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After graduating from college in 1994, I spent a few years at McKinsey & Co. — a young kid in an ill-fitting suit naively but energetically attempting to convince experienced and jaded managers to do their jobs differently.

One question that kept coming up for a number of clients was “who was likely to win the war to bring broadband access to homes: telephone companies or cable companies?” While we know the answer now (cable), I recall spending a lot of time studying the technical specifications of cable and telephony “last mile” connectivity.

The concept of the last mile — the final leg of the connection to each home — originated in telecom, but is now a primary focus for supply chain management and e-commerce, in particular.

The general principle applicable to all contexts is that the last mile is the most difficult and expensive to build, but equally the most valuable: Dominating the last mile can provide a nearly unassailable competitive position. In telecom and other utilities, the cost of building the last mile is what results in natural monopolies, thereby requiring regulation.

We are now seeing the emergence of the last-mile phenomenon in an unlikely setting: education. There are three reasons for this.

I. The hiring process has changed drastically

Today, more than 85 percent of all job openings (and nearly all positions in growing sectors of the economy) are posted online. As a result, the typical job posting receives approximately 200 applications — too many resumes and CVs for any hiring manager to seriously look at. So all large employers and most mid-size firms have resorted to utilizing Applicant Tracking Systems to manage their hiring processes. These systems, like Oracle’s Taleo, the market leader, filter applicants based on a keyword match.

What are Applicant Tracking Systems matching to? Increasingly, it’s technical skills. Over the past decade, technical skills have come to outnumber cognitive and non-cognitive skills combined in job descriptions across nearly all industries. While this is undoubtedly a product of the fact that, for any given job, it’s easier to come up with 10 different technical skill requirements than 10 different ways of saying “problem solving” or “critical thinking,” that is of no matter to the inexorable keyword matching logic of Applicant Tracking Systems, which filter out candidates without a sufficient level of keyword match. This means that most candidates with few technical skills are invisible to human hiring managers.

The prevalence of technical skills in job descriptions is particularly acute for entry-level positions, many of which now involve utilizing SaaS platforms to manage functions like supply chain, sales, marketing, customer service, finance, IT and HR. So candidates who don’t have keywords like Salesforce (sales), Pardot (marketing), Marketo (digital marketing), Google AdWords (digital marketing), ZenDesk Plus (customer service), NetSuite (finance), Financial Force (finance) and Workday (HR) on their resumes are unlikely to be considered.

II. Students really, really care about getting a good first job

The single biggest change in higher education over the past decade is the percentage of students who say they’re enrolling for job, career or income reasons. Today, more than 90 percent of students provide this as the sole or primary reason for going to college.

Some of this undoubtedly stems from the poor employment outcomes experienced by college graduates during the Great Recession. Most students have older siblings or friends who were underemployed — often significantly — for many years. Another cause is that today’s students have much less experience with paid work, which creates additional anxiety about getting a good first job. And finally, concerns about getting a good first job are real: There are simply fewer jobs that require college degrees without specifying experience requirements, perhaps because employers have given up hoping that new college graduates have the requisite technical skills, and so have begun imposing experience requirements. As a result, whereas a decade ago entry-level sales positions had few if any technical skill requirements, the same positions today are likely to specify two years’ experience with Salesforce.

III. Colleges and universities have not adjusted

Even though today’s students no longer buy it, the vast majority of colleges and universities continue to abide by the old adage: “we prepare you for your fifth job, not necessarily your first.” So despite increasing recognition that students are increasingly unlikely to get a good fifth job if they don’t get a good first job, there’s been little in the way of adjusting curriculum to reflect employer needs and job-market realities. Lower-level course curriculum hasn’t changed; most departments offer the same lower-level courses they offered 20 or 30 years ago. Meanwhile, upper-level courses continue to be dictated by faculty research priorities, which operate independently of labor-market demands.

Last-mile training providers

This growing gap — often referred to as the skills gap — has given rise to the emergence of last-mile training providers. These providers are focused on exactly the technical skills employers need (as demonstrated in job descriptions), but which colleges and universities don’t teach. Coding is the most obvious example; while all schools teach Java, few computer science programs actually expose students to how coding projects work in practice (e.g. using struts: existing code that developers call upon for common functions). But last-mile training providers are emerging in almost every sector. In addition to coding, my firm has already made investments in last-mile training providers in sales, medical devices and insurance.

Last-mile training provider models fall into three categories, each of which represents an advance over the traditional higher education value proposition. Viewing higher education through a 2×2 matrix, where the X axis shows cost to the student (paid or free) and the Y axis shows outcomes (no guarantee or some guaranteed outcome), traditional colleges and universities have always been and continue to sit in the bottom-left quadrant: pay your money upfront for no guaranteed outcome.

But given employer demand for the technical skills they are imparting to students, last-mile training providers are able to improve upon this value proposition. We are seeing bootcamp models where students pay tuition upfront and receive an explicit or implicit guarantee of employment; most student-pay bootcamps show placement rates of close to 90 percent into relevant, well-paid jobs.

We are also seeing income-share agreement models where students don’t pay anything upfront, but where the last-mile training provider is so confident of a positive employment outcome that it is happy to take payment as a percentage of graduates’ income for several years — typically only once students have begun making $50,000 or more. Finally, we are seeing staffing and placement models, where the last-mile training provider can truly guarantee an employment outcome because it hires graduates and staffs them out to clients. This revenue model allows providers to offer the last-mile training for free — further enhancing the value proposition for students.

As all three types of last-mile training providers further their engagement with employers, it will become increasingly difficult for traditional colleges and universities to keep up; their last-mile connectivity through antiquated career services offices will not be competitive with last-mile training providers whose business depends on having their fingers on the pulse of the technical skills employers need right now.

As last-mile training providers proliferate across every industry and enrollment flows and tuition dollars begin to shift, don’t be surprised if colleges and universities resort to the same tool that losers of last-mile competitions have always used to attempt to rein in the resulting natural monopolies: regulation.

This post originally appeared on TechCrunch.

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