Thomas Edison State College
Dennis W. Devery
Vice President for Planning and Research
The Changing Paradigm: Luxury to Necessity
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The Research
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Georgetown Center on Education and the Workforce
• ”Essentially, postsecondary education or training has become the threshold requirement for
access to middle-class status and earnings in good times and in bad. It is no longer the
preferred pathway to middle-class jobs it is, increasingly, the only pathway” (Carneval, Smith &
Strohl, 2010, p.13).
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Brookings Institute, Government Studies
• ”Big-ticket items once considered a luxury are now considered a requirement as well. Perhaps
the most important of these big-ticket necessities is a college education. Once seen as a luxury
for the children of the wealthy or the gifted, most middle-class parents now view it as a
necessary credential that will allow their children to succeed. College is no longer simply for
those who want to get ahead, but rather a requirement for simply getting by” (Jacobs, 2007, p.
9-10).
The Outliers (Didn’t need College, self–made men, Really?)
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Bill Gates
Steve Jobs
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The Changing Paradigm: Luxury to Necessity
The Agenda
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Product Life Cycles
• The Typical Pattern
• The Luxury to Necessity Pattern
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Three industries that have gone from Luxury to Necessity
• Telephone
• Automobile
• Higher Education
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Impact of Necessity on Higher Education
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Possible Higher Education Solutions
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The Changing Paradigm: Luxury to Necessity
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The Pattern
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Luxury to Nice to Have
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Innovation
Corporate/Government Support
Mass Consumer Acceptance
Decline in Sales
Decline in Price
Innovation
etc…..
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Examples
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Music- Records, 8Track, ,Cassett Tapes, CDs, IPODs, IPhone
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Movies – Theater, TV, BETA, VHS, DVD, Cable, Netflixs
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The Changing Paradigm: Luxury to Necessity
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The Pattern
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Luxury to Necessity
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Innovation
Corporate/Government Support
Mass Consumer Acceptance
• Societal Change
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Telephone
Cost/Access/Quality Issues
Corporate/Government Intervention
Organizational Change
Automobile
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Higher Education
The Changing Paradigm: Luxury to Necessity
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The History
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Telephone:
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Innovation: 1876 telephone invented, 1877 Bell Company formed
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Corporate/Government Support : 1913 AT&T agreed to become regulated monopoly to link Bell systems
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Mass Consumer Acceptance : 1900 5% have phones to 2000 99% have phones
• Societal Change: 1970 every home phone expected
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Cost/Access/Quality Issues: Monopoly restricted innovation and competition
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Corporate/Government Intervention: 1984 Court ends AT&T monopoly, Government expects Universal service
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Organizational Change: MCI, Electric companies, Cable companies, Consolidation and Industry Changes,
Cellular and Mobile exponential growth
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The Changing Paradigm: Luxury to Necessity
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The History
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Automobile:
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Innovation: Henry Ford Model T,
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Corporate/Government Support : Federal Highways Act 1921, 1938, 1944, Interstate and National Defense
Highways Act 1956
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Mass Public Acceptance : 1920 – 8 million, by 1930 - 23 million, by 2000 – 238 million
• Societal Change: Rail travel declines, Drive-In everything, Suburbs, (Pew Study ,2009) - 88% say Auto a
necessity
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Cost/Access/Quality Issues: Safety, Fuel Economy, Cost, Quality and lack of Competition
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Corporate/Government Intervention: Pollution Controls, MPG standards, Chrysler Bailout, Auto Industry Bailout
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Organizational Change: International competition, process changes, consolidation,
1900
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1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
The Changing Paradigm: Luxury to Necessity
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The History
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US Higher Education :
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Innovation: 1636 Harvard-Liberal Arts, 1811 USMA- Engineering, 1862 – Agriculture, Engineering, Military
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Corporate/Government Support : 1862 Morrill Land Grants
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Mass Public Acceptance : 1945-1955 GI Bill, 1960-1970 Civil Rights Federal Financial Aid, Higher Ed Act
• Societal Change: College Education required for success, College Education required to survive
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Cost/Access/Quality Issues: 1990 – 2000 Tuition Increases, For-Profit Colleges, State Subsidies Decrease
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Corporate/Government Intervention: Program Integrity Rules, Higher Education Reauthorization Act
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Organizational Change: ????
