“There are a few moments in my life I will never forget. Like the moment I proposed to my wife, Petra. … Today is one of those moments.”

Michael Horn
Co-Founder
Clayton Christensen Institute

So wrote Udacity founder and CEO Sebastian Thrun upon announcing a new $6,600 master’s in computer science degree in partnership with Georgia Tech.

Georgia Tech’s dean of computing Zvi Galil expressed similar glee when he said in an interview, “You know there is a revolution going on, right?”

Hyperbole about disruptive innovation in higher education is rampant. Starting as a trickle of conversation a decade back and turning into a torrent today, innovation now dominates the ecosystem’s collective mindshare.

Any time something new emerges, we at the Christensen Institute are inevitably asked, “Is this disruptive?”

Sometimes the circumstances around the innovation are opaque, and we are forced to write nuanced opinions that caveat our answers with things like government funding, regulation, accreditation, and “we’ll see if they can establish an actual business model.”

But in this case, there is no need for qualification. The Rubicon has been crossed.

This effort meets every criterion for being disruptive. The online master’s:

• Has a radically lower cost structure that enables a significantly lower price of $6,600 (for the entire degree!)
• Is aimed directly at what we refer to as “nonconsumers,” people who can’t access or afford the traditional offerings in a market for any number of reasons and have different needs from traditional consumers
• Serves these nonconsumers on both the student side and the employer side (the program has an exciting partnership with AT&T)
• Is simpler, more flexible, and more convenient

Both of us are nonconsumers of computer science education who are strongly considering pursuing this degree despite the fact that neither of us has ever thought about pursuing a third degree before. We just hope we get accepted, but if we don’t, the program also offers an even less expensive non-credit bearing credential that we suspect will carry some weight.

Our rationale is that the price is low enough not to break the bank but high enough to make our classmates and us really commit. Georgia Tech has a stellar reputation in computer science, and we have both been impressed with the commitment Udacity has made to improve continually its offerings, learn from its mistakes, and create quality courses that optimize people’s learning experiences. We are actually both glad that there will be non-graduate student, non-professor instructors because we think that there is a lot of benefit in working with people who specialize in instruction, and we don’t want to waste top-notch researchers’ time with our neophyte questions. Though neither of us wants to work as computer scientists, the credential would be valuable to each of us for different reasons.

Four things that would improve the program are if: 1) there is a long weekend on campus to meet our fellow students and instructors; 2) the courses are as competency-based as possible; 3) the admissions process is not selective; and 4) students have to put some money down up front.

Although incumbents have a hard time disrupting themselves, if they can pull off an “IBM” and create an autonomous business model that operates along very different metrics from the core offering, then the brand and resources that existing market leaders bring can be a valuable advantage. The facts that we wouldn’t hesitate today to send our own children to Georgia Tech and that employers will likely value this program helps show how true that is here. If Georgia Tech can maintain the necessary autonomy for this program, it starts with an advantage that, despite their disruptive elements, online programs such as the University of Phoenix have never possessed.

Even though we think that this announcement has the potential to be the disruptive moment for higher education, to extend the Julius Ceasar analogy, it is too early to Cry havoc and let slip the dogs of war.

Gunnar Counselman
CEO, Fidelis, Inc.

On the contrary, when disruptive forces are at play, it is crucial for incumbents to think and act strategically. Although there is a clear first-mover advantage when it comes to disruptive innovation, plenty of would-be disruptive upstarts have fallen flat by making mistakes along the way. By being first, Georgia Tech isn’t guaranteed of success, and there is room for several market leaders.

But as often happens when an industry is being disrupted, people aren’t able to see the big picture yet. It still feels like the year 2000, with Napster threatening the music industry while executives respond with uncoordinated spasms of anger and denial rather than strategy.

Most faculty and administrations have been forced to pull their heads out of the sand as the MOOCs have splashed across the horizon. But most are still stuck in a morass of political infighting over process and approaches to consultation and collaboration. To the extent they have joined the MOOCs, most universities have done so just to do something, not necessarily the strategic thing. Faculty, in rare moments of candor, will admit that their personal economic worries inform their feelings about academic acceptability.

Universities shouldn’t worry about being first per se; instead worry about being different. Be focused on being best for a given industry, a particular geography, your community of alumni, your existing feeder high schools, your current students, or a particular type of student need. Be patient for growth, but impatient for profitability or viability.

And engage your community to ask what job you do that makes your University unique? For whom? And what makes that hard to replicate?

Be honest in answering. Every institution cannot be everything to everyone. These are the first questions of strategy making, and it’s time for everyone in higher education to get strategic.

- See more at: http://www.christenseninstitute.org/udacity-and-georgia-tech-cross-the-rubicon/#sthash.HytNc0P7.dpuf

(Michael Horn is Co-Founder and Education Executive Director at the Clayton Christensen Institute for Disruptive Innovation.  His articles are frequently republished by the Georgia Public Policy Foundation.  Click here to watch Horn address the Foundation’s Education Innovation Breakfast on June 7.  Counselman is CEO of Fidelis Education and a Christensen Institute adjunct fellow.  This article was previously published by the Christensen Institute and Forbes.Com.)

The National Center for Policy Analysis has just reissued a ”cool” 2009 paper in which Iain Murray and H. Sterling Burnett outlined 10 policies to reduce carbon emissions.

