Changing Higher Education

Breaking ranks at the top on tuition

From the Los Angeles Times Jan 22, 2007 edition

Princeton won't increase tuition
From Times Wire Reports
January 22, 2007

Aided by one of the nation's largest endowments, Princeton University decided to hold tuition steady, something it hasn't done in four decades.

Trustees chose to keep tuition at $33,000 for the 2007-08 school year by dipping into its endowment of about $13 billion.

My recent posts Price and Costs in Higher Education: price and the political economic system and Price and Costs in Higher Education: price discuss some of the larger background pertinent to this announcement.  Before concluding that this will set off a wave of similar announcements, however, one needs to note that Princeton has the largest endowment per student of any of the major universities, and thus is most able to make such a decision with the least impact on its programs.

The Creative University in a Flat World

“Tom Friedman, in his bestseller The World is Flat: a brief history of the 21st century describes a world in which decreasing trade barriers and rapid advances in technology, especially communication technology, have led to a revolutionary globalization of industry. In this new world, corporations create global supply chains for services and manufacturing by searching out the best providers wherever they may be. Companies in China, India, Brazil and Indonesia are now able to compete on a level playing field with American companies for spots in those global supply chains. The world has been flattened.

However, numerous studies show that the global playing field is not, in reality, completely flat. There are geographic areas where particular types of activities can be carried out with unusual efficiency and creativity. These are areas that John Hagel and John Seely Brown called local ecosystems that can amplify capability-building opportunities, that Susanne Berger calls clusters, and Richard Florida calls learning regions or creative centers. Special characteristics of these regions enable them to become centers of creative activity of one type or another. As a consequence, companies located in one of these areas still have a competitive advantage over similar companies not located in such a cluster elsewhere.

For many of these special local ecosystems- but not all - a university provides a center for creativity that plays an important role in producing the special characteristics of the region. Thus the ability of the university to encourage and support creativity is key to its role in such an ecosystem."

This is the beginning of a talk I recently gave at a USC Templeton Lecture entitled The Creative University in a Flat World.  The subject of the talk was creativity generally,  and the special role that universities that encourage creativity can play in a flattening world.   

Assessing graduate education -with inputs again

Richard Vedder’s blog, the Center for College Affordability and Productivity, is always interesting, and often provocative. In a recent post, he pointed out an article that I had somehow missed in the Chronicle of Higher Education about a new company called Academic Analytics that has a new approach to ranking graduate programs.  Rather than depending heavily on reputations, as do so many rankings, Academic Analytics uses a variety of productivity measures. The measures used, and the weightings they are given in arriving at a final score, are field dependent to better reflect the ways in which different fields operate. The outcomes are interesting, to be sure, and differ in surprising ways from some of the more traditional rankings.

Offshoring Executives, not Executive Jobs

The January 12,2007 Los Angeles Times has a fascinating article entitled “Cisco’s executive migration.” Cisco hopes to have 20% of its senior managers working at its Globalization Center in Bangalore by 2010.  They will be a “mixture of rising stars from San Jose and Bangalore and  talent plucked from acquisitions and competitors worldwide” - a very international mix.  IBM, it turns out, already  has about 150 executives living in emerging markets.  This includes their Global Procurement office, now located in Shenzhen, China, which moved last summer with its American vice president in tow.   

The author of the article, Rachel Konrad, says that all of this shows that “moving resources to far-flung parts of the world has evolved from cost arbitrage to strategic imperative”.  This conclusion is very much in keeping with the conclusions of Hagel and Brown that I discussed in What has offshoring got to do with higher education?

Anna Lee Saxon, dean of the School of Information at UC Berkeley is quoted as saying,” People are finally realizing that the only way to create cultural capabilities, linguistic skills and personal social relationships is to move executives abroad.”  We in universities should know (but often seem not to) that an extended stay abroad  is the only way to accomplish the same goals with students.  Education in this age of globalization will certainly call for greatly increased emphasis on a period spent in another culture - at least if we want to turn out the kinds of graduates that Cisco and IBM are looking for.  See also my extended comments on time abroad in Modularity in university higher education: Education . 

Price and Cost in Higher Education: price and the political-economic system

In a previous post (Price and cost in Higher Education: Price, Jan.  2007) I looked at some data on tuition price increases over time, and the resulting debt load that many students have taken on. In this post, I want to talk, once again, about the ongoing global transition from  nation-states to a market-states (see Welcome to the Market-State,Feb. 20, 2006).   In this instance, I will focus on how that transition might relate to price in higher education.

Bobbitt describes the governing contract of the nation state as: the government (the State) commits to improving the lives of its citizens (the Nation), and in return, the citizens agree to sacrifice to support the state.   In the market state, the government only seeks to maximize the opportunity - rather than the welfare - of its citizens, and individuals then thrive or fail based on their ability to grasp the opportunities offered by the global marketplace.  As a corollary, since the market state is offering less of a guarantee of success to the citizens than does the nation state, the citizens in the former are less prepared to sacrifice on behalf of the state.  One consequence of this change is that there are increasing demands that tax loads decrease, with the result that the state has less revenue in a market state environment.

In the nation state, highly educated people across a broad spectrum of fields are considered to provide intellectual capital of great value to the state (see Metrics of Academic Excellence in the 21st century, Feb. 27, 2006).  However, in a market state, the state focuses its attention on creating educated people in more narrowly defined fields that are deemed to be of importance in order to meed some perceived need of the state.  Higher education overall is considered to be of primary value to the individual, rather than to the collective.  A recent Chronicle of Higher Education survey captures the changing societal view of this public good/private good perspective. The survey showed that 2/3 of adult Americans now believe that families and students should pay the largest share of the costs of higher education.  Similar surveys in the 1960s showed that most Americans believed the converse, that the federal government should pay the largest share of the costs of higher education.  Thus the transition to a market state lowers the responsibility of government to take the lead in paying for higher education.

However, there is a counter trend contained in the market state that gives the state a very large stake in higher education.  As the knowledge economy continues to expand, access to higher education becomes central to the principle of maximized opportunity that undergirds the market state contract.  However, as we saw in Price and cost in Higher Education: Price, increasing price is decreasing access to higher education.  As a consequence, the state needs to find ways to counter the effects of increasing higher education price in order to maintain legitimacy.  As a further constraint, it must do so without significantly increasing its costs of supporting what has increasingly become a private benefit.  And in any case, because of its lowered tax collections, the state is greatly constrained in the financial incentives that it could apply to increasing access even should that be desirable. 

Price and cost in Higher Education: Price

The issue of the rapidly increasing price of higher education has been much in the news of late. Increasingly, one hears calls from Washington for limits on price increases in the name of accessibility.  One hears responses from university groups that focus on rising costs, and the necessity of reflecting those rising costs into the price. (See my comments and links in Report from the Secretary of Education's Commission on the Future of Higher Education, Aug 10, 2006)

In fact, I believe that the calls from Washington are but a part of a broader, long term political-economic trend that inevitably will lead to controlling price in higher education.  If this interpretation is correct, then there are serious issues to be addressed, because I do not believe that costs in higher education can be controlled in a significant way by making trivial administrative changes.

In this post, I review some data on this contentious issue of price. In a subsequent post,  I will place the issue of price of higher education in a larger context of changes in the global political-economic scene, and discuss some ways in which I believe that control of price might occur.  In a yet-later post, I will consider the question of cost, and brainstorm about possible ways it might be controlled.