Will big brands disrupt higher education?

Daniel Pianko is co-founder and managing director of University Ventures, a fund focused on innovation from within higher education.

In the years to come, who will hospitality hiring managers trust to credential students: Cornell University or the Four Seasons? Will it be Google or Penn State that sets the standards that determine who qualifies as a good computer programmer? Could GE define competency in aeronautic engineering rather than Vaughn College? Should employers place more value in a fashion credential backed by the editors of Vogue or the Pratt Institute?

Institutions of higher education are, of course, not unfamiliar with branding. The brands of top-tier institutions shape not just consumer sentiment, but the market and regulatory landscapes that have governed their existence for decades. The single greatest determinant of U.S. News & World Report rankings is reliance on “reputation.” Eight of the top 20 U.S. News universities are Ivy League schools which are, on average, more than 250 years old.

Brands evolve slowly in any industry. Just ask Arizona State University’s Michael Crow or other leaders of a cadre of innovative colleges and universities that tout dramatic accomplishments, but fail to crack the spaces dominated for centuries by big brands like Harvard, Yale and Princeton.

But the role of brands in higher education may be changing. Mega brands from outside education are beginning to transform the way students and employers think about learning.

Owners of global consumer brands sense two broad shifts in higher education that make it ripe for “brand extensions.” First, traditional education is under assault. Employers are increasingly skeptical of the correlation between a college performance and workplace outcomes. Depending on how you count, coding schools may be graduating as many computer scientists as traditional universities.

Peter Thiel offers $100,000 to brilliant minds willing to drop out of college. Major companies like Google and IBM are looking beyond the degree to find employees with the skills and competencies they demand — regardless of whether they went to college. The New York Times partnered with Cambridge Information Group, which operates Sotheby’s Master’s degree-granting Institute of Art, on art business, contemporary art and fine and decorative arts and design. And startup MasterClass has made a splash by teaming up with celebrities like Wolfgang Puck, Serena Williams and Malcolm Gladwell to teach classes in their respective fields.

Will it be Google or Penn State that sets the standards that determine who qualifies as a good computer programmer?

The definition of education credential, too, is changing. As the shelf life of skills shrinks, the degree is fast losing relevance as the primary unit of measurement for post-secondary education. Our nation’s colleges and universities are, increasingly, using digital credentials to help their graduates show-what-they-know and enable employers to make sense of skills or accomplishments. Even the U.S. Department of Education is supporting “experimental sites” that decouple financial aid from the credit hour in favor of a focus on the underlying competencies that employers value most.

The economics of higher education also makes sense to big brands. Consider the potential for old-line media companies faced with falling revenues as digital distribution models take market share and compete for advertising dollars. Media brands desperately seeking product extensions understand that education is a big market, with over $500 billion of higher education spend in the U.S. alone. No-name private colleges charge $50,000 in tuition and fees. Name-brand colleges create massive profits, and emerging brands like General Assembly command premium fees to train students for the hybrid jobs of the future. Contrast the lifetime value of credential seekers with average revenues per customer selling ads and magazine subscriptions.

But the opportunity for brands is not just economic. Media companies bring other assets to the table, including more curated, and often times high-quality, content than virtually any university. Imagine working with Thomas Friedman, New York Times columnist and author of The World Is Flat, to create a course on the Middle East — or a product manager of Samsung on mobile computing.

This is not an either-or for universities. Parsons partnered with Teen Vogue Magazine to launch Certificate in Fashion Industry Essentials. Bellevue University teamed up with Chipotle to build a restaurant-oriented business degree program that maps to the Chipotle career path. And Queen Latifah — perhaps one of the best lessons in branding — is building with Strayer University an online course for aspiring entrepreneurs covering confidence and perseverance. Smart global brands and universities with stellar reputations will partner with each other to build up their respective competencies. Great universities will bring tradition and academic excellence — while the global brand has connections to employers and incredible content.

The formula is simple: Well-structured, branded programs will be superior to an unbranded degree. They will give elite institutions a run for their money. It’s only a matter of time before the U.S. News & World Report rankings are riddled with global brands.

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