What Innovations Can Additionally Attract University Applicants - Research Proposal Example

Innovation Module INTRODUCTION Universities have since long been striving to breakthrough the confinements that define the extent of their services, to extend their reach to the people who are unable to attain advanced education from academic institutions. Innovation in the university sector has enabled the education providers to achieve this goal by introducing the concept of Distance Learning or Virtual Learning Institutions- wherein the student does not have to be present in traditional classrooms, in fact they can learn from within the boundaries of their homes, or a nearby public institution that has a virtual teaching system, or almost anywhere, distance learning is hence considered an innovation in the academic sector. According to Rogers, when an idea, object or practice is considered to be new and unique by a unit that has to adapt it, then it is an innovation. Adding to this, DUIS is of the opinion that innovation occurs when a new idea has been successfully exploited by a company, an organization, an industry or a sector, and in its literal terminology, innovation stands for anything new and unique, which the market has not seen or experienced prior to its introduction, adding a value to the commodity or process, however, this might not always be applicable, for there are degrees of novelty of an idea or process that measure its innovativeness, and the rate at which the market accepts this is the innovation diffusion. KEY CONCEPTS Innovation’s degrees of novelty and Innovation Dilemma There are certain categories of these degrees of novelty which define the extent of innovation of an idea,: Incremental, this is the most basic stage, it occurs when a new idea results in only a slight change in the already existing product; but when the extent of its originality becomes wider, and it is considered to be entirely new, then it is a radical degree of innovation, lastly, when an innovation is based on the introduction of new technology or procedural form, then it is a discontinuous degree of innovation. There is a dilemma pertaining to the concept of innovation, because when innovation takes the form of something that was unexpected by the market or the consumer, then it is termed to be a disruptive technology or disruptive innovation, developed by Christensen in 1997 this dilemma focuses on the distinction between sustainable technologies and disruptive technologies, and declares that such an unexpected breakthrough is survived by new entrants, for existing leaders tend to fail when a massive change occurs due to a disruptive technological change. Forms of Innovation Innovation is categorized by economists into various forms, Tedd, Bessant and Pavitt in their book ‘Managing innovation' classify them according to their specific types and characteristics. Product innovation occurs when any existing commodity, a tangible good or an intangible service, is upgraded and modified, such that value is added to it. Process innovation occurs when the design of an organizational process is modified to increase the effectiveness and efficiency with which it works. When an already developed and existing service is extended into new markets and new users are targeted, then it is termed as Position innovation, furthermore when a new service is offered to a new group of users, then this is Paradigm innovation. An innovation in any field has its impact, both on the client and the service itself. S Osborne positions them according to the balance between the new and the existing element in the innovation. If it is an existing service that has been provided to an existing set of customers with a slight innovation, then it is the development stage; if an existing service is targeted at a new set of customers, then it is the evolutionary stage; if a new service is developed to cater an already existing clientele, it is known as the expansionary stage; and above all, if the service is entirely new, and the targeted customers are entirely new, then it falls in the total innovation category. Since distance learning can be segmented into two parts, with regards to the technology involved, the degree of novelty and the form of innovation can be judged separately. Synchronous technology- wherein delivery of lectures is undertaken via an online system at the same time to a number of students, in accordance with a time-table schedule, through video-conferencing or web-conferencing etc, it falls under the category of position innovation and is at Osborne's Evolutionary stage, since the means and processes used were already available, but were targeted at a different market, such as businesses, media and the government, but now the same technology is being extended into the university sector for the provision of education. Asynchronous technology- wherein participants access course materials according to their own schedules, this material can be in the form of emails, audio cassettes, voice mail/fax etc. This involves only an incremental degree of novelty, since course materials were already being used in the form of printed publications, which has now been converted via technology into audio and visual forms. This is a form of product innovation, because the already existing service is modified and upgraded, thus adding value to it, it can partially be categorized under position innovation as well and is an integral fraction of the developmental phase, because the degree of the targeted market has been expanded by the help of these easily accessible course materials. Is Innovation always good? The word innovation is usually perceived in the positive sense, however, it might not always be as optimistic as it sounds, thus researchers need to consider the negative implications of innovation as well. To an organization, it can be a form of creative destruction, that underpins the existing product or process, thus in distance learning, the professors have to create harder and more difficult examinations to make sure the students have carried out research, it also removes the students from having a face-to-face interaction with the professors and thus results in a less creative environment and a lower social interaction level, ensuring high level of social interactivity is one of the major purposes