Upscaling the American College Community

Last year, on the corner of the busiest intersection in College Park, Maryland—home of the University of Maryland’s flagship campus—a small but significant change took place. After 30 years of business, a derelict pizza shop closed its doors and, in its place, a popular chain of Portuguese chicken restaurants opened. This seemingly innocuous change is significant, not because of the reduction of pizza slices per capita (there are some 13 pizza joints near the campus) or the loss of a neighborhood institution. It is significant because it represents a microcosm of shifts taking place in College Park and many other college communities: upscaling.

There was a time when college communities were known, among other things, for cheapness. Cheap pitchers of beer at grimy bars. Cheap apartments and houses for rent. And, yes, even cheap slices of pizza. Goods and services were cheap in response to the well-worn mantra of the broke college student. If you wanted to attract college students, you competed on price more than quality. To be sure, there are still vestiges within every college community of businesses seeking to attract poor college students with basement prices. However, in many college communities there is a perceptible movement away from cheapness as a guiding business strategy. Instead, entrepreneurs are actively pursuing a more affluent segment of the consumer market.

As a professor of higher education, I have had the privilege of visiting many college communities, and in almost every case, the trend of upscaling is evident. By now, we’ve repeatedly heard and/or read about manifestations of this trend, particularly related to student housing. College communities have witnessed the construction of luxury apartment buildings, many of which are mixed-use developments, combining residential and commercial spaces. What this means in the context of college communities is that restaurants and convenience stores line the first floor of large apartment buildings. Students only need to walk down the hall and take an elevator to buy a burrito.

There are signs of upscaling beyond food and housing. Coffee shops feature designer roasts and every imaginable combination of espresso, milk, and flavoring. Bars are becoming less grimy and more glamorous, with signature cocktails and craft beer. Well-known fashion and technology brands are vying to occupy locations that receive heavy student (and parent) foot traffic. Entertainment venues like movie theaters are rolling out more services that carry higher prices. Mirroring trends in college pricing, the net effect of upscaling is that virtually everything in college communities is becoming more expensive. No matter where they look, students see opportunities to spend.

In some college communities, upscaling has been part of a purposeful plan to attract wealthy students and encourage faculty, staff, and young professionals to live near campus. As The New York Times recently reported, college communities in Philadelphia, Nashville, and Raleigh are building luxury housing not just for students, but also for members of the “creative class” in an effort to cultivate a “trendy live-work enclave.” The most idealistic of city planners hope that marrying the intellectual vibrancy of colleges with high-end housing replete with amenities will pull in young professionals and spark innovation, business creation, and economic growth. Some college communities—such as those David Brooks labeled “latte towns” in his analysis of the new upper class—have long flourished thanks to synergies between colleges, capital, and creativity.

Yet one question that arises from the upscaling of college communities is what it truly means for students, faculty, and staff. On the one hand, few people complain when an ugly building is torn down and replaced by an exciting restaurant. Who doesn’t want another option for late-night delivery or weekly office lunch? Additionally, from a safety perspective, there is value in students living in newer apartment complexes that are completely up to code. In the interest of work-life balance and protecting the environment, creating a college community in which faculty, staff, and students live nearby campus and forego long commutes is certainly beneficial. In fact, some would call the changes afoot in college communities as “smart growth.”

On the other hand, there is reason to challenge the notion that students, faculty, and staff have become affluent enough to explain and justify upscaling. If anything, research and experience suggests that colleges are welcoming increasing numbers of low-income and financially precarious students. These students may be the first in their family to attend college, they may be working adults, or they may be returning to school after a tour of duty in Afghanistan. Upscaling may price out those students who can’t pay to play, causing them to stop out or drop out, either due to financial pressures or a sense of marginalization.

The large proportion of students who rely on financial aid means that taxpayer money may be used to meet higher prices for goods and services. In this way, it is possible that the federal government subsidizes the “trendy live-work enclaves” developing within college communities. There are, of course, students from wealthy families attending college, perhaps enough to create a strong incentive to scale up. Still, the incongruence between mounting student loan debt and the transformation of college communities suggests to me a faulty assumption of affluence among students.

In addition to low-income students, international and graduate students may acutely feel the squeeze occasioned by upscaling. International students are generally not eligible for financial aid, and they may be shocked upon arrival at how far (or, more appropriately, not far) their money goes. We would be naïve to think that all or even a majority of international students come from wealthy families who can pay for what has become the quintessential American college experience. Much of the conversation around luxury housing in college communities has focused upon undergraduate students and young professionals. Graduate students, who may be attempting to support themselves and dependents on a paltry stipend, are seemingly excluded from the calculus of upscaling. As more and more luxury apartments are constructed, it becomes difficult for me to imagine how graduate students make ends meet.

Faculty and staff are perhaps better positioned to enjoy the fruits of upscaling in college communities because they earn a salary. It is true that if you want to convince faculty and staff to live near campus, you need more than cheap beer. Most faculty and staff desire decent housing options, reliable public transportation, good schools, and, if at all possible, places to exercise, relax, and enjoy a meal with family and friends. But this does not mean that faculty and staff seek luxury. Affordable housing and transportation remain paramount concerns, especially given that higher education continues to suffer through budget cuts that make the possibility of merit and cost-of-living pay increases a recurrent department meeting joke. Amidst the steady rise in the proportion of part-time instructional faculty at many colleges, the logic of upscaling is particularly twisted. In other words, while there are certainly benefits to changes underway in college communities, I’m left wondering who, precisely, constitutes the affluent segment of the consumer market.

College communities hold an important position in the American cultural imagination. We easily retrieve images of tree-lined streets, quaint pubs, funky shops, and red brick academic buildings. Having not visited every college community, I would guess that there are many places that still embody this description. However, I have seen enough to contend that our imagination is stuck in a version of college communities from thirty or even fifty years ago. Many of today’s college communities have dramatically changed in ways that require deep pockets to live comfortably. It is not at all coincidental that the college affordability crisis has emerged in tandem with the creation of college communities that are playgrounds for the affluent.

What Role Do Faculty Play in the Corporatization of Higher Education?

Yesterday, I wrote a post about recent claims that administrators in higher education increasingly have corporate backgrounds. This trend, it has been argued, explains a range of phenomena related to the corporatization of higher education, such as treating students as customers and hiring adjuncts. I challenged this argument in two ways. First, I gave reason to question the idea that administrators increasingly have corporate backgrounds. We don't actually have data (to my knowledge) that confirms this. Second, I suggested that while presidents are easy targets, responsibility for the corporatization of higher education does not fall on the shoulders of a single actor. Instead, I offered that all of us in the academy are complicit.

David Perry, an academic and writer whose work I admire, read the post and took issue with this last point. He tweeted:

@kevinrmcclure Again, I'm with you on not simply blaming presidents.
— David M. Perry (@Lollardfish) September 16, 2014

@kevinrmcclure I just think the "we're all guilty" needs more exploration if you want to make the claim.
— David M. Perry (@Lollardfish) September 16, 2014

In particular, he thought the argument would be more compelling if I could cite concrete examples of faculty contributing to the corporatization of higher education. So, I decided to think on it and write this post. What role do faculty play in the corporatization of higher education?

