Higher education in Indonesia: Go online or perish
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“The internet ruined everything!” said my Balinese Grab driver in Denpasar last week. I asked why. He elaborated that his tour-guide diploma program, which he completed in the mid-90s, was now obsolete. Foreign tourists no longer need local guides to visit local tourist sites. “It’s all on the internet!” he complained.
Thanks to the disruptive power of the Internet of Things (IoT), a few months ago Budi Djatmiko, the head of the Indonesian Private University Association, shared in a seminar that tourism diploma programs are rapidly facing extinction, along with journalism, travel agent, traditional retail and banking programs, whose industries are being decimated worldwide.
This week, United States investment bankers grumbled about a 30 percent cut to their annual bonuses, thanks to the arrival of algorithmic traders (algos) – automated machine learning programs that trade better, faster, at all applicable times, in multiple trading platforms simultaneously and do not go on maternity or paternity leaves, strike, ask for bonuses or pay raises.
“The objective of an algo is to minimize market impact by executing in an efficient and timely manner,” Chi Nzelu, head of macro eCommerce at JPMorgan, told Reuters in April 2019. These IoT change agents determine how best to execute a transaction, based on the results of billions of past trades, in 1 millionth of a second.
We’ve seen the same thing happened in retail; online e-commerce and travel sites have taken over sales from traditional high street retailers, resulting in rapid closures of supermarkets, travel agencies and popular retail chains. Traditional newspapers and magazines are merging, shutting down or even giving away their daily papers for free. Social media is becoming the preferred choice of 70 percent of American adults for their daily news. “Facebook is murdering local news,” stated the Philadelphia Inquirer in March 2019.
This disruption has also been quietly occurring in the higher education sector. In times of recession and downturns, whenever sectors experienced mass layoffs, unemployed workers used to flock to business schools and spend two years transforming themselves into high-value MBA holders. Currently, applications to traditional two-year MBA programs at most US business schools are experiencing a straight four-year decline. “Shorter, part-time and online courses that fit around work and family life are becoming more popular,” reported the Financial Times on Jan. 20.
To overcome the decline, some business schools have taken drastic measures, significantly cutting their expensive tuition fees. In 2016, Arizona State University reduced its 2-year, US$100,000, traditional, on-campus MBA fees to zero, costing an estimated $20 million annually. This more than doubled its applications to 1,159, but it was unsustainable. In 2019, the school stopped the offer and promoted a cheaper, fully flexible, $60,000, 100-percent-online MBA. A program called iMBA by the University of Illinois in partnership with Coursera is also fully online and costs $22,000.
A colleague recently asked me about the value of the traditional MBA. Having previously run four MBA programs, I recommended that he consider taking a master’s degree with significant components in artificial intelligence, data science and big data – the bread and butter of today’s IoT world.
In a recent trip to South Korea, I came across an article about Gachon University, a relatively unknown Korean university, launching Korea’s first department in artificial intelligence. Basic skills needed in the 4.0 IoT era, including robotics, natural language processes and basic computer coding, are part of the program. Starting in 2020, the university is requiring all its students to pass new mandatory courses in AI-big data and software education. They are also converting their traditional 16-week semesters of continuous lectures into 12 weeks of lectures, with the four remaining weeks employed for projects or work experience “utilizing the knowledge students gained in the lectures”.
Declining birth rates have led to significant declines in university applications and have forced many South Korean universities to out-innovate the disruptions caused by IoT in the higher education sector. Today, of the 200 or so traditional universities, 21 are cyber universities (fully online), 80 percent of which were set up in the early 2000s with average active student bodies ranging from 3,000 to 12,000.
Of the 4,800 universities in Indonesia today, how many are cyber universities? Only one: the Open University (UT).
The remarks of the Balinese Grab driver made me reflect on what is happening in Indonesia. I predict that it will just get more disruptive, as the race to go online is rapidly taking place.
In March 2019, seven Indonesian universities, led by UT and Bina Nusantara, were found to have fully functioning, fully online degree programs. The number jumped to 22 by November 2019. One can project the growth will only accelerate further in the coming years.
So, is the internet ruining your business or higher education institution? Better join the 4.0 bandwagon rather than perish (or is it 5.0 now?).