Are Universities now Digital Businesses?

The digital age has hit the higher education community quicker with the impact of Covid-19. All the innovations and developments that were due to aid teachers and professors had to speed their process up. Considering the rapid development and promotion of digital tools in higher education, have universities become digital businesses rather than institutions of learning?

‘Digital business is the process of applying digital technology to reinvent business models…(and) innovating products that create new value…’ There are different ways to define what a digital business is, but this is the main idea. Ultimately, a digital business takes technology to upgrade an institution or organisation, in order to improve the services offered and experiences of the consumers. With this in mind, let’s see whether higher education institutions have become digital businesses, exploring how and why they’ve done it.

Higher education as a business

The goal of universities has always been to educate students and award them for their efforts. Higher education gives students life experiences, such as moving into shared accommodation, which separates it from other means of education. However, a lot of the elements unique to universities involve financial distribution – accommodation, extra-curricular activities, social events and the degree itself are all usually paid for by the student. This has led to universities bringing in a lot of competitive revenue, which is frequently pitted against others for promotional reasons.

Recent research has shown multiple universities. The big data from UCAS allows us to see how much competitively sourced revenue has been in the full-time undergraduate system each year. We can clearly see that there has been an increase in applications and acceptances over the years, even when the impact of Covid-19 is considered. Students were thrown into a world of virtual lectures and studying remotely, experiencing university without the social aspects. Despite the negative impact this had on many student experiences, the rates of applications and acceptances did not drop as dramatically as many predicted.

Technology over pedagogy?

The pandemic was an opportunity for organisations to share their digital innovations. With people working and learning from home, companies such as Microsoft thrived with the influx of Microsoft Teams users. This is undoubtedly a great achievement and it makes sense for a corporate company to look for big data and competition – however, the same does not apply to education. Universities are supposed to prioritise learning and teaching above all else, yet statistics suggest they benefitted from the Covid-19 pandemic in a similar way to businesses, albeit on a lesser scale.

Universities are increasingly relying more on student tuition for revenue with the severe drop in student accommodation, due to international lockdowns. With the digital innovations for online sessions from Zoom, Teams, Skype, and more – students could study from home. The issue with this is students sacrifice the social aspects of the student experience, with the university only offering lectures, events and even graduation ceremonies online. Higher education institutions did well to provide students with the means to do all of this digitally, but charged those students the same tuition as those that had in-person learning experiences previously. Of course, universities couldn’t help but adapt to pandemic measures, but tuition fees has been a controversial topic. Students are typically on a budget, and since Covid-19, have been charged the same tuition fees as if they were not experiencing all of university from a laptop. Furthermore, with the escalating cost of tuition, this becomes even more of an issue.

When we look at higher education as a digital business, the core values of the institution change dramatically. The idea of universities prioritising technology over pedagogy suggests that competitive revenue comes before learning, which in itself is a controversial notion. Statistics show that competitive revenue increased significantly in UK universities from 2009-2019, including the revenue from international and postgraduate students. Tuition fees for postgraduates and students from overseas are always higher, making it the most competitive source of revenue among universities.

So, what’s the verdict?

The question we have to ask is this: do universities have a market mindset? No matter the statistics, in order for universities to be digital businesses they have to think and operate like a business. The escalating implementation of digital products, increased fees despite lessened quality of life with remote study, and ongoing competition between institutions to get international and postgraduate students all suggest they do. On the other hand, the fundamental goal of universities is to educate first and foremost, with the additional life experiences from shared accommodation, social events and graduation ceremonies. Despite the pandemic, universities did their best to provide events and graduations that followed government guidelines, but also tried to bring remote students together. This suggests that universities retain their pedagogical priorities, whilst behaving like digital businesses when it comes to revenue and growth. As the world progresses further into post-pandemic freedom, we have to see what higher education institutions do next.

Written for OEB Global 2022 by Chloë Sibley.