First, let me get all dissertation-y and provide a working definition of corporatization. I think of corporatization as an example of privatization within higher education (as compared to privatization of higher education, in the sense of state liberalization of a largely public higher education sector to allow for private providers). Bruce Johnstone provided one of the most comprehensive definitions of privatization within higher education. It's a good working definition for this post. He wrote:

Privatization...refers to a process or tendency of colleges and universities (both public and private) taking on characteristics of, or operational norms associated with, private enterprises. Although the term is not a precise one..., privatization connotes a greater orientation to the student as consumer, including the concept of the college education as a "product"; attention to image, competitor institutions and market "niches"; pricing and the enhancement of net earned revenue; and aggressive marketing. Priviatization also suggests the option of management practices associate with private business, such as contracting out, or "outsourcing"..., aggressive labor relations and minimization of payroll expenditures, direct decision-making and "top down" management, widespread use of audits and accountability measures, and an insistence that units...contribute to profitability.

Scanning through this definition, most of the practices seem far removed from what we typically associate with the academic profession. Faculty members push against any effort to think of students as customers, they lash out against "top down" management and promote shared governance, they question the utility of many of the products purchased to improve workflow, and they frequently don't champion accountability measures (think of post-tenure review). So, at first glance, my colleague is probably right to say that faculty should not bear responsibility for changes they did not enact. If anything, many faculty should be recognized for their efforts to oppose corporatization. Such opposition helps explain the irrefutable and mounting tension between faculty and administrators.

Yet, I still had the nagging sense that pointing the finger at administrators--and often a single administrator--is too simplistic. So, I offer here some tentative explorations of how faculty share some responsibility for corporatization. These ideas, many of which are inspired by higher education research, have been in my brain oven all of 12 hours, so feedback is heartily welcomed. I'll state here and reiterate that my position is not that faculty are to blame for corporatization. Here we go...

1. Faculty are administrators, administrators are faculty - Despite claims of the CEO-as-administrator, many leaders in higher education still follow a trajectory that started on the lowest rungs of tenure-trackdom. The administrators that are so heavily critiqued by faculty were often once faculty themselves. This means that either: a) some dramatic transformation happens when faculty become administrators that alters their thinking and precludes any identification with faculty or b) conditions in higher education create challenges and constrain possible solutions, meaning corporatization arises as faculty-administrators try their best. In any case, the point is that it's difficult to draw a clear line between faculty and administrators.

2. Faculty are people, people like nice things - This may rub a few people the wrong way, but the amenities arms race has been going on for a longer period time than many faculty realize. I wonder if opposition to new buildings was as vociferous when funding was more generous. I've heard plenty of faculty complain about their offices and classrooms. I think many would welcome the opportunity to work in new facilities, even if this required a tuition or fee hike. I went on a campus tour with new faculty once, and they were just as giddy about new recreational facilities and Starbucks in the library as students. In other words, faculty enjoy and come to expect amenities on campuses just like everyone else.

3. Faculty research, research requires money - Faculty are status addicts. The one activity that almost universally delivers status in the academy is research. In order to fund their research, faculty have courted corporate donors. Now, this is not true of all faculty. I'm in education - ain't no corporations funding my work. Select faculty members have also oriented their research to intersect with market demand. They view their discoveries as intellectual property that can be protected through patents. And they look to license these patents or use them to create spin-off companies. Although we are still probably talking about a minority of faculty at certain institutions, data shows that the number of faculty-entrepreneurs is rising (shout out to Slaughter and Rhoades).

4. Faculty are no strangers to adjuncts - To say that the adjunctification of the academy is a purely administrator-driven process is ludicrous. Faculty vote on professional degree programs taught by adjuncts. Faculty buy out courses knowing the courses will be taught by adjuncts. Faculty become department chairs and even hire adjuncts. Faculty marginalize adjuncts. (All the preceding, it should be noted, creates a distinction between "faculty" and "adjuncts." I don't agree with this distinction, viewing all faculty as faculty, but I use it here for clarity.) I've read article after article about how faculty know about the treatment of adjuncts, realize the number of adjuncts is rising, and do nothing.

These are just a few ideas. Again, my point is not that faculty are to blame for corporatization. Rather, my position is that this has been a group effort, born of a pervasive mindset--what many have called neoliberal governmentality. We can think of corporatization as a car speeding down the road. Faculty aren't in the driver's seat, and they may even be in the back urging the driver to slow down, but they are still in the car with everyone else. A response to my argument might be that faculty are simply reacting to conditions they did not create. There is validity to this response, but I think it too easily absolves us all of some part in the changes to higher education. Others might suggest that while faculty are complicit in corporatization, just like administrators, students, parents, and staff, they have played a smaller role. I think this is also true but doesn't take them out of the show altogether.

If we want to prevent the corporatization car from speeding down the road, we can't simply point a finger at the driver. Nor can we swap out the driver and put a faculty member in their place. It'll require a group effort because it was a group effort that led to the journey in the first place. In the words of the late Howard Zinn: you can't be neutral on a moving train.

The Former CEO as College President? Not So Fast

Are America's colleges and universities increasingly run by former CEOs? The answer is: honestly, we don't know. We don't have the data. However, that hasn't stopped a number of observers from suggesting that higher education has gone to hell in a handbasket chiefly because its leaders are introducing norms and practices derived from time spent at corporations.

For example, in her recent piece for the National Post, Rebecca Schuman included the following as one reason that, since the late 1990s, higher education has been in a precipitous decline:

...universities — especially public institutions, ever-starved of tax revenue and ever-more-dependent upon corporate partnerships and tuition — started hiring CEOs as administrators, most of whom gleefully explained that they would start running these public, nonprofit entities like businesses.

She linked the rise of the CEO-as-administrator to treating students as customers and adjunctifying the academy. Consequently, luxury dorms have been built in response to customer demand and academic freedom has been dismantled as more and more work is completed by faculty outside tenure-trackdom. In other words, two of the most controversial developments in higher education in the last decade, namely the amenities arms race and the increasing reliance upon contingent academic labor, are products of the encroaching presence of former CEOs in leadership positions at colleges and universities. Schuman is not the first and probably won't be the last to make this claim.

Now, it's certainly possible that there has been an uptick in the number of institutions recruiting people with business acumen for leadership positions. In fact, it makes perfect sense. Given that institutions increasingly must consider marketing, branding, and making money to compete and meet rising costs, there are obvious advantages to hiring someone who was previously responsible for marketing, branding, and/or revenue generation at a large organization in a competitive marketplace. Many academics have never done these things. This has not stopped several institutions from demanding that their next president come from the ranks of the faculty. And it should be noted that, even if said president were a historian of the nineteenth century south, faculty members have made fantastic leaders for as long as higher education has existed. But I digress. 

While I agree that the employment backgrounds of college and university leaders can help us understand the nature of change in higher education, we should be wary of easy answers. Before we jump to conclusions about the CEO-as-administrator, we need to collect data. (*Dibs* I'm planning to do this in the near future.) Even armed with this data, however, we can't claim, as so many do, that former CEOs are the cause of corporatization and its attendant maladies. In the short term, we might be able to assess the degree to which a certain employment background (academic v. private sector) among administrators relates to variables like the proportion of part-time faculty. All of this is a long preface to this key point: corporatization is absolutely an issue in higher education, but I'm not certain we should look to the employment history of administrators as an explanation.

I would, rather directly, look to strings attached to money coming from corporations. For example, the Center for Public Integrity has been reporting about large sums of money that the Koch brothers have donated to various colleges and universities nationwide through their charitable foundation. The money has often gone to fund research centers or faculty positions that promote free-market ideology and the shortcomings of government intervention. I would look to the political economy of education policy-making, which has subverted the notion that higher education is a public good that demands investment of public funds. And I would look to the pervasiveness of market rationality in virtually every facet of the academy. 

