Universities: Radically Change Or Cease To Exist

Tertiary education is too slow, too costly and too insulated from the world of work, and unless it transforms, technology and the labour market will replace it.

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Article link: https://open.substack.com/pub/johanosteyn/p/universities-radically-change-or?r=73gqa&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true

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Let me be clear at the outset: I am not against education. I am against paying a fortune, over four years, for something a machine can now deliver in seconds and a faculty too often cannot deliver at all. Tertiary education in its current form is on a collision course with technology and the labour market, and the institutions that mistake their buildings for their value will not survive the decade unchanged.

CONTEXT AND BACKGROUND

The financial warning signs are already flashing in the mature markets. In England, the Office for Students found that without corrective action, 124 institutions, some 45 percent of those analysed, faced a deficit in 2025-26, with nearly one in six holding less than thirty days of liquidity. In the United States, a demographic decline in the college-age population is projected to drive a wave of closures concentrated among smaller, tuition-dependent institutions. The model that charges a premium to deliver standardised content is meeting a generation that can find the content for free.

INSIGHT AND ANALYSIS

The honest objection is that the degree still pays. On average, it does. The New York Federal Reserve finds graduates earning a median well above their peers who hold only a school-leaving certificate, and that premium is real. The problem is what sits beneath the average. The return is wildly uneven by field, some degrees returning over a million dollars across a career and others barely breaking even, and the public has noticed: only 22 percent of Americans now believe a four-year degree is worth the cost if it requires borrowing. A uniform high price is being charged for an increasingly uneven and risky bet, and belief in that bet is collapsing faster than its value.

The deeper failure is relevance, and it is not primarily financial. A four-year qualification is a poor fit for a labour market in which a large share of core skills turns over within a few years, so institutions graduate students into a world that has already moved on. The most uncomfortable part of this is the faculty model. I have previously written about the tenured anachronism, the way the people teaching the future of business are so often stuck in its past, incentivised to publish research that takes years to appear while the field reinvents itself quarterly.

When a lecturer recites material a student could retrieve in seconds, the transaction no longer justifies its price. Employers have begun to act on this, prioritising demonstrable skills, though research from Harvard and the Burning Glass Institute shows the shift is still as much rhetoric as reality, with very few hires actually affected by dropped degree requirements.

IMPLICATIONS

South Africa cannot simply import the Western obituary, because its problem is the opposite one. Here the constraint is scarcity, not surplus: for the 2026 academic year the public system could offer roughly 235,000 first-year places while more than 245,000 candidates earned bachelor-level passes, shutting out thousands, and the graduate still enjoys a large premium against a brutal national jobless rate. The lesson is not that South Africa needs fewer universities, but that the same technological forces dismantling the Western model offer the tools to expand access and relevance here, if the sector is willing to be reinvented rather than merely defended.

CLOSING TAKEAWAY

The path forward is not the end of learning but the unbundling of the institution that monopolised it. The delivery of foundational knowledge moves to personalised AI tuition. The proof of competence moves toward demonstrated, verifiable skill and work-integrated learning. What remains for the university is the part only it can do: genuine research, supervised judgement, mentorship into a discipline, and the formation that happens among people rather than screens. The institutions that grasp this will narrow to what is irreplaceable and thrive. Those that keep charging thousands to deliver what a student can find for free, taught by people insulated from the world of work, will discover that radically changing was never the risk. It was the only way to survive.

Johan Steyn is a prominent AI thought leader, speaker, and author with a deep understanding of artificial intelligence’s impact on business and society. He is passionate about ethical AI development and its role in shaping a better future. Find out more about Johan’s work at https://www.aiforbusiness.net