I have an issue with the first sentence of their paper:

“Global warming is a reality. But whether it is a serious problem — and whether emis­sions of carbon dioxide (CO2) and other greenhouse gases from human fossil fuel use are the principal cause — are uncertain. The current debate over the U.S. response to climate change centers on greenhouse gas emissions reduction policies, which are likely to impose substantially higher costs to society than global warming might.”

My issue is that I don’t believe that opening sentence goes far enough. I would have written, “Global warming is a reality. But so is global cooling. That’s why activists have renamed it ‘climate change.’”

In fact, the latest news is that there hasn’t been any global warming in 16 years. (Watch this funny and disturbing video of activists in denial!)

That said, the paper has some really great ideas. It’s a 17-page paper, but the summary of the proposals highlights some of the approaches the Georgia Public Policy Foundation has championed.

No. 1: Eliminate All Subsidies for Fuel Use. Subsidies for energy research and development, as well as the production, transportation, mar­keting and consumption of energy, encourage greater energy use and raise emissions levels.

No. 2: Reduce Regulatory Barriers to New Nuclear Power Plants. Regulatory delays add substantially to the cost of nuclear power, which is the only proven technology that can provide enough reliable emissions-free energy to significantly reduce greenhouse gas emissions.

No. 3: Reduce Wildfires through Alternative Forest Management Institutions. Local and private forest management would reduce over­crowding and disease in poorly managed national forests, increasing the ability of the trees to absorb carbon and reducing wildfires, which release huge amounts of CO2.

No. 4: Liberalize Approval of Biotechnology. Through biotechnol­ogy we are developing faster growing varieties of trees that can absorb and store large amounts of CO2 as well as drought-resistant crops that can thrive despite climate change.

No. 5: Repeal the National Flood Insurance Pro­gram. Subsidized flood insurance is responsible for much of the development in coastal areas and in flood plains. Eliminating this subsidy would make us less vulnerable to higher sea levels and increased rainfall.

No. 6: Increase Use of Toll Roads with Conges­tion Pricing. Toll lanes with rates that vary according to time of day can reduce traffic delays that increase energy use and emissions.

No. 7: Remove Older Cars from the Road. Sub­sidizing the replacement of older vehicles with newer ones would increase fuel efficiency and reduce emis­sions.

No. 8: Reform Air Traffic Control Systems. Al­lowing pilots to fly more direct routes and avoid lengthy holding patterns and runway delays would save fuel and reduce aircraft emissions.

No. 9: Remove Regulatory Barriers to Innovation. Environmental regulations often increase the costs of replacing older, dirtier facilities with newer, cleaner ones.

No. 10: Encourage Breakthroughs in New Tech­nology. An “X” prize-type competition would encour­age the development of new transportation and electric power technologies that reduce CO2 emissions while meeting future energy demands.

Among the policies the Foundation has actively supported are nuclear energy; reduced regulatory barriers; congestion pricing and toll roads; private and local management of forests.

But what I admire about these proposals is that they encourage the innovative and entrepreneurial spirit of Americans. They are common sense. They don’t rely on government to provide the solution.

And, oh, yes. No. 7. I especially like No. 7. It’s about time for a new car for me.

What?

Read the proposals at http://www.ncpa.org/pdfs/st321.pdf

Benita M. Dodd, Vice President, Georgia Public Policy Foundation

What if you created a city that improved services for residents yet avoided the bloat of government bureaucracy and the long-term liability of government pensions? That’s just what happened in 2005 to Sandy Springs, when it became Georgia’s first new city in 50 years.

Before it became a city in December 2005, residents of unincorporated Sandy Springs spent three decades complaining about “substandard” county government services despite the high taxes they paid to an inefficient Fulton County government. Their campaign for cityhood followed unsuccessful attempts to annex Sandy Springs into the City of Atlanta. But Sandy Springs’ own efforts to incorporate were repeatedly resisted by the Democrat-controlled Legislature, which rejected a referendum because Fulton County resisted the loss of taxpayer revenue.

When Republicans took control of the General Assembly in 2005, they voted to allow the referendum on cityhood. The move was promptly approved by 94 percent of Sandy Springs voters in June 2005; a mayor and six councilmembers were elected in November and, in the blink of an eye, the new city of Sandy Springs was born on December 1, 2005. And this was a city with a twist: It opened business with just two city employees: the city manager and city clerk; after a bidding process, everything except police and fire services was contracted out to a private company through a public-private partnership (PPP).

Before it became a city in December 2005, residents of unincorporated Sandy Springs spent three decades complaining about “substandard” county government services despite the high taxes they paid to an inefficient Fulton County government. 

Why is this so important to the city’s success? When local governments all around were in the economic doldrums, Sandy Springs was sailing forward. That’s thanks to the efficiencies involved in handing over operations to the private sector, according to Oliver Porter, one of the architects of cityhood who became interim city manager and is now considered an international expert on privatizing local governments.

“One of the great benefits of the public-private partnership is the breaking down of the budgetary process,” Porter maintains.

“The typical government builds departmental budgets. What is the incentive the department head has? To provide more services. Each one builds a budget and it goes to the top, then you have to arbitrarily whack it. That’s broken down in the PPP model by the profit incentive.”

