Studies from the mid-1990s showed that, twenty years after the introduction of the personal computer, they didn't substantially improve personal productivity. Indeed, annual productivity growth in the US averaged around 1.2-1.5% between the mid-70s and the mid-90s. Economists at the time had several explanations: Perhaps the benefits were mostly in quality of life improvements rather than personal productivity. Maybe inflation had hidden the benefits. Increased government regulation was consuming resources. Or perhaps productivity gains were lost to solitaire and spam (even before Farmville and World of Warcraft).
|Source: Bureau of Labor Statistics|
While these may be factors, two important theories were confirmed when the productivity gains finally arrived in the late 1990s and the 2000s.
First is the Network Effect, the idea that the value of a good or service is increased by the number of others that are using it. The classic example is the telephone. It's not terribly useful to have the only telephone in the world but the value of your telephone increases with each other telephone that someone buys. Network effects related to the internet really started to take off in the late 90s. These included email, the world-wide-web, e-commerce and much more. Obsession with the network effect contributed to the Dot-Com Bubble but the productivity value of the effect continued even after the crash.
Second and related is Organizational Change. If you introduce new technology to an organization but practice continues as usual, there's increased cost (for the technology) with limited benefit. The structure of an organization must change in order to take advantage of new technologies. In other words, the way goods are produced or services are delivered has to be redesigned with the new technology in mind.
Organizational change is hard. An entire discipline of Change Management has been developed around it. As a result, technology is frequently deployed in hopes that organizational change will spontaneously follow. Technologists like myself are often guilty of taking this approach. But external pressure is is usually the real catalyst for change. In the case of business productivity, that pressure came in the form of economic recessions.
The recessions of 1990-1991, 2001 and 2007-2009 have all ended in so-called Jobless Recoveries. In each case, while GDP rose -- indicating an end to the depression -- employment remained low. Many economists believe that jobless recoveries occurred because the organizational changes were finally made that took advantage of available technology. Erik Brynjolfsson, an MIT economist, says, "It's as if the economy had a pent-up potential for labor savings that hadn't been harvested until the recession." If you look at the chart above, you'll see a correlation between productivity growth and the end of recent recessions.
Returning to education: Teaching and learning are today where industry was in the early 1990s. We've had computers in classrooms for decades. Learning Management Systems are installed at nearly every college and university in the US and in many high schools. Yet, educational achievement remains flat.
As with other industries, educational institutions will have to take advantage of network effects and make organizational changes before the potential of education technology can be realized. Unlike most industries where productivity is measured by the dollar value of goods and services delivered divided labor invested, I believe educational productivity should be measured by student achievement divided by the dollars invested in their education. So far, we have a few examples of institutions achieving superior results by this measure. Each operates very differently from traditional education. They include:
- Western Governor's University
- Rocketship Education
- Rio Salado College
- School of One / New Classrooms
- Carpe Diem Schools
A number of other examples are coming online and we're excited to see the results. I'll report on them here.
(As with most of my posts, I link to a lot of background information here. If you're interested in this topic or seek evidence to support these claims, I encourage you to follow the links.)