HIGHER EDUCATION BUBBLE UPDATE: The Economist: Slim down, focus and embrace technology: American universities need to be more businesslike.

Barack Obama invited a puzzling group of people into the White House on December 5th: university presidents. What should one make of these strange creatures? Are they chief executives or labour leaders? Heads of pre-industrial guilds or champions of one of America’s most successful industries? Defenders of civilisation or merciless rack-renters?

Whatever they might be, they are at the heart of a political firestorm. Anger about the cost of college extends from the preppiest of parents to the grungiest of Occupiers. Mr Obama is trying to channel the anger, to avoid being sideswiped by it. The White House invitation complained that costs have trebled in the past three decades. Arne Duncan, the secretary of education, has urged universities to address costs with “much greater urgency”. . . . Popular anger about universities’ costs is rising just as technology is shaking colleges to their foundations. The internet is changing the rules. Star academics can lecture to millions online rather than the chosen few in person. Testing and marking can be automated. And for-profit companies such as the University of Phoenix are stripping out costs by concentrating on a handful of popular courses as well as making full use of the internet. The Sloan Foundation reports that online enrolments grew by 10% in 2010, against 2% for the sector as a whole.

Many universities’ first instinct will be to batten down the hatches and wait for this storm to pass. But the storm is not going to pass. The higher-education industry faces a stark choice: either adapt to a rapidly changing world or face a future of cheeseparing.

Indeed.