In 2020, in the height of the Pandemic, NYU Stern's iconic Marketing Professor and Entrepreneur Scott Galloway predicted that an enormous number, even a majority of the Universities in the world would close down. He later amended his opinion few years later to a large number being impacted by employers not requiring a college degree. Although his predictions were taken with a large pinch of salt by mainstream educationalists, the emergence of Artificial intelligence has changed the equation. In fact, looking at present trends, it seems that his predictions have not gone far enough. The future as is unfolding, looks like a death knell for education in its present avatar as change is being resisted.

The Education Market:

The Global College market (studies after 12th grade) is estimated at 1.4 Trillion dollars. This is across 25,000 universities and colleges in the world. UNESCO estimates around 250 million students worldwide are registered in tertiary education. This is just the University and College market. In addition, many institutions earn significantly from the Global Training market which is a 400 billion dollar market. Till a decade ago, tertiary education was the domain of universities and colleges. But Edtech companies and large Corporates with Technical Training programmes have started impacting the core education market, particularly with online offerings. However, with the advent of Virtual Reality (VR) and Artificial reality (AR), the disruptions to the Education market dominated by the 25,000 Institutions worldwide will be high. Institutions who have not seen any significant threats over the last 100 years will change beyond belief, with many of them facing closure and irrelevance.

The Core Factor:

The core factor for both students and corporates has always been the ROI (Return of Investment) gained for their efforts. Universities and Colleges have been so immersed in their own jargon of 'learning outcomes' and 'skill development' that they have forgotton that students’ study for a lucrative career and future, with learning outcomes and skill development being a poor cousin. Statutory Education Authorities are even worse. They are even more behind the curve and apart from using VR and AI as buzzwords to showcase a few initiatives to their higher-ups or general public, are at loss on the realities of progress that should be done.

Institutions are in major denial. They use the convenient crutch of blaming the regulation and oversight of Statutory Education Authorities for not changing with time. And we cannot blame them because as the change needed is an almost a total reincarnation of their present offerings, it would be difficult for the most to even envisage, forget implement such changes. VR and AI will in the next few years change Education so much that in my opinion over 85% of what is being taught will be redundant. And the process of teaching will be so different that over 90% of present teaching staff will have to reinvent themselves. But will such a doomsday scenario for Institutions really happen? Yes, because there is a big fly in the ointment of higher education!

The Fly in the Ointment:

The 'flies' here are the Corporates'. If a student cannot get a job, or if he/she gets a job from alternative methods of study, the institution loses its relevance. And every student needs training on their first job. The addition of Internships, projects and apprenticeships have not made enough of an impact. Worldwide figures show that between 25-45% of students are not job-ready after studies. This is across almost every country in the world with no country going below 25%, even the ones that spend enormous money on education.

Thus far, the cost of getting new employees job-ready have been absorbed by Corporates due to the lack of any major alternatives. Tech Giants have added training programmes, but these have been limited to specific skill sets. Covid has made the ROI focus of Corporates more stringent. And if a better ROI offering is on the cards with better job and skill readiness, then that will be taken up without qualms. The Edtech and online companies tried to fill this gap during and just after Covid, but after an initial success period, turned out to be unimpressive and a poor alternative. But VR and AI? That is something which is more effective and will probably completely kill the institutional market in a few years.

The danger for institutions:

We have also forgotton that throughout history, many savants who did not have college degrees achieved great results. Thomas Edison who invented the light bulb did not have a degree. Leonardo Da Vinci, considered the greatest inventor of all time, did not have a degree. Robert Faraday who invented electricity did not have a degree. And if you go further in time, the list becomes endless. The argument that these were geniuses who did not need a degree is specious as we all dont need to invent the light bulb or create electricity. All we need is to do is do a great job for a Corporate and earn well because we are all well trained. And if doing this without a degree or formal diploma is possible, the threat to the institutions will become enormous.

VR and AI

But to what extent can VR and AI change education? At present a VR training programme takes 29 minutes compared to a 6 hour face to face programme. And because it is immersive and in 3D, it is 4 times more effective that face to face programmes. And it’s the next best thing to practical training which means it will reduce the job and skill deficiency ratio. But to what extent can VR and AI actually replace mainstream education? In my opinion, if a corporate invests in VR training programmes, it can replace as much as 40% of its intake from institutions in the medium term and over 80% in the long term . Of course, this will be resisted by most Institutions and Statutory Education Authorities. However, once the Corporate sector accepts VR and AI trained resources on an equivalent pay and career scale, then the entire Education sector will be forced to change. Let us look at a relevant example - marketing.

Learning about theories of marketing by rote, and trying to crack case studies are totally irrelevant to actually experiencing marketing situations in Virtual Reality. In addition, most VR systems connect to ChatGPT and other AI modules, so you can ask questions and get an answer from AI Realtime. In fact, the way the VR and AI development is progressing, AI is acting as a Realtime Tutor who will generate questions and even guide you in a lesson. And, it’s a customised 29 minutes session with animation and interaction which is shown to be 75% better for retention than any other mode of teaching. If a group of VR/AI modules are churning out a fantastic marketing professional, why on earth would a corporate hire an MBA who is half as good as him, and pay more on top of that!

Conclusion:

The march of VR and AI into education and training is already happening. It has moved from technical training (in medicine, architecture, and manufacturing) to soft skills and communication. The next step is mainstream education. In my estimation, this will happen in the next half decade. Those institutions who chose to stay in a shell and stick with what they have will become irrelevant very fast. Those who adopt and develop their own VR and AI training will go to the next level. Although there is an initial cost, this is marginal compared to the cost and impact of the closure of the institution. In fact, some institutions are already ahead of the curve. A few trailblazers are willing to certify VR and AI training programmes (not developed by them) as long as they fulfil certain learning criteria. Facebook (Meta) is spending 150 million dollars to help 10 Universities migrate into the metaverse (which is where VR and AI are available).

These are the Universities of Maryland, Kansas, South Dakota, Florida, California State, Alabama and New Mexico. Unfortunately, the other 25,000 Universities in the world will have to fend for themselves, and I think that a lot of them will stay put with and wish this is a temporary phenomenon similar to the edtech wave we say after Covid. Unfortunately, as the ROI from using VR for Training is extremely advantageous to both students and corporates, it is a wish that will be unfulfilled and we will see a re-alignment of the entire education system in the next decade with massive college closures, huge disrupts to syllabi, and a totally different way of learning. The philosopher Khalil Gibran put it aptly when he said, "Progress lies not in enhancing what is, but in advancing towards what will be"