I Have Seen the Future, and It Wont Work

1
I Have Seen the Future, and It Wont Work

• Professor Roger Brown, Vice-Chancellor
• AUA Annual Lecture, 25 October 2006

2

• I have seen the future and it works.
• American journalist Lincoln Steffens (1866-1936)
• (following his visit to the Soviet Union in 1919)

3

• American higher education has been the envy of
  the world for years.
• (Commission on the Future of Higher Education,
  2006 vi)

4
Expenditure on Tertiary Education as a of GDP
(2003)
(OECD, 2006)
5
Annual Expenditure on Tertiary Education Per
Student for All Services (2003)
(OECD, 2006)
6
Net Entry Rate into Tertiary Type A Education
(2004)
(OECD, 2006)
7
Market Share of Foreign Students (2004)
(OECD, 2006)
8
I want to look at

• the criticisms of American HE put forward by the
  Commission on the Future of Higher Education
• remedies proposed by the Commission
• consider how far any of this might be relevant
  to Britain

9
The Commission on the Future of Higher Education

• appointed late 2005
• brought together a wide range of interests
• Chaired by Charles Miller, former head of the
  Texas Board of Regents

10
http//www.ed.gov/about/bdscomm/list/hiedfuture/in
dex.html
11
The Commissions job was to

• devise a comprehensive national strategy for
  American higher educations future.
• (Commission on the Future of Higher Education,
  2006)

12

• Between 1995 and 2005 average tuition fees at
  private four-year colleges and universities rose
  36 percent after adjusting for inflation. Over
  the same period average tuition and fees rose 51
  percent at public four-year institutions and 30
  percent at community colleges.
• (Commission on the Future of Higher Education,
  2006 9)

13

• In todays knowledge-driven society, higher
  education has never been more important
• (Commission on the Future of Higher Education,
  2006 6)

14

• Too few Americans prepare for, participate in,
  and complete higher education especially those
  underserved and non-traditional groups who make
  up an ever-greater proportion of the population.
  The nation will rely on these groups as a major
  source of new workers as demographic shifts in
  the US population continue
• (Commission on the Future of Higher Education,
  2006 7)

15

• Our higher education financing system is
  increasingly dysfunctional. State subsidies are
  declining tuition is rising and cost per
  student is increasing faster than inflation or
  family income. Affordability is directly affected
  by a financing system that provides limited
  incentives for colleges and universities to take
  aggressive steps to improve institutional
  efficiency and productivity. Public concern
  about rising costs may ultimately contribute to
  the erosion of public confidence in higher
  education
• (Commission on the Future of Higher Education,
  2006 9)

16

• The entire financial aid system including
  federal, state, institutional, and private
  programs is confusing, complex, inefficient,
  duplicative and frequently does not direct aid to
  students who truly need it. Need-based financial
  aid is not keeping pace with rising tuition
• (Commission on the Future of Higher Education,
  2006 11)

17

• At a time when we need to be increasing the
  quality of learning outcomes and the economic
  value of a college education, there are
  disturbing signs that suggest that we are moving
  in the opposite direction. As a result, the
  continued ability of the American postsecondary
  institutions to produce informed and skilled
  citizens who are able to lead and compete in the
  21 century global market place may soon be in
  question
• (Commission on the Future of Higher Education,
  200612)

18

• There is inadequate transparency and
  accountability for measuring institutional
  performance, which is more and more necessary to
  maintaining public trusts in higher education
• (Commission on the Future of Higher Education,
  200613)

19
The Commissions central conclusion was that
American higher education

• must change from a system primarily based on a
  reputation to one based on performance.
• (Commission on the Future of Higher Education,
  200621)

20
Accountability and Transparency

• Every one of our goals, from improving access and
  affordability to enhancing quality and
  innovation, will be more easily achieved if
  higher education institutions embrace and
  implement serious accountability measures.
• (Commission on the Future of Higher Education,
  2006 20)

21

• A consumer-friendly information database on
  higher education with useful, reliable
  information on institutions, coupled with a
  search engine to enable students, parents
  policymakers and others to weight and rank
  comparative institutional performance.
• (Commission on the Future of Higher Education,
  2006 20)

22

• Develop a national system for tracking student
  records to follow the progress of each student in
  the country, with appropriate privacy safeguards.
  
• (Fischer, 2006 A43)

23
Accreditation agencies

• Should make performance outcomes including
  completion dates and student learning the core of
  their assessment as a priority over inputs or
  processes. A framework that aligns and expands
  existing accreditation standards should be
  established to (i) allow comparisons among
  institutions regarding learning outcomes and
  other performance measures (ii) encourage
  innovation and continuous improvement and (iii)
  require institutions and programs to move toward
  world-class quality relative to specific missions
  and report measurable progress in relationship to
  their national and international peers.
• (Commission on the Future of Higher Education,
  2006 24)

24
Other recommendations include

• improving access
• shifting student financial aid towards need and
  away from merit
• greater curriculum innovation
• a national strategy for lifelong learning
• increase investment in education and research in
  critical areas such as science, technology,
  engineering and mathematics.

