Universities Feel the Heat Amid Cuts is a timely article about the high cost of college today and the necessity to reduce those costs materially without also sacrificing the quality of the educational opportunity offered to students.
At least that's the story being told by university officials. My own view is that the quality of the education received by college students, as well as its cost, hasn't been a priority of universities. Their leadership is instead focused on the inner workings of the institution itself and not paying much, if any, attention to the "customer student."
As with GM and other hidebound inward focused bureaucratic cultures, too many of our U.S. universities tend to look "inward" and focus on themselves rather than concentrate "externally" on what should be the real purpose of the institution --- educating their students.
It's simply the nature of government monopolies in combination with OPM. Customer focus is lacking throughout government, and that includes government schools, K-12 and at the college level, too.
In contrast, in the private sector a lack of customer focus and internal cost control will result in bankruptcy.
Large U.S. Research Universities --- 50%+ of Funding Comes from Government
Now let's quote from the above referenced article about large public "research" oriented universities:
"U.S. research universities "are in
grave danger of not only losing their place of global leadership but of
serious erosion in quality," the committee of 22 academic, business and
nonprofit leaders warned in a 250-page report issued Thursday. The
report, commissioned by Congress, called for a combined effort among the
schools, governments and corporations to reverse the decline.
Richard Vedder, director of the Center for College
Affordability and Productivity and retired economics professor at Ohio
University, reviewed parts of the report Thursday and was skeptical. He
said he has found no correlation between extensive university research
and a nation's economic prosperity. The Center for College Affordability
is a research group that focuses on free-market solutions for rising
"It read to me like a lobbying effort
for the National Research Council," he said, referring to the report and
the organization that appointed the panel.
research universities—generally defined as those that compete for
research funding and offer advanced degrees—typically depend on federal
and state appropriations for more than half of their budgets. Private
research universities get about a third of their funding from the
government. . . .
This comes after many universities
have seen huge growth in their budgets in recent decades. At the
University of Virginia, state funding has dropped to 5.6% of the total
budget this year from 26.2% in 1990. But the university's total budget
ballooned during the same period to $2.58 billion from $678 million."
Private Sector Companies ... 100% "Customer and Shareholder" Funded
Now let's look at the private sector and compare the two approaches, public and private.
In the university, it's apparently all about the institution and its "research." But in the private sector, innovation and research are all about better serving the customer.
In other words, one ignores the student and taxpayer, whereas the other makes serving the customer job #1 in the eyes of the shareholder.
Accordingly, Myths of the Big R&D Budget has a different take on the topic of research and innovation. And it's one with which I completely agree. Please consider its essential point:
"In the world of R&D spending, more doesn't necessarily mean
better. And R&D may not describe all the innovation that matters.
"I think the numbers are pretty useless," says Michael Schrage, a
research fellow at MIT's Sloan School who has studied the subject. "What
matters more is the kind of innovator you are. If it were really true
that the people who spent the most on R&D were the most successful,
we wouldn't be subsidizing General Motors."
"There's no statistically significant relationship between how
much a company spends on R&D and how they perform over time," adds
Barry Jaruzelski of Booz & Co. "There's a set of people who just
consistently seem to skin the cat better." . . .
The big variable, though, is how effectively this money gets spent. . . .Winning at innovation "is all about talent, process, execution and
strategy," he says. "That's given the U.S. a pretty strong advantage
To me a university's research budget (and one which is funded by a government that has no money) doesn't help to better serve the customer --- the student. It only serves the people who do the research, at least with respect to the student paying for his education.
The amount of money that gets spent in no way determines how well the institution runs, nor does it in any way indicate that the money is well spent. And if it's not being spent on the customer student, it's a luxury the taxpayer can ill afford these days.
In the private sector, money spent on research and innovation is either effectively spent to do a better job serving customers or the company will eventually cease to be in business.
Not so in expensive and underperforming "government schools," including K-12 schools and big U.S. universities as well.
Here's my take: We spend way too much taxpayer money on schools.
Meanwhile, the real customers, the students, receive way too little educational benefit for the amount of money spent.
That has to change.