Another advantage was that, by outsourcing all services except public safety, the fledgling city’s management company could move resources around as needed.

Third, when there are no government employees, there are no long-term liabilities, such as public employee pensions, or union negotiations. Until Sandy Springs set up its own police and fire departments in 2006, it contracted with Fulton County for those services. By law, the county can bill no more than the actual cost of providing services to the new city, but when unhappy county governments lose revenue as new cities are formed by pockets of higher-income residents, “costs” of services contracted can be high: “We were killed in Sandy Springs for police and fire until we could get out of it,” Porter recalls.

Today, apart from police and firefighters, Sandy Springs has fewer than 10 employees, including the city manager, the city clerk, court clerk and finance director. The city receives about 15 percent of taxes for local services; 52 percent goes to the county for schools. Porter, who modestly attributes Sandy Springs’ success to being “lucky,” has one regret in hindsight: “We should’ve taken welfare services, too.”

Today, apart from police and firefighters, Sandy Springs has fewer than 10 employees, including the city manager, the city clerk, court clerk and finance director. 

“I’m not sure if there are constitutional prohibitions, but I bet we could take that remaining 33 percent – twice what we spend on local services, mind you! – then do the same job with welfare for 15 percent.”

In 2011, the city switched from managing company CH2MHill, which had succeeded in getting Sandy Springs up and running in three months, to service contracts with several companies with lower bids. The move is expected to save $35 million over five years.

Has the city’s PPP model met with satisfaction? Yes, according to citizen surveys. Yes, according to the first election after incorporation: 84 percent was the lowest vote for an incumbent. That’s no surprise, considering the millage rate and taxes haven’t increased, parks and roads are improved, the city boasts a $35 million reserve against a budget of $85 million and there are no unfunded liabilities, all despite the economic downturn. Sandy Springs’ success has spurred six new cities in Georgia alone, and the Sandy Springs model is trumpeted as efficient, effective and closer to the people.

Sandy Springs is not perfect. Residents do complain, but rarely about operations. Most complaints arise with City Council decisions, such as when residents are unhappy with zoning.

“I say to people, look at this: You actually went in and you were heard,” Porter says “How much chance did you get of being heard in Fulton County? The very fact that there was discussion and debate – even an argument – is a plus for our side.”

Benita Dodd is the Vice President at the Georgia Public Policy Foundation. This commentary first appeared in The Ripon Forum, Volume 47, No. 2, Spring 2013.

By Bill Peacock 

Back in the depths of the Great Recession, Texas became the target of liberal commentators across the nation, just as the Lone Star State was in the midst of creating more new jobs than the rest of the nation combined. The New York Times’ Paul Krugman led the chorus claiming, “the Texas miracle is a myth, and … offers no useful lessons on how to restore national full employment.” Of course, it wasn’t the new jobs they minded: it was the fact that the Texas miracle was brought to pass by the Texas model of lower taxes, less regulation and a sound civil justice system.

Though there is nothing miraculous about the Texas model, it appears so to many because it flies in the face of today’s prevailing approach to economic development, which mainly involves subsidizing business using taxpayer money. In other words, it is government centric — and that’s why liberals like it. Nevertheless, the support for this approach is quite bipartisan. Businesses like it because they don’t have to compete for money through the market, and policymakers like it because they can claim that they did something to improve the economy.

Texas hasn’t entirely eschewed this model. The Texas Enterprise Fund uses corporate subsidies to attract new businesses; and the Texas Emerging Technology Fund actually takes an ownership interest in startups. These along with other economic development programs will receive close to $300 million in the state’s current two-year budget.

Additionally, the Texas Legislature just passed legislation that would renew targeted, economic development property tax cuts at the local level. The cost of that bill is expected to rise to close to $500 million a year.

Texans simply don’t believe that government is the way to grow the economy. 

Despite these programs, Texas devotes relatively few resources — comparatively — to these ends. Our research shows that in 2010, Texas ranked 37th in per capita spending on economic development. Texans simply don’t believe that government is the way to grow the economy. Instead, businesses in Texas are allowed to earn profits in the marketplace that they can then invest in jobs for hard-working Texans. How is Texas doing with this counter-cultural approach? Pretty darned well. Texas has 52 companies on the Fortune 500, second only to California’s 53. Its 10-year gross state product growth is 57.7 percent, compared to the national average of 46.6 percent.

Nowhere can the effects of the Texas model be seen more clearly than in job growth. During the 10 years through 2011, the rest of the United States lost over 700,000 jobs while Texas alone gained 1.2 million. More recently, Texas added 326,100 jobs from April 2012 to April 2013, the largest year-over-year job growth of any state. In times of feast and famine, the Texas model is working.

It’s working in other states as well. States with low economic development spending top those with high economic development spending in job growth, income growth and population growth. The low spending states also spend less on government overall, again proving the success of the Texas model.

Texas added 326,100 jobs from April 2012 to April 2013, the largest year-over-year job growth of any state.

Of course, the Texas model didn’t begin in Texas. What we’ve really done is try to live out the American Dream. The problem is that most other large states have abandoned the Dream and seem satisfied with living in the nightmare of anemic job growth, population loss and recurrent poverty.

