How Technology Will Change Higher Education with Michael Smith

Episode Summary

Executive Summary: Scott Walston interviews Michael Smith about The Abundant University, which argues higher education is financially and morally unsustainable because universities protect scarcity in seats, faculty, and credentials. Smith says technology and alternative credentials can widen access, improve talent discovery, and reduce reliance on elite degrees, though elite schools and research may remain viable.

Main Topics: Why universities are vulnerable to disruption (Priority: 5/5): Smith argues higher education, like media and entertainment, is being reshaped by technology because the traditional model depends on scarcity that digital tools can remove. The three sources of university power (Priority: 5/5): He identifies scarce classroom seats, scarce faculty access, and the credential’s labor-market value as the core levers universities use to maintain status and pricing power. Credentialism and employer behavior (Priority: 5/5): The discussion centers on employers increasingly de-emphasizing four-year degrees and using alternative signals such as portfolios, online work, and skills-based assessments. Social justice and unequal access (Priority: 5/5): Smith says admissions and degree filtering disproportionately benefit affluent students and elite institutions, making the system unjust and inefficient. Costs of disruption and the role of elite universities (Priority: 4/5): He concedes that residential experiences and some research funding could be lost, but argues elite universities will likely survive while lower-tier schools face greater risk. Examples of adaptive incumbents and online models (Priority: 4/5): Southern New Hampshire University, Arizona State, Georgia Tech, and platforms like Outlier and Khan Academy are presented as examples of institutions using technology to expand access and lower cost. Teaching, research, and rethinking faculty roles (Priority: 3/5): Smith critiques how universities reward research over teaching and suggests online, modular, and multi-instructor models could better match how students learn.

Key Arguments: Higher education is financially unsustainable and, in Smith’s view, morally unsustainable because it excludes many capable students. University power rests on controlling access to classroom seats, faculty expertise, and especially the credential that signals value to employers. Digital learning made seats and faculty more abundant, but did not yet weaken the credential’s market value; that is now beginning to change. Employers are increasingly building their own training pipelines and using alternate credentials, reducing dependence on elite degrees. Admissions and degree-based hiring often reproduce socioeconomic inequality rather than measure talent efficiently. A viable alternative path should let students prove skills without spending four years and accumulating large debt. Elite universities will likely remain strong because they offer network value and brand power, but many lower-tier institutions are more exposed. Technology can personalize education by matching content, pace, examples, and instructors to different learners. The university’s mission should be talent development for society, not merely preserving an elite labor-market filter. Research can remain important even if teaching and credentialing are reorganized, though its current cross-subsidy model may change.

Data Points: Podcast date: September 29, 2023 - Opening introduction to the episode Tuition increase on average: 40% - Smith notes average college tuition rose over the prior decade while discussing Southern New Hampshire University Southern New Hampshire University tuition: $10,000 per year - Example of a lower-cost online model maintained by President Paul LeBlanc Student access from top 1% families: 1 in 4 - Raj Chetty research cited on likelihood of attending a highly selective school Student access from bottom 20% families: 1 in 300 - Raj Chetty research cited on likelihood of attending a highly selective school Relative advantage for top 1% vs bottom 20%: 77x - Smith’s interpretation of the Chetty finding on access to elite schools Loan debt example: a quarter of a million dollars - Smith uses this as an estimate of what many students may avoid under alternative paths Mid-career master’s cost example: $100,000 - Smith cites this as a barrier for workers needing reskilling Employer example: Kaggle leaderboard: Brazilian engineer Roberto Titoris reached the top of the Kaggle leaderboard - Illustrates skill-based hiring beyond university branding High school class example: University of Pittsburgh credit from Outlier.org - Used to show how online courses can offer accredited alternatives

Pivotal Quotes: "what we're doing today in higher education is financially unsustainable. I'm going to argue it's morally unsustainable." — Michael Smith: Smith’s central thesis in the elevator pitch "the university is not a business, and therefore you can't use market logic to think about the university" — Scott Walston: Walston summarizes a major objection raised by referees and colleagues "I would love for us to create a system where people can signal their true skills without having to rely on the brand name of the university." — Michael Smith: Smith explains the goal of alternative credentials and labor-market signaling

Implications: The episode argues for a major shift toward skills-based, tech-enabled higher education. If employers keep de-emphasizing degrees, many students could access cheaper, more personalized paths, while elite schools persist and weaker institutions face pressure to adapt or disappear.