Artificial Intelligence and the Transformation of Higher Education Institutions: A Systems Approach

Artificial intelligence (AI) advances and the rapid adoption of generative AI tools, like ChatGPT, present new opportunities and challenges for higher education. While substantial literature discusses AI in higher education, there is a lack of a systems approach that captures a holistic view of the structure and dynamics of the AI transformation of higher education institutions (HEIs). To fill this gap, this article develops a causal loop diagram (CLD) to map the causal feedback mechanisms of AI transformation in a typical HEI. We identify important variables and their relationships and map multiple reinforcing and balancing feedback loops accounting for the forces that drive the AI transformation and its impact on value creation in a typical HEI. The model shows how, motivated by AI technology advances, the HEI can invest in AI to improve student learning, research, and administration while dealing with academic integrity problems and adapting to job market changes by emphasizing AI-complementary student skills. We explore model insights, scenarios, and policy interventions and recommend that HEI leaders become systems thinkers to manage the complexity of the AI transformation and benefit from the AI feedback loops while avoiding policy traps that may lead to decline. We also discuss the notion of HEIs influencing the direction of AI and directions for future research on AI transformation and the sustainability of HEIs.