Public Ed: Competing in the Economy of "Free"

In his book Free, Chris Anderson observes that unlike products and services in the traditional economy that inflate in price over time, products and services in the digital economy tend to rapidly decrease in price.  This is because demand in the physical world leads to scarcity, while in the digital world, free of the costs associated with duplication and distribution, demand leads to abundance.  Abundance, in turn, creates a gravitational pull on prices that "eventually leads to zero."  One merely needs to consider the many free products and services that we rely on every day to validate Anderson's argument.

The free economy has played havoc with the traditional physical economy.  The music and publishing industries have been devastated by online content sharing and distribution networks.  They have attempted to stem the tide through lawsuits and technical hurdles, but history assures us that these are merely artificial barriers that have no real hope of turning back the clock.

Of course, nothing is more abundant in the digital economy than information.  In fact, the most vital free service that we rely on today is "Search."  Whether we use Google, or Yahoo or Bing, we need sophisticated help just to sift through and manage the abundance of information available at our finger tips.

Now many in the education community have sounded the alarm that in this age of information abundance, public education faces serious challenges.  Indeed it does!  Clayton Christensen at Harvard predicts that by 2019, half the high school courses taken in the US will be taken online.  The 2010 Horizon Report indicates that "open content" such as the MIT curriculum that is freely available on the web will enjoy mainstream use by universities in the next 12 months.  Of course, this same valuable content is available to high schools, parents and anyone else who wishes to use it.

Unlike the physical economy where price is perceived to reflect value, in the digital economy that is not the case at all.  Consider that Google paid $1.65 billion for YouTube in 2006.  Even more amazing, Facebook, still a privately held company, was valued at $14 billion in January 2010.  Both of these services are free to consumers.

To understand this, Anderson explains, one must recognize that the monetary economy is only one measure of value.  Of increasing importance today are two related economies, the economies of Attention and Reputation.  It is from these economies that Google, Facebook and YouTube derive their value.  Facebook has over 400 million active users, more than the population of the US.  Half of the Facebook users log on every day.  That's a lot of attention!  Yet, Facebook's value could be easily threatened by a scandal or security breech.  Thus, the importance of Reputation.

"Free" is the market sector in which public education competes.  We are not particularly accustomed to competing and we are also not very attuned to economics.  If nothing else, the current fiscal crisis should provide a clear wake up call to all public educators that we must become competitive and we must understand the market in which we compete.

Schools must increase their valuation in the economies of Attention and Reputation.  No longer can we command attention simply by shouting "Eyes Forward" from the front of the room.  We must truly engage students.  We must cultivate a reputation for excellence and innovation by instilling joy and creativity into teaching and learning.

Competing in the Economy of "Free" is difficult.  But as many have found, it can reap tremendous rewards.  Approximately 62 million school-aged children are counting on us to compete well.