Presentation to members of a regional college communicators conference

1. The Business of Change
College Communications Association
Alan McKay, PhD
January 18, 2019

2. What the Hell Happened in 2007?
• Facebook went public
• Twitter launched
• Android launched
• Bitcoin launched the Block chain revolution
• Kindle launched the e-book revolution
• IBM’s Watson was created and launched artificial intelligence
• Amazon Cloud Service (AWS) launched (2006)
• iPhone launched in partnership with AT&T which led to the rapid expansion of data storage in the
cloud
• VMware (software translation) launched and vSphere (2009) soon followed permitting one
application to run on a variety of platforms, many in the cloud
• Hadoop (2011) was launched as an open source programming tool that made data mining across
various software platforms a reality
• Apple made their operating system open source with led to the explosion of software enabled
applications (apps)
2

3. Thomas Friedman and the Age of Acceleration
• We are currently in the fourth industrial revolution or that he refers to as the Age of
Acceleration.
• First industrial revolution – steam and water power substituted for humans
• Second industrial revolution – electricity and communications
• Third industrial revolution – computers and networks
• Fourth industrial revolution – IoT, artificial intelligence, machine learning, robotics
• Previous industrial revolutions took several lifetimes (e.g. 20 years or more) for the changes to
disseminate fully and be replaced by the subsequent wave.
• The current revolution began around 2007 and is causing wholesale changes in 7 – 10 years.
• The next revolution, characterized by big data, Internet of Things, machine learning and artificial
intelligence, is just taking shape.
3

4. Introduction
• Demographic disruption
• Disruptive innovations
• Workforce displacement
• Disruptive change in higher education
• The business of change
• Becoming an agent of change
4

5. The Business of Change
Demographic trends
5

6. High school graduation rate
2000 - 2032
0
20000
40000
60000
80000
100000
120000
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
VirginiaGraduates
USGraduates
National Virginia
6
Source: Western Interstate Commission for Higher Education, Knocking at the College Door: Projections of High School Graduates, 2016, www.wiche.edu/knocking.
Note: Virginia’s fertility rate is 1748 live births below the U.S. rate of 1765 and well below the projected replacement birth rate of 2,100/1000 women. DC had the
lowest replacement birth rate in the U.S. at 1,421. Matthews, T.J. & Hamilton, B.E., Total Fertility Rates by State and Race and Hispanic Origin: United States, 2017.
https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_01-508.pdf.
Great Recession Enrollment drop
The US fertility rate is the lowest since 1987.
CDC spokesperson “we have been waiting for the rate to
tick upward every year but it hasn’t happened.” WSJ 1/10/19)

7. New International Graduate Student
Applications 2012 – 2018
2.0%
10.0%
3.0%
1.0%
-3.0%
-7.0%-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
7
Source: CGS International Graduate Admissions Survey & The Institute of International Education Open Doors Report.

8. Demographic disruption
• After rising 36% from 1993-94 to 2008-09 high school graduates peaked in 2012-13 and the
number of graduates began to slowly decline; a trend that is projected to continue until 2030-31
• Number of white high school graduates will decline (-8%) and most of the “growth” will be among
students of color (+19% - Black, Asian, Hispanic)
• While the number of high school graduates in the “pool” will remain stagnant or decline for the
next two decades, the number of institutions of higher learning, particularly for profits, continue
to rise
8
Source: The Western Interstate Commission for Higher Education, Knocking at the college door: Projections of high school graduates, 2016, www.wiche.edu/knocking

9. Earnings by college major
2015-16
$31,000
$35,000
$36,000
$35,000
$40,000
$40,000
$43,800
$50,000
$50,000
$55,000
$60,000
$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000
Early childhood development
Art history
History
Philosophy
Political science
Average
General business
Information Systems
Nursing
Business analytics
Computer science
Early Career Salary (age 22 – 27)
Source: Federal Reserve Bank of New York, The Labor Market for Recent College Graduates, based on Census Bureau’s American Community Survey data, Education pays (2018)
9

