The Opportunity Cost in Higher Education

Do you remember agonising over your pocket money and how to spend it? Carefully considering the benefits of each of the sweets or treats available, patiently weighing up each alternative?

Years later whilst studying Economics I discovered that this common dilemma has a name: the ‘Opportunity Cost’. In its simplest form, the theory goes that it is not only the cost of an object that is important, but what that money could have been spent on instead (Fruit Salads, Fizzy Colas or Wham Bars in my case).  The idea is that Opportunity Cost is vital in ensuring the correct allocation of scarce resources. However it is not just restricted to the monetary value alone and applies to the opportunities and the benefits of the alternatives.

So why is this relevant to Higher Education? Well, the sector faces some stark choices in relation to their estates.  Utilisation rates are at levels that the commercial sector would not tolerate - and it’s the cost of a cellular office that is subject to most scrutiny.  The Opportunity Cost of a cellular office is huge – in terms of space, utilisation, which is often as low as 20-30%, and the absolute cost.  For example, what other student focussed facilities could be provided if the offices weren’t there?

Of course, it’s not that simple as there needs to be a recognition that an Academics office isn’t just a space: it’s a symbol.  It is a representation of what they have achieved and an accumulation of all they have learnt.  Its ‘value’ is more than its ‘cost’ and the Opportunity Cost needs to account for this.

Developing the Opportunity Costs model with the users is part of our Change Management process.  We realise that change can be a terrifying prospect and needs to be sensitively addressed.  Our participatory design process is built on the principle that ‘Design happens with you, not to you’ with the aim of helping the users understand their options and make choices based on a full awareness of the Opportunity Cost.   To make an informed choice, awareness of the opportunities associated with any alternatives and the user’s knowledge of the options needs to be expanded.  In our case, this is done through workshops, education and sharing experiences.

These workshops allow open discussion about change, and its implications on their work life and culture.  It is a forum for users to have input in the design process, influence the direction and to understand why design decisions are made in the context of the established vision for the project.

We’ve just begun to work with some enlightened Universities that are wanting to explore how to do things differently.  Establishments that are wanting open discussions with staff and to illustrate the benefits of ‘spending’ the space budget differently. We have found that by engaging with Academics and utilising the Opportunity Cost model we can begin to see them changing how they wish to spend their space budget, to afford a better workplace that offers the best solution for all.

Gavin King