This last point merits reiteration. Although presidents are easy targets, the reality is that all of us are complicit in the corporatization of higher education. It is, by now, a deeply ingrained mindset. Which is to say that change is going to require a great deal more than ensuring that college leaders are not corporate big shots. It is going to require a long, hard look in the mirror. 

It's Not Just Institutions Driving the Amenities Arms Race: Meet American Campus Communities

Many higher education institutions have received critical scrutiny for building luxury resident halls, student centers, and recreational facilities. Some observers have argued that institutions compete with one another to attract students through these buildings and services in what higher education scholars call the "amenities arms race." A careful study of spending in higher education reveals that climbing walls and swimming pools are easy targets for critics looking to confirm widespread allegations that colleges and universities are wasteful and drive up prices that students and their families pay for higher education.

Some of this critique is warranted. However, in a common theme that runs throughout popular portrayals of education issues in America, a major player in the amenities boom is missing in the conversation: the private sector. A whole range of companies are cashing in on the college student market, with little regard for how their products encourage frivolous spending and increase the price of attending college. You may say these costs do not matter because they are outside the tuition that students must pay. I would counter this thinking by arguing that: 1) many of the services offered by institutions that are condemned for costliness do not factor into tuition; and 2) with this in mind, we should always think about the price of attending college in broad terms, encompassing tuition, as well as fees, books, as well as discretionary spending.

One of the companies that is a major force in the higher education landscape (physically and figuratively) is American Campus Communities (ACC). You may not have heard of ACC, but you've likely seen their products if you've spent any time on a college campus recently. Launched in 1996 by a former resident assistant, ACC has developed $4.2 billion in properties and $4.6 billion student housing assets. They own and operate their own buildings off campus, but also work with colleges in public-private partnerships to manage or develop specified housing facilities. In 2004, they became the first publicly traded student housing real estate and investment trust (REIT). Their buildings grace the campuses of the University of New Mexico, Princeton University, Portland State University, Arizona State University, and the University of South Florida, to name a few examples.

Vista del Sol Apartments in Tempe, AZ

ACC does not specialize in run-of-the-mill dormitories. You won't find cinder block rooms, rickety furniture, and communal, bleach soaked bathrooms in their Vista del Sol property or Casas del Rio property. These are luxury residence halls that cater to the consumer demands of the Millennial generation. In fact, it would be difficult at first glance to even determine that ACC buildings are, in fact, designed for college students. They look more like resorts, complete with swimming pools, high-end fitness centers, and movie theaters. Rather than being criticized for opulence, ACC is praised for its profitability and sustained, recession-proof growth. It has been regularly named a company to watch and its stock has several times been pinpointed as a smart investment. In other words, when a private company creates expensive amenities to compete in the lucrative college student market, they are viewed as forward-thinking and entrepreneurial, not symbols of a system spinning out of control as it strives for prestige.

The double standards are less concerning than the presence of companies like ACC (there are many others) on campuses and the influence they exert. As privately constructed buildings infiltrate a university space, public or quasi-publicly-funded and operated buildings must change to keep pace. The amenities arms race, in other words, is not just a product of institutions competing with one another. It is also a product of competition created by companies like ACC building on and around campuses nationwide. Before long, luxury student housing becomes normalized, such that students and parents feel like it is the most acceptable option. A family could certainly look into less expensive options, but they fail to capture the imagination, communicate a sense of comfort, and convey status quite like a resort-esque apartment complex. And if so many others can afford it, they reason, so can we. The normalization of spending in higher education is not something that has been systematically studied, but there is reason to further explore the ways in which companies like ACC do not simply respond to consumer demand--they create demand where it previously did not exist.

The Varsity, an ACC property down the street from my house in College Park, MD

 The costs of living in these buildings adds to the rising tuition burden at many institutions. While it is true that institutions themselves have increased student fees to pay for services and facilities, and many have built their fair share of lazy rivers and Mongolian barbecues in partnership with companies, we should not ignore the private sector. Many, many companies are profiting as students fall further into debt. And while we can express outrage at institutions, at least the non-profit ones are investing the money they earn back into an enterprise ostensibly dedicated to further education. The same cannot be said of a company like ACC, where profits go shareholders.

The Frontiers of University Administration

Last week, David Perry highlighted a striking trend in American higher education: the expansion of administrative positions at colleges and universities and the simultaneous "fall" of tenure-track faculty. Two quick caveats are required to understand this trend before getting to the crux of my post.

First, some call this growth "bloat," which fails to acknowledge that a chunk of the additional personnel were hired to meet enrollment demands and spur completion. In other words, as Perry acknowledged, not all administrative expansion should be thought of as excessive. Second, "administrative" is an umbrella term that disguises precisely where growth is happening. In my experience, certain areas have massified to a greater extent than others. For example, when I was job searching a few months ago, it was impossible to miss the plethora of new positions in development and fund-raising. I had to learn a whole new vocabulary just to understand the job descriptions.

Although I recognize that the number of administrative positions is relevant and intersects with the the state of the academic profession, I don't think it captures the major transformations currently afoot in administration. If you want to learn about the relationship between administration and corporatization, keep your eyes fixed on two increasingly widespread phenomena: 1) efficiency-based restructuring and 2) contracting with private companies to develop administrative technologies. These practices are remarkably under-studied, and they are often absent in conversations related to the nature of change in higher education and the advent of disruptive innovation that's all the rage these days.

Starting with the first phenomenon: efficiency-based restructuring. Many institutions are looking for synergies between units that justify cost-cutting mergers. An example of this at my own university was the decision to create a center for innovation in teaching and learning by combining the center for teaching excellence and an e-learning office. A few experts in big data will be hired in the process, but the move also frees up office space and reduces the need for some administrative positions. Efficiency wasn’t the only objective in this process—it was a signature initiative for the provost who, like many chief academic officers, seems to be gunning for a presidential appointment.

Another example of efficiency-based restructuring is a model of shared services being explored at the University of Michigan and the University of Texas at Austin. Not coincidentally, both universities were advised by the consulting firm Accenture LLP, which is not the only consulting firm cashing in institutions' pursuit of organizational efficiencies. A friend at Booze Allen recently told me that his team is getting into higher education consulting. The shared services model looks to identify and eliminate administrative redundancies, typically through the centralization of certain administrative functions that are shared by many units. This model has been hotly contested by faculty at both institutions, partly because it oversimplifies the work done by many staff people and could result in substantial loss of grant money. So, rising numbers of mid-level managers in higher education is not the only example of failed corporatization. Many constituents at colleges and universities oppose the type of lay-offs required to achieve the efficiencies proposed in restructuring. 

The second phenomenon is contracting with private companies to develop or implement technologies that improve the administrative functioning of campuses. Right now, our university has a number of contracts with companies in order to digitize paperwork, streamline the collection and analysis of information, and measurably cut the bureaucratic red tape that is said to inhibit change. One of these products is an online portal that collects information on faculty in order to facilitate annual reporting to the state, generate standardized CVs, and eventually streamline the promotion and tenure process. Other products are designed to replace the antiquated applications that were created in-house to manage student information, course registration, and financial aid. A booming business has emerged to capitalize on various administrative functions in higher education. We don't have any sense of how much money is being spent on these and similar products, or if they even work as advertised. It seems rather odd that a research university with some of the brightest minds on earth would rather pay a company than encourage its own people to develop new technologies.