Texas Governor Rick Perry recognizes these advantages. So while he can tout Texas’ economic development programs when reaching out to business in other states, he mainly focuses on the Texas model. This can be seen in a recent radio ad in California where he noted that “[b]uilding a business is tough, but I hear building a business in California is next to impossible.” He then invited California businesses to “come check out Texas … and see why our low taxes, sensible regulations and fair legal system are just the thing to get your business moving to Texas.”

The Texas model is based on the simple premise that freedom begets prosperity. Life, liberty, and the pursuit of happiness are still honored in the Lone Star state. Not perfectly, of course. But the American Dream still has a fighting chance in Texas.

Bill Peacock is the Vice President of Research and Director of the Center for Economic Freedom at the Texas. This article is republished from The Ripon Forum Volume 47, No. 2, Spring 2013

June 14, 2013 

It’s Friday! 

Today is Flag Day. Do you know the proper way to handle the American Flag? Find out here: hwww.usa-flag-site.org/etiquette.shtml. 

Quotes of Note

“The Federal government will not start or carry on any commercial activity to provide a service or product for its own use if such product or service can be procured from private enterprise through ordinary business channels.” – Bureau of the Budget Bulletin 55-4, January 15, 1955

“The greatest [calamity] which could befall [us would be] submission to a government of unlimited powers.” – Thomas Jefferson

“There are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power than by violent and sudden usurpations.” – James Madison

“All trips on a roadway are not the same, therefore, all lanes on a roadway should not be the same. Motorists value their time differently – whether driving to a job, getting to the airport to catch a plane or picking up a child at day care, versus more leisurely trips for shopping or movies. Urban corridors need to provide choices for motorists who can evolve into customers of priced managed lanes, a mobility option available to motorists when they need it.” – Matthew Click, HNTB

Energy and environment

Fueling price hikes: Overall, the Renewable Fuel Standard program led to higher prices for staple foods all over the world, a Mercatus Center report explains. “By some estimates, up to 70 percent to 75 percent of the increase in food prices was due to biofuels and the related consequences of low grain stocks, large land use shifts, speculative activity and export bans.” Worse, the spike in food prices, coupled with the global economic crisis, halted and even reversed the long-time trend in reducing malnutrition.

Bad ban: Contrary to the myth propagated by environmental lobbyists, plastic bags are not a significant source of waste, the National Center for Policy Analysis points out in an op-ed in the Dallas Morning News. The op-ed opposing a proposed ban on plastic bags in Dallas notes that the bags are frequently reused and recycled. “Indeed, the national 2009 Keep America Beautiful study does not even include plastic bags in its top 10 sources of litter. A recent study found that plastic grocery bags make up less than 0.6 percent of the overall waste stream.”

Transportation

A great case for congestion pricing: Matthew Click, HNTB’s Atlanta-based priced managed lanes director, maintains that, “there is no capacity building strategy that can fully solve congestion, and even if there was, it is not affordable or sustainable. The only strategy that can solve congestion is an operational strategy using the congestion pricing concept with deployment strategies like priced managed lanes. Not only do priced managed lanes provide a mobility option for automobile customers, they also provide a reliable transit corridor for buses at a much lower cost than traditional fixed-rail transit.”

Demonizing curbside bus service: Intercity bus services such as Megabus have grown by leaps and bounds over the past decade, becoming the fastest-growing segment of intercity passenger travel. But a 2011 study by the National Transportation Safety Board claimed that the curbside buses were unsafe. Dozens of news stories reported that curbside bus companies were “seven times more likely” to be involved in a fatal accident than conventional bus operators. The study has now been exposed as bogus by Jim Epstein of Reason.TV. One example: of the 37 fatal accidents allegedly occurring on curbside carriers, 24 were actually on conventional Greyhound. Overall, Epstein verified that 30 of the 37 accidents had actually occurred on buses operated by conventional carriers.

Education

The Next Generation Science Standards (NGSS) aim to do for Science what Common Core does for English language arts and math: define “college- and career-readiness,” according to the Thomas B. Fordham Institute. Fordham gives the standards a C grade, for 5 points: “The NGSS grade is clearly superior to grades we granted to the science standards of 16 states and the PISA framework in the State of State Science Standards 2012 but clearly inferior to those of 12 states and the District of Columbia, as well as the NAEP and TIMSS frameworks.” Georgia was among the seven states Fordham considered “too close to call,” earning a C grade but one point more than the NGSS.

Events

July 11: Education expert Jay Greene is the keynote speaker at the Foundation’s annual Friedman Legacy for Freedom Day, which will be marked with a noon Policy Briefing Luncheon at the Athens Country Club. ($30.) Find out more at http://tinyurl.com/nz9at52; register at http://tinyurl.com/ojcs5fp.

Mark your calendar: The fourth annual Georgia Legislative Policy Forum takes place Friday, October 11, at the Renaissance Waverly Atlanta. Last year, hundreds of Georgia’s legislators, businesspeople and interested citizens attended to hear national policy experts discuss free-market solutions to Georgia’s challenges. Details to follow.

June 19: How will ObamaCare impact your business? Find out at the Georgia Chamber’s 2013 Federal Health Care Conference. Details and registration at  http://tinyurl.com/k2vjobl. (Foundation members who are not Georgia Chamber members can contact Ashley Cody (acody@gachamber.com) to take advantage of the Chamber member rate for this event.)

