Excellence V Equity
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SPECIAL REPORT UNIVERSITIES MARCH 28th 2015 Excellence v equity 20150328_SRUniversities.indd 1 20/03/2015 12:44 SPECIAL REPORT UNIVERSITIES Excellence v equity The American model of higher education is spreading. It is good at producing excellence, but needs to get better at providing access to decent education at a reasonable cost, says Emma Duncan IF YOU LEARNED that the top dogs in a particular market were the same as 100 years ago, you would probably surmise that the business con- cerned had suffered a century of stagnation. In the case of higher educa- tion, which hasbeen dominated byAmerican universitiessince the early 20th century, you would be quite wrong. It grew slowly for the first quar- ter-century, gathered pace in the middle half and took off in the fourth quarter. You might then conclude that the top dogs were truly outstand- ing, orthatthere wassomethingveryodd aboutthe market. In the case of higher education, you would be right on both counts. America gave the world the modern research university. The Amer- ican elite imported the model of the Oxbridge college in the 17th century to give its rough sons a polish. In 1876 the trustees of the estate of Johns Hopkins, a banker and rail- road magnate, decided to use what was then the largest be- quest in history to marry up the Oxbridge college with the re- CONTENTS search university, an institution the Germans had developed at 3 Rankings the beginning of the 19th century. Top of the class Both private and public universi- 5 NYU’s Abu Dhabi campus ties adopted the model, and Har- A pearl in the desert vard, Yale, Princeton, Caltech and the rest of America’s top rank 6 Privatisation emerged as the prime movers of Mix and match the world’sintellectual and scien- 7 America tific life shortly afterwards. A flagging model These institutions have pro- duced a startling number of the 9 Technology inventions that have made the Not classy enough world safer, more comfortable 10 Policy options and more interesting. “Imagine Having it all life without polio vaccines and heart pacemakers…or municipal water-purification systems. Or space-based weather forecasting. ACKNOWLEDGMENTS Or advanced cancer therapies. Or jet airliners,” wrote a bunch of Ameri- Many people helped the author with ca’s business leaders to Congress in 1995, pleading with the government this report. As well as those quoted, not to cut research funding to universities. Since then, those institutions she would like to thank Javier Botero Alvarez, Doug Becker, Daniel Bell, have also powered the digital revolution that has improved life in every Roger Benjamin, Frances Cairncross, corner ofthe planet. Matthew Chingos, Ryan Craig, John America led the world, too, in creating mass higher education. That Crist, Ron Daniels, Andrew Delbanco, transformation was driven in part by the economy’s need for higher Don Graham, David Greenaway, Kevin Guthrie, Steven Hill, Colin Hughes, skillsand in partbysociety’sdesire to give the men who foughtin the sec- Barbara Kehm, David Kelly, Bill ond world war a chance to better themselves. America thus became the Kirby, Jane Knight, Hongbin Li, Lexa first country in the world in which the children of the middle classes Logue, Wanhua Ma, Francisco went to college, and college became a passport to prosperity. Marmolejo, Jamie Merisotis, Pratap Mehta, Tang Min, Ben Nelson, Mary Given its success, it is hardly surprising that the American approach Nolan, Driss Ouaouicha, Helen to higher education is spreading. Mass education has taken off all over A list of sources is at Perkins, Steven Pinker, Stevan Rolls, the world. The American-style research university is the gold standard, Economist.com/specialreports Alan Smithers, Josh Taylor, Marijk and competition among nations to create world-class research universi- van der Wende, Russ Whitehurst, An audio interview with Ben Wildavsky, David Willetts, Matt ties as good as America’s is intensifying. Spending on higher education is the author is at Yale, Rao Yi, Shamoon Zamir and rising: across the OECD, from 1.3% of GDP in 2000 to 1.6% in 2011. Provi- Economist.com/audiovideo/ David Zweig. sion, financing and control everywhere is moving away from the Euro- 1 specialreports The Economist March 28th 2015 1 SPECIAL REPORT UNIVERSITIES 2 pean model, where everything is done by the state, towards the dent numbers grew from 1m to 7m in 1998-2010. In the decade to American one, in which the private sector provides a large part 2009, Chinese universities hired nearly 900,000 new full-time ofthe education and individuals pay formost oftheir tuition. faculty members. The country now produces more graduates But just as the American model is spreading around the than America and India combined, and by 2020 aims to enroll world, it is struggling at home. America’s best