Opportunities for Micro-Credential Recognition on the Blockchain

Everyone has natural strengths; over our lifetime we build our unique “talent stack” of knowledge, skills, experience on top of our performance traits. Learning is not just time in schools. It extends across multiple contexts, experiences and interactions. A thoughtful approach to micro-credential recognition reduces burdens on workers and consumers. It will turn institutions of higher learning into student-centric organizations.

Construction our talent stack is not an isolated or individual concept but is an inclusive, social, informal, participatory, creative and lifelong quest. Moreover, it is not sufficient to think of learning as just consumption; instead, we are active participants and producers in an interest-driven, lifelong learning process.

Learning Environment

The concept of a 'learning environment' encompasses many areas beyond the classroom and online. Moreover, across these learning environments, we have multiple pathways to gain competencies and refine our skills through open resources and processes. However, the systems to recognize our complete talent stack are fragmented. They remain mired in paper-based records.

Our world is very different from the one in which the current education and micro-credential recognition systems were developed and standardized. Continuing to operate in this paradigm increases costs and limits opportunities. We are shifting the focus from compliance to competency, micro-credentials help people master skills and implement them in their workplaces. The micro-credential learning pathway requires reflection and self-evaluation, and it culminates in users selecting and submitting evidence that they feel best demonstrates the target competencies. The emphasis is truly on helping individuals master their professional practice and reach their full potential.

Occupational Licensing

There has been an increase in “occupational licensing” in the past few decades. Today, one-quarter of U.S. workers must have a license to do their jobs, a five-fold growth since the 1950s. However, this model is a significant barrier to the migration and movement of professionals in our global economy.

Consumers benefit from the regulation of workers through higher-quality services and improved health and safety standards. However, policymakers often do not carefully weigh the total costs and benefits when licensing a profession. The result is a patchwork of different licensing decisions and requirements. A Whitehouse report explored the rise in occupational licensing and its significant consequences for the economy. The trend is a global one. Service providers encounter barriers to trade in foreign countries when confronted with non-transparent licensing or authorization systems.

Licensing laws also lead to higher prices for goods and services, with research showing effects on rates of between three and sixteen percent. Moreover, in some other studies, licensing did not increase the quality of goods and services, suggesting that consumers are sometimes paying higher prices without getting improved goods or services. — Occupational Licensing: A Framework for Policymakers

Barrier to practice

Licensing an occupation means that work in that field is only available to those with the specified credentials and means to fulfill licensing requirements. By making it harder to enter the profession or trade, licensing reduces employment opportunities, lower wages for excluded workers, and increases costs for consumers. Credential recognition is the most prominent barrier to the licensing process. What is vital to the public is that licensed individuals practice with competence and integrity. The benefits of licensing, therefore, need to be balanced against these costs. Micro-credential recognition on the blockchain offers promise to reduce costs.

In Canada and the U.S., most licenses are governed by the state/provincial/territorial authorities. Licensing requirements vary substantially by jurisdiction, creating barriers to workers moving across jurisdictional boundaries and inefficiencies for businesses and the economy. Workers must apply for a new license in each jurisdiction. They must also meet the unique professional development requirements of each authority to maintain their license. The process of sorting out requirements across jurisdictions — applying for the appropriate permit can be lengthy, involving anything from filling out paperwork, paying fees and passing examinations, to going back to school to fulfill new educational and training requirements.

Overregulation hurts the economy

A 2017 Whitehouse blog stated that overregulation hurts the economy broadly:

• Excessive regulation is a tax on the economy, costing the U.S. an average of 0.8 percent of GDP growth per year since 1980.
• If we held fixed the number of industry-relevant regulations at levels observed in 1980, the U.S. economy would have been about 25 percent larger (roughly $4 trillion) in 2012.

The web has transformed the ways that we create and share information. The blockchain platform takes micro-credential to the next level. The platform is based on openness, universality, and transparency.

We no longer need to rely on the expert authority or professionally-produced a micro-credential artifact to provide us with the information. Instead, we can find it from peers or make it ourselves online.

A blockchain enables increased access to information and profound opportunities for micro-credential recognition, This includes improving the efficiency of regulation and reducing its drag on the economy without impacting the consumer benefits that accrue from regulation.

Blockchain is an emerging technology

There are frequent announcements on blockchain’s applicability to everyday life. The distributed, decentralized nature of blockchains provide significant opportunities to disrupt traditional products and services. New features such as the permanence of the blockchain record, and the ability to run smart contracts create additional opportunities.

Blockchains provide incorruptible records. Anywhere you need documents that cannot be altered or deleted, adequately distributed blockchains can (a) produce and (b) safeguard them.