Social media

We’re heading toward 2,100 “likes” on the Foundation’s Facebook page! Join us at facebook.com/GeorgiaPolicyto get daily policy news, views, updates, Quotes of Note and photos. Nearly 1,000 Twitter followers get their Foundation news at twitter.com/gppf. Find out about student scholarships to attend Foundation events at facebook.com/GeorgiaPolicySOSProgram.

YouTube: We’ve recently been adding to our archives. For some Georgia history, take a look at speeches from our 1995 Freedom Award Dinner honoring the late former U.S. Attorney General Judge Griffin Bell, the late Senator Herman Talmadge and Bo Callaway. Subscribe to the channel to make the best use of our resources: http://tinyurl.com/agkm5h5.

This Week in The Forum: In “Checking Up on Health,” Benita Dodd writes about higher premiums for young people, a greater doctor shortage, great news for temporary workers, and how Americans are not warming up to ObamaCare. Find this and other recent posts in The Forum, the Foundation’s blog, at georgiapolicy.org/category/the-forum/.

Visit www.georgiapolicy.org to read our latest commentary, “Putting College in Students’ REACH,” by Benita Dodd.  

Have a great weekend. 

Kelly McCutchen and Benita Dodd  

FRIDAY FACTS is made possible by the generosity of the Georgia Public Policy Foundation’s donors. If you enjoy the FRIDAY FACTS, please consider making a tax-deductible contribution to help advance our important mission by clicking here. Visit our Web site at www.georgiapolicy.org. Join The Forum at http://forum.georgiapolicy.org/. Become a fan of the Foundation on Facebook and follow us on Twitter at twitter.com/gppf.

In a week highlighting more disappointing actions among so-called leaders at the national and state level, in a climate where good corporate citizens are often demonized, a shining beacon was celebrated June 11 at the Georgia Governor’s Mansion: the REACH scholarship program.

REACH Georgia – for Realizing Educational Achievement Can Happen – was launched in February 2012 by Governor Nathan Deal, who continues to champion the privately funded program. It’s a remarkable, comprehensive, needs-based scholarship program, using private funds to target young students who otherwise couldn’t dream of going to college and who may not even reach high school graduation.

The program was introduced to Georgia by Dr. Howard Hinesley, current superintendent of Cartersville City Schools, who developed the model while he was a superintendent in Florida. Florida took the program statewide.

This past school year the program was active in three counties: Dodge, Rabun and Douglas, systems with high rates of students from low-income families. In Dodge County, nearly three out of four students are eligible for free and reduced-price lunches. In Douglas, it’s 60 percent; in Rabun, it’s almost 69 percent. Sadly, there are some Georgia counties with higher rates of poverty. Even with Georgia’s HOPE scholarship, many of these students’ families lack the funds or wherewithal to obtain a college education.

The program begins in the difficult middle-school years, in the seventh grade. Unlike the Lottery-funded HOPE scholarship, REACH is not a handout to students upon graduation. It must be earned along the way. It’s a promise of future college funding – up to $10,000 – based on the student’s ongoing commitment and participation. It requires academic achievement – a C grade or better – as well as good attendance and behavior. And it’s backed by the community: Every student must have regular meetings with an academic coach and mentor.

“REACH allows students to start dreaming about the future,” Rabun Superintendent Matt Arthur told a gathering of education and business leaders on June 11 at the Governor’s Mansion.

“When you’re in seventh grade and 12 or 13 years old, not many students have thought about it. But with the REACH scholarship they begin to dream; they begin to see that there is light at the end of the tunnel. It places responsibility for success on the child, but it also places that responsibility on the parents, and the schools and the community.”  

In involving the community, in bridging middle school and high school, and in targeting bright but at-risk, low-income students, REACH is transformational.

“REACH is instrumental in building Rabun County’s and Georgia’s next workforce. But we’re also looking for our next leaders in Rabun County and Georgia to come from these REACH scholarships,” Arthur noted.

Rabun’s superintendent brought along one of his REACH participants. Laura Vinson, who just completed eighth grade with a 4.0 GPA, was joined by her father, grandmother and sister, who have raised her since she was 3 years old.

“Growing up with only one parent most of my life has been difficult,” the nervous 14-year-old told the group. “The REACH program has helped and supported my plans for the future in many ways I could not.

“I have been given the opportunity to pursue my dreams, but there are thousands of other students around Georgia who have the same desire and deserve the same opportunity that I have, because it can truly change their lives, just like it did mine.”

The program is a shining example, too, of corporate citizenship: REACH was launched in 2012 with $250,000 from AT&T. At the Governor’s Mansion on June 11 Sylvia Russell, president of AT&T Georgia, announced the company would contribute another $100,000.

It’s a generous contribution and an investment. AT&T is savvy enough to foresee the advantages to Georgia’s economy and its own growth with an educated workforce. The graduation rate for Georgia students was just under 70 percent last year. What is more urgent is that by 2018, more than 60 percent of job openings in Georgia are expected to require some form of postsecondary education. Do the math.

This is a program that clearly still has plenty of room to grow. Nevertheless, amid dark days of bad news and disappointing leadership, Georgians should be proud to know that their leaders are forward-looking with great ideas that advance the state through academic achievement, accountability and individual responsibility.

