Thursday, June 01, 2017
Tech and Costs
Josh Kim, following Jeff Selingo, asked yesterday why higher ed’s adoption of technology hasn’t cut costs. For present purposes, I’ll focus on cost of provision, rather than price. (Subsidies affect price but not cost; when the subsidies are frozen or cut, price goes up even if cost is flat.) And I’ll focus on the community college sector, where the “amenities arms race,” lazy rivers, climbing walls, “administrative bloat,” and the like are mostly irrelevant.
At a really basic level, on my own campus, 80 percent of the operating budget is labor. (And that’s with carrying a substantial, if not unusual, adjunct percentage.) When tech doesn’t replace labor, it leaves the major driver of cost in place. As long as the core enterprise of teaching remains substantially the same, tech will matter only on the margins.
The difference with, say, manufacturing is dramatic. Part of what has driven “onshoring” of manufacturing has been the much lighter burden of labor costs that new tech has enabled. If a new machine enables a worker to make twice as many widgets in an hour, and the demand for widgets doesn’t change, the company can reduce its production workforce by half. We don’t have that option.
In a typical business, the judgment about adopting technology is (supposed to be) based on expected return on investment. (Sometimes it comes down to the very human fascination with shiny new toys, but the basic argument stands.) A business will invest in tech if it thinks the tech will pay off. If it thinks it won’t pay off, it won’t invest.
That’s not how it works here. We have to upgrade technology to prepare students for the workplaces they’ll encounter. That means buying tech not because it saves us money, but because the world for which we’re preparing students is more tech-heavy than it used to be. If we continued to run our computer labs on Windows XP, our students would be in rough shape when they hit the real world.
The expense really shows in specialized fields. We just opened a new allied health building with some pretty incredible simulation tech for nursing. The gain to the program is in quality; students can make mistakes on simulators that we couldn’t ethically allow them to make on real people. The mistakes are the key learning moments. We have rooms that look like hospital rooms, complete with much of the expensive equipment you’d see in hospital rooms. Even when the equipment is funded by Perkins grants, of which I’m a fan, it still needs to be maintained. And it doesn’t cut costs at all. To the trained eye, we’re doing a better job of fulfilling our mission. To the untrained eye, it looks like we lack “discipline.”
The same is true in Graphic Design, or Photography. The fields still exist, but the tools of the trade have become more specific, high-tech, expensive, and short-lived. Drafting tables could last for decades, but software has to be upgraded every couple of years (as does the hardware to keep up with it). Old-school darkroom equipment could last a decade or more, but digital photo equipment is changing every year. For professionals in the field, that may pay for itself. For educators, it’s overhead.
Yes, sometimes we find some labor savings on the margins. But they don’t come anywhere close to the kind of savings that private businesses can realize, given our different purpose.
This may sound like special pleading, but it’s easy enough to verify. The factors I’m pointing out pervade the sector. Discipline varies from campus to campus and president to president. Are cost pressures sector-wide, or specific to certain campuses?
Given the right direction, there are cases in which tech can help cut cost. Open Educational Resources are a clear case, though there the savings accrue to the student rather than to the institution. Online teaching can cut transportation costs, though again, the savings there accrue to the student, rather than the institution. From an institutional perspective, given the mission, it’s difficult to realize significant, consistent savings with technology because of our mission.
Efficiency is great, but we’ve seen what happens when colleges are run like businesses. Until and unless the basic labor-intensity of the field changes, and as long as the fields for which we prepare students continue to get more technologically advanced, it will continue to be difficult to get real costs down. The issue isn’t “discipline,” but structure. The fix will have to be structural, too.