Knowledge goes out to market

May 24, 1996

Developments in information and communications technology mean that knowledge has become divorced from organisations and places. In future, people will use knowledge where it is, not where it can be institutionalised. With knowledge footloose, knowledge businesses will become a common phenomenon.

I am intrigued by the possibilities of a new breed of knowledge entrepreneur, many aged between 25 and 35. Some are being given opportunities by the firms that employ them; others are establishing their own businesses. Whether they choose to move into fields previously dominated by universities or enter quite new activities, many of these new businesses will succeed because they have a key entrepreneurial talent. They are not totally wedded to their original business idea of launching a particular new product, which is why many scientific and technical inventors fail. They are wedded only to the success of the business. This kind of aptitude is almost unknown in universities and, if found, usually suppressed.

It will take some years for a clear pattern of knowledge activities to evolve while businesses and universities are establishing their precise roles. What is clear is that some big companies are already moving substantially into traditional university activities.

In teaching this is happening where large companies believe they can provide technical, commercial and/or administrative training for employees which is more appropriate to them, because it is closer to the company's specific needs than if provided by universities. It is also designed to inculcate the particular ethos, knowledge and skills which the company requires.

Unipart University is an interesting example. The stimulus came from the need to raise educational standards in order to compete successfully in crowded international markets for automobile components. The route chosen was to become a "learning organisation". Unipart U is the direct opposite of a conventional university. Any employee can become a student. And any employee is also a potential teacher. There are no examinations or qualifications. Dan Jones, one author of The Machine that Changed the World, explains that Unipart U does not teach what may be useful later on, with a certificate to say so. It provides what is needed for the immediate job.

The aim is continuous (incremental) learning, leading to steadily improved performance through students teaching their own skills and learning those of colleagues. The only "examination" question is: do you perform more effectively in your job? Learning comes also from teaching, which is often the best way.

Many smaller companies are already taking advantage of the need for lifelong learning which is raising the demand for post-experience programmes. Curiously, such training companies have the advantage that only a small proportion of university academics keep their presentation skills sufficiently up-to-date to reach the necessary standards. Those who do are often members of a "freelance fringe" of people who either have left employment in universities or who still work in universities as well.

In research, there are scientific and technical laboratories Q for example, in pharmaceuticals Q where world-class scientists work on issues as fundamental as any in a university environment and do so more purposefully. Those who work in such laboratories learn from their own study and from their colleagues, though perhaps less formally than in a university. As individuals move in and out of the laboratory, knowledge and ways of learning are spread, but the key objective is research not training.

With the evolving knowledge society, what is happening in other fields is perhaps instructive. For example, in applied economics, there are already fields where businesses have established virtual monopolies, as banks and stockbrokers have with studies of short to medium-run economic developments. Doubtless the fact that many of these studies are free to clients, researchers and teachers helps their success but relevance, high intellectual standards, clear exposition and above all speed of publication, are crucial. For example, Goldman Sachs faxes significant new information to clients as soon as it becomes available. Success comes from an imaginative focus on the client, but mainly from promptness and speedy delivery.

Businesses are using information technology to produce educational material. There are already about 10,000 educational databases, many the property of United States businesses, and this is where the knowledge entrepreneurs are most active. The great majority of these databases are still primitive, but one can see that they have enormous potential. While the Open University is still the dominant supplier in the United Kingdom of high-level university television/video programmes, numerous smaller companies are specialising in producing training videos and CDs. They will succeed, not least because they have built up the ability to run good production teams. Many of them also organise training courses alongside their own material. How good will universities be at all of this?

The CD-Rom may well have a bigger impact even than television and video, because it forces interaction between the student and a combination of written and graphic teaching material, "talking heads" etc, and can interrogate the student and record how well he or she has answered the questions.

Virtual reality will become important too. Already some airlines train pilots on a "flight deck", using a simulator. A growing range of technical, selling, trading and administrative skills will be learned in this way. Further into the future, one can imagine more conceptual skills being learned through virtual reality as well.

As yet, businesses produce few university-level CD-Roms, but a straw in the wind is a partnership between IBM and a very small company, CRT Multimedia. This is developing CD-Roms for NVQ students in business administration. Once NVQ material exists it will not be difficult to move on to produce first-year university programmes where CDs can be very effective. The potential for a firm like IBM is huge.

Businesses are already moving into the new field of knowledge broking and are set to make big inroads into what one might have expected to be the university's province. The function of a knowledge broker is to understand the information which businesses and other organisations need and then organise to provide it.

Many business people acquire knowledge by talking, not reading. There is therefore a growing market for periodic conversations with experts (especially in science and technology) who can give authoritative advice Q what we may call "distributed brain tapping". Physical proximity no longer matters and "conversations" will doubtless be on the Internet as well as on the telephone. This is a field where universities could play a big role, but I expect entrepreneurial knowledge businesses to have the edge because of their dynamism, inventiveness and because they are not hampered by long-established ways of operating. They will comb the world for "experts".

For the foreseeable future the pattern of activity of businesses working as universities will be very fragmented, with entrepreneurial businesses leading the way especially in fields like information and communications technology, the provision of databases and other new forms of knowledge exchange.

It is hard to see any businesses setting up a complete university in the UK, but that does not mean that business will not be a substantial participant, especially since technological developments mean that the market for education is now international. Potentially big players are lurking. For example, Pearson/Longmans has acquired Henley Distance Learning, which spun off from Henley Management College and is a successful seller of distance learning programmes. More intriguing is the decision of IBM, already mentioned, to work with very small organisations to gain experience in the educational field. With its size, global reach, skills and brain power, a computer business is likely to be the first to establish a "real" university. Will it be IBM or Hewlett-Packard, or even some other firm?

Sir Douglas Hague is a fellow of Templeton College, Oxford. A longer version of this article will appear in next week's Demos quarterly.

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