universities still do 40% ofits young people in universities. more top-class research than any other country’s; the problem All over the world labour-market changes, urbanisation lies in getting value for money on the teaching side. Tests suggest and demography have fuelled the boom. The “knowledge econ- that many students do not learn enough these days. They work omy” has increased the demand for workers with well-fur- less than they used to. The average performance of America’s nished minds. When people go to live in cities, universities be- graduates, compared with those of other countries, is low and come more accessible so more people attend them. Rising slipping. Higher education does not increase social mobility but numbers ofyoung people have fuelled the boom, and—especial- reinforces existing barriers. At the same time costs have nearly ly in Arab countries—combustible politics increase the need to doubled in real terms in the past 20 years. The enrolment rate is offer opportunities to teenagers. falling. Technology offers the promise ofmaking education both In most countries the number of 18- to 24-year-olds will cheaper and more effective, but universities resist adopting it. shrinkin the next half-century, but the demand for higher educa- This special report will argue that the problems spring in tion seems likely to more than counteract that demographic ef- part from the tensions at the heart of higher education between fect. Simon Marginson of University College London’s Institute research and teaching, and between excellence and equity; but of Education reckons that “the tendency to growth of participa- that technology and betterinformation can help make the teach- tion in higher education appears to have no natural limit” once a ingside ofthe businessmore effective. America, having exported country’s GDP per person rises above $3,000. its model to the world, could learn some lessons from other The laws of supply and demand suggest that this vast in- countries about how to improve its own system. crease in the numberofgraduatesshould reduce the return on in- vestment in a degree, and to some extent that seems to have hap- How much is too much? pened. By and large, the return to higher education is higher in “Everybody’s gettin’ so goddam educated in this country poor countries than in rich ones (see chart 2, next page), except in there’ll be nobody to take away the garbage…You stand on the the Middle East, where high enrolment combined with low street today and spit, you’re gonna hit a college man,” says Keller growth has led to high graduate unemployment. Harry Patrinos, in ArthurMiller’splay, “All MySons”, written in 1946. Higheredu- the lead education economist at the World Bank, reckons that cation in America started to spread from the elite to the massesas globalisation has increased the chances for well-qualified peo- earlyasthe 19th century, with the establishmentofthe land-grant ple in poor countries ofgetting a good job. universities, but got its biggest boost with the 1944 GI bill that In the rich world, even though nearly half of young adults paid servicemen to go to college. are graduates and numbers are continuing to rise, the graduate What happened in America then happened in Europe and premium (the wage difference between those with and those Japan in the 1960s and 1970s, in South Korea in the 1980s, and is withoutdegrees) hasremained high enough foritto be worth go- now happening the world over. Student numbers are growing ingto university. Part ofthe explanation may be credentialism in faster than global GDP. So hungry is the world for higher educa- some rich countries. The more people have degrees, the more tion that enrolment is growing faster than purchases of that ulti- employers will insist on recruiting graduates. In many countries mate consumer good, the car (see chart1). The global tertiary en- jobssuch asteachingand nursing, which did notrequire a degree rolment ratio—the proportion of the respective age cohort 30 years ago, are now reserved for graduates. When just a small enrolled in university—increased from 14% to 32% in the two de- elite went to university, plenty of decent jobs were available to cades to 2012; the number of countries with an enrolment ratio those with only secondary schooling. That is no longer true. ofmore than halfwentup from five to 54 overthe period. Sub-Sa- But changes in the labour market also help to explain the haran Africa is the only part of the world where “massification” ever-growing pressure to get a degree. Automation has created is not much in evidence yet. what Claudia Goldin and Lawrence Katz, two Harvard academ- Some countries, such as South Korea, where pretty much ics, have called “a race between education and technology” everybody goes to university, have probably reached saturation which only those with plenty ofeducation will win.