25

• How far could this critique essentially that
  American universities are not providing the
  American economy or society with good value for
  money apply here?

26
Index of Teaching Income per Weighted FTE Student
2004/05
(Brown and Ramsden, 2006)
27
Index of Teaching and Research Income per
Weighted FTE Student 2004/05
(Brown and Ramsden, 2006)
28
Net Assets of Higher Education Institutions
(RSM Robson Rhoades, 2006)
29
Allocation of QR Funding (2004/05)
(HESA data, 2006)
30
Allocation of QR Funding (2004/05)
(HESA data, 2006)
31
Allocation of QR Funding (2004/05)
(HESA data, 2006)
32
(DfES data quoted by UCU, 2006)
33
Universities with the highest proportion of
students from low socio- economic groups among
young full-time undergraduate entrants (2004/05)
(THES, 2006, based on HESA data)
34

• But the big mistake was the 3,000 because it
  didnt create a market. Everybody charges
  3,000. I insisted on 5,000 because it would
  have created a market some would have charged
  nothing, some would have charged 1,000, some
  would have charged 5,000.
• (Sykes, quoted by Haldenby, 2006 16)

35

• First of all you would have to look at the
  product what product are you producing? What do
  people earn when they leave Imperial College?
  What jobs do they do? And then you can show are
  you making a Rolls-Royce or are you making a
  bicycle? They dont cost the same.
• (Sykes, quoted by Haldenby, 2006 16)

36

• Everyone knows the best universities are in the
  US because there is a higher education market
  there. I would welcome the liberation of the
  higher education market in the UK and, sadly, the
  resultant bankruptcies.
• (Kealey, 2006)

37

• A more competitive market is the approach that we
  are supporting elsewhere in education and
  elsewhere in the public services, and I believe
  that higher education in general will benefit.
• (Ruth Kelly, Secretary of State for Education and
  Skills, speech to the Universities UK Annual
  Conference, 2005)

38

• If funding follows the student, this will
  introduce a greater degree of competition into
  the system to drive up standards.
• (Sanders, 2006 8)

39
Secondary Detriments of Marketisation

• Increase cheating
• Grade inflation
• Student consumerism and the decline of trust
  between institutions and students
• The potential undermining of academic research
  by commercial sponsors
• The increasing diversion through activities
  like marketing, enrolment and administration of
  resources that could and should be used for the
  core tasks of teaching and research
• The tendency for the policy discourse to focus
  on the success or failure of individual
  institutions rather than on the functioning and
  health of the system as a whole.

40
Limitations of Market Theory

• there are wider benefits from higher education
  that it may not be in the interest of private
  providers to offer because they cannot recover
  the full cost through pricing.
• because of the wider role that higher education
  qualifications play, there is in almost all
  jurisdictions some limitations on market entry.
• markets depend on reliable, accessible and
  specific information about price, quality and
  availability, yet this is not easy to find in
  higher education.

41

• The perfectly informed customer of economic
  theory is nowhere to be seen.
• (Winston, 1997)

42
Fundamental difficulties in applying market
theory to higher education

• universities serve a multiplicity of purposes for
  a wide range of stakeholders, both external and
  internal
• many of these purposes interact in ways that we
  do not yet fully understand (for example, the
  relationship between staff research and student
  learning)
• our effectiveness in achieving at least some of
  these purposes is very hard to measure.

43

• there is no agreement across higher education
  either about what is meant by quality or how it
  is to be judged
• even if there were an agreed definition, it would
  still be necessary to adapt it to the interests,
  learning approaches and circumstances of the ever
  increasing numbers and types of students in the
  system
• even if such adaptations could be achieved, how
  could the necessary information be provided to
  each student, in advance, in an economical and
  accessible form?

44

• People investing in human capital through a
  purchase of higher education dont know what
  theyre buying and wouldnt and cant know what
  they have bought until it is far too late to do
  anything about it.
• (Winston, 1999 15)

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Institutional Motivations

• 1. those seeking to maintain their prestige with
  other institutions, students and external
  stakeholders such as state governments,
  business, and private individuals including
  alumni
• 2. those seeking to acquire such prestige
• 3. those seeking a reputation for successfully
  meeting the needs of students and other potential
  clients.

