With lower growth as a result of deleveraging consumers and high public deficits and debts, the race is on to lower the cost of the public sector. The nature of the services, like education and healthcare, have made it difficult to gain anywhere near the same productivity increases as industry.
However, new ICT and software has opened up a host of different possibilities of increasing, sometimes even dramatically increasing productivity in sectors that until now, were stubbornly resisting any increases in productivity, wedded as they were to the industrial model.
For-Profit Online Education
Perhaps the biggest opportunities lie in education. The internet opens up vast possibilities here. Where previously start professors had an audience of 1000 at best, now size doesn't matter anymore. In the words of Wuster and Evans, the internet does away with the trade-off between "richness" (the amount of information that can be exchanged) and "reach" (the number of people participating).
For instance, while the books are browsable (richness), traditional bookshops can only stack so many books (limited reach). Amazon busted this trade-off and offers both richness (browsable books) and reach (millions in catalog), and even some nifty new tools to navigate this bewildering world, like recommendation software.
Lectures of star professors previously had a limited reach, but they can now be made available online and have an infinite audience and be seen when it's convenient for the student, even though some of the richness is lost (no direct interaction with the professor or fellow students).
They can also be endlessly repeated and watched from the comfort of the student's home, saving on commuting time and cost. Against these advantages there are a couple of disadvantages. The whole experience might be more convenient, it considerably alters the student's experience. Student 'life,' with all social aspects of joining clubs, making friends, living in dorms, studying together, stuff like that will disappear if education moves completely online.
There are two aspects of this, the cultural (that is, student life) and educational aspects. Let's focus on the latter first. Education is imparting a host of skills, social, disciplinary, verbally, stuff that's difficult to impart with an on-line video of a lecture, no matter how good.
Much knowledge that students acquire in a traditional school or university is tacit, rather than the more explicit information imparted through lectures. Much of this can be reproduced on-line by how-to video tutorials, practicing routines, and exercises, or the institution could make people available on-line for answering questions.
With the advent of Web 2.0 technologies, students can form virtual study groups, or even real ones based on location. But while all of this helps, none of it reproduces the full immersion of a real university (let alone the student life 'experience.') Which is why it's probably good to mix features, having a real 'bricks and mortar' school with a host of online resources available that increase productivity and efficiency of education.
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