Blockchain technology will disrupt any field of activity that requires time-stamped record-keeping of titles of ownership. Within the credential recognition sector, activities likely to be disrupted by blockchain technology include the award of qualifications, licensing, accreditation, management of student records, intellectual property management, recruitment, qualification-based selection, and payments.

Blockchain systems can do a lot for credential recognition

However, credential recognition is not currently high on the list of initiatives. Also, stakeholders within the sectors that issue and assess credentials are mostly unaware of the social advantages and potential of blockchain technology.

An individual will be able to compile a much more extensive and complete list of their talent stack — skills, knowledge, performance traits, accomplishments, and qualifications using blockchain. The blockchain’s open distributed database means each micro-credential is a validated public record of every entry that contributed to the individual’s talent stack.

The transaction could include a course credit, internship report, work report, learning outcomes achieved, professional development, recommendation, bonus, elements of smart contracts, or badge. Each record would consist of the details of the transaction, an individual’s unique account number, a timestamp and the verification source (i.e., granting institution). The resulting micro-credential log would offer a much more complete record and supplement or even replace the many parts of an employment application, license application, qualification-based selection submission or online profile. Individuals would have control regarding what they choose to share.

Blockchain will disrupt the market in information systems and credential recognition systems and loosen the control current players have over this market. One such example of a micro-credential system is MIT's Media Lab which is looking at this for students via its Blockcerts.

Key Advantages of Blockchain Technology

From a social perspective, blockchain technology offers significant possibilities beyond those currently available. Moving records to the blockchain can allow for:

• Collaboration — the ability of parties to transact directly with each other without the need for mediating third parties
• Disintermediation — the removal of the need for a central controlling authority to manage transactions or keep records
• Immutability — for documents to be written and stored permanently, without the possibility of modification
• Self-sovereignty — for users to identify themselves while at the same time maintaining control over the storage and management of their data
• Transparency — for users to conduct transactions in the knowledge that each party can enter into that transaction
• Trust — for a technical infrastructure that gives people confidence in its operations to carry through with transactions such as payments or the issue of certificates

Areas likely to be disrupted by the adoption of blockchain technology

The following fields are most likely to be impacted by the adoption of blockchain technology shortly:

Blockchain technology will accelerate the end of a paper-based system for documents.

Any kind of certificate issued by organizations, including qualifications and records of achievement and requirements for licenses, can be permanently and reliably secured using blockchain technology. More advanced blockchain implementations will automate the award, recognition, and transfer of credits, or even store and verify a complete record of formal and non-formal achievements throughout lifelong learning.

Blockchain technology enables users to automatically verify the validity of certificates directly against the blockchain, without the need to contact the organization that initially issued them.

Thus, it will likely remove the need for educational institutions and regulators to validate credentials. This ability to publish and then reliably validate certificates automatically can also be applied to other scenarios. Thus, one can imagine certificates of accreditation being granted to institutions by quality assurance bodies, or licenses to teach being awarded to educators, with these being publicly available and verifiable by any user against a blockchain.

Blockchain technology can also be applied to intellectual property management.

The tracking of first publication and citations, without the need for a central authority to manage these databases. This enables the possibility of automatically tracking the use and re-use of open educational resources.

Blockchain technologies will create nrw data management structures.

Users have increased ownership and control over their data which could significantly reduce organizations’ data management costs, as well as their exposure to liability resulting from data management issues.

Blockchain-based cryptocurrencies will be used to facilitate payments.

The ability to create custom cryptocurrencies is also likely to mean that blockchain will find significant use in a grant or voucher-based funder of education and lifelong learning in many countries.

Blockchain technologies will be used to facilitate smart contracts that ensure payments for services.

Smart contracts enable rewarding the individual for performance that exceeds the contract specification. These contracts could also pay institutions and individuals who provided skills and knowledge. We could move to an actual performance-based education system, where all education is free — institutions receive micropayments as their students are paid for the value delivered about their skills and knowledge.

The development of the technology in the credential recognition field should be considered as a shared competence of the market and public authorities, to ensure an appropriate balance of private sector innovation coupled with the safeguard of public interest.

Effective governance is needed

Effective governance will determine the extent and speed of progress. Policymakers need to investigate and support the application of blockchain technology to specific use cases, such as those described above, by organizing and promoting innovation pipelines leading to their implementation.

The benefits of micro-credential recognition using blockchain technology accelerate from a network effect when applied transnationally. The development of open blockchain implementations is essential. Credential recognition bodies and governments need to consider creating and promoting ‘open’ records, which enshrine the principles of recipient ownership, vendor independence, and decentralized verification — and supports or adopts technologies in compliance with this approach.

