Driver 2: The digital transformation
The digital transformation is the change associated with the application of digital technologies to all aspects of human society. It focuses on customer experience design, user-centered design, and hyper-personalization. Those three things are built on data, the Internet of Things, and AI.
“Transformations have three phases, and you have to know where you are,” Phelps said. Those phases are refine, disrupt, and transform, and U.S. higher education is in between disrupt and transform.
Response:
1. Build adaptability into every aspect of your organization–we don’t know what the disruptions or transformations will be, so we have to build in adaptability
2. Create a “futurology” practice or program featuring scenario planning or “what if” sessions
3. Actively manage the health of the organization as disruption rolls through
Driver 3: Employment and income challenges
More and more students are experiencing increases in expenses and loan debt. With all the financial burdens students seem to face when they leave college, will students be willing to stay out of the workforce, and wage-earning opportunities, for 4-6 years to earn a degree?
Response:
1. Create more, and more graceful, entry and exit points for students
2. Leverage digital technologies to make sure students have the best and most efficient experience
3. Drive down administrative costs through automation, autonomous systems, etc.
4. Look for partnerships to offset student tuition
Driver 4: Higher education’s financial crisis
Some experts predict that more and more colleges will go bankrupt in the not-too-distant future. Many institutions are merging, reorganizing, or restructuring.
Response:
1. Automate everything possible to drive down costs
2. Look for merger opportunities to build your institution’s footprint or brand, and find efficiencies
3. Find alternative funding sources, such as partnerships, to offset tuition and list government revenue
4. Eliminate or collapse departments
What does a future higher-ed institution look like after disruption?
These institutions will use algorithms to match students with everything they possibly can, including courses, peer groups, co-curricular activities, advisers and mentors, transportation, and food, said Phelps.
They will provide multiple entry and exit points, and will match prospective students with their “best fit” experience.
Future institutions also will have strategic workforce development that helps guide roles and skills across the university.
“Innovation is constantly focused on the digital experience, on improved efficiency, and broadening the reach of the university,” Phelps said. “Reinvention and innovation will be core to the culture.”
- Weak tech could push students, faculty to other institutions - April 13, 2026
- 13 predictions about edtech, innovation, and–yes–AI in 2026 - January 1, 2026
- 5 essential dimensions of AI literacy - December 12, 2025