Communications - March 2011

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known as “Baumol’s cost disease:” Some sectors are labor intensive, require highly qualified personnel, and see no increases in labor productivity, due to improved technology. This is true for higher education: As long as a main measure of the quality of higher education is the student/faculty ratio, teaching productivity of faculty cannot increase; as long as faculty salaries keep up with inflation, the cost of higher education will keep up with inflation.d Such a situation will lead to the same pressures we see now in the health sector, and will force major changes. IT is, in many service sectors, the cure for Baumol’s cost disease; 27 can it be in higher education?

IT often cures Baumol’s cost disease not by increasing labor productivity, but by enabling a cheaper, replacement service. It still takes four musicians to play a string quartet, but digital recording enables us to enjoy the music where and when we want to hear it. ATMs replace bank tellers, Internet shopping replaces sales clerks. The convenience of getting a service where and when we want it, and the lower cost of self-service, compensate for the loss of personal touch. To many of our students, the idea that one must attend a lecture at a particular place and time in order to obtain a piece of information chosen by the lecturer is as antiquated as pre-Web shopping. Increasingly, students will want to obtain the information they need when and where they want it. An increasing shift to “self-service” education that is “ student pull” based, rather than “lecturer push” based, may well be the cure to Baumol’s cost disease in higher education, as well as the cure to the depressing passivity of many students.

“Self-service” education need not imply a lack of social interaction. The study of Richard J. Light, at Harvard, indicated that participation in a small student study group is a stronger determinant of success in a course than d Note, however, that the recent fast rise in the cost of higher education in the U.S. is not due to increases in faculty salaries. According to the AAUP, faculty salaries have risen in real terms by 7% in the last three decades (http:// www.aaup.org/AAUP/GR/CapHill/2008/rising- costs.htm); state support to public universities has shrunk by more than one-third during this period. 13