Unlocking the revenue potential of stackable credentials for universities

SOURCE: Shutterstock
Micro-credentials and digital badges could be a new revenue source for universities.

By U2B Staff 

Read all stories

It’s often been said that the degree is dying or dead. 

It’s not that educational attainment rates are down. Quite the contrary, with the rise of the global middle class comes an increase in spending power and a heightened demand for higher education.

More families today want and can afford to educate their offspring, only they are finding the degree has lost much of its appeal, offering a much lower return on investment than before. Students graduating with an associate’s degree, especially in non-STEM fields, are finding it harder to find jobs that match their skills. To secure a meaningful place in the modern workforce, it’s no longer enough to get a degree – a graduate must also be job-ready and well-equipped with the skills businesses today actually need.

Fact is, in addition to practical experience and hard skills, there’s also greater emphasis on soft skills in today’s business recruitment strategies – ie. qualities such as critical thinking, problem-solving, ability to work in teams and effective communication are among the most in-demand skills of employers.


In its current form, the traditional university degree model doesn’t place nearly enough emphasis on developing such skills. The problem lies not so much in common challenge areas like teaching quality, medium of instruction or curriculum design (although these certainly are contributing factors) but in the overall structure of the degree itself.

What exactly does this mean and how should universities address the problem?

In an interview with U2B, Michael King, Vice President and General Manager of IBM’s Global Education Industry, weighs in.

Technology: a double-edged sword

According to King, the reason for higher education’s failure to keep pace with business demands is the same reason causing the current upheaval in the global labour market: resistance to technological change.

“Higher education institutions are very slow to change,” King says. “It’s a pernicious and persistent problem.”

“To make a change in formal curriculum requires a lot of consensus across the faculty, a lot of deliberation and planning… so consequently, you have the industry itself, and institutions that are fairly slow to change but a curriculum as well that can be slow to change.”

King had said the same in 2015 when advocating university-business collaboration in a piece for the Harvard Business Review (HBR). He’d pointed out then that a system overly focused on exams and lectures was creating students unprepared for the workforce.

“They’re (the students) suffering as a result – along with businesses and higher education institutions themselves. How can we expect students to be effective and successful employees when we’re using outdated models to prepare them?” he’d asked.

Exam hall
Higher education’s focus on lectures and exams has left graduates unprepared for the modern workforce. Source: Shutterstock

Today, four years later, King says the pace of change facing industry has only accelerated, creating an even greater need for higher education models to change their current pre-set format.

“At IBM, we used to think in terms of product cycles that were two or three years, even 18 months. But as more and more technology moves to cloud-based Software as a Service models, that life cycle is now measured in months,” King says.

Shorter product cycles, he says, mean businesses are operating in a much tougher climate, leading to less available resources for training and upskilling of new or current staff. King points out that 30 years ago, more companies were willing to hire and train fresh graduates to fill a particular job or role.

“Today, they no longer have the latitude, the flexibility to do that – they’re in a much more competitive environment. They’re looking for people to come in much more prepared to hit the ground running,” King says.

The result of that is businesses relying entirely on universities to fill their talent needs. But as slow adopters, universities often come up short.

This has to change, King says.

“The need for learning, and the rate and pace of change in that, has become even more dramatic than it was a few years ago.”

Personalised and lifelong: the future of education

Pressured to meet the needs of an increasingly demanding market, world-leading universities are ramping up efforts to put their learners on an education pathway that leads to higher guarantees of employment.

In many institutions, employability teams and strategies have been established, new degrees in tech fields such as blockchain and cybersecurity introduced, as well as more avenues for practical work and industry engagement. 

And with the competition for students getting stiffer in a saturated market, institutions are also pushing harder on lifelong learning options, offering more short courses and options for CPD (continuing professional development), and engaging the services of online programme management (OPM) firms to take their courses online.

Some institutions have gone a step further, introducing badging and micro-credentialling initiatives to increase the value of their offering. 


These stackable credentials are the future of higher education, according to King. 

