This is what a bubble looks like.
They’re generally not that hard to spot. I remember various prescient hand-wringing articles about the tech stock bubble and the housing price bubble. The problem is people don’t see the bubble all at the same time right up until the moment that it suddenly pops. At that moment we can genuinely claim to be surprised and not surprised at the same time.
Here’s another graph. This one is about college costs. You look at it and you say, “Man, that just can’t continue.” College costs are growing out of all proportion to income growth and cost-of-living increases.
It well and truly cannot continue growing at this pace, because like all exponential growth, it would eventually blot out the sun. Of course, going to college is a great thing. But sooner or later you just can’t pay for it. The rumblings of discontent are starting to show up in popular media. Here’s the anonymous Professor X writing for the Atlantic: An Anti-College Backlash?
Colleges are stuck in a textbook innovator’s dilemma in the sense that they are still making good money catering to a high-paying market. But because they won’t, or are structurally incapable of cutting prices, disruptive forces will eventually gut them from below. And those disruptive forces are almost certain to take the form of online education of one kind or another. That’s the theme of this piece from the Chronicle of Higher Education: Disrupting College. It in turn points to an analysis written by Mr. Innovator’s Dilemma himself, Clayton Christensen. And finally, here’s a short piece written about Scott McNealy’s investment in open source education. McNealy can always be counted on for a good sound bite: “Universities will be forced to decide what they are. You know, are they going to be football teams with libraries attached? That’s what a lot of them are now.”
It’s hard to say when, but change is on the way. All I know for certain is I would be nervous to be on a university’s payroll at this moment.