Editor’s note: This is Part 2 of a two-part article about the state of innovation in higher education. The author argues the concept of innovation in higher education has been progressively corrupted, functioning less as an analytical category and more as a symbolic and legitimizing discourse – or “innovation theatre.” Part 2 outlines pathways toward genuine innovation based on structural redesign, ecosystem collaboration and a reorientation of leadership from preservation to transformation. Part 1 was published on May 27, 2026.

From institutions to ecosystems: the end of institutional sufficiency

By Stephen Murgatroyd

Stephen Murgatroyd teaches at the University of Alberta and is Chief Executive Officer of Murgatroyd Consulting & Communications Inc. He is the former Dean of the Faculty of Business at Athabasca University, where he led the team that created the world’s first fully online MBA in 1994-94.

The shift now confronting higher education is not simply one of adaptation, but of ontological repositioning. The traditional university model rests on an assumption of institutional sufficiency – the idea that teaching, assessment, credentialing and knowledge production can be effectively organized within a single, bounded entity. That assumption is no longer tenable.

The forces outlined in Part 1 of this article – AI-enabled learning systems, employer-led credentialing, demographic contraction and alternative learning infrastructures – are dissolving the conditions under which institutional self-containment was viable. Learning is no longer scarce, content is no longer institutionally owned, and pathways to competence are no longer linear or time-bound.

As a result, value is migrating away from the institution as a provider and toward the system as an orchestrator of learning across multiple contexts.

In this emerging environment, higher education institutions must reposition themselves as participants in, and stewards of, distributed learning ecosystems rather than as dominant, self-contained providers. This is not a matter of partnership rhetoric or expanded outreach; it requires a reconfiguration of core functions.

Credentialing, for example, must become interoperable across institutional and non-institutional contexts, allowing learners to assemble verified evidence of competence from multiple sources. This challenges the monopoly of the degree and requires new forms of validation, trust frameworks, and quality assurance that extend beyond institutional boundaries.

Similarly, curriculum can no longer be designed solely within disciplinary silos or institutional committees. It must be co-produced with employers, communities and increasingly with learners themselves, reflecting rapidly evolving domains of practice rather than static bodies of knowledge.

Most significantly, the temporal structure of higher education must shift. The dominant model – front-loaded, time-bound and episodic – is incompatible with labour markets characterized by continuous skill evolution.

Ecosystem-based models support lifelong engagement, modular progression and recursive learning pathways, in which individuals move in and out of formal education as needs evolve. This requires institutions to abandon the assumption that learning is completed at the point of credential and instead embrace a role in sustaining learning over the life course.

These shifts imply a profound redefinition of institutional boundaries. Universities and colleges must become more permeable – organizationally, pedagogically and technologically. This includes integrating external learning experiences into formal recognition systems, sharing infrastructure with partners, and participating in networked platforms that distribute teaching, assessment, and credentialing functions. The institution becomes less a site of delivery and more a node within a wider architecture of learning.

The implications are not marginal.

Ecosystem participation redistributes authority, disrupts existing governance arrangements, and challenges long-standing professional identities. Faculty roles, in particular, must evolve from content ownership toward mentorship, curation and the design of learning experiences across distributed environments.

Similarly, institutional strategies must shift from competition for enrolment toward positioning within networks of value creation.

The central point is this: the transition from institutions to ecosystems is not an optional strategic direction. It is a structural consequence of changes already underway.

Institutions that attempt to preserve self-sufficiency will find themselves increasingly peripheral to the most dynamic forms of learning and credentialing. Those that reposition successfully may retain – and even expand –  their public value, but only by relinquishing the assumption that they are the sole or primary locus of higher learning.

Leadership after stability: from custodianship to consequence

Leadership is not a peripheral issue in this analysis; it is the fulcrum on which the transition from “innovation theatre” to structural transformation turns.

For decades, higher education leadership has been shaped by a logic of custodianship –  preserving institutional continuity, managing risk and maintaining legitimacy within stable governance frameworks. These orientations were rational within a relatively predictable environment. They are no longer sufficient.

The emerging context – defined by technological acceleration, labour-market disintermediation, demographic instability and declining public trust – renders preservation itself a strategic risk.

Institutions that prioritize stability over adaptation are not protecting their futures; they are deferring their obsolescence. In this environment, leadership cannot be understood as the careful stewardship of existing models. It must instead be understood as the management of consequence – the willingness to make decisions that materially alter institutional structures, redistribute authority and reconfigure long-standing assumptions about how higher education operates.

This shift demands a different leadership posture. It requires moving beyond consensus as the primary organizing principle toward deliberate, time-bound decision-making under conditions of uncertainty.

It requires enabling experimentation not as an isolated pilot activity, but as a mechanism for systemic learning tied to institutional strategy.

It requires confronting, rather than accommodating, the structural barriers that anchor institutions to incrementalism – whether in governance, funding or academic work.

Most critically, it requires leaders to abandon the implicit bargain at the heart of innovation theatre: that institutions can signal transformation without incurring the risks of change. That bargain is collapsing.

Leadership now involves making choices that will produce winners and losers within the institution, challenge established professional identities, and disrupt familiar operating models. Avoiding these choices is no longer a neutral act; it is itself a decision with long-term consequences.

In this sense, the task of leadership is no longer to balance change and continuity, but to determine which elements of the institution must be preserved, and which must be fundamentally redesigned. This is not a technical challenge. It is a political, cultural, and strategic one.

Reclaiming innovation: from rhetoric to redesign

The central argument of this two-part article is that innovation in higher education has become detached from its original meaning. It no longer functions as a descriptor of structural change, but as a symbolic resource – mobilized to signal responsiveness, secure legitimacy and satisfy external expectations. In doing so, it has obscured the distinction between incremental adjustment and systemic transformation.

That distinction can no longer be blurred. The forces reshaping higher education – AI, labour-market restructuring, demographic change and the emergence of alternative learning systems –  are not incremental pressures that can be absorbed through adaptation. They are structural shifts that expose the limits of the current model. In this context, innovation that does not alter institutional architecture is not simply insufficient; it is misleading.

Reclaiming innovation, therefore, requires more than definitional clarity. It requires a reorientation of institutional purpose and design

 Innovation must be re-anchored in questions of structure: how learning is organized, how capability is recognized, how value is created, and how institutions relate to the ecosystems in which they operate. This involves moving from innovation as activity – a set of initiatives, pilots and programs – to innovation as architecture – the deliberate redesign of systems, relationships, and incentives.

It also requires confronting the systemic conditions that have enabled innovation theatre to persist. Governance models must support timely and consequential decision-making. Funding systems must reward long-term redesign rather than short-term compliance. Quality assurance must evolve to recognize adaptive and distributed forms of learning. Academic work must be redefined to align with new pedagogical and technological realities.

The implication is stark. Higher education is no longer choosing whether to innovate; it is choosing whether to remain relevant.

Institutions that continue to treat innovation as communication – something to be articulated, branded and reported – will find themselves increasingly disconnected from the evolving landscape of learning and capability development. Those that treat innovation as design –  something to be enacted through structural change – may not only survive but redefine their public value.

The question, then, is no longer whether innovation will occur. It is whether higher education will continue to perform innovation or finally begin to undergo it.

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