of having an academic institution; and even when they innovate after expending large sums of money in research and development, and a lot of hard work, the competitors can easily imitate their steps and achieve similar results, reducing the incentive to innovate. This drawback can be avoided if there is network availability, wherein students and professors who are not in contact can be brought closer via computer networks and conferencing. As industries and service providers strive to figure out ways to innovate and set their products apart from their rivals, it can have a negative impact on the societal whole, as resources are being spent, and the result might not always be a success, furthermore a lot of time is consumed, that could be utilized in the production and provision of the existing products through conventional processes, according to Alfred Bork, the development and delivery costs of providing education through the distance learning method has substantially increased the costs, since in conventional teaching systems, the costs are associated with lecture and delivery, and not the extensive development of the course materials, which is a must in this new method of teaching, thus an increase in costs computed is a major setback of this system, however, if the positive externalities are considered, then the intrinsic value associated with educating a larger number of people might have an added value that is beneficial for the society in the long term, in the form of a literate and skilled workforce. Generic Process of Innovation and Major Pitfalls Innovation is perceived to be good if it is useful, however if the idea is a new one, which is not adapted by the customers, then it is a mere failure, and not an innovation that could be celebrated. In accordance with Bessant’s view innovation moves through a generic process wherein initially a search for new ideas and ways is undertaken, then an appropriate identification is selected, it is built upon and then implemented, and finally it is a form of learning, this virtuous cycle repeats itself with the search of a new idea once the old one is incorporated into the system. Innovation methodology also includes the possibility of failure, because there are pitfalls as well in the process which can hamper the progress towards development of a new idea. If the innovation is merely a technology push, which is passed through the research and development process, and finally reaches the market without the consideration of whether a demand for it exists or not, then, according to Michael J Martin, the innovation has failed, and faced a major pitfall. Another disaster could be when the developer is only seeking a major breakthrough, and in search of that, s/he ignores the incremental degree of innovation that can prove to be fruitful. Also, the innovator must not ignore that there is a significant interrelationship between a product and a process, the innovation in a process must add value to the product or save time, and an innovation in the product must make use of the process and should not discard it, otherwise it cannot be incorporated unless a new process is developed which is conducive for the production of the innovative product. Distance learning however, is not a mere technological push, after ample research and development, it was introduced in the wider market, and has attracted a number of users, resulting in the development of virtual universities, such as Open University in the UK, the Chinese version of the T.V. University, ISIM – California (the International School of Information Management, Mind Extension University centered in Colorado etc., as mentioned by Alfred Bork in his article 'Distance Learning and Interaction'; Distance Learning is also supported by W. Daniel Edge and John P. Loegering in their article 'Distance Education', they stress that for academic institutions, distance learning has offered a wider market base, it has upgraded their services and also provided the opportunity of increased access and flexibility to the participants, who can now attain education from anywhere, and thus it has enabled the society to make an efficient use of resources. PESTEL ANALYSIS Political Factors However, since a business does not operate in isolation; there are many external factors that have certain affects on the way a business functions. A Pestel analysis is fundamental to the analysis of these factors, which takes into account current and future factors that can affect a business. As a business operates in a locality, which is part of a wider region of a nation, and the economy of a nation revolves around the political setup that has been established, which is affected by the global politics, thus the political factors play an eminent part in the Pestel analysis. When one political party gives way to another, the policies change simultaneously, and this can have a major impact on any business.. The openness of a nation’s economy into the global arena, its trade policies, and its reputation in the world owing to its relations with other nations and jurisdictions can affect the way the foreign nations respond to its businesses. Since distance education provision is a form of business that emits positive externalities, thus it receives great support from the government usually, in the form of grants or easy and efficient ways of service provision, e.g. the government provided financial support for the transmissions for instance The Star Schools in the United states, and also easy broadcasting of videos by the help of Public Broadcasting Systems in the United Stated (as stated by Alfred Bork). If the government is not supportive of this innovative teaching method, then this system might not survive. Economic Factors Any business, let it be a sole proprietorship or a public limited company, is affected by the prevailing economic conditions. Macroeconomic factors that can affect a business are: Inflation rate, since it can directly affect the income of people and the likelihood that they will consume a particular product, the interest rate has a dual affect, it can affect the savings pattern of the consumer and thus adjacently affect the marginal propensity to consume, the inflation rate also determines the borrowing pattern in the economy, and thus directly determines the amount of investment