My talk on economics for university administrators

by on June 10, 2009 at 7:29 am in Education | Permalink

Thank you all for the advice; in my talk I promoted the following ideas:

1. Many mid-level schools do not yet apply rigorous quantitative analysis in reviewing their fundraising techniques; this should change.

2. Norms will shift toward a greater inequality of rewards for lower-level staff.  Yet any single administrator who tries to bulldoze through a business-like, highly-incentivized solution does so at his or her peril.  The shift of norms will take a long time.

3. Community colleges are in many cases turning out to be stronger competitors than are for-profits.

4. The higher education bubble has burst.  The expiration of stimulus funds in 2011 will be a crushing event for many public sector universities.

5. Faculty governance is essential for tenure and curriculum decisions.  But faculty governance for setting university priorities is a big mistake.

6. The value of face-to-face classroom time (discussed in Create Your Own Economy, by the way) will prove robust.  But the very best teachers of the future will take on an increasing role as editors, collage creators, and DJs.  A brilliant scientist who doesn't understand YouTube will be crippled as a teacher.  Adjuncts may lead the wave of innovation here.

7. The way to be fiscally responsible is to refuse luxury projects in good times.  If bad times have come it is already too late.

8. Current administrators are using stimulus funds to buy off the old interest groups, under the view that these are temporary bad times.  Relative to what will come, these are "good times," and much of that surplus ought to be put in reserve funds.  That is not happening.

9. Many mid-level schools underinvest in making incremental improvements to their strong, core departments, because nobody gets much credit for that.

10. Being a good university administrator requires the right mix of idealism and cynicism and that is hard to come by.

CJ June 10, 2009 at 8:09 am

I’m very curious about item 4. I believe that there is some sort of bubble, but I would like more of a discussion of its nature and causes.

Evan June 10, 2009 at 10:39 am

Quick question – what exactly do you mean when you say “mid-level schools” (items 1 and 9)? Are these the less-heralded public research universities (say, Michigan State or Arizona State), or liberal arts colleges such as Grinnell?

Andrew June 10, 2009 at 11:16 am

Youtube..? ugh. I’m glad I’ve finished college.

Steve Sailer June 10, 2009 at 12:20 pm

A good list.

I would add that the most important thing a lower reputation college that wants to rise in the world can have is a high energy president who always has his hand out asking rich people for money and/or getting the college’s name in the press.

Aurelia Masterson June 10, 2009 at 1:32 pm

But face-to-face time is quite frequently seriously watered down in classes of hundreds of students, or even 60. People are bored, and I think that is because of something that you did not mention–the irrelevance of so many degrees these days. There is growing competition for education outside the system, and this factor alone will save the general institution, but not most of the actual facilities. Each college is going to have to improve and cut down in areas where it sucks (like the philosophy department in most schools). I mean, the bubble has burst for a good reason, I just hope the public schools cut back in the right areas.

edwardseco June 10, 2009 at 4:03 pm

I will echo DH’s comments. Interesting insights. I will pass it on to some administrator friends.

Slocum June 10, 2009 at 5:35 pm

4. The higher education bubble has burst. The expiration of stimulus funds in 2011 will be a crushing event for many public sector universities.

Hmmm. Why not more trouble for private sector, rather than public sector universities? I would think that would be the case for the same reason that community colleges are proving to be strong competitors — the value proposition is better.

6. The value of face-to-face classroom time (discussed in Create Your Own Economy, by the way) will prove robust.

But why? Already students would be far better served by a professionally produced series of documentaries streamed over the web at their convenience, than a series of sessions in the back of a 400 seat lecture hall listening to a non-tenure track talking head. Now you might claim that face-to-face time in small classes by high-quality teachers will remain valuable. But very few students get this for more than a fraction of their undergrad instruction. And, as currently structured, this is too expensive for universities to provide for more than a fraction of their undergrad instruction.

Tracy W June 11, 2009 at 6:16 am

Slocum – the advantage of big lectures is that they happen at a specific time of day. The disadvantage of videos streamed over the web is that they can be watched at your convenience, and in my case if any hard thinking is involved (eg learning maths) normally I find it convenient to watch something one hour later. The only exception is late at night when it’s convenient to watch the video the next morning.
External structure is useful.

jimmy June 11, 2009 at 12:45 pm

Point #1..Amazing, given the fall off in public funding for HE, that more emphasis analyzing effectiveness of fund raising techniques and fund raising officers hasn’t occurred. Appropiate models from the private sector exist. Certainly the technology is available. In my experience, senior management lacks ability, skill, nerve, so measurement, corrective action seldom happen.

Your Majesty June 12, 2009 at 7:57 pm

#4: I certainly hope the university bubble has burst. Tuition increases have outpaced inflation for how many decades now? And my alma mater (a large, renowned state school) jacked up tuition 13% in 2001 (during a recession) and again in 2002 (in the 9/11 aftermath), then had the gumption to blame too-small state funding increases.

#7: University administrators really screwed the pooch on this one. Ideally, they’d raise millions for the general fund and spend according to priorities. But their spending has been historically so low-priority — or so offensive to alumni and the public — that virtually all donations are now targeted (translated: contractual obligations).

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