Why don't we hear more about these phenomena? Higher education's reform-industrial complex has not nearly been as concerned with administration as instruction. Innovation and disruption, it seems, are solely applied to teaching and learning. Frequently, innovation revolves around cutting costs by putting students in front of a computer, instead of in a classroom with others. I have yet to see a panel, summit, or conference dedicated to “re-imagining” administration. The reality is that many of the innovation evangelists have no experience in administration and may not have a strong sense of where to introduce new ideas. Administration is also less politically-charged and sexy than how much students are learning and whether tenured faculty are superstars or deadweight. Thus, these two phenomena are largely occurring under the radar.

In thinking about administration in higher education, we should set our sights on more than just counting the number of administrative jobs. There are major shifts taking place in administration, and they represent the frontier of university operations—we know little about them, how much they cost, or whether they work. And these trends are just as important and say more about corporatization than the number administrators. 

Inside the EdTech Reform Circus

Today, I begin what I hope will be a useful look inside the circus of technology-based higher education reform. My goal is to see higher education through the eyes of education technology evangelists, corporations, startup companies, innovation gurus, consultocracy elites, reform funders, and investment capitalists. What are the main issues in higher education? What are their proposed solutions? Who are the major players? How are they related and whom do they represent? The idea is to better understand how this influential group is shaping the higher education reform agenda, map the ties that bind them, and unpack the ideologies that guide them.

My plan is to begin attending the various conferences, summits, meetings, and panel discussions devoted to identifying problems in higher education and presenting "innovative" solutions. This should be relatively easy for the time being, as many of the take place in the District. I'll start next week by attending an event called "Hack the University," co-sponsored by the New America Foundation and Arizona State University. For the record, I'm not opposed to change, and I don't believe colleges and universities are perfect. I also recognize that there are individuals active in this space who genuinely care about the future of higher education. However, I am concerned about how the conversation is dominated by individuals with no real experience with the realities of higher education work, many of whom stand to benefit, either personally or professionally, depending on how the reform agenda is framed. For example, a tech company that assigns badges based on mastery of certain competencies is likely to support any number of events critiquing the use of credit hours as a metric of learning.

I decided to take on this project last night, after scrolling through the list of speakers for the Education Innovation Summit. This is not the first time I have walked down this path, but I'm hoping to stick with it. The reality is that this is a huge undertaking, a bit like trying to wrap your arms around an elephant. To help launch the project, I'm beginning here a list of the major players, which I'll continue to update.

Education Technology Evangelists:
Jeff Selingo, Chronicle of Higher Education
Anant Agarwal, President of edX
Michael Crow, President of Arizona State University
Daphne Koller, Coursera
Thomas Friedman, New York Times
Henry Christensen, Harvard University
Daphne Koller, Coursera

Corporations:
Kaplan
Pearson
Blackboard
DeVry Education Group
Apollo Education Group
Desire2Learn

Startup Companies:
2U
Codecademy
Udacity
Coursera
edX
Khan Academy
inBloom
Knewton

Innovation Hubs:

Arizona State University

Consultocracy Elites:

McKinsey and Company

Reform Funders:

Gates Foundation

Lumina Foundation
Thiel Foundation

Investment Capitalists:
GSV Capital

Think Tanks:
Clayton Christensen Institute

Experiments:

The Minerva Project

   

No, You Don't Understand "Soaring" College Costs

I read yet another article today attempting to explain "what's behind America's soaring college costs." These articles have proliferated, especially since the economic crises that began in 2008. The problem with many of these articles is that they are brimming with faulty assumptions and often end up misinforming those who don't have a firm grasp of higher education finance. I'm going to pick apart this latest article, which appeared in The Atlantic on Friday. In response to Mr. Keenan, I say: "No, you don't understanding 'soaring' college costs." My point here is to suggest that journalists either stop writing these sweeping "explanatory" pieces on higher education finance, or do better research to truly understand its complexity and contribute to reasoned dialogue.

1. The article begins by claiming that concerns over America's $1.1 trillion debt burden have been "subdued." This may be true, if you have been living under a rock. Student debt is a major educational and, as the article notes, economic issue, and it is has received mounting attention from a range of stakeholders. No one with any connection to higher education would argue that the financial aid system is functioning well, nor would they naively say student indebtedness is a non-issue. Of course, this first point is somewhat trivial, so let's move on to some of the more flagrant problems with the article.

2. According to the author, we should care about student indebtedness because it will hinder the ability of college graduates to spend in the future, negatively affecting the consumption on which America's economic growth depends. I don't contest this point, but I think it emphasizes the wrong reason why student indebtedness matters. We should care about college affordability because access to higher education is a cornerstone of American democracy. Even though sociologists have pointed out that the higher education can metaphorically be more of a sieve that stratifies society than a pathway to social mobility, we know that colleges helped build a thriving middle class as part of a postwar academic revolution that ended roughly, and not coincidentally, around the time Ronald Reagan became president.

3. The article's main argument is that students are in debt because they take on loans, which have grown in order to pay rising tuition. Rising tuition, in turn, is caused by indulgent spending. The author blames institutions for student loan debt, although we should remember that the federal government made the decision to give financial aid directly to students (a type of voucher in a quasi-market) in the 1970s and has shifted from grants to loans. Institutions have had no control over these decisions. The author also contends that colleges are actually spending more because they know students have access to all the federal loans they want. Let's look at this closely and try to be clinically precise with our terminology. When we talk about "college costs," we must clarify whether we are referring to institutional costs or costs to students. Institutional costs are basically all the things institutions must buy to fulfill their missions, and we typically track this through measures of spending. Costs to students encompasses tuition, fees, and all other costs associated with pursuing a college degree.

The Delta Cost Project tells us that, as a result of the recession, most four-year institutions actually cut spending in recent years and redirected spending to instruction. There has certainly been an overall trend of rising institutional costs, but these increases are in part due to swelling enrollments and the student services personnel required to provide a quality education. Costs to students have increased, not only because of rising tuition, but also because of the massive consumer market that has developed to prey on college students. What the author fails to mention--and this is of crucial importance--is that rising tuition is principally a factor of declining subsidies. The price of college is subsidized by an endowment at private institutions and state appropriations at public institutions. No one pays the full price for a college degree. Thus, college costs are not the culprit for student indebtedness. Shrinking subsidies are to blame, and shrinking subsidies at public institutions are a direct product of nearly four decades of government disinvestment in education.

4. The idea that federal loans are pushing up tuition basically states what we in higher education researchers call the Bennett hypothesis. Named after former secretary of education William J. Bennett, the hypothesis goes something like this: "increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that federal loan subsidies would help cushion the increase." The hypothesis has not been validated by empirical research, though it has not been completely discredited. We hear nothing of the controversy surrounding this hypothesis, or the mixed research results, probably because the author is unaware of the debates. The reader is led to believe that this relationship is fact, not a hypothesis that has yet to be confirmed.

5. Greedy colleges, in the view of the author, have been using student money to take part in a positional arms race, building "lavish" facilities and expanding administration. The salaries of university presidents were raised as evidence of out of control spending. Two notes on this, again coming from excellent work done at the Delta Cost Project. In 2005, 15% of all new buildings in higher education were dedicated to student life, such as dinging halls, recreational facilities, and student centers. Half of new construction was for academic buildings, and a quarter for residential space. However, what is more alarming than new construction is what colleges aren't spending on facilities. Many institutions cut spending on facilities, creating a backlog of deferred maintenance that will have huge cost implications in the future. Like the Delta Cost Project said, fancy buildings "are easy targets, maybe even fair game, but they aren't what's behind the rising price of college." As for president pay, the author is right to pick up on the importance of personnel spending in higher education. Employee compensation accounts for as much as 70 percent of college spending. We can absolutely argue over how much presidents are making, but their compensation is a small slice of a huge pie. Administrative "bloat," in general, needs some qualification. Executive administrative hires have increased in step with enrollment. The explosion of administration can be traced to student services personnel.

