Edu-business as usual—market-making in higher education

Ben Williamson

The Nido Spitalfields Tower, the world’s tallest student accommodation, sits on the boundary of the  financial district of London. Image by UggBoyUggGirl

The global education business Pearson has established itself as a major player in higher education around the world. With core business interests in digital online courses and alternative models of HE provision, Pearson is currently making significant in-roads into British universities and the HE sector more widely. From a critical perspective, Pearson’s ongoing business activities appear symptomatic of the further marketization and privatization of contemporary HE under current government policy and regulation. A ‘neoliberal takeover of higher education’–the subtitle of a tight little book by Lawrence Busch–means universities are increasingly focused on achieving market value through competition, performance metric ranking, consumer demand, and return on investment. However, we need a better understanding of the specific role of edu-businesses such as Pearson in remaking higher education as a market.

Newspaper coverage in The Telegraph in June 2018 reported on a new law passed by government permitting the Office for Students—the HE regulatory body—to share student data with Pearson, HMRC, the Student Loans Company, and the Competition and Market Authority. Headlined ‘University students’ data to be shared with private companies’, the article focused on the risk of student data being exploited for profit, threats to student privacy, and potential re-use or sale of the data for undeclared purposes by Pearson. Response to the news demonstrated considerable  concern about Pearson’s role in furthering business interests in HE through its use of student data. Pearson is a major, multi-billion dollar market actor with a huge global business, and participating in the expanding data infrastructure of the UK’s higher education system too–but questions remain about exactly how Pearson participates in marketization of HE itself. This work-in-progress is an attempt to think these issues through–a working paper rather than a blog post–and the third part of a series on key actors in the expanding data infrastructure of higher education (the first was on the Higher Education Statistics Agency, the second on the Office for Students).

Market-making micro-processes
To understand Pearson’s role, I adopt a framework from Susan Robertson and Janja Komljenovic to analyse marketization in HE. They have adapted it from Çalışkan and Callon, who define ‘marketization as the entirety of efforts aimed at describing, analysing and making intelligible the shape, constitution and dynamics of a market’. For Çalışkan and Callon, markets ‘organize the conception, production and circulation of goods’. Importantly, though, markets depend on a complex arrangement of rules and conventions, technical devices, metric systems, calculating equipment, logistical infrastructures, texts, technical and scientific knowledge, and human competencies and skills—all of which are engaged in power struggles over the definition and valuation of goods. Their definition and approach to marketization—as effort and coordination among people, institutions and things—applies across a diversity of markets.

Following this approach to study the effort of marketization in the HE context, Robertson and Komljenovic therefore argue ‘markets do not simply appear’ as the outcome of market ideology, but instead ‘are both made and remade, as new products and services, frontiers and spaces, are imagined, invented, implemented, inventoried, vetted and vetoed.’ In particular, they focus on how the formerly non-market space of higher education has been reframed and re-made as an ‘education services market’, and subsequently how these HE markets work. The market-making process in HE involves considerable ‘investment’ at the macro-level by policymakers, politicians, investment advisors, education firms, and universities to imagine higher education as a market to be opened up and exploited. At the micro-level it also involves the ‘nuts and bolts’ of creating higher education products and services that can be exchanged in a range of marketplaces. As such, understanding HE marketization requires not just macro analysis of neoliberal political ideology, but micro analysis of the practical, material, technical and discursive effort of market-making and maintenance.

To better understand the micro-processes involved in HE market-making, Robertson and Komljenovic—via Çalışkan and Callon—identify processes of (1) pacifying goods, (2) marketizing agencies, (3) market encounters, (4) price-setting, and (5) market design and maintenance. These analytical categories provide a useful way to think about the emerging role of edu-businesses such as Pearson in the everyday practices and processes of contemporary universities.

Pacifying goods
The first micro-process of pacifying goods refers to how things and services are represented as describable and predictable ‘packages’ with fixed qualities to which value and price can be attached. Robertson and Komljenovic offer the examples of a university being packaged as an object for investment, ‘student experience’ as a product with distinctive elements for students to consume, or ‘business intelligence’ as information software worth purchasing to assist strategic decision-making by university managers.

Pearson’s core business model within the higher education sector depends on the production of packages of goods and services in which it hopes universities will invest. Behind the recent Telegraph coverage of Pearson’s data-sharing agreement with the Office for Students is a longer history of Pearson involvement in producing services and products for HE. As an alternative HE provider, it established Pearson College London in 2012, the only FTSE 100 company in the UK to design and deliver degrees (validated by the universities of Kent and Bradford). Being a higher education provider, Pearson has legitimate reasons—like other providers—to require data access from the OfS for these purposes (as it did previously via HEFCE).