The primary beneficiaries of the adoption of blockchain-based technologies in credential recognition are likely to be networks of educational organizations, professional regulators, licenses holders, and learners. To this end, we suggest outreach to the networks to help them understand the benefits of blockchain technology and the incorporation of the principles behind the technology into digital competence education for learners.

Micro-Credential Recognition — Opportunities on the Blockchain

For Consumers

The reduction of the administrative expenses by regulators related to micro-credential recognition should translate to lower cost of regulation. The improved access for individuals seeking licensure will provide consumers will addition choices which may lead to increased value from the services delivered. The ability to engage in a valid “qualification-based selection” process of professionals will lead to making better and high-value selections of professional services.

The ability to create smart contracts with professionals for exceeding performance requirement will drive innovation and provide consumers with more value for money — a sharing of the additional benefits created. For example, if an engineer can design a building that is more energy efficient than current standards, the building owner benefits for the lifetime of the building. A smart contact could reward the engineer for her innovation and validate the relevant portion of the talent stack of the engineer.

For Trade in Services Agreement

The ability to facilitate speedy credential recognition in domestic regulation is essential to the inclusion of professional services in trade deals. It assures the parties of predictability and transparency in the licensing or authorization process in the jurisdictions covered by the trade agreement. Consumers would receive the standard of service that they expect. Also, this also provides a means to ensure that measures relating to licensing and qualification requirements and procedures do not discriminate based on race or gender and eliminates protectionist barriers to trade.

For Students

Some 65% of students entering elementary school will end up in jobs that haven’t even been created, according to LinkedIn’s Emerging Jobs Report. No matter what field students are considering, the report emphasizes that workers who want to future-proof their job prospects ought to focus on honing their soft skills such as adaptability, collaboration, and leadership abilities and building their talent stack. Students need to develop an adaptable talent stack that can capitalize on emerging opportunities.

As students are embarking on their career journey, they need to be able to select learning experiences that align with their behavioural strengths and interests to achieve career success and satisfaction. Students build their talent stack from a range of learning experiences, but institutions have a rigid rule regarding transfer credits that limits students from taking full advantage of the opportunities at a given institution. Awarding a micro-credential for each learning experience will reward ongoing learning.

Today, 80% of US college students change their major, and on average it takes six years to get a four-year degree. These rules often are driven by an accreditation body’s requirement. Students need to have the ability to move where their best learning experience will occur — freely within various facilities with an institution or to change institutions and complete their degrees — and have their learning outcomes acknowledged in a meaningful way to potential employers.

For Institutions of Higher Learning

Delivering highly efficient and customized learning experiences for each student without concentrating on the rigid requirements to drive the student to attain a specific degree presents tremendous opportunities for educators. Institutions could facilitate cross-discipline learning and grant degrees based on the validation of the required set learning outcomes. They can focus on preparing students for jobs that do not exist and have the time to teach the soft skills needed to be successful in tomorrow’s workforce.

Institutions of Higher Learning could create centers of excellence and facilitate the smooth transfer of students as juniors and seniors from other institutions who may be interested in advanced study in the given area. The micro-credential recognition on the blockchain could provide a means for a student receives to receive full recognition for their prior learning experiences. This would enable more students to study abroad and in different regions.

The European Commission’s Joint Research Centre Open Education research area provides evidence-based scientific support to the education policymaking process in Europe. Its exploratory study published in November 2017, Blockchain in Education contributes to ongoing research carried out in the broader domain of an Open Education Framework. The Joint Research Centre’s Open Credentials Report was based on recognition of Massive Open Online Courses-based learning. The report concludes that blockchain technology benefits from a network effect when applied transnationally, need for standardization activities in this area and that the primary beneficiaries of the adoption of micro-credential blockchain-based technologies in education are likely to be networks of educational organizations and learners.

For Accreditation Bodies

Advanced accreditation systems have moved to outcome assessment. However, for practical purposes, accreditation is conducted at the program level and on a cyclical basis, typically every five or six years. Decoupling courses from programs and moving to accreditation at a course level will present new challenges and opportunities. As micro-credential recognition gains momentum, accreditation bodies can shift the outcome accreditation to individual courses. The use of the certified course can be much broader that entire program. Institutions can facilitate cross-discipline learning and centers of excellence on the building blocks of accredited courses.

Fundamental to the blockchain is the authority that recognizes the learning experience. Accreditation bodies can raise the value of the learning experience to higher levels regardless of the delivery method. A global alliance of accreditation bodies providing certification to defined standards can and needs to emerge.

