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Beware efficiencies! Assetisation as the future defraying of costs savings in the present

by Kean Birch

This blog is based on a presentation to the 2021 SRHE Research Conference, as part of a Symposium on Universities and Unicorns: Building Digital Assets in the Higher Education Industry organised by the project’s principal investigator, Janja Komljenovic (Lancaster). The support of the Economic and Social Research Council (ESRC) is gratefully acknowledged. The project introduces new ways to think about and examine the digitalising of the higher education sector. It investigates new forms of value creation and suggests that value in the sector increasingly lies in the creation of digital assets.

What makes learning more efficient? And what makes teaching more effective? According to EdTech providers and their champions, it is the digital transformation of higher education. The consulting company Gartner – which releases regular EdTech industry reports – defines this transformation as a shift from a ‘collectively-defined’ quality model in which universities provide their services – theoretically – to anyone, to a model in which quality is personally defined and delivered at scale through MOOCs or other means. In fact, Gartner emphasize the importance of EdTech providing scalable technologies for ensuring ‘cost effective education for the benefit of society’. And this seems to be the concern of many EdTech firms themselves; they aim to provide technologies that make life and work more efficient and effective for higher education institutions, managers, faculty, students, and staff.

But what does this actually mean?

I am part of a project, led by Dr Janja Komljenovic, looking at how value is increasingly being created in the higher education sector through the transformation of ‘things’ into digital and other assets – it could be students’ data, it could be research, it could be lectures, and so on. Part of our concern about these changes is the way they can end up reconfiguring societal, public, or commonly held resources as private assets from which companies can exact an economic rent. An important reason for examining this assetisation process is to analyse exactly how things are turned into private assets as a way to open them up to public scrutiny, and political intervention, should we so desire. While assets are constituted by legal forms, like property rights, and technical changes, like digital rights management, they are also the result of broader narratives about how we should or should not understand the world. Epistemic justifications matter. The World Economic Forum highlights what I mean here. They support the deployment of education technology as a way to “create better systems and data flows”. And this means more efficient and effective learning and teaching. But, what does efficiency and effectiveness mean in the case of higher education?

As we have interviewed EdTech providers in our project, we have noticed how they emphasize ‘efficiency’ as one of the key contributions of their technology, where this seems to be equated with producing an outcome at lower cost, whereas this is understood – in common sense terms – as doing something ‘better’ than before. It is important to see how the concept of efficiency is enrolled in the transformation of higher education into a range of assets. Assetisation in higher education depends on the development and promotion of a set of analytics that can identify efficiencies, understood as cost savings that someone or some institution can benefit from. Key to this assetisation process is the characterisation of efficiency as a common-sense goal for universities, managers, faculty, students, staff, and governments; in fact, efficiency can appear to be the very thing that education technologies are turning into an asset. For example, making it cheaper for students to study by enabling them to rent their textbooks, rather than have to buy them. Or making it cheaper for universities to pay subscription only for those electronic texts – or even parts of those texts – that are actually read and used by their staff and students. But this raises an important question: how do EdTech companies make money, if they are simply reducing costs all around?

EdTech companies look to the future for their success. Assets are temporal entities, entailing the creation of a stream of future revenues that can be capitalised in the present, thereby enabling investors to put a value to them that does not depend on being profitable now, or even generate significant revenues now. Efficiencies in the present often end up as defrayed costs in the future as those cost savings today compound into increased revenues for someone (eg EdTech) in the future. The future revenue expectations of EdTech companies come from the illusion of efficiency as cost savings at this point in time; for example, students can save on textbooks now but will be induced to subscribe to lifelong learning resources, or their personal data might be exploited in the future in multiple ways, or their reading habits will be used to sell something to universities, or any manner of revenue generating schemes. Someone is paying in the future.

EdTech companies have to make money somehow, and how they make money is the interesting question. Ideas about the current and future state of higher education and EdTech matter as they provide imaginaries of what is possible and desirable, which we discuss in this report. Claims to efficiency are part of how they make money; they are part of the way that EdTech companies construct new asset classes out of universities and their students, faculty, and staff. Interrogating how these supposed efficiencies are monetised is critical for getting a grip on the implications of EdTech for higher education in the longer term. It is essential we analyse this dynamic now to allow for timely public scrutiny, democratic debate and social intervention.

Kean Birch is Associate Professor at York University, Canada. He is particularly interested in understanding technoscientific capitalism and draws on a range of perspectives from science & technology studies, economic geography, and economic sociology to study it. More specifically, his research focuses on the restructuring and transformation of the economy & financial knowledges, technoscience & technoscientific innovation, and the relationship between markets & natural environments. Currently, he is researching how different things (e.g. knowledge, personality, loyalty, etc.) are turned into ‘assets’ & how economic rents are then captured from those assets – basically, in processes of assetisation and rentiership.

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Digitalisation, Assetisation and the Future of Value in Higher Education

by Rob Cuthbert

Janja Komljenovic (Lancaster) led a seminar hosted by the SRHE South West Regional Network/International Centre for Higher Education Management at Bath University on Wednesday 19 February 2020.

The SRHE South West Regional network, convened by Rajani Naidoo (Bath) and Lisa Lucas (Bristol), never disappoints, and this seminar was the perfect antidote for a windy wet Wednesday in the West, with a brilliant presentation by Janja Komljenovic, co-Director of the Centre for Higher Education Research and Evaluation at Lancaster University.

The presenter declared her research interests in digitalisation and marketisation, and made a convincing case that these things should be seen as two aspects of the same HE phenomenon: digital infrastructure is “the hidden architecture of HE”, citing Ben Williamson (Edinburgh). An introductory tour d’horizon of educational technology in its manifold apps and applications in HE showed us the range of the possible, but this was no more than scene-setting, creating a platform for what was to come. Higher education has conceived of markets as if they were driving commodification and making the value of HE no more than something that can be measured in a price. Komljenovic wants us to achieve a radical reframing, in which commodities give way to assets, and price gives way to rent. Market-making in HE is, she argues, a process of assetisation, not commodification, drawing on a wide range of sources from many disciplines, not least Kean Birch’s ‘Towards a theory of rentiership’.

Assets differ from commodities in many respects, but in particular they change the way we should think about ownership, monetisation and value. Digital assets can indeed be owned, but are more likely to be licensed or rented out than to be purchased outright. Some have argued that digital data are the ‘hot’ 21st century product that occupies the place in the global economy which oil had in the last century. But the analogy is deeply flawed: monetisation of HE assets involves subscription not pricing, and the uses to which assets may be put are subject to contractual restrictions, quite unlike the buyer’s freedom to do as they please with a barrel of oil once purchased. And value is not backward-looking, bought and paid for, it must have a future orientation – higher education is not something that can be banked, its value lies in its potential to deliver in the future. Hence one direction for research is to explore the nature and value of emerging HE assets, who owns them, who can charge for their use, and on what terms.

Dynamic experimentation means that edtech may be oversold. Something touted as the new disruptive technology can prove to be overly ambitious when held up to the light, with the latest disappointments being MOOCs’ original claim of free access to high quality education and, it seems, the blockchain university. Digitalisation is different, and it indeed calls for new ways of understanding the higher education enterprise. The seminar challenged us to reconstruct our understanding of what a higher education market might mean in a digitalised world, to rethink what we understand by ‘value’, and to re-examine what we understand by ‘university’ – and whether the university itself is a sustainable platform for whatever HE may become in the 21st century. What a treat.

Rob Cuthbert is the editor of SRHE News and Blog.