Pearson also offers online degree programs, with several UK universities entering into long-term 10-year deals with the company to deliver courses (at present these are King’s College London, Leeds, Manchester Metropolitan, and Sussex, with others in the US too). Through its ‘full-service approach to creating online degree programs or individual learning solutions’, Pearson’s online learning services are presented as streamlined technical systems and standardized program management packages for universities to purchase in order to ‘help you expand access, reach each student, and improve achievement’.

The process of rendering its services and products as standardized packages within HE markets, however, has required significant investment of company effort to justify government registration and student fees as HE provider. Pearson College London advertises itself as ‘powered by industry experience’ and, through ‘work with industry giants from Unilever, L’Oreal, WPP and IBM, to Framestore, Double Negative, MPC and The Mill’, it has established itself as a distinctive market provider which is ‘transforming higher education’. As such, these industry partners have become part of the package of Pearson’s HE market offer to fee-paying students.

In order to further expand the model as a viable and marketable package, Pearson also released Demand Driven Education: Merging work and learning to develop the human skills that matter predicting a shift in ‘future skills’ requirements for students (based on data from the Future Skills project collaboration between Pearson, Nesta and the Oxford Martin School). Its authors concluded  a transformation in HE would be needed to achieve these future skills. If earlier HE reforms had focused on widening access and improving academic success, ‘demand driven education’ would ‘focus more strongly than ever on ensuring graduates are job-ready and have access to rewarding careers over the course of their lifetime’.

The Future Skills landscape, mapped by Pearson, Nesta & Oxford Martin School

As these examples indicate, Pearson has sought to ‘pacify’ its goods and justify them for investment—by universities and prospective students—both by appealing discursively to the ‘widening access’ priority of the university sector, and by actively prompting a shift toward industry-led, future-skills-focused, and demand-driven higher education through the material circulation of glossy reports and websites. It has produced technical systems and logistical infrastructure for program management to ease universities into the online learning market too.

In these important ways, Pearson is participating in making an increasingly competitive HE market in which it is itself a competitor, with an alternative provision that sets it apart from the conventional degree provision of most established universities. At the same time, the model of flexible, technology-infused provision it offers is also increasingly the model pursued by existing HE institutions, indicating how the commercial online learning model is becoming the focus of market competition among universities themselves. Along with its competitors, Pearson has standardized, stabilized and packaged online learning to create a market within UK higher education. Along the way, students have been packaged in terms of marketable ‘future skills’ whose development universities need to invest in as human capital, and universities have been reframed as market providers of ‘valuable’ demand-driven education services.

Marketizing agencies
Marketizing agencies refer to the actors competing to define what is a valuable good or service, which takes place among people, technologies, laws and forms of calculation. As such, marketizing agencies within HE include human actors such as market analysts, data managers and business intelligence officers, but also computer software, business strategies, and private company support.

Pearson has established itself as a powerful marketizing agency in HE, carefully defining through its glossy reports and brochures such as Demand Driven Education what are valuable goods and services for contemporary universities to offer. Through its ‘full service’ online learning packages, it offers its expertise as a global ed-tech courseware and platform provider in ways that have produced conviction in its offerings among university leaders, the Department for Education and the Office for Students. Indeed, the law itself has been changed through the statutory instrument signed off by the DfE’s HE minister Sam Gyimah to enable Pearson and the OfS to share data.

Pearson is also bringing novel kinds of practical ‘know-how’ and expertise into HE—both human experts who know how to engage with complex digital technologies and data, and nonhuman technologies of expertise that can enhance universities’ engagements with their data. It has, for example, positioned itself as a leading centre of expertise in digital data analytics for education (including performance metrics and comparative methodologies) at a global scale, across both the schools and universities sectors. It has developed specific technologies such as data dashboard software packages to allow university leaders and administrators to measure institutional performance through metrics and indicators. The development of these technologies positions it both as a market provider with product, services and expertise to sell and share, and as a market-maker, seeking to prompt universities to see themselves in quantitative terms as performance rivals and competitors with other providers.

Pearson puts higher education under the microscope in Demand Driven Education

As a marketizing agency, what Pearson can do depends on its computer and mathematical equipment, as well as on the cognitive activities of its experts—its software developers, data analysts, education advisers, courseware designers and so on. This hybrid of human expertise and nonhuman equipment enables Pearson to function as a marketizing agency.