46

• The fact that elite schools are increasingly the
  gateway to professional positions offering
  six-figure starting salaries has fuelled the
  explosive growth in demand for elite educational
  credentials, and growth in demand for elite
  educational credentials explains the growing
  importance of academic rankings. The market for
  higher education, always a winner-take-all
  market, has become perhaps a quintessential
  example of such a market.
• (Frank, 1999 9)

47

• employers perceptions of quality and standards
  in higher education reflect and cement the
  vertical differentiation between the individual
  institutions. The result is a closer fit between
  social hierarchy, educational hierarchy and
  employment opportunities.
• (Morley et al, forthcoming)

48

• Status competition in higher education has a dual
  character Producer institutions compete for the
  customer the most preferred students, those with
  the best academic standing whilst students
  compete for entry to the most preferred
  institutions.
• (Marginson, 2004 186)

49

• Providing the elite institutions sustain their
  prestige, the more intensive the consumer
  competition for entry, the less those elite
  institutions are required to court the consumer
  in the conventional manner by dropping prices or
  providing more or better services. They must
  compete vigorously in terms of research
  performance, which is essential to maintaining
  and advancing their prestige, and they must make
  the right noices about the quality of teaching,
  but in reality they do not compete directly on
  the quality of teaching services.
• (Marginson, 2004 189-190)

50

• Positional markets in higher education are a
  matching game in which the hierarchy of
  universities, and individual market choices are
  determined by status goals.
• (Marginson, 2004a)

51

• At the bottom end of the market, the workings of
  status competition are different. Institutions
  must compete hard to attract students to fill
  their places and secure revenues and their
  success is always provisional and contestable but
  these institutions do not receive full
  recognition of the quality of good programs. In
  a status market their efforts to improve the
  quality of teaching are over-determined by their
  low status. Meanwhile intermediate institutions,
  combining scarce high-value places with low-value
  access places, find it difficult to move up the
  ladder because of limits to the number of
  high-prestige producers. They are classed as
  second-choice producers or specialists.
• (Marginson, 2004 189-190)

52

• What the faculty and staff of both public and
  private institutions have learned is that in the
  end there is really no market advantage accorded
  to institutions that provide extra-quality
  educationWhat matters in this market is not
  quality but rather competitive advantage.
• (Zemsky quoted in Burke (ed) 2004 287)

53

• Competition at the top is heavily positionalthe
  bottom line for any school is its access to the
  donative wealth that buys quality and position.
  Several authors have described the conflict
  between individual and social rationality and the
  wasteful dynamics of positional markets.
  Essentially, the notion is that the players
  become trapped in a sort of upward spiral, an
  arms race, seeking relative position.
• (Winston, 1999 30)

54

• public research universities are mostly grazing
  in the same fields, feeding at the same watering
  hole.
• (Rhoades, 2005 2)

55
Proposed Reform Agenda

• we must stop seeing the issue of marketisation in
  simple terms. We must try to learn from
  experience in America, Australia and New Zealand
  where various forms of marketisation have
  proceeded further than they so far here.
• we must remind ourselves of the wider, public
  purposes of higher education as against the
  perpetual references to the private benefits, the
  advantages in terms of lifetime earnings etc.
• we must restate and demonstrate the intrinsic
  benefits of higher education, as opposed to the
  extrinsic or instrumental ones, not only for
  student education but also staff research and
  scholarship.

56

• 4. we must try to look at the system as a
  whole. Apart from anything else, our future
  overseas earnings from higher education will
  depend on the UK system retaining some degree of
  integrity.
• 5. we must be prepared to use the leverage that
  existing public policies for funding,
  regulation and steerage give us to try to
  restrain institutions behaviour.
• 6. we should acknowledge the limitations of
  information about quality, especially that
  which is published commercially in the
  interests of newspapers and their proprietors
  or shareholders.

57

• we should tackle the research/prestige issue by
  linking research funding to evidence of impact on
  student learning.
• we should be prepared to redress the major
  access, funding and esteem differentials between
  institutions and social groups, even if this
  means interfering with institutional freedom of
  action in areas such as admissions. Similarly, we
  may need to revisit levels of public funding of
  teaching.
• There should be a genuinely independent body
  independent both of the institutions and the
  Government to monitor and report on overall
  levels of quality.

58

• in spite of the enormous amount which has been
  cumulatively invested in them, the post-1992
  quality arrangements actually tell us very little
  about quality in UK higher education
• we have major developments in our midst which at
  the very least pose challenges for quality the
  expansion in student numbers the worsening of
  staff-student ratios the fall in the real unit
  of resource serious and continuing
  under-investment in the learning infrastructure
  and in staff development the increasing use of
  communications and information technologies the
  increasing resort to untrained, unqualified and
  poorly motivated teaching staff the increasing
  separation of teaching and research
  increased student employment during the academic
  year etc. Yet hardly any of these has been
  seriously studied or evaluated for its impact on
  quality, any more indeed than the accountability
  regimes themselves have been.
• (Brown, 2000 10)

59

• Just as capitalist markets generate inequality of
  wealth in the economy, market coordination in
  American higher education has tended to
  exaggerate financial inequality across colleges
  and universities and encourage social inequality
  in student access to educational opportunities A
  significant degree of social equity is maintained
  only through the continual presence of government
  coordination, through support for public and
  community colleges and through the provision of
  student financial aid.
• (Geiger, 2004 180)