Ideas
Dustin Mattison / Manfred Bornemann

Dustin Mattison interviewed Manfred Bornemann who discussed Value Chains in Education.

Burgess COMMENTARY

Peter Burgess

The Future of Supply Chains ... Dustin Mattison ... Value Chains in Education

I interviewed Manfred Bornemann who discussed Value Chains in Education.

It’s great to speak with you again, Manfred. I look forward today to hearing your new topic that you want to discuss, which is value chains in education. Can you first provide a brief background of yourself?

Hi, Dustin, it’s my pleasure to be with you again. Thank you very much for this talk. My background is as a researcher in intellectual capital now for almost 18 years. I started with some ideas on measurement of intellectual capital, and I did some projects in the German industry and German-speaking countries. We focused on small- and medium-size enterprises in industry and worked on some projects that focus on applying the concept of intellectual capital to networks and clusters as well in the automotive industry. Recently, I turned to education and, based on some project of some students of mine, I happened to learn about that industry quite a lot and was lucky enough to do some background research. I’m working as a consultant and working as a teacher and part-time lecturer. I try to bridge those domains of knowledge.

Thanks. Can you first discuss what intellectual capital is?

The concept of intellectual capital I think was introduced in the mid-’90s and focused on the intangible part of our economy. We have lots of tangible assets like, for example, factories and infrastructure in our businesses, but there is another side as well. This is the intangible part; we call it the intellectual part. Of course, there are humans. There’s human capital; we need people to work. We need structures, processes, for example, organizational structures that remain in an organization when people leave the organization. And there’s a third dimension, which is relational capital; this is the outside perspective. For example, if I’m providing a service, I need a customer, and I need to transfer that service. The customer needs to understand what I do, and I need to understand him. Together, we are creating some value. The idea of intellectual capital was implemented in production processes. We can infuse knowledge, we can infuse intellectual capital in our value-creating processes and at substantial higher value. There is an interesting difference to, for example, steel. If you pour steel and add it, for example, to a car, then you can use it only once, but if you use intellectual capital, you can use it twice or three times, as many times. And the more frequently you use it, the more valuable it becomes, because others can relate to it.

Thanks. My next question is regarding governance. Can you talk about governance or integrated management within educational institutions in Austria?

Yes. As I’m living in an automotive city, in Graz in Austria, the concept of value chains and supply chains is omnipresent; you can see it everywhere. The idea of integrating resources along value chain is quite established in the city and in industry. I was thinking about applying that concept to education as well.

What I figured was a bold comparison of setting a student similar to a car in automotive industry. A car is, of course, produced by many different suppliers and then assembled in a large factory and then it’s trimmed to customer demand and customer specifications. If we apply the same idea to education processes, the student should be ready for the challenges of the knowledge economy and future employers, right? My thinking goes that we could probably optimize the education processes to create best students available or the best future workers for industry in the future. I tried to test that idea. I’m aware that this is probably a concept that could be misunderstood, but the integration idea is just such a good one because it saved time and resources. I think that might be applicable to government processes as well.

The idea’s quite simple: If you can integrate different levels of education starting from kindergarten and preschool to high school and probably, later on, university levels, we could maybe reap some of the cost savings and efficiency gains we’ve seen in automotive industry as well. This essentially is the idea of applying an integration concept of a value chain or supply chain concept to education as well. I tested that and asked teachers and directors and 16 different institutions in Austria about the idea. We asked about their ideas on intellectual capital and particularly focused on that relational part; their relational part.

The relational capital part of intellectual capital covers, for example, drivers like collaboration with other institutions. In that case, collaborating schools or probably competing schools in the same district. And on the next level, for example, from kindergarten, you go to school and then the next levels of schooling. We asked directors, for example, their relations to the next level of education. Particularly on the teachers’ level, we found that there is almost no contact to the next level of organization or to the level previous that they’re on. That was interesting because it’s exactly the opposite of an integration idea. They were focusing on the pupils, of course. They were teaching them and investing lots of energy and knowledge to improve skills and knowledge of the pupils and students, but they did not really reflect on improving the relations to their surrounding institutions. That could be interesting.

Of course, they do share some infrastructure, like gyms, for example, or labs, so there is some contact, but regarding the level of knowledge, of competence of students, integration did not yet happen. I did a little experiment and asked teachers, as well as directors a simple question. I asked them: Who is your customer? I expected answers ranging from “My student” or “My pupil is my customer” or “The parents of my student is the customer of my training efforts,” or a third alternative could be, “I’m training the students to be future knowledge workers for industry or whatever research, whatever they want to do. There is a long and wide range of who the customer of a training process, of schooling, could be. In that case the relational capital part in the value chain of education was not yet defined, and I think that’s a huge potential to integrate the training and teaching processes along the value chain.

If we are aware that our pupils should be citizens and the future workforce, I think some of the training processes could be focused a little bit more. The general idea is to integrate education processes over time and support students in their development early on and help them avoid some frustrations, as well as develop some of their special talents and gifts, much more focused than they do it right now. In Europe we have a political program; it’s called PISA Project that compares teaching performance all over Europe. The general problem is that not all of our students are achieving their potential. We have to adapt our infrastructure, we have to adapt our institutions and think about new concepts of education, essentially.

Can you talk about what the focus should be on for the future?

Well, I think the environment of education changed a lot. We have not only complete new developments in technology, like a digital * (7:00—unclear); we have completely new technologies in sharing and doing online training, but we have new forms of interactions as well. I think the central approach of schools focusing on the students is absolutely essential, but I think we could open it up a little bit. So far, schools are closed entities, I think. They’re working in their curriculum; they start in autumn, most of them, and finish four years later probably, and then they see the students off to the next level.

I think we could maybe learn from industrial concepts like this value chain and focus on the customer idea. I think could probably learn the customer needs and apply this new integration of ideas on the training process as well. Probably that is demanding, particularly because, in some countries, there different stakeholders paying for the educational process. Sometimes it’s the program, sometimes it’s the state, and then there are, of course, some private institutions as well. Maybe we can benefit from the idea, from the market idea, or we learn from industry, whereas OEMs, some car manufacturers focus on their product and streamline the whole value chain in front of them. Probably we could benefit and integrate, for example, universities in the high school and college level to attract more students to higher education and give them the right education we need for the knowledge economy.

Thanks, Manfred, for sharing your views today on this topic of intellectual value chains in education.

My pleasure. I was happy to publish some of these ideas in an article. I’m going to send you the URL to this journal. It’s great to get some feedback probably, and I’m happy to have another chat with you.

Thank you. About Manfred Bornemann