a radical shift in its business model to offer free email for those with broadband. They are forfeiting approximately $2 Billion in revenue hoping to make a leap to an advertising business model.
The period from inception to dominance (and sometimes to decline) is often incredibly short. Guthrie noted, for example, the rise of Blockbuster (with an enormous investment in store infrastructure), then Netflix (with a completely different infrastructure), and now Video-on-Demand. TiVo created a niche that may now be filled by DVRs.
The question, offered Guthrie, is whether the networked information economy has truly collided with the higher education “world” and the organizations that serve it? Are aspects of higher education at risk, not in decades, but potentially in a much shorter time horizon? Are the current pressures different from past changes… because these changes are fundamentally about the distribution and dissemination of information, the heart of the academic enterprise? For example, search capabilities that were long the purview of academic libraries are being rapidly supplanted by Google. Not long ago, observed Guthrie, higher education said that Google search results would never be of high enough quality for the academic market.
Guthrie described three forces in the broad networked information environment that may now or soon apply to the academic enterprise. The first, the network effect, is the phenomenon whereby a service (fax machines, e-mail, open source software) becomes more valuable as more people use it. Growth can be incredibly fast, often “viral,” and can occur with little or no centralized effort or control. Asked Guthrie: “Are there aspects of the academic enterprise that could take better advantage of the power of the network?”
The second force is two-sided markets, essentially markets in which two sets of customers need each other. Credit cards are a simple example. Merchants are unlikely to accept them unless many customers have them. Customers are unlikely to use them unless many merchants accept them. Such services are therefore difficult to establish. And so, asked Guthrie, what parts of academic endeavors are characterized by two-sided markets? Perhaps scholarly publishing?
Guthrie’s third force is the wisdom of crowds or, as James Surowiecki put it, “…under the right circumstances, groups are remarkably intelligent, and often smarter than the best people in them.” [“The Wisdom of Crowds”, James Surowiecki, Random House]. Examples include open source software development, Wikipedia, and Las Vegas Odds making. And so, Guthrie asked: “Are there ways to harness this phenomenon for higher education’s benefit?” Perhaps for peer review?
For the key players within academia, there are clear implications for life in this new world.
Libraries, predicts Guthrie, will have to reallocate resources to manage access and preservation of systemwide collections in addition to local ones. They will take advantage of economies of scale to reduce costs through sharing of services, often outsourcing activities that at one time were essential to their operation. We will see a transition from a world dominated by collections to one dominated by services. Staff will have to engage with constituents, for example, in a highly consultative fashion, providing services tuned to the particular needs of users.
Publishers, in turn, will feel the pressure to share basic infrastructure. “Publishers” that harness network effects and who are able to build self-sustaining communities where users and contributors convene and contribute to a virtuous circle will grow faster than all others. Nonetheless, Guthrie predicts that the existing model of publication will not change fundamentally until new methods for judging quality scholarship emerge.
Faculty will have to become ever more conversant with information technologies to continue to engage students effectively. New technologies will make the teaching process more efficient and faculty more productive. The locus of research is increasingly going to be the network rather than institutions. This will increase the trend of faculty affinity being with their colleagues and professional associations rather than their institutions.
Finally, predicts Guthrie, for the institutions of higher education, the current rate of increase in the cost is not sustainable indefinitely. But universities will continue to be insulated until there is disruptive competition. Today, they compete primarily only with each other. Is this likely to remain the case indefinitely?
Posted by Lorene Lavora