I’ve been saying for quite a while that the problems that the record industry have run into are in large part due to a fundamental misunderstanding of how they were adding value. Record companies thought that they were adding value by developing artists (which most artists don’t actually need help with), when in fact they added value by filtering (the amount of bad music out there is genuinely staggering, and someone has to help us figure out what’s worth listening to). Like universities, record companies were already performing one of the key functions that we need (filtering), but because they didn’t realise that this was where they were creating value, they protected the wrong part of their business model. The thing that scares me about universities is that the odds are high that they also don’t realise where value is being added either.

But then having a chat with my friend Jason Tangen gave me another idea which gives me some hope. UQ has recently opened a Centre for Educational Innovation and Technology, headed up by Phil Long. Jason and Phil have been talking about new teaching models, based on those that Phil helped develop at MIT. The basic idea is that classes will look something like this:

• Lectures (and other similar content) are pre-recorded via some form of podcasting. Students are expected to watch this material, and read whatever they’re supposed to read, prior to face-to-face time.
• The classroom time then is oriented around addressing issues that students bring to class. These can by anything relating to the content that they’ve already worked with.
• The role of the teacher is to facilitate the discussion – and the ‘teacher’ can be the lecturer, or a class member, or a guest speaker

There’s obviously a ton of detail that goes behind this idea, and I’ve almost certainly skipped some important ones here. But this model raises a couple of important points. The first is that the pre-recorded content can come from anywhere. The course co-ordinator can make it, or we can bring in material from superstar lecturers at other universities. The important business model idea here is that the role of the person putting the course together is not necessarily to create content, or to transfer it into the heads of the students. The main jobs here are aggregating and filtering – compiling information, figuring out what is essential, and then creating a framework within which students can explore this knowledge using all of tools (mental, physical and digital) at their disposal.

However, It’s the second and third parts of that model that gave me an important insight. John and I have done some teaching like this – and the real challenge to making this teaching method work is to being adept at connecting up disparate ideas. In general, this is where students gain value in this kind of setting. It’s a very challenging way to teach. There’s no set of slides to guide you, your primary resource is what you know, and there is a small but measurable chance that things can go completely haywire. On the other hand, when it works, it is exhilarating. So I’m adding a third key value adding activity for digital business models: connecting.

Clay Shirky just posted his latest thoughts on news business models. He did some analysis of the original content in his local newspaper, and discovered that the amount of original local reporting actually constitutes a small part of the total amount of information contained in a newspaper. Nick Davies came to similar conclusions using a much bigger sample in research for his book Flat Earth News. This original local reporting is what we need from journalists – this is where accountability comes from. As Shirky says:

There are dozen or so reporters and editors in Columbia, Missouri, whose daily and public work is critical to the orderly functioning of that town, and those people are trapped inside a burning business model. With that framing of the problem, the question is how to get them out safely…

The list of important stories that have been reported in the Columbia Daily Tribune made me realise that these journalists are also connecting. They take things that don’t make sense (why are the beaches at the local lake closed due to elevated e.coli levels), and connect them up with reasons that have been previously hidden (the state government was covering up the research into the cause because it suggests that the government is in breach of environmental laws). Connecting is the key value adding function here.

Connecting is critically important both in journalism and in education. So that makes three value adding activities in the digital economy: aggregating, filtering, and connecting. The lesson to take from the current states of both the music industry and journalism is that you have to have a clear understanding of how you’re creating value so that you build and protect the correct parts of your business model. Perhaps universities can learn this lesson before educational business models are disrupted as well.