Find out more about REACH at www.reachga.com.

Benita M. Dodd is vice president of the Georgia Public Policy Foundation (www.georgiapolicy.org), an independent think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (June 14, 2013). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.

By Matthew Click

Today, states across the country face the daunting challenge of providing reliable transportation alternatives in their metropolitan areas. Urban congestion results in wasted fuel and time for people and puts American businesses at a disadvantage when compared to their global competitors. 

It’s just not growing on you: Most voters continue to view ObamaCare unfavorably, according to the latest Rasmussen Reports survey. Two out of three expect it to increase the federal budget deficit, six out of 10 expect it to increase health care costs and half expect it to hurt the quality of care. The survey finds that 39 percent of likely U.S. voters hold at least a somewhat favorable opinion of the health care law, while 53 percent view it unfavorably. This includes 16 percent with a very favorable opinion and 38 percent with a very unfavorable one.

Not affordable: An editorial in Investor’s Business Daily points out that the left continues to claim,” as Paul Krugman did not too long ago, that the law ‘will become more popular once ObamaCare goes into effect.’ But its numbers are virtually certain to fall once millions of Americans learn firsthand that all those promises Democrats made – about how it would lower costs and let everyone keep their health plans and doctors – were bogus,” the editorial predicts.

Good news, bad news: Temporary staffing jobs hit a record 2.68 million in May as employers look to lighten the burden of ObamaCare’s regulations and fines for failing to provide full-time workers health coverage. Temp employment grew by 25,600, eclipsing the previous high seen in April 2000. In the past four months, the temp industry has added 99,000 jobs. Temp firms allow employers to stay below that 50-worker threshold and free from ObamaCare’s regulations. Firms above that level who don’t provide health coverage will face a $2,000 per-worker fine (minus 30 workers), so the 50th employee could mean a $40,000 fine under ObamaCare. Employers that do offer health coverage also can face fines, if that coverage doesn’t meet the law’s “affordability” and minimum value tests. In that case, employers will face a $3,000 penalty for each full-time worker who taps ObamaCare subsidies. The temp industry also offers these firms a route to minimize expenses. Consider an employer who needs to hire a full-time worker for a six-month project. If the firm hired this worker directly, it would have to provide health coverage within 90 days of hiring, under ObamaCare rules. Source: Investors.com

No doctors: Thanks to the Affordable Care Act, the 20,000-doctor shortage is set to quintuple, Sally Pipes of the Pacific Research Institute writes in Forbes magazine. She also notes that doctors don’t want to deal with Medicaid patients. Medicaid pays about 60 percent as much as private insurance. For many doctors, the costs of treating someone on Medicaid are higher than what the government will pay them. These underpayments have grown worse over time, as cash-strapped states have tried to rein in spending on Medicaid.

Youth has its disadvantages: Four out of five people younger than 30 will face higher premiums than without the Affordable Care Act even with the subsidies many can receive, according to Grace-Marie Turner of the Galen Institute. “The law requires young people to pay more for their health coverage so older people can pay less. A study published this year by the American Academy of Actuaries’ Contingencies magazine found that because of this provision, ‘premiums for younger, healthier individuals could increase by more than 40 percent.’ Young men will pay even more than young women. A former director of the Congressional Budget Office, Douglas Holtz-Eakin, conducted a survey that showed fewer than half of young people will sign up for insurance if premiums rise by 30 percent.”

Devastation: John Goodman does an excellent job of dismantling The New York Times’ claims of devastation to low-income patients in states that don’t embrace Medicaid expansion: “Let’s begin with [Paul] Krugman’s claim that the failure of the states to expand Medicaid will cause 19,000 deaths a year. This number comes from an extrapolation by RAND Corporation researchers of a study by Katherine Baicker and her colleagues finding association, but not causation, between Medicaid enrollment and reduced mortality. What Krugman doesn’t tell his readers is that Baicker was the lead author of a more recent and much more careful study of the issue involving the Oregon Medicaid experiment. That study found no effect of Medicaid (versus uninsurance) on health! Further, the Oregon study is consistent with most of the serious literature on this subject, including a very famous study by the RAND Corporation itself.” Source: Forbes.com

In Brief

A little help: Balch & Bingham LLP has launched the Affordable Care Act Review, a blog authored by members of the firm’s Affordable Care Act Strategists. The ACA Review, located at www.acareview.com, serves as a resource to provide timely information, practical commentary and analysis to the business community.

