Tag Archives: Clayton Christensen

A Capitalist’s Dilemma

In the last three recoveries, however, America’s economic engine has emitted sounds we’d never heard before. The 1990 recovery took 15 months, not the typical six, to reach the prerecession peaks of economic performance. After the 2001 recession, it took 39 months to get out of the valley. And now our machine has been grinding for 60 months, trying to hit its prerecession levels – and it’s not clear whether, when or how we’re going to get there. The economic machine is out of balance and losing its horsepower. But why?

The answer is that efficiency innovations are liberating capital, and in the United States this capital is being reinvested into still more efficiency innovations. In contrast, America is generating many fewer empowering innovations than in the past. We need to reset the balance between empowering and efficiency innovations.

Clayton Christensen — A Capitalist’s Dilemma

Colleges in crisis

The success of these online competitors and the crisis among many of higher education’s traditional institutions are far from unique. These are familiar steps in a process known as “disruptive innovation” that has occurred in many industries, from accounting and music to communications and computers. It is the process by which products and services that were once so expensive, complicated, inaccessible, and inconvenient that only a small fraction of people could access them, are transformed into simpler, more accessible and convenient forms that are also, ultimately, lower in cost. We are seeing it happen more rapidly than one could have imagined in higher education, as online learning has exploded: roughly 10 percent of students took at least one online course in 2003, 25 percent in 2008, and nearly 30 percent in the fall of 2009.

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Although this transition has begun, much of online learning’s promise for higher education is still on the horizon. For example, online learning has not yet led to lower prices from the perspective of many students—even though many of the online universities operate at lower costs than the traditional universities and enable students to fit coursework around existing jobs or other responsibilities. To date, moreover, significant portions of online learning have not taken advantage of this new medium to personalize instruction and create new, dynamic and individualized learning pathways within a course for students.

Clayton Christensen — Colleges in crisis. Emphasis mine.