• Education models need to reflect the demand for lifelong learning to cope with the technological and social changes brought by the Fourth Industrial Revolution.
  • Skills not degrees may be the reality of the future.
  • Start-ups and new business models are disrupting traditional educational institutions and operating models.

In a future of unprecedented societal shifts, education is crucial to managing the challenges ahead. With more automated, digitized and fluid job markets, today’s higher education systems are quickly becoming incompatible with the future we are looking towards. We are two decades into the 21st century, yet higher education is generally still geared to succeeding in the 20th. Indeed, universities themselves (at least in the US) express doubts about their ability to adapt to future developments.

While most debates around the future of education focus on the skills needed for the future and the imperative of reskilling, it is equally important to discuss the inevitable structural transformations of higher education.

There are at least four – and arguably many more – major developments that in their interconnectedness structurally challenge the current higher education model.

1. Increasing need for life-long learning in a non-linear world

We need to continually learn and update our skills in order to stay relevant. Work in the digital economy will, not surprisingly, consist increasingly of knowledge work. More jobs will require substantial interaction with technology, shaped by technological disruption, labour automation and more flexible and fluid employment. The outdated industrial-age mindset where people received an education early in life to be ready for a lifetime of work no longer reflects the individualized and unexpected trajectories of modern careers.

The idea of life-long learning is nothing new. But in a world that has become much more non-linear, the conditions for lifelong learning have changed significantly since the concept was first introduced. The need for lifelong learning to enable individuals to access learning opportunities – in different ways, for different purposes and at various career stages – has never been greater. We need to build education models that reflect this change and a culture that promotes it.

What will the jobs market look like in 2022?
What will the jobs market look like in 2022?

2. Evolving needs and expectations of the “student-consumer”

Like any other business sector, the changing demands of consumers (in this case, students and life-long learners) drive change in the education sector. Student demographics are changing, while learners who would previously be considered ‘non-traditional’ are becoming the new norm. As a result, there are new expectations for seamless higher education and life-long learning experiences that fit different lifestyles, individual circumstances and preferences.

Younger generations entering higher education have a completely different point of departure than previous generations. As digital natives, they have always had technology fully integrated into most aspects of their lives, so why would they expect anything else when it comes to their educational experience?

One-size-fits-all in education will soon be a thing of the past and individual learning paths will arguably be less defined by traditional educational structures. Consequently, students increasingly adopt a consumer’s mindset and shop for flexible, seamless and personalized educational experiences. They look at an increasingly diverse array of education providers to fulfill their demands and will exercise choice by going elsewhere if their expectations are not met – as is the case in most aspects of their lives.

3. Emerging technologies and business models

Even though the pace of change in the education sector is generally slower than in other more profit-driven sectors, business model innovation is becoming ever more prevalent thanks to digital transformation. As such, the education landscape is bound to change significantly in the next decades as new actors shake up conventional higher education and life-long learning models.

Fast-growing innovators in educational technologies and education industry outsiders are already challenging the status quo by structurally undermining the long-established business models of higher education. These new actors use technology and data to introduce new, alternative approaches that better deliver on the evolving expectations of learners. Imagine tech giants such as Google, Microsoft, or Amazon offering inexpensive, personalized, AI-driven education, maybe on a flexible “Netflix for education” style scheme.

How the skills in demand will from 2015 to 2020
How the skills in demand will from 2015 to 2020

This will inevitably test the agility and adaptability of established players and their long-prevailing business models. In response, more and more universities are experimenting with changes to their business models, but the future higher education landscape will almost certainly include disruptive new entrants, competing and collaborating with the traditional actors – maybe with a redefined role for traditional institutions altogether.

4. Towards a “skills over degrees” model

While the degree still rules, by and large, we are slowly moving towards a reality with more focus on acquiring skills not degrees. Conventional thinking tells us that the surest route to success in professional life lies at the end of a higher education degree and, not surprisingly, that holding a degree correlates with improved chances of employment as well as higher income.

However, the value of degrees is being questioned more than ever before and not just in places where students face high tuition fees and life-long debt, but also in education systems where university is “free” (the opportunity cost of spending several years on study are worth the next 60 years in a career that will likely constantly change over time). Whether traditional higher education is still the best way to provide people with the skills needed to compete in unpredictable job markets is debatable.

For most companies, degrees continue to function as a signalling device that vouches for a potential employee’s abilities. But research shows that education level is only weakly correlated with job performance and, in fact, more and more companies, including prominent ones such as Google, Apple, Penguin Random House, Ernst & Young UK and IBM, are actively shifting focus away from degrees to new ways of measuring employability as a consequence of the changing nature of work.

What does this mean for higher education systems?

Higher education today finds itself in a society in flux and it is becoming increasingly difficult for “education incumbents” to keep up.

Almost everything developed for the 20th-century workforce is being dismantled and reconstructed; higher education is no exception. Universities must reevaluate their roles now and what they could grow to be in the future. We will have to acknowledge that the educational systems and pathways of the future will be better served by alternative, innovative models that do not necessarily add up to four or five years, and that likely involve new actors – however uncomfortable this first makes us feel.