The federal government has paid $14.6 billion to 295,205 eligible professionals and hospitals as part of the Medicare and Medicaid electronic health record (HER) incentive programs since its inception in 2011, according to a monthly update. This year through April, 1,877 were paid through the program, which gives incentive payments to those that demonstrate “meaningful use of certified EHR technology.” Eligible professionals can receive up to $44,000 over five years. Georgia ranked 10th in the nation for funds received: $392 million. Source: Becker’s Hospital Review

Do you know the difference between Sudden Cardiac Arrest and a heart attack? The Health & Safety Institute (HSI) has published an infographic on Sudden Cardiac Arrest (SCA) and the only way to save a victim’s life, which is prompt CPR and use of an automated external defibrillator (AED). SCA always is fatal without prompt intervention. It also explains that an SCA victim only can survive without CPR and defibrillation for about 10 minutes. Source: EHS Today

Quotes of Note

“If we consider new models, using technology to rethink and redesign health care, costs need not continue to rise. In fact, they could drop, becoming affordable to even the poorest. We need to do for health care what microlending is doing for banking: revolutionize an industry stuck in old ways.” – Muhammad Yunus

“I reckon being ill as one of the great pleasures of life, provided one is not too ill and is not obliged to work till one is better.” – Samuel Butler

“Just because I have a fitness app on my phone doesn’t make me an athlete.” – Dr. Harry Greenspun

Michael Horn
Co-Founder
Clayton Christensen Institute

In Larry Cuban’s recent piece in the Washington Post, “Why K-12 online learning isn’t really revolutionizing teaching,” he in essence says that our research showing that online learning is a disruptive innovation that has the potential to transform K–12 education into a student-centric learning design that can allow each student to realize his or her fullest potential is unfortunate hype from academic gurus.

What’s unfortunate is Cuban’s misrepresentation of our research to hype his argument.

Cuban refers to our prediction that by 2019 50 percent of all high school courses will be delivered online in some form or fashion. He says that the prediction is erroneous because of the different forms in which online learning will arrive and argues that online learning will not disrupt schools.

What might shock him is that we agree with those two statements.

For the first, that’s why our prediction states that online learning will occur in different forms and fashions, and the bulk of it—at least 90 percent—will be in blended-learning environments. It is interesting that Cuban doesn’t dispute that these different forms might add up to 50 percent of high school courses by 2019.

Indeed, our research at the Clayton Christensen Institute has explored in sharp detail the different forms of online learning in K–12 education, as we have provided a definition of blended learning that is used widely in the field and have classified the different models we see emerging in schools themselves to give educators a language to talk about the different innovations they are pioneering. Perhaps Cuban should draw on some of this research before discussing blended learning.

As to the second point, we have never stated that online learning will disrupt schools; instead, our research shows that online learning will disrupt the traditional classroom environment in secondary schools over the long term. Our latest research adds another subtlety, which is that online learning is unlikely to be disruptive to the traditional classroom in elementary schools, but instead will, for the most part, take place within those traditional classrooms.

Cuban’s other main point in the piece is more complex. He says that some online learning programs are teacher-centric, whereas others are quite student-centric and high quality. He is right. Not all online learning—in blended-learning or distance-learning environments—is good. Some of it is great, and some of it is bad. This is why we’ve said that online learning has the potential—but is not guaranteed—to transform schools into student-centric learning environments.

Cuban has long done some of the best work in explaining why so many hyped learning fads and technologies have failed to transform schooling. His past work is in fact consistent with the theories of disruptive innovation, which show that the model in which a technology is implemented is often more important than the technology itself. This is in part why we relied heavily on his research in Chapter 3 of Disrupting Class. Central to his argument has been that despite all the reforms and fads, once the classroom door shuts, teachers have the domain to ignore all of the reform efforts and fall back on what they know and believe is best.

Once again, we agree. This is why, however, disruptive innovation is so powerful. In education, it can allow us to replace that classroom model with a new one that is far more conducive to personalizing learning for each student. What the theory of disruptive innovation says is that online learning—in its many forms—will disrupt the traditional classroom over the long haul in secondary schools. What disruptive innovation does not say is whether the result will be a student-centric learning design. The theory is largely silent on this normative question.

That’s where the potential enters the equation. Because online learning scales naturally, the good programs about which Cuban writes can theoretically serve millions of students and aid millions of teachers. The question at hand is how do we create the conditions for the good programs, not the mediocre or bad ones, to thrive.

Because we have the chance to reinvent the learning model as we know it—with far fewer constituencies standing in the way of protecting the “status quo” in online learning—there is currently a window in which to put in place policies that create the proper incentives. Paying providers for student outcomes; not regulating and paying for inputs so as to free up educators on the ground to make smart decisions for their students; moving to a competency-based learning system, in which students progress once they have mastered a concept, not when the calendar says it is time to move on; and having appropriate on-demand systems of assessments that allow for a bottoms-up accountability that rewards growth instead of today’s top-down accountability system together appear to be critical pieces.

If online learning continues to grow within the current regulatory environment, however, which focuses on inputs instead of outcomes and has at its core a set of assumptions that takes the factory-model classroom system that has been in place for over 100 years as a given, then we may lose that window.

We education transformers—those who do not want to just reform education but to transform it into a student-centric design—don’t have all the answers for how to do this well. We should admit that. But Cuban and others could help. Rather than simply act as naysayers who say why everything is doomed to fail, they could be part of “the solution.” Asking how we might make this unique opportunity different—or pointing out where we are erring in shaping it in a constructive fashion—would go a long way. The past is instructive, but it should help guide us forward, not hold us back.

(Michael Horn is Co-Founder and Education Director at the Clayton Christensen Institute.  Horn was the keynote speaker at the Public Policy Foundation’s June 6 Education Innovation breakfast. Watch his remarks in their entirety or as excerpts on our YouTube channel.   This article is republished from the Clayton Christensen Institute website and Forbes.com.) 

 June 7, 2013 

It’s Friday! 