6. Finally, the article states that "administrative bloat fueled by excessive spending seems to be diminishing what college is supposed to be about." He then cites a study which, I gather, is meant to suggest that faculty are spending less time teaching. Let's set aside the fact that this is a patent abuse of causation that makes little sense. The idea that faculty are teaching less is far more complicated than the author makes it seem. The study he cites shows that the number of faculty survey respondents (and we don't know how the study defines "faculty," how many respondents there were, etc.) saying they spent 9 or more hours teaching has declined. I read the report from the Higher Education Research Initiative at UCLA, and the author does not indicate that these are 9 hours preparing for courses. The actual time spent in the classroom has also declined slowly, but the report argues that these changes are due to the increasing use of part-time faculty, as well as "furloughs and reduction of course sections, which institutions have implemented to respond to budget constraints."

What can we take away from this analysis? I don't believe journalists and writers should stop writing on college costs entirely. However, I do think they should give up on trying to explain in brief articles remarkably difficult topics in higher education finance. If they want to dig into these topics, they should do their research and recognize the diversity of institutions in American higher education. There has been much research on higher education finance, though you wouldn't know that from reading this piece. The public relies upon journalists to help them understand issues of vital importance. At the moment, much of the writing on higher education does a public disservice.

Student as Customer: More than Language

In a recent opinion piece for the Chronicle of Higher Education, David M. Perry cogently argued against the use of "corporate-speak" at colleges and universities. Responding to a job announcement that included the provision of "excellent customer service" as a requirement for faculty candidates, Perry concluded by saying, "Faculty members are not cashiers, ringing up the bill when students check out with knowledge—and not because that would be demeaning to the professor, but because the responsibility of a teacher to his or her students is far greater than the employee to the customer." I agree, but think the argument could be extended beyond language.

It is not just that references to students as customers has infiltrated higher education discourse, principally amongst administrators. Indeed, it is increasingly the case that college and university professionals assume that students are consumers who demand consumer amenities. There is a subtle difference between talking about students as customers and assuming that they are consumers, but it is a significant difference. The logic of student as consumer is powerfully shaping the geography of campuses and college towns. It also influences student conduct in potentially alarming ways.

Whereas the customer exchanges one type of valued good or service for another, the consumer buys an identity, or a sense of middle class belonging and comfort. As noted in a rejoinder to Perry's article, colleges and universities should not have to build their service delivery model around customer demands, but they do need to be sensitive to providing high quality products and pay some attention to satisfaction. Yet what does it mean for colleges and universities to assume that students are consumers who demand consumer amenities? It means, for one thing, creating opportunities for students to express their identity, and hopefully their affinity to the institution, through spending on consumer goods. The manifestation of such opportunities would most obviously be the outrageously priced campus book store, where students can proudly advertise their achievement through sweatshirts, hand bags, and bumper stickers.

Moreover, it means allowing, and sometimes encouraging, students to buy the consumer goods that cultivate a sense of belonging and comfort. This means setting up places where students can purchase all of the accoutrement that signals their membership in middle class America. It should come as no surprise that there is a strong cultural link between higher education institutions and middle class status, as colleges and universities have long been considered an essential pipeline to upward mobility. Evidence of encouraging consumerist behavior can be found in the agreements many schools establish with Apple, making it possible for students to easily purchase iPhones and iPads. It is also why Starbucks has become ubiquitous on college campuses: the white Starbucks cup with the brown sleeve is about more than caffeine. It says something about being able to buy a fairly expensive cup of joe and to be seen drinking it. The meaning attached to Starbucks is why there are so many imitator white cups and brown sleeves. It has little to do with coffee and everything to do with symbolism.

When college and university administrators think of students as consumers, they encourage students to spend their way to feeling normal and accepted at a time when many struggle with self-doubt, imposter syndrome, and the exclusivity common to institutions striving for selectivity. The implications of this orientation extend beyond language to the physical constitution of campuses and outlying areas. As I have previously argued, many colleges and universities are now partnering with private industry to create mixed use housing and retail developments. I call these concentrated campus-based consumption areas, as high end student apartments are fused with Chipotle, Starbucks, and other businesses to which students flock. The quaint college town and the brick and pillar campus is slowly being replaced with every variety of space dedicated to consumer capitalism. When higher education spaces as transformed into concentrated campus-based consumption areas, what happens to student behavior?

Quite naturally, those who can, spend freely. These trend-setters and norm-makers tend to be those whose parents provide plenty of discretionary funds, recharging student ID/campus debit cards as needed. Less well-off students seek to emulate their upper crust peers and follow suit by finding ways to spend in similar fashion, sometimes working jobs in order to have the disposable income required to sustain an active consumer lifestyle. No student wants to feel outside the norm, so on campuses where spending dictates belonging, the assumption of students as consumers can shape behavior, yielding a vicious cycle. Perhaps more alarmingly, it can alter student subjectivities, such that one only feels like a true college student if they buy the UnderArmour hoodie, live in the luxury student apartment high rise, surf Facebook on a MacBook, and patronize Starbucks.

In other words, for all the reasons cited above, our sense of outrage should not stop at the encroaching dominance of "corporate-speak," however damaging such public discourse can be. We should challenge the prevalent logic that students are consumers who demand sites of consumption in order to attend this or that higher education institution. It is true that faculty are not cashiers, but language of students as customers is simply one byproduct of an entire logic system that has found traction in higher education. If the college experience, and campus geography, is increasingly dictated by the swipe of a card, it will be difficult to suggest that education is somehow different from anything else or outside the realm of consumption.

"Innovation" and University Legitimacy

A recent story in the Chronicle of Higher Education reported that Governor Andrew M. Cuomo has written an economic development plan that turns all 64 campuses of the State University of New York into tax-free zones. This means that companies that move into these zones would pay no sales, property, or business taxes for 10 years, and employees would pay no income taxes. The rationale for this idea is that it would encourage businesses to set-up shop around the state’s universities and drive the translation of research into products, thereby promoting economic growth. 

North Carolina's Research Triangle Park 

New York is not alone it attempting to place universities at the center of regional innovation hubs, which might be defined as institutionalized partnerships between public universities and private industries to capitalize on their respective expertise and assets for economic value creation. These public-private partnerships are not simply linking two discrete sectors, as suggested by the hyphenated name, but rather represent a new structure in academe, with its own jargon, goals, rationales, resource base, and specialized workforce. The collaborative process not one in which university researchers sit in their labs and churn out knowledge products that a nearby company buys and develops. Rather, private companies use funding to set the research agenda; faculty members build careers around the needs of spin-off companies; and universities own equity in ventures they helped to launch. The line between university and business, public and private, non-profit and for-profit is intentionally made obsolete. 

The National Science Foundation supports the establishment of innovation hubs by funding what they call I-Corps Nodes, which they say “work cooperatively to build, utilize and sustain a national innovation ecosystem that further enhances the development of technologies, products and processes that benefit society.” The University of Maryland, Virginia Tech University, and the George Washington University received $3.75 million to become nodes in a regional innovation network. According to a news release about the award, the goal is to “find the best entrepreneurial student and faculty researchers and help them bring discoveries to market.” NSF is thinking even bigger, funding many nodes and facilitating many networks as “the foundation of a national innovation ecosystem and focus on the front-lines of local and regional commercialization efforts."