10. Student loan debt
• Growing concerns for a debt bubble (1.53 trillion and growing)1
• 42% of all adults who attended college have some student loans
• Average debt load is between $20,000 – 25,000; monthly payments of $300
• Debt profile – 94% student loans, 25% credit card, 6% home equity loans
• 35% of student loan borrowers were officially sub-prime; 15% had no credit score
• Default rates are rising – 11.5% according to the New York Federal Reserve are more than 90
days late in making payments or are in default
• Students who declare bankruptcy are still liable for federally secured loans
• Millennials (22-37 years old)2 have the highest unemployment rate3
• Student debts are preventing 1/3 of millennials from buying a home
1. Singletary, M., U.S. student loan debt reaches a staggering $1.53 trillion, Washington Post (10/3/18) https://www.washingtonpost.com/business/2018/10/04/us-
student-loan-debt-reaches-staggering-trillion/?utm_term=.30d175fc9c1b
2. Dimock, M., Defining generations: Where millennials end and post-millennials begin, Pew Research Center (3/1/18) http://www.pewresearch.org/fact-
tank/2018/03/01/defining-generations-where-millennials-end-and-post-millennials-begin/?amp=1
3. Tanzi, A, U.S. student loan debt sets record, doubling since recession, Bloomberg (12/17/18) https://www.bloomberg.com/news/articles/2018-12-17/u-s-student-
loan-debt-sets-record-doubling-since-recession
10

11. Home ownership age 22-37
45% 45%
37%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Baby Boomers Gen X Millennials
Source: Urban Institute 2018 Homeownership report using U.S. Census Bureau’s 2015 American Community survey
11

12. First-time millennial home buyers are turning
to the bank of mom and dad
22.0% 22.2% 22.5%
25.6% 25.9% 26.3% 26.1% 26.2%
7.5% 6.2% 7.5%
9.0%
11.4% 12.1% 12.3% 12.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Type of Assistance
Family Other
12
Note: FY ends on September 30
Source: Eisen, B., More first-time home buyers are turning to the bank of mom and dad, WSJ (1/4/19) https://www.wsj.com/articles/more-first-time-home-
buyers-are-turning-to-the-bank-of-mom-and-dad-11546597800 citing data from the Federal Housing Administration

13. Summary of demographic disruption
• Declining birth rate (1.8 replacement birth rate)
• Declining enrollments (- 1.1%/year over the past six years)
• Declining public confidence in higher education (- 9% in 3 years)
• Students and parents are increasingly influenced in career choices by salary potential
• Increasing student loan debt is hampering graduates for much of their early careers
• Student debt is also affecting the financial security of parents and grandparents
• Some economists are recommending that the federal government reduce subsidized student
loans and instead put funding directly into government sponsored career pathways that don’t
necessarily emphasize four year college (e.g. community colleges, technical schools
apprenticeship programs)
13

14. The Business of Change
Disruptive Innovations
14

15. Disruptive innovations
Technological progress is going to leave behind
some people, perhaps even a lot of people, as it
races ahead. As we’ll demonstrate, there’s never
been a better time to be a worker with special skills,
or the right education, because these people can
use technology to create and capture value.
However, there’s never been a worse time to be a
worker with only “ordinary” skills and abilities to
offer, because computers, robots, and other digital
technologies are acquiring these skills, and abilities
at an extraordinary rate.1
15
1 Brynjolfsson, E. & McAfee, A., The second machine age: work, progress, and prosperity in a time of brilliant technologies, WW. Norton, New York
(2016) p. 11

16. Technology is not the problem
More than 85% of respondents report that their firms have started programs to create data-driven
cultures, but only 37% report success thus far. Technology is not the problem. The culprits include
management understanding, organizational alignment, and general organizational resistance. If
only people were as malleable as data.1
16
1 Davenport, T.H. & Bean, R., Big Data Executive Survey 2017, NewVantage Partners (Jan. 2017) http://newvantage.com/wp-
content/uploads/2017/01/Big-Data-Executive-Survey-2017-Executive-Summary.pdf

17. The Business of Change
Workforce Displacement
17

18. 18
Source: Whitehouse, M. & Rojanasakul, M., Find out if your job will be automated, Bloomberg (7/7/17)
https://www.bloomberg.com/graphics/2017-job-risk/

19. Summary of workforce displacement
• Economists indicate that the U.S. labor force is reaching full employment
• Highest unemployment rate 10.2% (1982)
• Unemployment at peak of Great Recession 9.9% (2009)
• Lowest unemployment rate 1.2% (1944)
• Current unemployment rate 3.9% (2018)1
• Labor participation rates have continued to decline (since 1999) despite improvements in
unemployment (projected to remain around 63%)
• Economists have suggested that the declining labor participation rate is due, in part, to individuals
who lack the skills to compete in the new industrial age
• Jobs are not going away, but the needed skills for good jobs are going up2
• McKinsey Global Institute3 has estimated that as many as 375 million workers in the world (14%)
may need to switch occupational categories as digitalization, automation, and advances in AI
disrupt the world of work
19
1 Anon., U.S. Unemployment rate, Trading Economics (1/4/19) https://tradingeconomics.com/united-states/unemployment-rate
2 Friedman, T.L. Thank you for being late, Picador, New York (2016) p.224.
3 Illanes, P., et al., Retraining and reskilling workers in the age of automation (2018)