However, Pearson is of course in a struggle with other agencies to define what counts as a valuable service—indeed, to define the value of higher education itself. Universities themselves are marketizing agencies, as are the Department for Education and the Office for Students. A key actor in the marketizing agencies involved in HE market-making is Sir Michael Barber, the Chief Education Adviser for Pearson from 2012 before taking up the post of Chair of the Office for Students in 2017. A former senior adviser in the Prime Minister’s Delivery Unit under Tony Blair and education adviser to David Blunkett, he was also a member of the review group for the Browne Review of university funding in 2009-10, and served as a partner of the consultancy McKinsey’s, heading its Global Education Practice programme. Barber physically embodies a meeting-point between agencies, rendering porous the boundaries between government agency, consultancy and private company. He represents effectively how the capacities of agencies across the private and public sectors, such as Pearson and the OfS, have begun to dominate HE institutions, imposing their market model of HE as a valuable consumer commodity upon the sector. This exercise of power is at the core of contemporary struggles by many university employees over the purposes and practices of the university.

Market encounters
Market encounters then refer to how agencies and goods meet one another, such as at higher education fairs, conferences, seminars and other events, as well as through social media, web pages and other online and material arrangements. One might say that the Pearson online learning environment is a key site of market encounter. It brings together the commercial provider, the university, students, and staff into a shared space where diverse investments are made in each other and value is produced for each agency through relations made possible by the software service.

More straightforwardly, Pearson invests considerable effort in staging market encounters with the HE sector. Barber himself, in his prior Pearson role, contributed to various events and material publications promoting a transformative model of HE. His co-authored report An Avalanche is Coming (published by the IPPR think tank) made the argument that:

University leaders need to take control of their own destiny and seize the opportunities open to them through technology – Massive Open Online Courses (MOOCs) for example – to provide broader, deeper and more exciting education. Leaders will need to have a keen eye toward creating value for their students. Each university needs to be clear which niches or market segments it wants to serve and how. The traditional multipurpose university with a combination of a range of degrees and a modestly effective research programme has had its day. The traditional university is being unbundled.

The report particularly emphasized competition between universities and online providers, ensuring education for employment, supporting alternative providers and the future of work, and recognition that the ‘new student consumer is king’. Universities not adapting to these challenges and opportunities risked being swept away by the avalanche of change brought by technology—or, in other terms, market failure. Five years on, the report reads like a template for HE market reform under the Higher Education and Research Act 2017 and the regulatory strategy of the OfS under Barber. As a result, consensus is growing among UK government departments and agencies for the model of HE promoted and offered by Pearson for consumption in the HE market, as its growing presence in the sector demonstrates.

This consensus and market-consolidation is also demonstrated by the Department for Education announcement of an open data competition allowing software developers access to longitudinal student employment and earnings outcomes data in order to create apps or online services to help prospective students choose courses and institutions. (On its launch, HE Minister Sam Gyimah tweeted: ‘We want students to be better informed about degree choices & the returns–today, we’re officially launching a competition for tech companies to take graduate data & create a MoneySuperMarket for students, giving them real power to make the right choice’). The logic of the competition is that student choice is best made on the basis of future earnings, in ways highly similar to Pearson’s own emphasis on career-readiness courses and demand-driven education. But an additional feature of the competition is that it forces prospective students to think of HE as a marketplace, and to see themselves as future ‘human capital’ whose choices about which universities to attend and courses to study are a form of self-investment which will affect their future prospects and value in labour markets.

The eventual products of the competition—whether they are apps or other types of MoneySuperMarket-style online price-comparison services—will themselves become mediating sites of market encounter between students and universities. They will act as sites where the value of a degree, as a pacified good, becomes a matter of calculation. Universities will have to calculate about how best to present the value of their service, algorithms will calculate the data for national comparison and visualization, and students will have to calculate about how to choose in their best interests. As such, these apps and services will be key market-making devices.

Price-setting
Setting a price for a good or service is established through struggles between the different agencies that encounter each other, such as determining how much to sell or buy a service or product. Pearson is an important actor in price-setting in HE because it is offering alternative degree pathways and full service online provision; as such, it is itself in a competitive market among other online HE providers for university customers. It is also interested in how students, seen by its CEO John Fallon as ‘the Spotify generation’, may themselves ‘pay for use. They don’t want to buy to own, and they only want to pay to use things that are directly relevant to their course and their outcomes’. So its price-setting model is adapting to the market logics of online streaming services, and treating students as a direct-to-consumer market.

Deciding how much to pay for a service is a key aspect of market-making in the university sector (this of course is the heart of government disappointment in the failure of universities to differentiate fees in England). Within universities, though, as Robertson and Komljenovic observe, administrators routinely have to make budgetary decisions regarding the purchase of goods or services, but that price is sometimes secondary to personal relations or trust in certain suppliers. Through high-profile partnerships with UK universities that speak the same language as Pearson—emphasizing ‘flexible online study’ and meeting ‘the demands of the evolving labour markets’—the company is establishing itself as a value-for-money provider in an emerging marketplace where traditional universities are hybridizing with alternative providers. It is not the only provider in this space, and is in a struggle with competitors through formal processes such as tendering and procurement.