In some ways, university-based innovation hubs are an exciting development because they may just be responsible for making discoveries that tackle some of society’s biggest problems. However, there are also several downsides to these arrangements to consider, starting with two assumptions that underpin the whole notion of marrying university research and business creation. The first assumption is that problem-solving is best accomplished through the private sector and taking ideas to market. The second is that the private sector is the source of solutions and not the origin of problems. This assumption is particularly tenuous in light of the myriad products developed for the defense industry. Both assumptions have an ideological basis in the effort to discredit government as inefficient and ineffective, positioning corporations in negative relation to the bureaucratic welfare state. In this way, we should not think of innovation hubs as entirely distinct from other forms of privatization.

Privatization is clearest when we consider Gov. Cuomo’s plan. Of course, a tax-free zone is a monumental incentive to locate a business near a university. However, it effectively means that the private sector can harness the research and development (R&D) capabilities of universities, some of which are publicly funded, without giving money back through taxes. The reduction in costs by outsourcing R&D and not paying taxes certainly facilitates the accumulation of profit, but questions remain about whether there is any presence of the “public” in the objectives, processes, or outcomes. There are also lingering questions about who or what, precisely, stands to benefit. Universities may generate some revenue from licensing intellectual property and equity ownership, but it is hard to tell if this revenue amounts to much because we don’t have a good sense of how much is being spent to build and administer innovation hubs. There is also some research suggesting that only a handful of institutions (e.g., MIT, Stanford) make much money from their entrepreneurial ventures.

Why, then, are universities seemingly so eager to partner with the private sector and position themselves as innovation hubs? Positioning, I think, is a key part of the decision. Far more lucrative than money to universities is the symbolic value of showing that research money is not being wasted—that universities are relevant and even necessary to propel economic growth. In an era when people are regularly critiquing universities for their inability to control costs, their inefficient preoccupation with traditions, and their lack of success at creating and transferring usable knowledge, it is no stretch to claim that public higher education is in the midst of a legitimacy crisis.

Universities are desperately seeking legitimacy, and what better way to do it than by orienting what they do to innovation? The legitimating logic, then, for many institutions has been to constantly extoll their contributions to business growth, job creation, and national economic competitiveness. It is no coincidence that the I-Corps Node news release quoted Congressman Dan Lipinksi: “given the size of the federal investment in research—$60 billion annually—the American people should be getting even more new companies and jobs for their money. I-Corps represents a low-cost way to get us across the much-discussed ‘Valley of Death’ that separates laboratory discoveries from profit-making companies that boost economic growth and American competitiveness.”

In its drive to be seen by taxpayers, consumers, and other stakeholders as legitimate, universities have symbolically and structurally emphasized anything that connects them to the “economic imaginary” of the knowledge-based economy. At every turn, university presidents are highlighting the businesses created at their institutions, and organizational change is justified with language of “innovation and entrepreneurship.” The legitimacy conferred by these efforts may be an important short-term survival mechanism, but the long-term returns could be marginal and forever change the philosophical moorings of higher education and the key actors involved in its governance. Once the “innovation ecosystem” is in place, it may be impossible to tell where the campus ends and corporation begins. It's possible that the campus-corporation distinction was myth to begin with, but if there ever was purposeful distancing between the two, a drastic new approach is being taken, and I venture to guess many of us who work, teach, and study at universities, while perhaps somewhat conscious of it, do not fully grasp its pervasive influence. 

Under-acknowledged Dimensions of College Affordability

Conversation surrounding college affordability is inescapable in education policy circles these days. Pundits point to steadily decreasing institutional subsidies to students and attendant tuition hikes. It is true that, after adjusting for inflation, tuition at four-year public institutions increased by 75 percent between 1991 and 2004. For some, state governments are partly to blame for rising tuition, as many have cut appropriations to higher education. Nevertheless, there is a key dimension to this conversation on college affordability that is consistently overlooked—the student-consumer. It’s not just institutions or states that need to rethink their approach to higher education. Students and the cultural norms driving social spending in college likewise need to be re-envisioned.

As an important backdrop, financial aid began a marketization process in 1972 when the Higher Education Act of 1965 was amended so that financial aid was given directly to students, instead of institutions. This policy shift was justified through discourse of student choice, making it one of the first pieces of federal higher education legislation to explicitly use market-based rhetoric. Pell grants effectively became vouchers, and students became state-subsidized consumers in higher education quasi-markets. This shift meant that higher education institutions were more explicitly competing for students. Competition was accompanied and fueled by the rise of corporate management techniques and ranking systems starting in the 1980s.

Institutions compete through the reputation of their academic programs, but also through amenities like gymnasiums, student unions, and residence halls. Because the competition is often motivated by a desire to improve in rankings, amenities become part of a positional arms race, with no definitive end game. All of these amenities carry cost, some of which have bearing on tuition (see this report by the Delta Cost Project for additional data and analysis on this topic). A handful of these amenities are paid for by student recreation or programming fees. Although these fees may not contribute to rising tuition, they certainly factor into wider affordability concerns, as indicated in a recent story from New Mexico University. Sharing the responsibilities of rethinking higher education, then, should be students, who must confront how their own demand for certain amenities is ratcheting up what they must pay to attend college. 

Student Union at the University of Akron

This re-thinking shouldn’t be limited to bricks and mortar on campuses. In considering college spending and affordability, few people account for all of the social spending that has been normalized in the college experience. Anyone who works in higher education is well aware of how much students and their families pay for a variety of things to increase comfort and make adjustment and acceptance easier. This spending includes the almost outrageous amount of stuff bought prior to move-in day to decorate or outfit dorm rooms: mini-fridges, bed lofts, carpet squares, televisions, storage units, and more. Several companies have capitalized on this spending by making lists so that students have everything they “need” to start college. I would argue that a good portion of the spending on outfitting dorm rooms is designed to signal that one has the requisite class standing to make it or belong in college. Ironically, some recent research suggests that students whose parents pay the entirety of their educational expenses don’t perform well because they engage in more leisure activities.

Dorm room designs courtesy of Wal-Mart

The sad reality is that much of this stuff purchased to outfit dorm rooms is perceived as disposable. At the end of the year, dumpsters around college dormitories are stocked with a variety of gently worn futons and the like, which students either can’t move or figure they will repurchase for next year. Several organizations have started to dumpster dive to recover these items and donate them to charity. At my own alma matter, volunteers would sit next to dumpsters on move-out day and inspect any “trash” students were throwing out for items that could be repurposed.

Dorm room items are just a small piece of social spending in college. Other spending includes:

• clothes that bear the college or university’s name, which can be purchased from the bookstore at phenomenally high prices;
• food and beverages, including coffee and alcohol, especially at concentrated campus-based consumption areas; 
• Travel for spring break, away weekends, or study abroad. 

Purchases on these items were patently evident to me a few years ago, when I collected data as part of an ethnography of how students use the campus library. During participant observation, the brand-name accoutrement of studying was ubiquitous: Apple products, Starbucks coffee cups, and Under Armour apparel. (Full disclosure: I also drink an embarrassingly large amount of Starbucks coffee.) These are not cheap items, and I know several students who have sought employment on campus to support their spending habits, not contribute to tuition payments. I have also spoken with students who have acquired large credit card debt as they went through their college years, precisely due to social spending. Of course, it should be kept in mind that there are students for whom these comments do not apply—students who work several jobs to pay for school or make different lifestyle choices. Still, I think this is an important line of research that should be pursued to provide a more complete picture of costs associated with higher education.