20. The Business of Change
Radical change is coming to higher education
20

21. Transformation of learning
Source: Bersin, J., Watch out, corporate learning: here comes disruption, Forbes (3/28/17)
https://www.forbes.com/sites/joshbersin/2017/03/28/watch-out-corporate-learning-here-comes-disruption/amp/
21

22. Shift to just-in-time mobile learning
• Facebook (https://www.insidehighered.com/news/2017/06/12/facebook-testing-features-let-
users-teach-online-courses)
• Amazon Inspire (https://www.amazoninspire.com/)
• Apple (https://www.apple.com/education/)
• Netflix MOOC’s and Online Courses (https://www.mooc-list.com/tags/Netflix)
• Google Open Online Education (https://edu.google.com/openonline/)
• Microsoft (https://www.microsoft.com/en-us/learning/training.aspx)
• LinkedIn Learning (https://www.linkedin.com/learning/)
• SAS University (https://www.sas.com/en_us/software/university-edition.html)
• Open SAP (https://open.sap.com/)
• Udacity (https://www.udacity.com/)
22

23. The most in demand hard and soft skills in
2019
Soft Skills
• Creativity
• Persuasion
• Collaboration
• Adaptability
• Time management
Hard Skills
• Cloud computing
• Artificial intelligence
• Analytical reasoning
• People management
• UX Design
23
Source: Hess, A., The 10 most in demand skills in 2019, according to LinkedIn (1/6/19)
https://www.cnbc.com/2019/01/04/the-30-most-in-demand-skills-in-2019-according-to-linkedin-.html
Most studies of the impact of automation and artificial
intelligence point to a cluster of soft skills that can help to
distinguish a successful career path from one that is in
jeopardy. These are also the skills employers say are most
important in addressing the skills gap.

24. The Business of Change
Creating An Innovative Environment
24

25. Amara’s Law
We tend to overestimate the effect of a technology in the short run
and underestimate the effect in the long run.
Roy Amara
Institute for the Future
25

26. Defining Digital Transformation
Digital transformation is the application of digital technologies to fundamentally impact all aspects
of business and society.
InfoWorld
Digital transformation in any industry consists of three steps:
1. President and their leadership team recognize a need to change.
2. Develop key performance indicators that measure the change(s).
3. Designate an individual or a team to lead the change(s)
McKinsey & Co.
26

27. The Business of Change
Becoming an agent of change
27

28. Chief Innovation Officer – behavioral traits
• Tolerate failure but not accept incompetence
• Willingness to accept ambiguity but be highly disciplined about results
• Psychologically safe but brutally candid; protect your team
• Collaboration but with individual accountability
• Develop a professional network in the tech world
• Drive the vision with actions and words (passion and clarity)
• Flat but strong leadership
Source: Di Fiore, A., A chief innovation officer’s actual responsibilities, Harvard Business Review (11/26/14) https://hbr.org/2014/11/a-chief-innovation-officers-actual-
responsibilities.
28

29. Chief Innovation Officer – roles and functions
• Support best practices
• Develop skills
• Support disciplinary and inter-disciplinary teams to develop new initiatives
• Identify new market spaces
• Help people to develop and prototype new ideas
• Provide seed funding and arrange money to scale promising ideas
• Provide shelter for innovators and entrepreneurs
Source: Di Fiore, A., A chief innovation officer’s actual responsibilities, Harvard Business Review (11/26/14) https://hbr.org/2014/11/a-chief-innovation-officers-actual-
responsibilities.
29

30. Chief Innovation Officer – keeping current
• MIT Technology Review (intelligent and informed use of technology)
• Fast Company (essays on life in the fast lane)
• Wired (intersection of technology with consumer trends)
• Forbes (business and technology trends)
• Harvard Business Review (change leadership)
• Bloomberg Business Week (market trends)
• Wall Street Journal (business and workforce)
• News 360 (national and international new aggregator)
• c/net (latest consumer electronic trends)
• Raconteur (British “take-on-things”)
• McKinsey & Company (national and international technology)
• Accenture (future workforce)
• Gartner (focus on health care transformation)
• Pew Foundation (focus on Millennials)
30

31. The prophet – Kahlil Gibran
31
Your children are not your children.
You may give them your love but not your thoughts for they have
their own thoughts.
You may house their bodies but not their souls, for their souls dwell
in the house of tomorrow, which you cannot visit, not even in your
dreams.
You may strive to be like them, but seek not to make them like you.
For life goes not backward nor tarries with yesterday.