He points out that with the accelerated speed of innovation in the global marketplace, the front-loaded degree model no longer works as well as it used to. But with stackable credentials, students can supplement their degrees with the skills most in demand, and do this continuously throughout their lives.

“I think we’re going to see education that’s more personalised… really tailored to the individual,” he says. 

“People are going to take snippets of education along the way. If you believe the statistics that a third of people are going to be in the gig economy and people are going to change jobs and careers half a dozen times, then you know they’re going to be constantly reskilling.”

Micro-credentials differ from the traditional degree in that they can be completed in shorter periods, an attribute that makes them particularly attractive to CPD learners. In essence, micro-credentials are like a modular degree, with the curriculum broken down into mini-programmes that stack towards the full degree.

Digital badges are a form of credential in which a learner gets to display a specific skill or competency that they picked up through a learning experience. This varies and can include soft skills like problem-solving, critical thinking, teamwork and communication to name a few, or core competencies in specific areas of technology such as digital analytics or cloud computing.

These badges are clickable and shareable across social, which helps burnish the learner’s online CV, aiding them in a job hunt.

Already, these digital learning options are gaining popularity in the higher education space.

IBM, for example, works with several higher learning institutions to create joint badges which integrate the company’s in-house education programmes with the university’s academic credentials. Late 2017, the firm inked an agreement with Northeastern University to allow learners to use IBM-issued badge credentials toward three professional master’s degree programmes. Last year, it developed its first digital badge programme with a community college in the US, the Wake Technical Community College.

According to a recent study by the University Professional and Continuing Education Association, at least one in five learning institutions in the US have issued digital badges. That was in 2016.

Today, the badging market has grown, thanks to the proliferation of scores of new entrants. A MarketsandMarkets report says the value of the badging market would likely hit US$205.6 million by 2023, growing at a Compound Annual Growth Rate (CAGR) of 19.8 percent from US$83.3 million in 2018.

But this is only just the beginning, King says.

“I think there is going to be a lot of technology innovation in this space, especially now that we have successful models. With these examples, we can look into building new platforms that allow for greater collaboration and scalability,” he says.

Job interview
Shareable on social media, digital badges can help a student’s job hunt. Source: Shutterstock

Universities as lifelong learning partners

Despite arguments claiming the rise of badging firms, OPMs and online learning options would kill business for universities, King disagrees.

To the contrary, he says digital badges should be seen as a new revenue potential for universities.

Instead of recruiting a student for a four-year associate’s degree and perhaps having them enroll for a further two-year Master’s degree after, education should be lifelong and continuous. Universities, King says, should see their student customers as “lifelong learning partners” to whom they would market new learning opportunities even beyond their first degree.

This means staying with the student throughout their learning journey, from their physical (or online) presence at the university, through to the rest of their working lives.

King envisions the future of higher education to be a seamless digital experience for both students and employers.

Using digital technologies like artificial intelligence, he says universities could keep track of their students’ skills levels throughout their careers, work with businesses to stay updated on industry needs and advertise new internship or job opportunities to these learners, and offer new upskilling opportunities to learners to fill current or future skills shortages.

“They won’t only deliver a degree but perhaps also deliver the kinds of services that a HR department at IBM might deliver where we keep track of people’s skills and give them customised experiences to identify skill gaps and look at new opportunities, new technologies to build their skills.

“We’ve got a lot of AI-driven tools for IBM employees to help them upskill and reskill – those kinds of services are the sorts of things that higher education institutions are going to need to deliver in the future.”


For employers, such a system also opens up a world of opportunity, King says.

On top of designing their own digital badges, companies could play a more active role in closing the skills gap by offering more work-study options, online internships and apprenticeships through partnerships with universities.

“I envision a world where I could get on my phone and see where my skills are today, what jobs are emerging in the marketplace in the next day and the next couple of years, what skills could I be earning based on my current profile, and where can I get those classes.

“To me,” he says, “that becomes a great revenue opportunity for universities.”

“Not only is this an area for growth, it’s one that can address this skills gap.”