done in a business, it can have a major impact on the research and development which is the source of innovation; the fluctuations in an exchange rate can determine the import/export pattern of a business, with regards to inputs or outputs, and also with regards to foreign competition, another macroeconomic factor is the unemployment rate, since the production of a company is directly dependant on labor supply, the availability of labor can affect the business’ supply directly. With reference to the provision of distance education, inflation can play a major role, as better quality service which involves greater interactivity and access to network which connects the student base and professors also adds to the cost of participation, thus customers will compare quality with the money involved, and high prices might result in a disappointing demand, a high interest rate would also tempt the consumers to save rather than spend to acquire education that is expensive. It might also become profitable for the business to invest the borrowed amount acquired at a higher interest rate in a more profitable business. On a microeconomic level, the costs of other businesses can have a significant impact on any business, if the costs of business A producing a homogeneous good is lower than business B, then it is a reflection of business B’s inefficiency, plus the firm A would have a cost advantage and it can lower its price level and thus capture the market. A business is affected by practices of the public sector, in forms of grants and subsidies, or the triggering of the multiplier effect to stimulate income in the economy, thus a business is affected by the amount of finance in the pocket of the government, this is also affected by the political party in dominance, and thus is partially a political factor as well. Government funding is essential in order to make distance education provision a feasible and attractive earning opportunity for investors, otherwise, it might lead to lower profits in order to provide a social service, and could be a better option for Non-Profit Organizations rather than investors seeking profit returns. Socio-Cultural Factors Since a business operates in a society, there are social factors that would inevitably affect the business’s operations. Such as the location of the business, and the attitude of the residents there towards its products and services, and any changes in their perceptions and lifestyle would affect the business, hence the attitudes of the people and their acceptance of distance learning over traditional academic institutions can be a major factor influencing demand, it is an attractive option for household women who need flexibility of timings, and cannot cope up with hardcore conventional university schedules to acquire education, but might not be a feasible option for a teenager who is seeking an opportunity to acquire education in a highly interactive environment. Furthermore, the balance that the labor in the area maintains between the work and leisure time can impact the supply, the requirements regarding the educational qualifications of the personnel and the actual availability might differ, and the health factor also has to be considered in order to setup congenial working conditions. Pertaining to distance learning, the availability of instructors who are willing to provide services through this method would determine the supply of the service. Legal Factors Legal factors are to some extent related to the socio-cultural factors, they vary from nation to nation, yet some aspects are globally recognized, such as the due accreditation of intellectual property rights and the level of information disclosure, hence giving due recognition to the authors whose ideas are being used in the curriculum is a must. The varying regulations could be with regards to the competition laws, labor market regulations and the legal business standards that need to be met. Thus they can pose to be an opportunity as well as a problem for a business. Technological Factors Since technology is considered to be the backbone of innovation, it affects a business’ progress. It determines the reliability and effectiveness of the research and development procedure and its implementation, the expansion of the product line and maintenance of the existing product line, and also the communicative effectiveness of a business. Technology can also affect the business highly because it determines the rate of obsolescence of the machinery and equipment under use. This factor is critical with regards to distance learning, due to the equipment being used, such as audio/video quality, and as according to Alfred Bork: 'The value of the course materials is a key issue in distance learning.' Environmental Factors Environmental factors have also become a major consideration for any business in contemporary times, owing to the growing emphasis on sustainable development, thus a firm’s maintenance of the environment and its level of sustainable production can directly be related to the sensitive issues of global warming, pollution emission, energy conservation, and the depletion of natural resources. Since distance learning does not harm the environment, it does not have many environmental factors affecting it, except the location of the centre where the technological equipment and the network wires are placed. COMPETITION: PORTER’S FIVE FORCES MODEL As competition in the market is another major factor that affects the progress and growth of a business, it is apt to consider the forces which regulate the extent of rivalry for a business. Since any business that earns significant profits is likely to attract competition, thus according to Porter’s five forces model, the elements which affect the attractiveness of a business can be categorized into five factors which are not constant, but dynamic and face great fluctuations; however they can be countered and overcome if the business understands and uses them to facilitate their response to different business scenarios. A supplier is in a better position to bargain if it has a monopoly over the resource market, or if the switching costs or lack of competition lead to fewer available substitutes, their position is also strengthened if inputs have a high impact on the costs of the business. The buyer can be more powerful