A selection of recent Pearson reports focusing on digital transformations in education

The hybrid model of the traditional university partnering with a private company to offer online courses is an interesting example of a particular kind of market. Robertson and Komljenovic note that many universities are involved in ‘inside-out and for-profit’ activities where they are involved in market exchanges by selling services to others for profit—such as selling ‘student experience’ in the shape of study programmes to overseas students. Universities are also involved in ‘outside-in and for-profit’ activities where they act as buyers and contribute to the profits of other actors—such as software vendors, data suppliers, and other outsourced providers of services. The hybridized partnership model that Pearson is establishing creates a market that is both inside-out and outside-in at the same time, with the university gaining advantage from investing in Pearson (in terms of profit-turning distance student fees), and Pearson gaining an advantage through returns on its investment in the shape of paying student customers.

Universities, driven by the imperative to increase revenue, are increasingly seeking ways of recruiting international students their online offerings, thus opening up the market to multiple players and catalysing a price-setting competition between different online providers. At the same time, the price-setting is mirrored by the revenue generation promises of the online service for the university, and by the return on investment projections for the provider. Reputation for all the agencies involved is also a factor–Pearson gains reputational advantage from being embedded in elite institutions, while institutions gain reputational advantage from appearing innovative in digital delivery of future-focused, demand-driven services.

Market design and maintenance
The last micro-process of market-making—design, implementation, management, and maintenance—describes how various elements are brought into being and reproduced to enable ongoing stability, continued extraction of profits, and efficient value-for-money use of resources.

In order to maintain its own market position, Pearson has established a ten-year partnership model with a number of universities to provide online learning services, which is establishing its longevity in UK HE as well as scaling up its online learning services, one of the fastest growing parts of the business. It has built long-term relations of trust with its partner institutions. Through the provision of well-packaged products, providing expertise, staging encounters with the sector, and establishing agreements over price and value of its provision, Pearson is seeking to build and maintain the market for its products to ensure its long-term stability and profitability. In this sense—as Çalışkan and Callon observe in relation to markets more generally—Pearson and its partners don’t just trust each other, but invest considerable hope in the market relationship they are developing. There are market emotions at play in these efforts to implement, manage, and maintain a market of online learning services.

Through reports such as An Avalanche is Coming and Demand Driven Education, Pearson is also involved in market design. It is establishing a discourse and an imaginary of the reformed, transformative future of HE in ways which are closely aligned with the governmental objectives of the Department for Education and the Office for Students as a market regulator. For example, as one of the most powerful figures in British HE, Michael Barber is highly involved in shaping the sector, and is pursuing the same vision as chair of the OfS as he did in his role as chief education adviser at Pearson.

Here it is important to return to the data-sharing issue raised in The Telegraph. While Pearson may well have legitimate reasons to access OfS data as a HE provider, it also has ambitious plans around the use of digital data analytics in HE in ways that reinforce the data-led reforms represented by the OfS. The two organizations share an imaginary for the future design of HE. One obvious point of congruence is that Pearson’s online learning services will be able to provide the kind of fine-grained student data that conventional universities cannot. These data will be available on dashboards for university teachers and administrators to inspect in order to assess and evaluate the performance of courses, staff and students, in ways which reflect the OfS emphasis on performance metrics.

Pearson’s data-led ambitions go beyond performance dashboards however. Demand Driven Education, for example, highlights the potential of using AI and ‘predictive talent analytics’ to match students to career paths. This idea is highly congruent with the DfE’s software competition linking students and courses to earnings potential. Additionally, Pearson has invested considerably in data-driven digital technologies for use in the HE sector, including learning analytics and adaptive learning platforms that require access to huge quantities of past student data and real-time data from student activities on digital courses. It even has a partnership with IBM Watson to embed ‘AI tutors’ in digital courseware that can constantly track a student’s actions and progress, and then ‘interact’ to ‘improve student performance’.

Clearly, these kind of data analytics and AI technologies will require access to vast databases of student information. Their rollout would create a new market of student data that would be valuable to AI systems in a market exchange where students surrender their information in exchange for personalized learning support. As such, a clear and shared imaginary of a technology-intensive, demand-driven, skills-focused HE infuses both governmental and commercial ambitions to design and maintain a highly marketized higher education sector.

Edu-business as usual
The marketization of contemporary higher education has been brought into being and sustained through a range of processes, many of which Pearson is involved in. Of course, Pearson is not alone in making HE into a market, but it is a significant actor as a private company and a provider of digital technologies required by universities to compete in the imagined HE landscape of the future. Contemporary universities are increasingly involved in different kinds of markets and market exchanges, all of which involve considerable social activity, technical involvement, and effort to make, manage and maintain. Pearson is moving its business considerably into the making of HE markets, and establishing ‘edu-business as usual’ as the reformatory model for the future of higher education in the UK and beyond.