The Times Australia
The Times Australia

.

AI is driving down the price of knowledge – universities have to rethink what they offer

  • Written by Patrick Dodd, Professional Teaching Fellow, Business School, University of Auckland, Waipapa Taumata Rau




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.

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.

The model worked because the supply curve for high-quality information sat far to the left, meaning knowledge was scarce and the price – tuition and wage premiums – stayed high.

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

According to global consultancy McKinsey, generative AI could add between US$2.6 trillion and $4.4 trillion[1] in annual global productivity. Why? Because AI drives the marginal cost of producing and organising information toward zero.

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 “knowledge premium” universities have long sold is deflating as a result.

Employers have already made their move

Markets react faster than curriculums. Since ChatGPT launched, entry-level job listings in the United Kingdom have fallen by about a third[2]. In the United States, several states are removing degree requirements from public-sector roles.

In Maryland, for instance, the share of state-government job ads requiring a degree slid from roughly 68% to 53%[3] between 2022 and 2024.

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.

But the value of knowledge is not falling at the same speed everywhere. Economists such as David Autor[4] and Daron Acemoglu[5] point out that technology substitutes for some tasks while complementing others:

  • codifiable knowledge – structured, rule-based material such as tax codes or contract templates – faces rapid substitution by AI

  • tacit knowledge – contextual skills such as leading a team through conflict – acts as a complement, so its value can even rise.

Data backs this up. Labour market analytics company Lightcast[6] notes that one-third of the skills employers want have changed between 2021 and 2024. The American Enterprise Institute[7] warns that mid-level knowledge workers, whose jobs depend on repeatable expertise, are most at risk of wage pressure.

So yes, baseline knowledge still matters. You need it to prompt AI, judge its output and make good decisions. But the equilibrium wage premium – meaning the extra pay employers offer once supply and demand for that knowledge settle – is sliding down the demand curve fast.

What’s scarce now?

Herbert Simon, the Nobel Prize–winning economist and cognitive scientist[8], put it neatly decades ago: “A wealth of information creates a poverty of attention.” When facts become cheap and plentiful, our limited capacity to filter, judge and apply them turns into the real bottleneck.

That is why scarce resources shift from information itself to what machines still struggle to copy: focused attention, sound judgement, strong ethics, creativity and collaboration.

I group these human complements under what I call the C.R.E.A.T.E.R. framework:

  • critical thinking – asking smart questions and spotting weak arguments

  • resilience and adaptability – staying steady when everything changes

  • emotional intelligence – understanding people and leading with empathy

  • accountability and ethics – taking responsibility for difficult calls

  • teamwork and collaboration – working well with people who think differently

  • entrepreneurial creativity – seeing gaps and building new solutions

  • reflection and lifelong learning – staying curious and ready to grow.

These capabilities are the genuine scarcity in today’s market. They are complements to AI, not substitutes, which is why their wage returns hold or climb.

What universities can do right now

1. Audit courses: if ChatGPT can already score highly on an exam, the marginal value of teaching that content is near zero. Pivot the assessment toward judgement and synthesis.

2. Reinvest in the learning experience: push resources into coached projects, messy real-world simulations, and ethical decision labs where AI is a tool, not the performer.

3. Credential what matters: create micro-credentials for skills such as collaboration, initiative and ethical reasoning. These signal AI complements, not substitutes, and employers notice.

4. Work with industry but keep it collaborative: invite employers to co-design assessments, not dictate them. A good partnership works like a design studio rather than a boardroom order sheet. Academics bring teaching expertise and rigour, employers supply real-world use cases, and students help test and refine the ideas.

Universities can no longer rely on scarcity setting the price for the curated and credentialed form of information that used to be hard to obtain.

The comparative advantage now lies in cultivating human skills that act as complements to AI. If universities do not adapt, the market – students and employers alike – will move on without them.

The opportunity is clear. Shift the product from content delivery to judgement formation. Teach students how to think with, not against, intelligent machines. Because the old model, the one that priced knowledge as a scarce good, is already slipping below its economic break-even point.

References

  1. ^ add between US$2.6 trillion and $4.4 trillion (www.mckinsey.com)
  2. ^ fallen by about a third (www.theguardian.com)
  3. ^ slid from roughly 68% to 53% (www.nga.org)
  4. ^ David Autor (labourmarketresearch.springeropen.com)
  5. ^ Daron Acemoglu (www.aeaweb.org)
  6. ^ Lightcast (lightcast.io)
  7. ^ American Enterprise Institute (www.aei.org)
  8. ^ economist and cognitive scientist (www.nobelprize.org)

Read more https://theconversation.com/ai-is-driving-down-the-price-of-knowledge-universities-have-to-rethink-what-they-offer-260493

Temu’s Local Seller Program opens fully in Australia

Local businesses of all sizes across Australia now have a new, low-cost channel to reach millions of online sh...

Times Magazine

Building an AI-First Culture in Your Company

AI isn't just something to think about anymore - it's becoming part of how we live and work, whether we like it or not. At the office, it definitely helps us move faster. But here's the thing: just using tools like ChatGPT or plugging AI into your wo...

Data Management Isn't Just About Tech—Here’s Why It’s a Human Problem Too

Photo by Kevin Kuby Manuel O. Diaz Jr.We live in a world drowning in data. Every click, swipe, medical scan, and financial transaction generates information, so much that managing it all has become one of the biggest challenges of our digital age. Bu...

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

The Times Features

Is our mental health determined by where we live – or is it the other way round? New research sheds more light

Ever felt like where you live is having an impact on your mental health? Turns out, you’re not imagining things. Our new analysis[1] of eight years of data from the New Zeal...

Going Off the Beaten Path? Here's How to Power Up Without the Grid

There’s something incredibly freeing about heading off the beaten path. No traffic, no crowded campsites, no glowing screens in every direction — just you, the landscape, and the...

West HQ is bringing in a season of culinary celebration this July

Western Sydney’s leading entertainment and lifestyle precinct is bringing the fire this July and not just in the kitchen. From $29 lobster feasts and award-winning Asian banque...

What Endo Took and What It Gave Me

From pain to purpose: how one woman turned endometriosis into a movement After years of misdiagnosis, hormone chaos, and major surgery, Jo Barry was done being dismissed. What beg...

Why Parents Must Break the Silence on Money and Start Teaching Financial Skills at Home

Australia’s financial literacy rates are in decline, and our kids are paying the price. Certified Money Coach and Financial Educator Sandra McGuire, who has over 20 years’ exp...

Australia’s Grill’d Transforms Operations with Qlik

Boosting Burgers and Business Clean, connected data powers real-time insights, smarter staffing, and standout customer experiences Sydney, Australia, 14 July 2025 – Qlik®, a g...