and persuasive if it has perfect information, about costs and substitute suppliers, which makes a shift to other suppliers easier and convenient, in addition, the input does not make up a high proportion of the overall costs, and it does not affect the buyer's profitability or performance, and if there is a chance that they can integrate backwards into the supplier's market. There is an ever increasing threat of new entrants coming to steal a portion of the market share from an existing business; entry barriers can restrict these new entrants, these barriers might be artificial or natural, and thus the existing players can retaliate if they have low cost advantages, or secures government protection, or control the supply of the product or the supply of inputs. If legal requirements to setup a business are high then it can also restrict new entrants, or it could be proposed that the knowledge and experience level required is high. Apart from new entrants, there are existing businesses who offer substitutes to a particular business, the threat from the substitute’s side is high if they are relatively inexpensive and provide the same level of utility. When the customers have perfect information and if switching costs are low then they would easily shift to a substitute, this factor is an additional threat if there is low or no brand loyalty to the existing business. All these factors determine or affect the competition level that a business has to face, thus high rivalry would exist when there are many other players in the same market, and the market is saturated along with low potential for growth, the products are more or less homogenized; and there is perfect information available to all actors. If the proportion of fixed costs is high, then it can be a barrier to exit, as quitting becomes expensive, plus it could be costly if the redundancy costs are high too. A business could overcome these rivalry problems if it develops a differentiated product, which can result in brand loyalty, or create a specific market for the business, they can also focus on catering the needs of a niche market, and thus occupy a unique place, or they can become cost effective, and be the overall cost leader; these are the generic strategies that an existing player can play in order to overcome competitive threats. Since distance education provision is a service that carries with it goodwill, and is subsidized by the government, the setup is not very expensive, and the substitute (traditional academic system) is old and distance learning is a differentiation in form innovation, thus rivalry would be high. However, the profit potential is not very high as yet, thus there are a few existing players in the market, but this industry has a great growth potential as W. Daniel Edge and John P. Loegering state: 'We believe that DE will continue to increase in prominence at institutions of Higher Education.' CONCLUSION AND RECOMMENDATIONS Thus it is recommended that the quality of the services should be upgraded in order to attract a greater client base. The curriculum should be designed in a way to support the different participants from different cultures, this system must take into account its major drawback, that is lack of interactivity, and try to overcome it by developing networking opportunities, which should not add a huge cost to the business and must not raise price drastically, as it is already an industry in infant stages, it should have penetrating prices that attracts customers. Quality assurance is a must for distance learning, as it is expanded on a wider scale, where the participants are out of the sight of the instructors, the authenticity of feedback and understanding cannot be ensured, in addition the service which crosses national borders becomes difficult to assess and there is a probability that the course materials might reach some participants while others are left out, or there could be a differentiation in the material received, thus as also recommended by Antony Stella and A Gnanam the solution to this problem lies in pooling the entire resource base in order to ensure coherence and standardization in the knowledge that is being imparted, and identification of better ways of assessments that ensure a no-cheating policy is being implemented, and this system should also welcome feedback from the customers and answer their queries in the most appropriate manner. Degree provision and proper marketing strategies can be adapted to create a client base; otherwise it might become an innovation that is not demanded. Course materials must take into account that experimentation and field practice cannot be undertaken within supervision, thus courses should be designed accordingly. Distance Learning is an innovation in the higher education sector that could be properly exploited to benefit the supplier, the customers, the labor, the government and the society as a whole, hence mechanisms should be designed to promote it appropriately and reap the fruit of this progressive phenomenon. References: Alfred Bork (1995) Distance Learning and Interaction: Toward a Virtual Learning Institution. Journal of Science Education and Technology, Vol. 4, No. 3 pp. 227-244. Springer Publications. Retrieved April 9th 2010 from http://www.jstor.org/stable/40188505 Antony Stella and A. Gnanam (2004) Quality Assurance in Distance Education: The Challenges to be Addressed Source: Higher Education, Vol. 47, No. 2. Pages 143-160. Springer Stable. Retrieved April 10th 2010 from http://www.jstor.org/stable/4151536 Christensen, C (1997) The Innovator’s Dilemma. Harvard Business School Press. DUIS (2008) Innovation Nation White Paper, Department for Innovations, Universities & Skills Martin, Michael J.C. (1994). Managing Innovation and Entrepreneurship in Technology-based Firms Osborne, S (1998) Voluntary organizations and innovation in public services. Routledge, London. Porter M (1990) Competitive Advantage of Nation. Free Press Rogers, E (1995) Diffusion of Innovation Tidd, J, Bessant, J and Martin, K (2005) Managing Innovation- 3rd Edition. Wiley, Chichester. W. Daniel Edge and John P. Loegering (2000) Source Distance Education: Expanding Learning Opportunities: Wildlife Society Bulletin, Vol. 28, No. 3 (Autumn, 2000), pp. 522-533. Allen Press. 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