We have already seen the sub-1000 dollar computer. Then the sub-500. And now the sub-200.
We have seen sub-4000 dollar cars, thought impossible by Detroit. While they are not perfect by the glossy standards of American companies, these vehicles fit a critical demand. One can also reasonably expect the cars' manufacturers to become increasingly powerful on the world stage. Meanwhile the cost in emerging markets of so many other services, such as cell phones minutes, are tiny fractions of their US counterpart. Every year brings more breakings of price floors - the equivalent of beating the four minute mile - in market segment after market segment.
There is one race that may be under the radar of most, but has huge implications. That is the global race to the sub-1000 dollar MBA.
Why the 1K MBA?
The need for a low cost MBA is both obvious and less so. In the obvious camp, there are highly populous nations that need to put vast numbers of workers through MBA programs to become their emerging business leaders. These are people who would be fighting for the privilege of getting an 80 thousand dollar MBA if they were in the United States or Europe.
But there are less obvious markets as well. In all countries including the United States, in most corporations, there are entire swaths of employees, from directors to vice presidents and higher, who are without formal skills in everything from financial management to project management to leadership. This “winging-it” middle management – who often resemble MBA’s in everything but skills - represent tremendous penalties to shareholder value. The lowering of MBA’s costs will greatly increase their adoption by these employees who desperately need the skills.
New Design Principles
Creating the 1K MBA will require some significant re-engineering. New principles will have to frame the design.
Before we go any further, we can anticipate the predictable response from the existing MBA vendors, including institutions and professors. They will say that it is impossible to create equivalent value proposition at this new price point. They will say that attempts are even fundamentally dangerous, as they will necessarily create cheap imitations and degree inflation.
Given that, here are some of the necessary principles for the new MBA:
- The mission of the 1K MBA programs must remain the same as existing MBA’s. The quality has to be very high – in selective places better than current top rated programs, including Harvard, Insead, or Wharton.
- Collectively, the 1K MBA programs will have more than ten times the number of graduates than all of the current MBA programs combined. The emphasis will be on high volume, not elitism. (This puts greater pressure on the role of quality content and rigorous certification.)
- The human component of delivery has to be greatly minimized. Rather than offloading the marquee professor to the teaching assistant as is currently the practice, the programs will require the better capturing of deep content from the marquee professor in the technology itself wherever possible.
- The programs will leverage distance learning technology and methodology
- The programs will leverage simulation technology and methodology
- The programs will leverage social networking technology and methodology
Technology Part 1: Distance Learning
One of the three core technologies is around distance learning. This is necessary to eliminate the need for travel, room and board - all major current costs. This also increases starting and ending time flexibility. Finally, it allows some students to get MBA’s while also holding jobs and being productive in their family and community.
There has been much progress in the areas of distance learning over the past five to ten years. Early mistakes have been made, and best practices are now established.
Unfortunately, most distance universities currently have to make a significant choice between the following two insufficient models:
- Low cost/flat content. Some distance universities have flat content, but delivered at a relatively attractive price point. The universities, including many that define the distance learning marketplace, have seen the value of their master’s programs decline.
- High cost/rich content. Some distance universities, such as Full Sail University’s Masters of Educational Media Design & Technology, have rich programs with high student engagement and satisfaction, but not delivered at a significantly lower cost than face to face. This is in part because of the very involved role of the instructors.
The second of the three core technologies is social networking. This has currently been increasingly and successfully integrated into leading distance learning programs, including through using Facebook and YouTube, and through new tools integrated into course management systems such as Moodle.
The experience of working through challenging content with a set of peers over time must be maintained and even improved. "Classes" are critical, and maybe even better assembled than through chance today. Meanwhile, textbooks will be over time replaced by open-source online material.
Technology Part 3: Simulations and Serious Games
The third critical piece of technology is simulations and serious games (collectively called sims). It is not an overstatement to say that sims are necessary for any 1K MBA due to their combination of engagement, effectiveness and scalability.
This is because, unlike the talking-head videos and interactive workbooks of first generation eLearning, sims are super-media. They:
- Cover twice as much content in half as much time (4X improvement), due to their richness and interactivity.
- Develop knowledge that decays at one-fifth to one-tenth the rate of directive learning (5 to 10X improvement). Sims develop passion and commitment through kinesthetic experiences.
- Aggregated over time, cost one tenth (or less) per student per hour (10X improvement) for delivering content. This is because many sims, as many computer games today, are stand-alone, with instruction built in. Sims can therefore hugely reduce the amount of rote work done, allowing fewer professors to add greater value to more students.
From a capitalization perspective, the cost of creating a critical mass of sims is relevant but not insurmountable. From scratch, sims cost about 100K per finished hour. This will require investment up-front in sim based content that pays off over five to seven years, but usable over an infinitely broad marketplace.
Need for Lead Designers
The technology already exist. What is needed, and is currently in short supply, are lead designers – people who have actually created large numbers of proven sims, not the academics who currently speculate about them. This is an art and science. But the grammar of this new discipline is covered in
Current MBA Programs will be endangered
The propagation of the 1K MBA will challenge the existing models. It is conceivable that the United States will loose the bottom half of their MBA programs every five to ten years moving forward indefinitely and asymptotically. Harvard and Wharton are safe, but the overall market will shrink.
Impact and Conclusion
The 1k MBA will have multiple positive impacts. First, it will improve the standard of living of millions. It will increase the productivity of people, and at the same time curb inflation driven by higher people costs during booms. Further, it will provide a new role model for all education. It will soon impact other disciplines, and schools in general.
And the cascade effect brought about by successful low-cost, sim driven alternatives to traditional higher ed, while painful to schools in the short run, could have the long-term effect of bringing the postindustrial revolution to education.