Showing posts with label management consulting firm. Show all posts
Showing posts with label management consulting firm. Show all posts

Monday, April 23, 2012

Educational Innovation, Technology and Entrepreneurship - Fernando Reimers

I have spent the last 25 years studying and working with governments and private groups to improve the education available to marginalized youth, in the United States and around the world. Most of that work was based in the belief that change at scale could result from the decisions made by governments, and that research could enlighten those choices. When I joined the Harvard faculty 13 years ago I set out to educate a next generation of leaders who would go on to advise policy makers or to become policy makers themselves, and designed a masters program largely responsive to that vision. During those years I continued to write for those audiences.

Over time, however, I have become aware that traditional approaches can't improve education at a scale and depth sufficient to ready the next generation of students for the challenges they will face. I have also become more skeptical of the assumed linear relationship between conventional research and educational change. I now believe the needed educational revitalization requires design and invention, as much as linear extrapolation from the study of the status quo — that is, of the past. It also requires systemic interventions — changes in multiple conditions and at multiple levels, inside the school and out. And it requires a departure from the conventional study into how much we can expect a given intervention or additional resource to change one educational outcome measure — typically a skill as measured on a test or access to an education level, or transition to the next.

It is this interest in change that has led me to study the work of education entrepreneurs — of innovators who are creating new education designs, in ways that exceed the resources they command. I am especially interested in the entrepreneurs whose goal is to produce significant educational innovation — rather than simply providing access and delivering services to new groups, or rather than improving the efficiency of the educational enterprise as we know them — to teach our old schools a few new tricks, so to speak. I am also particularly interested in entrepreneurs who can achieve sufficient scale and develop the strategy to significantly change the ecosystem, to shift the conversation about education, to eventually transform the sector in the way in which Wilhelm Humboldt transformed the sector of higher education with the creation of the University of Berlin, or in the way in which Joseph Lancaster propelled the universalization of basic education with the development of a method to teach a basic curriculum at low cost.

The conversations in these blogs on Educational Innovation and Technology are an exciting opportunity to explore a promising mix — the synergies that can result from combining innovation, the utilization of technology in education and the role of education entrepreneurs in creating new designs that can transform the ecosystem. It is in the interplay of these three factors that I see the greatest potential. Not all education entrepreneurs using technology generate innovation, and most of their designs have failed to transform the sector and not all innovators using technology have produced designs that can be scaled or with the ambition and potential to change the conversation or the sector. As a result, educational enterprise is a fragmented territory, of modest scale, yet to transform the education ecosystem.

In order for these three elements — innovation, technology and entrepreneurship — to produce the synergies necessary to substantially transform education, we will need to build a collaborative architecture that allows for the fruitful integration of careful study, design and invention, and action at scale. Such collaboration of industry, academy and the public schools is exceptional, not the conventional way of business for universities, governments or businesses.

Universities are uniquely positioned to lead in forging these partnerships. The trust we receive from society in the form of financial resources, financial and legal advantages and institutional autonomy enable us to anticipate new organizational forms to support educational renewal, rather than reproduce the established forms of the past. While we haven't done this consistently in the history of higher education in the US or abroad, there are good historical precedents of universities taking seriously the task of substantially improving the work of elementary and secondary schools, of serving those who are not direct members of the university community.

This is the time for universities to lead the task of fundamentally reinventing public education. But to do it well, we need to seriously commit to design and innovation, and to work with others — with entrepreneurs, industry and governments — so that their ambitions and impatience for results, and the accountability they have with the constituencies they serve, can help align our efforts with the creation of public value in the form of education institutions that prepare the next generation to lead and manage the challenges we have passed on to them. via blogs.hbr.org 

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Tuesday, April 3, 2012

Find A Need and Fill it: How Apple becomes the first $1 trillion company

Its market cap today is $577 billion. Where do the next $400-plus billion come from? 

Click to enlarge.

In a note to clients issued early Tuesday, Piper Jaffray's Gene Munster raised his Q2 iPhone estimate (to 33 million), set a new 12-month price target ($910 per share) and -- most provocatively -- laid out a roadmap for Apple's (AAPL) market capitalization to go from $576.79 billion as of Monday's close to $1 trillion by 2014.

That would be a first. The previous record for the largest market cap (price per share times number of shares) ever reached by a public company was $619 billion, set by Microsoft (MSFT) in 1999.

So where does Apple get the next $400-plus billion?

The short answer: Half from more money pouring into tech stocks and half from money continuing to drain from the market cap of Apple's major competitors, who have roughly $1 trillion between them.

As the chart above shows, in the past four years, Apple's market cap increased by more than $390 billion while that of six core competitors -- Research in Motion (RIMM), Nokia (NOK), Sony (SNE), Dell (DELL) Hewlett-Packard (HPQ) and Microsoft -- decreased by more than $400 billion.

Turning to the next three years (2012-2014), Munster writes:

First, we believe dollars invested in US technology companies will increase ~5% y/y on average for the next three years (CY12-CY14). By comparison, dollars invested in US tech companies were up 9% y/y in 2011. Therefore, the tech sector will add ~$390 billion in market cap through 2014. We assume Apple could capture half of this market cap (from 85% in the 4 years prior).

Second, the companies we consider to be the 10 most relevant competitors to Apple (Samsung, HTC, RIMM, NOK, SNE, DELL, HP, MSFT, INTC, GOOG) represent nearly $1 trillion in market cap today. We believe 20% of that value, or ~$200 billion could shift to Apple through 2014. Thus there is potential for Apple to repeat history and add another $400 billion to its market cap. At a $1,000 share price (roughly $1 trillion in market cap) Apple would represent 26% of the total US tech market cap from 17% today.

Ironically, Munster believes that the impact of Apple's dividend -- which for years was touted as the trigger for growth funds to finally start putting money into Apple -- will be relatively small:

If we assume that 25% of large cap tech income funds buy AAPL (which we estimate to be about $150 billion), that would add around $40 billion to Apple's market cap or 10% of the total market cap increase needed to get to a $1,000 share price. That said, we believe many income funds have already bought shares of AAPL, so the more likely impact is closer to a 5% benefit.