{"id":77517,"date":"2025-07-10T01:10:53","date_gmt":"2025-07-10T05:10:53","guid":{"rendered":"https:\/\/world.edu\/?p=77517"},"modified":"2025-07-10T01:10:53","modified_gmt":"2025-07-10T05:10:53","slug":"ai-is-driving-down-the-price-of-knowledge-universities-have-to-rethink-what-they-offer","status":"publish","type":"post","link":"https:\/\/world.edu\/ai-is-driving-down-the-price-of-knowledge-universities-have-to-rethink-what-they-offer\/","title":{"rendered":"AI is driving down the price of knowledge \u2013 universities have to rethink what they offer"},"content":{"rendered":"

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For a long time, universities worked off a simple idea: knowledge was scarce. You paid for tuition, showed up to lectures, completed assignments and eventually earned a credential.<\/p>\n

That process did two things: it gave you access to knowledge that was hard to find elsewhere, and it signalled to employers you had invested time and effort to master that knowledge.<\/p>\n

The model worked because the supply curve for high-quality information sat far to the left, meaning knowledge was scarce and the price \u2013 tuition and wage premiums \u2013 stayed high.<\/p>\n

Now the curve has shifted right, as the graph below illustrates. When supply moves right \u2013 that is, something becomes more accessible \u2013 the new intersection with demand sits lower on the price axis. This is why tuition premiums and graduate wage advantages are now under pressure.<\/p>\n

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According to global consultancy McKinsey, generative AI could\u00a0add between US$2.6 trillion and $4.4 trillion<\/a>\u00a0in annual global productivity. Why? Because AI drives the marginal cost of producing and organising information toward zero.<\/p>\n

Large language models no longer just retrieve facts; they explain, translate, summarise and draft almost instantly. When supply explodes like that, basic economics says price falls. The \u201cknowledge premium\u201d universities have long sold is deflating as a result.<\/p>\n

Employers have already made their move<\/strong><\/h3>\n

Markets react faster than curriculums. Since ChatGPT launched, entry-level job listings in the United Kingdom have\u00a0fallen by about a third<\/a>. In the United States, several states are removing degree requirements from public-sector roles.<\/p>\n

In Maryland, for instance, the share of state-government job ads requiring a degree\u00a0slid from roughly 68% to 53%<\/a>\u00a0between 2022 and 2024.<\/p>\n

In economic terms, employers are repricing labour because AI is now a substitute for many routine, codifiable tasks that graduates once performed. If a chatbot can complete the work at near-zero marginal cost, the wage premium paid to a junior analyst shrinks.<\/p>\n

But the value of knowledge is not falling at the same speed everywhere. Economists such as\u00a0David Autor<\/a>\u00a0and\u00a0Daron Acemoglu<\/a>\u00a0point out that technology substitutes for some tasks while complementing others:<\/p>\n