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The Changing Paradigm: Luxury to Necessity
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The Impact of Necessity on Higher Education
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Demand exceeds Supply and is less elastic
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Student Demographics Change
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The “New” Traditional Student
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Adult, Part-time, Working
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Diversity (Culture, Readiness)
Stakeholder Expectations Change
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Leads to some issues
Cost
Access
Production
Quality
Stakeholders attempt to redress issues
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Personal/Organizational Changes
Competitively
Legislatively
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The Changing Paradigm: Luxury to Necessity
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The Possible Fixes
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Status Quo
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Cost, Access and Outcomes
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Competing for Resources with the Baby Boom Generation
New Higher Education Models
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Option A (Individualization)
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Course, Program, Institution
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Option B (College with Traditional and Non-Traditional Schools)
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Internal Parallel College or School that use the Principles of Individualization
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Non-traditional provides financial support to overall College
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Option C (Status Quo and Outsource )
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College + Outsourced Vendor that assists with or provides courses
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Vendor takes a percentage of Tuition
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Option D (College Cooperative)
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College + Other Colleges work together
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Colleges share revenue from the cooperative
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The Changing Paradigm: Luxury to Necessity
References
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Slide #2
Carnevale, A. P., Smith, N., & Strohl, J. (2010). Help Wanted: Projections of jobs and education requirements through
2018. Retrieved from Georgetown University Center on Education and the Workforce website
http://cew.georgetown.edu.
Gladwell, M., (2008). Outliers; The story of success. Little, Brown and Company, New York, NY.
Jacobs, E. (2007). The Politics of Economic Insecurity, Issues in Governance Studies, No. 10, The Brookings Institute,
Washington DC
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Slide #4
Product Life Cycle Graph Figure 1 – Quick MBA.com retrieved from
Product Life Cycle Graph Figure 2 – retrieved from
Product Life Cycle Graph Figure 3 – retrieved from
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Slide #5 – Graphs - See slides 6,7,8 references
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Slide #6
Moore, S. & Simon, J. L. (1999). The Greatest Century That Ever Was 25 Miraculous Trends of the Past 100 Years,
Policy Analysis, No. 364, The CATO Institute, Washington DC
A short history of the telephone industry and regulation, California State University Dominguez Hills, retrieved from
http://bpastudio.csudh.edu/fac/lpress/471/hout/telecomHistory/
Modern Communications Graph - Moore, S. & Simon, J. L. (1999). The Greatest Century That Ever Was 25 Miraculous
Trends of the Past 100 Years, Policy Analysis, No. 364, The CATO Institute, Washington DC
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The Changing Paradigm: Luxury to Necessity
References
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Slide #7
The Age of the Automobile US. History.org, retrieved from http://www.ushistory.org/us/46a.asp
National Interstate and Defense Highways Act of 1956. (2003). U.S. News & World Report, L.P. retrieved from
http://www.usnews.com/usnews/documents/docpages/document_page88.htm
Taylor, P. & Morin, R. (2009). Luxury or Necessity; The public makes a U-turn. Pew Research Center. Retrieved from:
http://www.pewsocialtrends.org/files/2010/10/luxury-or-necessity-2009.pdf
Automobile Graph – Shoup, D., (2005). The High Cost of Free Parking. APA Planners Press,
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Slide #8
"No. HS-21. Education Summary—High School Graduates, and College Enrollment and Degrees: 1900 to 2001“. US
Census Bureau. Retrieved from http://www.census.gov/statab/hist/HS-21.pdf
Gumport, P. J., Iannozzi, M., Shaman, S. & Zemsky, R. (1997). The United States Country Report: Trends in
Higher Education from Massification to Post-Massification
US Higher Education Enrollments Graph - "No. HS-21. Education Summary—High School Graduates, and College
Enrollment and Degrees: 1900 to 2001“. US Census Bureau. Retrieved from
http://www.census.gov/statab/hist/HS-21.pdf
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The Changing Paradigm: Luxury to Necessity
Questions and Discussion?
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