(upbeat music) – [Albert Wenger]: As Richard said, the
question that our section of the panel was supposed
to address is the question, are universities good value for the money? And also, what gaps, if any, are
there in higher ed and who will fill them? I want to convince you
that’s maybe the wrong set of questions to be asking right now. And it’s useful to get a little bit of historical perspective on this. So the sort of modern
university started to emerge about 1088 with the founding
of the University of Bologna, Oxford University I think was founded something like 1160 and change. And by the 18th Century, there were 100 plus universities around, and the modern model was
essentially fully formed. It was the combination of
research and of learning. It was the idea of degree programs. It was the idea of schools
organized into faculties, all of that, academic publishing. Everything that we think of
a modern university today was sort of in place back then. Now at that time if you
wanted to hear somebody speak, you had to be in the same
room at the same time, preferably up front or maybe
with good acoustics higher up. If you wanted to read
a book, you had to be in the library with the
one copy of the book. If you wanted to do any
of this, you had to travel to get there because you
had to be there in person. And travel was arduous
and took a long time. So it made sense that once
you had traveled there, you would spend a whole
bunch of time there. Essentially what happened is we had a certain production
function, a cost function, that really, really empowered bundling. And we wound up with
a hugely bundled model that takes a whole bunch of different things and
throws them together. Now the reason why the internet
is so incredibly disruptive in so many places is
because it’s unlike anything that’s come before it. So if you think about the
internet and its characteristics. It’s global, it’s
instantaneous, it’s free. Now by free, I mean free on the margin. You don’t really think about
the extra email you send or the extra picture you take. It’s connected, by which we
mean all the various graphs and systems that shoot
the information around on the internet very rapidly. And because we now all have
a smartphone in our pockets and many people all around
the world do, even in some of the poorest places, the
internet is always with us. Now if you think about any
technologies that came before it, they were inferior not
just across all five of those dimensions but
literally on every single one of those dimensions, whether
that’s the TV or the telephone. None of them came even close. And one of the big thrusts
of this new combination is to allow for the unbundling of previously-bundled businesses. So one of the biggest examples of that are of course newspapers. I still, for kicks, get The
New York Times in print form. And in the morning, a car goes by and somebody throws out the newspaper. And it’s a super-visual image of there’s not gonna be eight cars coming by, one bringing the business section, somebody else bringing the sports section, somebody else bringing the cultural news. That is just not cost effective. But on the internet, I
can go with one click from an article about sports
to an article about business that can be on a completely
different domain, produced and written by
somebody completely different. And so as a result, in content, we’re seeing a massive unbundling. And a lot of education
is that, is content. Now we heard some references
to there are other things, there are in-person
experiences, absolutely. There are research labs, absolutely. But all of these could be unbundled and some of that is happening. So for instance, Codecademy is an example of unbundling the learning of
a particular type of skill, and removing it from anything else. They’re not also trying to teach physics. They’re not also trying
to teach foreign language. They’re just doing one thing. But they can do it at
potentially global scale. We’re investors in Codecademy. We’re also investors in a
company called Science Exchange. What Science Exchange is doing,
it’s letting research labs make their capacity available
all around the world. So all of a sudden, that
research lab can say, well we have all these fancy machines and we know how to run these experiments. You have an experiment, we’ll
you can run it in our lab. So I think the real question here is, first, what will all these small units be that get unbundled? And that’s more than just a course. It could be tiny events. It could be a particularly
great simulation of a particular type of physical event or it could be a great
performance of a play. So I think we really need to think about what are these various units that go into into the university? And how do they get
provision in this new world? Because part of what we’ve
seen in other industries where this has happened is that
once the unbundling happens, often the unbundled elements are individually in a global market. And all of a sudden, all
the duplication that existed in the world previously,
where every newspaper had an international
newsroom, it evaporates. And so one of my
predictions, the question was predict something provocative is that once the unbundling
of the university really happens, the size of the systems is going to massively shrink. Because there’s a huge
amount of cross-subsidization that’s taking place today of
content that isn’t first rate, that’s second or third rate, of research that isn’t first rate,
that’s second or third rate. In fact, when you look
at the reproducibility of research these days, it’s pathetic. So I think the big question is what does the unbundling look like? And then once we figure out
what the unbundling looks like, then there’ll be new opportunities, new opportunities for re-aggregation. And that re-aggregation
will involve universities that have physical campuses. But it’s unlikely to necessarily involve four-year degree
programs and unlikely to involve many of the
things that we think of today as belonging to that bundle
that we call the university. (applause)