Selective Universities Won’t Be Disrupted

Just over a decade ago, Clayton Christensen and I predicted that serious challenges were coming to higher education. Thanks to a confluence of factors—unsustainable business models and cost structures, demographics, and new, low-cost college options or alternatives powered in part by online learning—roughly 25% of colleges would close or merge in the couple decades ahead.

Since then, many have suggested that we were wrong because there hasn’t been a cataclysmic cliff yet. Never mind that the real demographic “cliff” with fewer 18-year-olds—particularly in the northeast and Midwest—doesn’t begin until 2026. And never mind that there may never be a rapid “cliff” of closures but instead a steady stream of shutdowns for many years.

For some, their evidence is that the top 200 schools seem largely intact. Never mind again that we have been clear that the top schools are unlikely to be affected the trends we documented.

Still, given the confusion, it’s worth being clearer. Not only will the top selective undergraduate programs likely be OK, but they almost certainly won’t be “disrupted” at all. Commoditized and reduced to less influence in the country? Perhaps. But not disrupted—as the word is understood when we’re talking about the theory of disruptive innovation that Christensen coined.

Understanding a few aspects of the theory of disruptive innovation will help illustrate why.

Disruptions Don’t Take Existing, Desirable Customers At First

When disruption strikes, its impact tends to go unnoticed initially. Or if it is noticed, it’s because it’s helping the incumbent institutions.

That’s because disruptions start by serving nonconsumers—people who aren’t using the existing products and services in an industry. Disruptive innovations initially expand the pie in other words. They don’t steal market share. That’s one reason why the presidents of disruptive innovations like Western Governors University and Southern New Hampshire University don’t feel like they are really competing with each other at this point. When you realize that there are 40 million adults with some college and no degree, for example, you realize just how much more pie there could be! The nearly half a million learners that these two institutions serve—while a lot—are still a drop in the potential bucket.

Indeed, some of the players expanding the pie aren’t even accredited colleges and universities. They might be players like YouTube, LinkedIn Learning, Udemy, Coursera, Pluralsight, ChatGPT, and more—the places where adults go to learn just about anything online when they get stuck or have a problem to solve.