Even amidst efforts aimed at sustainability, many campuses have actively encouraged social spending, turning their unions into mini-malls and allowing companies to test products on campus. Some scholars have suggested that college has become a training site for consumer capitalism, where students internalize a never ending cycle of studying, credentialing, and working to afford more and more stuff. Again, social spending may have negligible effects on tuition, but it has major implications for affordability. The cultural expectations of the college experience can have a strikingly high price.

As we search for ways to reform higher education so that it is more effective and efficient, the conversation should not exclude the habitus of student-consumers. We need to address the wastage and values being cultivated among these actors just as much as institutions and state governments.

Incubate Your Dreams, Invent Your Future

Today, my university played host to what has become one of the largest non-athletic events on campus: the Cupid’s Cup business model competition. The event is funded, in part, by alumnus Kevin Plank, the founder and CEO of Under Armour. The name of the event reflects Plank’s first business venture, which involved buying roses wholesale and selling them cheaply to students around Valentine’s Day, undercutting nearby retailers. This is not the only business model competition on campus. In fact, many of the competitors seemed to have circulated all of the various opportunities on campus for securing seed funding and other resources.

Nevertheless, Cupid’s Cup is one of the largest and has garnered national attention, largely due to its presence in the corporate spotlight. The day started with a business and innovation showcase, where local and university-based start-ups can present their products and services to potential investors at conference-like booths. Attendees voted on their favorite booths, and the winners were presented with cash prizes of $2,000 each. The main event, however, was a competition in which six teams of student entrepreneurs from around the country pitched their ideas to a panel of judges. The teams essentially have a few minutes to tell their entrepreneurial story, complete with props and multimedia, in the hopes of winning $50,000 and access to Plank’s expertise and network.

As an interested onlooker and researcher, this was an illuminating experience for a number of a reasons. First, there was clear evidence supporting the idea that entrepreneurship permeates my university’s institutional culture. In one short afternoon, I observed the culture’s heroes (e.g., Plank, the epitome of the enterprising student turned entrepreneur), codes (e.g., “the special sauce,” referring to intellectual property, or what makes a product or service unique), and symbols (e.g., the marker board, signifying the constant need for daring ideas and curiosity). When the Dean of the business school spoke, he proclaimed that “we live and breathe entrepreneurship every day in the halls of Van Munching [Hall].” Dr. Wallace Loh, President of the University of Maryland, made it clear he wants this to be a university-wide occurrence, declaring his ambitious goal that all 37,000 students to be exposed to innovation and entrepreneurship education.

Second, I was immediately struck by the resources required to produce an event of this magnitude.  Of course, much of the money was put up by donors, which included AOL and BB&T Bank. Still, the event was largely planned and implemented by university staff in the business school, particularly its two entrepreneurship-related centers. There are scholars who link the rise of entrepreneurship in colleges and universities to the search for new money in the face of declining state and local appropriations. Although at least one of teams competing was marketing a product whose intellectual property belonged to the university, I could not help but wonder if more is being spent promoting and teaching entrepreneurship than is being brought in through licensing royalties. If this is the case, we need research that looks at the true costs and benefits of these initiatives. And we cannot think of the entrepreneurial turn in higher education as purely a rational response to economic conditions. It must serve other purposes.

Third, I noticed an interesting paradox that has been discussed by a few others. Entrepreneurship, in part, is about taking risks to disrupt the status quo. For this reason, the university has developed an entire marketing campaign around the slogan “Fearless Ideas.” But what Cupid’s Cup and similar initiatives try to do is minimize the risk to students by providing coaching, access to experts, and seed funding. The university has created a set of resources that collectively create a business incubator for students. Some of these resources come directly from state appropriations, hence the concept of the state-subsidized student entrepreneur developed by Matthew Mars. Interestingly, the competition included an award for the team that had best leveraged all of these resources in developing their product or service. Plank encouraged “all those out there who want to start a venture but don’t know where to begin” to make use of campus resources to incubate into reality “the fearless ideas that keep you up at night.” What I find intriguing, however, is the possibility that all of this coaching and all of these resources actually constrain innovation. There are norms and parameters set, shaping the types of ideas that students pursue in order to gain access to seed money. It could be the most disruptive, novel ideas are those that are never given the chance to compete or win any money because they do not conform to institutional expectations of social/economic value creation.

The final learning moment for me was the most profound. It aligned with a comment one of my advisors made during a talk I gave on entrepreneurship in education. He said that the rise of entrepreneurship is a symptom of system failure. We saw similar discourses about the need to be innovative and entrepreneurial in the 1980s, when, much like today, our country grappled with slow economic growth, questions about global competitiveness, and high unemployment. In other words, we turn to entrepreneurship when there are few good jobs, and the powers that be want people to reignite the rugged individualist spirit and channel ingenuity in order to pave their personal path to prosperity. At Cupid’s Cup, President Loh told the audience that there is a lack of formal, full-time jobs for this generation of students. Graduates in the 21^st century need to invent their own jobs, and the nation needs them to innovate in order to out-compete India and China. After all, in order “to win the future” students must contend not just with competition from “Baltimore and Boston, but also Bangalore and Beijing.”

So, it’s not really just about fearless ideas and making dreams come true. We have to think about the particular historical moment that has given rise to investment in student entrepreneurialism—how the social context has shaped the field. The sociology of knowledge teaches that a field emerges not merely from ideas themselves, but also the settings in which researchers and practitioners work. How is it that entrepreneurship has developed into a subject of study, something that is “recognized as worth knowing, teaching, credentialing, advancing through research, and the like”? (Gumport, 2007, p. 349). When we step back to do this type of analysis, we recognize the multifaceted dimensions of the push for entrepreneurial studies—equal parts political, economic, and cultural. Entrepreneurship comes to embody the concept of functionalization. That is, when one discourse comes to serve the strategic and utilitarian ends of another: national economic competitiveness. 

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Gumport, P. (Ed.). (2007). Sociology of higher education: Contributions and their contexts. Baltimore: The Johns Hopkins University Press. 

Developments in Higher Education's Entrepreneurial Turn

Last week, I attended a patent seminar at my university, which was advertised as both an introduction to intellectual property as it relates to academe and an explanation of changes to the patent filing process as a result of the 2011 America Invents Act. The university’s vice president and chief research officer spoke at the beginning of the seminar, and his remarks reinforced an unmistakable trend in higher education: the cultivation of entrepreneurial spirit in faculty and students.

Entrepreneurship is not a new phenomenon among America’s research universities, but a recent wave of popularity is propelling it into areas previously detached from such activities. The spread of entrepreneurship raises several questions for the student of higher education policy: Why now? For what ultimate purpose? To whose advantage and whose disadvantage? And it raises at least one question for the somewhat interested onlooker: Who cares? In keeping with the RBMB mission, this post offers a few tentative, untested ideas.

Judging by the sign-in sheet, I might have been the only person in the patent seminar not affiliated with a science or technology program. The lens through which I understood the event, then, probably differed from others in the room, many of whom were professors and advanced graduate students whose work directly intersects with the market. Nevertheless, a few choice lines delivered by our chief research officer could not be subject to divergent interpretations:

• “A patent is like a publication. They are both junk unless you plan ahead and do something with them.”
• “I don’t care about your patent, I want to hear about your business plan.”
• “Figuring out how to get your methodology to market is more important than patenting.”
• “Do great things. Become rich!”

The overall message of the presentation was that research devoid of commercial follow-through on the part of faculty and graduate students was of little value. To simply discover new knowledge is wasteful, given the wealth-generation potential of certain types of university-based research. Gone are the days of basic, curiosity-driven research. Many would chalk up this message up to the emergence of the knowledge economy over the past fifty years.

