Disequilibrium in education

Published July 10, 2020
The writer is a senior research fellow at the Institute of Development and Economic Alternatives, and an associate professor of economics at Lums.
The writer is a senior research fellow at the Institute of Development and Economic Alternatives, and an associate professor of economics at Lums.

ONE post-pandemic prediction is that irrespective of when the Covid-19 threat goes away, online education, especially at the undergraduate level, is here to stay. For many, the trend towards online education predates the virus; Covid-19 has just pushed us harder and faster in the direction of exploring online potentialities for education.

What are the implications for how universities and the higher education sector are organised? Is there a potential for globalisation to work here too? Can a top university, like Harvard, MIT or Oxford, offer its degrees to students across the world, and in much larger numbers? How will this impact lower-ranked universities and/or universities in developing countries?

Some argue that the potential of online education is being overstated. Online education had been around for a decade and a half before Covid-19. And it made scant inroads in the market for higher education. Right now, universities have no option but to go online due to the pandemic. As soon as universities can open up, people will go back to their preference for in-person education.

Technology for communication is evolving very quickly. Even four months ago, few people knew of Zoom or Microsoft Teams. When people wanted online meetings, it was usually on Skype. The pandemic changed that almost immediately. And now technology companies are scrambling to bring newer innovations in existing platforms and/or creating new ones to facilitate even better online communication. Zoom has added a significant number of new features for security as well as ease of communication over a short period of time. Comparing the possibilities of online learning now with what was available a few years ago might be very misleading.

Can universities in Pakistan create value that global players cannot?

Perhaps, equally or more importantly, the experience of the last few months has shaken people out of their inertia and entrenched ways of doing things. It has weakened some of the shackles of habit and removed some of the blinkers on our sight and imagination. A lot of people are realising that, in many instances, communication that seemed to necessitate physical presence can be done almost as well through virtual interaction. For example, many professional conferences have shifted to virtual spaces and are finding that the savings on time and money makes virtual conferences quite an appealing and competitive alternative. Similarly, for many people, remote work is quite possible, and might work even in times when there are no problems with having physical meetings.

Working from home saves substantially on time and money spent commuting. What benefits and opportunities are there in online education? We might be at the start of the innovation cycle in this area so it might be hard to predict but, clearly, even looking at what is currently available, online education is going to become a stronger and more competitive alternative.

Ronald Coase, a pioneer in law and economics, had long ago asked the question about the nature and boundary of the firm. He had asked, given economies of scale, why did we not just have a few or one large firm instead of so many firms. Researchers spent a long time answering the question about the boundary of a firm and factors like technology, transaction costs, economies and diseconomies featured prominently in the answers. It might be time to ask the same question for universities too. If technology allows us to deliver reasonable quality education online, do we need 200 universities in Pakistan? Or should we have a fewer larger ones? Will the higher quality ones expand their reach into smaller cities and even rural areas? What are the pricing models that will back up these expansions?

If a student has a choice between an online education from a well-recognised university and an in-person education from a not-as-well-recognised local university, which one would the student choose? What fee differential would tilt the individual’s choice from one to the other? Imagine if the best engineering school in Pakistan was currently charging a million rupees per year in tuition fees and a local university was charging Rs300,000. If the best school offered an online degree, how much lower would it have to be priced in order to attract students from the local university? If the best school were able to reach that price, can the local university survive by cutting prices and enhancing quality, or would it have to close its doors? These are the type of issues that will come up, locally and globally, in higher education over the next few years.

If undergraduate economics is all theory and empirical techniques that apply globally, why would you not take the degree from MIT and why would you choose to go to a Pakistani university? Can MIT make a competitive pricing model? Can the Pakistani school create value through local content and through processes of teaching that the global player cannot? Answers to such questions will determine the shape of the higher education landscape in the years to come.

Multinationals have driven local businesses to extinction in many areas, but in the provision of many goods and services — especially services, where customisation, localisation and/or contextualisation are important — local businesses have been able to effectively create competition.

Is undergraduate education a standardised product and/or service? If it is, the bigger players will, with the help of new technologies and innovations, be able to provide it to all and drive out local and smaller players. But if it is not, the impact of online education might not be strong enough to change higher education landscape much. Smaller players would be able to compete effectively by making their services more customised.

There is already talk in many universities of how their teaching, even online, is going to be more individualised than more standard offerings. Already, there is also talk of local content in many disciplines and sub-disciplines. Whatever the new equilibrium, there will be significant turmoil for universities across the world for the next few years.

The writer is a senior research fellow at the Institute of Development and Economic Alternatives, and an associate professor of economics at Lums.

Published in Dawn, July 10th, 2020

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