Paul Hill and Marguerite Roza just released Curing Baumol’s Disease: In Search of Productivity Gains in K–12 Schooling published by the Center on Reinventing Public Education. The paper is premised on the dilemma that while some labor-intensive industries—education included—fail to keep pace with productivity gains realized in manufacturing and other services, there is pressure for salaries to keep the pace. Since the vast majority of costs in traditional schooling are personnel, the result is that the system’s costs consistently outpace increases in revenue.

What to do? Hill and Roza look to other industries for examples of increased productivity. They distill eight advances that have led to improved performance for less cost in other industries:

All of these processes are forms of innovation. In education the question is what forms of policy and what models of school will make it most likely innovation will occur? During these times of budget crisis the different responses of different school models and platforms show that the differences actually matter quite a lot.

Teacher furloughs in California, Pennsylvania, Georgia, and elsewhere are a representation of the traditional school response that only knows (and is only able) to ratchet up or downsize by austerity. Traditional schools don’t change form. To the contrary, an autonomous chartered school or an online school can re-think its contracts, delivery model, partnerships, or any other component in an intense effort at survival. Teachers may be involved in the decisions, or even direct them. It is in times like this that some of the most remarkable and improvements are made in an organization.