Quotes of Note

“Good intentions will always be pleaded for every assumption of authority. It is hardly too strong to say that the Constitution was made to guard the people against the dangers of good intentions. There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters.” – Daniel Webster 

“The ‘private sector’ of the economy is, in fact, the voluntary sector; and … the ‘public sector’ is, in fact, the coercive sector.”  – Henry Hazlitt 

“Georgia Tech’s online degree, powered by Udacity, is such a game-changer. For the same $7,000 a year that New York City spends per student on school buses, you can now get a master’s from one of the most well-respected programs in the country. Moore’s Law says these fees should drop to $1,000 by 2020 – a boon for students and for the economy.” – Wall Street Journal 

Government

Debt: Georgia has the 47th lowest total state debt per capita ($1,373) in the nation, according to the Tax Foundation. Tennessee has the lowest ranking with a debt of $925 per capita, and Massachusetts has the highest at $11,309.

Privatization: The experiences of the thousands of other local governments around the country (and indeed, around the world) that have embraced privatization demonstrate that there is indeed another more entrepreneurial and pragmatic way to govern, according to  Leonard Gilroy and Adrian Moore of the Reason Foundation. “When implemented with care, due diligence and a focus on maximizing competition, privatization is an approach that puts results, performance and outcomes first and can deliver high-quality public services at a lower cost.”

Economy

Thank a foreign firm:  From 2007 to 2012, foreign investment in U.S. manufacturing totaled $493 billion, compared with $270 billion the previous six years, according to the Organization for International Investment. Source: IndustryWeek

Look north for economic advice: Canada’s score on “economic freedom” in the Fraser Institute’s Economic Freedom of the World report is now higher than the score for the United States, Chris Edwards writes for the Cato Institute. Canada has balanced its budget every year since 1998 and has actually cut spending. Canada has reduced trade barriers, privatized businesses, slashed its corporate tax rate and the Canadian central bank has adopted a goal of price stability. The United States could try some of these ideas to get us out of our economic doldrums. 

My pleasure to serve you: After neighbors objected and the city rejected the design of a drive-through window at a Chick-fil-A restaurant in Birmingham’s Five Points South neighborhood, the Atlanta-based fast food chain instituted “curb-side” service, according to a report by the Birmingham News. Source: Bizjournals.com

Events

July 11: Education expert Jay Greene is the keynote speaker at the Foundation’s annual Friedman Legacy for Freedom Day, which will be marked with a noon Policy Briefing Luncheon at the Athens Country Club. ($30.) Find out more at http://tinyurl.com/nz9at52; register at http://tinyurl.com/ojcs5fp.

Mark your calendar: The fourth annual Georgia Legislative Policy Forum takes place Friday, October 11, at the Renaissance Waverly Atlanta. Last year, hundreds of Georgia’s legislators, businesspeople and interested citizens attended to hear national policy experts discuss free-market solutions to Georgia’s challenges. Details to follow.

June 19: How will ObamaCare impact your business? Find out at the Georgia Chamber’s 2013 Federal Health Care Conference. Details and registration at http://tinyurl.com/k2vjobl. (Foundation members who are not Georgia Chamber members can contact Ashley Cody (acody@gachamber.com) to take advantage of the Chamber member rate for this event.)

Got students? The Foundation’s Student Outreach Scholarship (SOS) Program uses supporters’ tax-deductible contributions to cover the charge for qualified students to attend events, giving them an opportunity to hear national speakers on free-market ideas and to network with Georgia’s business, community and political leaders. Find out how to apply to attend events or to contribute to this Program at http://www.georgiapolicy.org/?p=9167.

Social media

We’re heading toward 2,100 “likes” on the Foundation’s Facebook page! Join us at facebook.com/GeorgiaPolicyto get daily policy news, views, updates, Quotes of Note and photos. Nearly 1,000 Twitter followers get their Foundation news at twitter.com/gppf. Find out about student scholarships to attend Foundation events at facebook.com/GeorgiaPolicySOSProgram.

YouTube: The Foundation’s YouTube channel is a rapidly expanding resource for rich, fact-filled public policy discussions, both new and historical events, including Georgia Legislative Policy Forum sessions, Leadership Breakfasts and Policy Briefing Luncheons. Subscribe to the channel to make the best use of our resources: http://tinyurl.com/agkm5h5.

This Week in The Forum: In “Checking Up on Health,” Benita Dodd writes about Virtual Health Assistants, a potential cure for juvenile diabetes and how the federal government wants input on regulating health care information technology. Find this and other recent posts in The Forum, the Foundation’s blog, at georgiapolicy.org/category/the-forum/. 

Visit www.georgiapolicy.org to read our latest commentary, “High-Speed Rail in Europe and Asia: Lessons for the United States,” by Baruch Feigenbaum.  

Have a great weekend. 

Kelly McCutchen and Benita Dodd  

FRIDAY FACTS is made possible by the generosity of the Georgia Public Policy Foundation’s donors. If you enjoy the FRIDAY FACTS, please consider making a tax-deductible contribution to help advance our important mission by clicking here. Visit our Web site at www.georgiapolicy.org. Join The Forum at http://forum.georgiapolicy.org/. Become a fan of the Foundation on Facebook and follow us on Twitter at twitter.com/gppf.