Whereas as production strategies and economic growth immediately following World War II were organized around assembly-line manufacture of material goods, today they are a function of creating new science and technology-related products and services, and applying these inventions via information processing and telecommunications. Knowledge becomes a raw material that can be owned and sold. This organization of production requires not an abundant source of unskilled laborers, but rather a smaller number of educated information managers overseeing a larger cadre of flexible workers.

The research university has become indispensable to the knowledge economy because it is a central site of knowledge production and transfer. On the one hand, universities have become de facto research and development wings for corporations. As a result of the Bayh-Dole Act in 1980, universities can retain ownership over discoveries from federally-funded research, creating a new revenue stream. On the other hand, universities have become vital in preparing the educated, technology savvy consumers and workers the new economy requires. Consequently, various policymakers and corporation leaders have become keenly interested in reforming higher education to better teach “21^st century skills” that are aligned with the demands of the labor market.

The shift from an industrial to knowledge economy sheds some light on the question: Why now? Entrepreneurship in universities is both more feasible and better supported today than in the past because the exchange—versus symbolic or intrinsic—value of research has grown exponentially. Equally important, however, is the fact that research universities have been forced to search for new sources of income. The steady roll back of state and local funding for higher education has meant that universities, if they hope to remain competitive and not compromise quality, must address budget shortfalls with privately acquired revenues—from sale of merchandise and professional certificates to patent royalties and equity in spin-off companies. And, of course, one of the most important private sources of income is tuition.

The astute observer of higher education would argue that entrepreneurship is a new name for a longstanding tradition within research universities of innovating and operating in the context of a free-market capitalist system. It is certainly true that one aspect of research universities has always been to support economic development. In the same vein, university research has always been instrumentalized to serve purposes beyond the search for truth or greater understanding of the universe and its inhabitants. In fact, most university labs in the postwar era were generously funded by the federal government, which believed that basic research was the foundation of applications useful to national defense. Knowledge production has always been pursued for pragmatic reasons, not the least of which include personal and societal improvement. But to simply say that the entrepreneurial spirit has always played a part in what universities do is to give no consideration to how that role has changed over time.

I’ll sketch out here a few of the ways in which I think that the entrepreneurial turn in higher education deviates from the past. First, we must acknowledge that entrepreneurial activities are more deeply embedded in campus life. I’ll use my campus as an example, which may be misleading because our president has made innovation and entrepreneurship one of his top priorities. Nevertheless, many of these initiatives predate his arrival, and I have seen them at other campuses nationwide. Here’s a quick rundown of entrepreneurial programs and offices at the university:

1. M Square – a research park and business incubator space adjacent to campus. M Square “serves to physically and programmatically link university researchers, students and staff with federal laboratories and private sector companies.” The park is co-sponsored, in part, by the university’s division of research. This office also sponsors the Maryland Small Business and Technology Development Center and list of resources facilitating the founding of companies near campus
2. Office of Technology Commercialization (OTC) – since 1986, this office has provided support and assistance in safeguarding intellectual property, encouraging technology transfer, and fostering collaborative research with industrial sponsors. According their website: “OTC has recorded more than 1,700 information, life and physical science invention disclosures; secured more than 300 U.S. patents; licensed more than 900 technologies to business and industry, which have generated more than $16.3 million in technology transfer income; and assisted in the creation of more than 50 high-tech start-up companies founded on the basis of technologies developed at the University of Maryland. Continued growth is expected as the University builds on its strengths in engineering, information technology, and biotechnology.”
3. Maryland Technology Enterprise Institute (MTech) – claims 3 missions: to educate the next generation of entrepreneurs, start successful technology ventures, and connect the university and companies in the state. Included among the MTech initiatives are entrepreneurship and innovation walk-in hours, legal services, a venture accelerator, a technology company incubator, a student business model challenge, and a start-up lab.

The former director of MTech was recently named associate vice president for innovation and entrepreneurship. He will launch the university’s new Academy for Innovation and Entrepreneurship this year, which, in the words of the provost will “ignite students' entrepreneurial spirit.”  This introduces a second point of departure in the current entrepreneurial turn—the fact that, in addition to being deeply embedded, it also affects new stakeholders. The expanding breadth of entrepreneurial activities means that no longer are conversations about intellectual property, research commercialization, and technology transfer limited to scientists and their graduate students.

Like the Academy for Innovation and Entrepreneurship, several initiatives have been established with the explicit purpose of developing an entrepreneurial mindset in undergraduate students from diverse majors. Engineering students have long taken entrepreneurship courses. Now, however, students can take part in Hinman CEOs, “the nation’s first living-learning entrepreneurship program” and “a groundbreaking initiative placing entrepreneurially-minded students from all technical and non-technical academic disciplines in a unique community.” Furthermore, undergraduate students can minor in technology entrepreneurship or, if they are academically talented, receive a scholarship or take part in an entrepreneurship honors college to develop skills in innovation and business creation.

Faculty from all disciplines are also affected by the breadth of the entrepreneurial turn. Although patents have always been factored into promotion and tenure decisions for faculty in the STEM fields, the university is now pushing a committee to consider how entrepreneurship can be included in the academic rewards system across campus. Accordingly, the previously three-legged stool of the academic profession (service, teaching, and research) could soon include a fourth leg: entrepreneurship. Some faculty have reservations about this move, as they argue that faculty members who have developed companies or products are less interested in their work on campus. They are pulled in a different direction. Other faculty members wonder what kind of behaviors this move incentivizes  and who truly benefits from the work of academic entrepreneurs. Do inventor faculty better campus life, improve the educational experience of students, or simply bolster their incomes?

This brings is back to the last of our original questions. There are, naturally, advantages and disadvantages to recent manifestations of entrepreneurial turn in higher education. These advantages and disadvantages are not evenly experienced among all groups. It cannot be denied that a campus dedicated to the cultivation of big ideas is a good thing. Some of these ideas may address real social problems, and the university has repeatedly emphasized its contributions to job creation, economic development, and state wealth. While overlooking the nuance of specific cases, we can acknowledge that these are positive outcomes for many people.

On the other hand, certain areas of universities cannot be easily commercialized. They are designed to help us better experience and understand what it means to be human, to think about how the past can instruct and illuminate the present, and provide society a critical voice and social conscience. These areas are marginalized in a campus environment that is unabashedly forward-thinking, innovation-centric, and deeply invested in translating academic products and services into sources of revenue. The value of an idea has fundamentally changed on many campuses: a discovery, novel theory, or compelling narrative of humanity are “junk” unless they can be turned into a business plan.

We arrive, then, at the answer to the big question: So what? After all, the skeptic is probably reading this post and labeling me a left-leaning academic-to-be, resistant to adapt to new realities. Perhaps the university is finally making itself relevant and useful. Perhaps it really is like a microcosm of the market, with academic departments opening and closing like firms at the whims of supply and demand. Perhaps these are all true. But, as I reflect on the depth and breadth of efforts to cultivate “entrepreneurial spirit,” I wonder what is being compromised, or even lost.

Our campuses have not suddenly come into extra state money to fund these academies, programs, and research parks. They often must accept money from the private sector and, therefore, increasingly answer to the expectations of their funders—expectations which, as a number of court cases have pointed out, do not always have public wellbeing in mind. Or they must divert funding and energy from other areas, like character building, citizenship education, and the liberal arts.

Universities nationwide may be educating the next generation of inventors. But questions surround whether these inventors will have anything beyond self-enrichment guiding them. “Do great things. Get rich!” This may be a valid, albeit simplified, approach to economic prosperity. But I maintain it should not be part of the mission of our college and university campuses.