Editor’s note: This is a guest post by Gunnar Counselman, CEO of Fidelis Education. The post went through PandoDaily’s usual editorial process and Mr Counselman was not paid for his work.

Between Udacity’s launch of Nano Degrees, General Assembly’s approach to short form focused skills gap training, and Duolingo’s challenge to language tests, there’s blood in the water around credentialing. Peter Thiel may have made the point about the insufficiency of degrees most loudly, but others are building products to fix the problem. To be honest though, these aren’t new ideas, just new efforts aimed at an idea that’s as old as the boy scouts -- competency badges.

“Silicon Valley’s Dilemma Over Credentials,” posted to TechCrunch on July 13th by Danny Crichton, talked about the love-hate relationship that Silicon Valley has with college degrees. It got me thinking about the current state of micro-credentials (AKA digital badges) and what needs to happen to get them from the fringe to the mainstream.

People love to use superlatives when debating digital badges. They’re termed either the savior of the education system or the destroyer of the degree. Neither is true of course. All a credential or badge is at its core is a letter of recommendation -- an organization or person vouching for the abilities of another. A degree therefore is a type of badge.

What has people excited about digital badges is that they can be for very specific competencies. Whether you call them micro-credentials or nano-credentials, they’re smaller than a degree and there’s a strong feeling that we need more specific output from the educational system than the 4 data points that currently represent 16 years of school and 32K hours of studying (degree, year, school & GPA).

Talk of digital badges is everywhere from the highest-ranking universities like Stanford and Harvard, to Mozilla and Digital Promise, to the Secretary of Education and JOBS Act that was recently signed into law. The sad truth though is that so far, it’s all just talk, and digital badges have been a non-factor in solving the skills gap, aligning education with the needs of the economy, and fixing the education cost problem.

So why haven’t badges been taken up as a currency for credentialing? I think there are two major reasons - both on the supply side and on the demand side.

First, on the supply side, schools don’t know what to do with them. Their data systems are not set up to manage a complex array of credentials. In schools, LMSs and SISs are set up specifically for everyone to get the same basic diploma. To make sense of micro-credentials, schools need a better way to manage content, credentials, and relationships - something like a CRM, but one that is purpose built for learning, not for sales - a Learning Relationship Management System.

Second, badges, digital or otherwise, aren’t good enough yet to be useful to employers, so they’ve not invested in tools to allow them to search badges effectively.

If badges are going to fulfill their promise, we’ve got to start first by fixing the demand side. And to do that we’ve got to capture employers' attention by making badges better. Here's seven specific ways how:

1) Useful to industry. To publish a badge, you should have to use it yourself for hiring. All badges would then be focused on the real needs of organizations responsible for evaluating the capabilities of people, whether they’re employers or research centers or individuals looking to collaborate with someone who has complementary skills -- the key is, “If you build it, you’d better use it.

2) Searchable. Badges need to be searchable within plaintext job requisitions and job descriptions.

3) Branded. If you look at the world of certifications, it’s a cacophony of 3 and four letter acronyms that represent well-meaning, though unknown industry associations whose badges mean very little. Prestigious universities and well-known companies need to get in the game and publish badges.

4) Leveled. We need to deep-six the notion of binary certification. The idea that you’re either certified or not is boneheaded - everyone’s expertise lies along a spectrum, and so to be useful, all badges have to be scored along a spectrum.

5) Convenient. Mozilla has made creating badges easy. Now we need to make it just as convenient to set up exams to assess lots of people’s skills and then confer badges based on their results.

6) Transparent. Take a look at Mozilla Open Badges. I think you’ll find that it’s too hard to discern which badges you can trust and which you can’t. We’ve got to make it a seven-second effort for a someone to understand what a badge means. Both Brand and Levels will contribute to transparency, but it needs to be addressed directly.

7) Deep. Badges should not just be about basic knowledge. The levels should extend to extreme levels of expertise. A level 8/10 in Physics should be the equivalent of a PhD, and a 9/10 in Physics should be one of 250 leading experts in the field.

Finally, if badges are to fulfill their promise, they need to be conferred exclusively for real achievements. No badges for participation. No badges conferred like so many trophies at the end of the soccer season, to make people feel good or to enhance someone’s self-esteem.

Employers have no patience for degrees that don’t act as a good quality filter and they’ll have even less patience for badges unless they can clearly see a way to use the badges to quickly identify good candidates.

If you are interested in research on the topic of digital badges for education, you can find it here.

[Illustration by Hallie Bateman for Pando]