For Professional Regulators

Professional regulators expend between 35 and 80 percent of their resources on credential recognition, i.e., assessment of credentials required for licensure and professional development to maintain licensure. Consumer protection would be improved if these resources were used in the proactive regulation of the practice and governing the behaviours of the license holders. Best practices in licensing safeguard consumers while maintaining a modernized regulatory system that meets the needs of workers and businesses.

Many good ideas for reform are out there, including:

• empowering independent agencies to conduct cost-benefit analyses of licensing policies
• ensuring that licensing requirements are closely aligned with public health and safety goals
• using certification as an alternative to licensing

The use of the blockchain for micro-credential recognization presents a significant opportunity to accelerate this needed reform.

For Newcomers

The Survival of Success: Transforming Immigrant Outcomes[i] the Expert Panel that I was a member of the recommended six steps to streamline the labour market integration process

Recommendations

1. Require each regulated occupation to develop a single pan-Canadian standard, and insist that the assessment process is initiated from abroad by prospective immigrants and tracked in the immigration system. This single pan-Canadian standard should be complemented by a single point of contact and Web portal for each occupation. Also, clear benchmarks, key performance indicators and timelines should be set to monitor progress against these goals globally and by profession.
2. Develop a broader strategy for alternative careers with a more prominent role for regulators. Require regulators to advise newcomers who are unsuccessful in the licensing process in finding an alternative job, or refer them to an appropriate organization for this service.
3. Foster leadership, support and shared responsibility among all stakeholders for helping immigrants find jobs. Large and small employers, immigrant-serving organizations and governments must work more closely together to maximize the effectiveness of the tools and services that help immigrants gain meaningful employment. This also helps employers access a more productive and more diverse pool of talent.
4. Establish a “Multi-Stakeholder Advisory Group for Better Immigrant Employment Outcomes.” This group of employers, regulators, and immigrant-serving organizations would monitor and report to governments on progress in implementing the Panel’s recommendations, advise governments on broader issues involving the labour market integration of immigrants and champion the shared commitment of hiring newcomers.
5. Produce more comprehensive labour market information targeted at newcomers. Federal, provincial and territorial governments should provide immigrants with timely, accurate and geographically-based information to set realistic expectations about job prospects and licensing practices in Canada.
6. Educate communities on how to increase retention outside large metropolitan areas. Recognizing that retaining immigrants requires a holistic approach, efforts must reflect collaboration among employers, governments, and immigrant-serving organizations.

Implementation of the recommendations

Having the newcomer’s talent stack on the blockchain would make the implementation of all six of the recommendations easier, especially the first proposal. Newcomers would know if their talent stack meets the requirements in the jurisdiction where they plan to migrate to and the gaps if any. Regarding the second recommendation, with the talent stack known and validated, the expertise provided by regulators will no longer be required to assist in looking at individual alternate careers. Placement agencies would be able to help newcomers maximize the use of their talent stack.

For Employers

Our talent analytics show that people who are high in self-expression are much more likely to get hired than those who are not. These folks can talk themselves into a job that is not a good fit themselves or the company. Today, employers look for employees that have the experience that matches closely with their needs. This satisfies their demand in the short-term. A better approach is to hire the person who has the requisite knowledge and who is an excellent fit with the organization.

If employers had access to a micro-credential recognization system, including our full talent stack, on the blockchain, they would be in a much better position to hire a candidate — both the company and the individual would be more successful. Where licensing may be required, the employer would be able to know with certainty the likelihood of the individual becoming licensed in a reasonable time. The future holds a blockchain-based resume.

For Government

Governments have economic classes of immigration where they choose skilled immigrants as permanent residents based on their ability to settle in the jurisdiction and take part in its economy. Systems typically work on points assigned for given credentials. The challenge is the validation of the credentials and making the recognition of these credentials meaningful to employers and regulators.

Micro-credential recognition on the blockchain permit recognition of the full talent stack of the potential immigrant. Governments can identify the labour market demands in much higher details and select potential immigrant with the talent stack that will best serve prospective employers. Employment agreements and required licenses could be issued before the newcomer arrives in their new country. The newcomer would be able to hit the ground running with full employment that matches their talent stack. Currently, it takes anywhere from 12 to 48 months. Some newcomers never achieve full employment even though they were recruited through an economic program target at filling labour market shortages.

Final thought

Working together, we can build a more thoughtful approach to credential recognition that maximizes its benefits, while reducing burdens on workers and consumers.  The benefits will be achieved through open implementations of the technology, which

• utilize open source software
• use open standards for data
• implement self-sovereign data management solutions
• has effective governance systems

[i] Survival To Success: Transforming Immigrant Outcomes ... (n.d.). Retrieved from https://www.canada.ca/en/employment-social-development/programs/foreign-credentials