A few years ago, at a luncheon at Harvard University, Larry Summers noted an interesting fact. If you look at the top ten players in any industry or business 50 years ago, the list would look wholly different than it does today–except in higher education. It was Harvard, Yale, Princeton . . . back then, and it’s Harvard, Yale, Princeton . . . now. Summers cited that situation to reflect upon how difficult it was for the economist to enact sensible reforms during his rough term as president of Harvard, which had ended a year before.
According to Clayton Christensen and Michael Horn, however, that consistency is about to collapse. Their article in Harvard Magazine, “Colleges in Crisis”, announces the death knell of Standard Operating Procedure in higher education, and it warns campus leaders that if they don’t accept the coming “disruptive change,” they will suffer the fate of every other business that didn’t innovate accordingly. The problem, they say, is money.
Undergraduate tuition fees have risen faster than the costs of health care (6.3 percent to 4.9 percent over the last 30 years), a surge that ordinarily would have infuriated consumers and shuffled the leading providers. But colleges have been able to soften the costs through “gifts from alumni, earnings from private university endowments, subsidies from state tax revenues for public universities, and federal subsidies for point.”
The real innovators at the present time, Christensen and Horn say, are online universities. The technology forces them into a complete reinvention of higher education. They streamline the delivery of instruction, they disengage research from teaching (which simplifies the online university’s mission), and they promise to lower costs (although online courses are still more expensive than they should be, the authors assert). Unless traditional universities start doing the same, not just adding on a Web component to standard practices but fundamentally changing their business model, their fiscal problems will only get worse.
I suspect that few observers outside the very elite circles of higher education would disagree. In a piece for Inside Higher Ed penned by Christensen and Henry Eyring, the same argument is made, but it exempts “a relative handful of institutions,” specifically, the most selective institutions whose prestige factor places them somewhat beyond the ordinary business model. That concession doesn’t alter the situation among the public at large, though, which considers higher education a mess. Tally the number of positive and negative reports of higher education in the popular media in the last two years and the latter far exceed the former. One of the central story lines of Occupy Wall Street is the college graduate who can’t get a job and owes $90,000 in student loans. Two of the most talked-about books in the country this year were both sharp indictments of the quality of higher education in the United States, Arum/Roksa’s Academically Adrift and Dreifus/Hacker’s Higher Education: How College Are Wasting Our Money and Failing Our Kids–and What We Can Do About It. Cases of closed-minded ideological bias continue to surface, too, as with the incident at Wisconsin a few weeks ago in which a mob of students instigated by university diversity officials attempted to disrupt a forum on affirmative action. Those circumstances don’t relate to money, to be sure, but they contribute to a loss of confidence in higher education that makes rising tuition fees all the more galling. It emboldens state legislators to demand more accountability from public university officials, it sensitizes journalists to different story lines about the campus, and it downgrades public opinion regarding the campus.
And yet, can we really conceive of Tier 1 and 2 schools beyond that handful, at least several hundred of them, undergoing the kind of radical disruption here envisioned?
An Abomination of Fiscal Principles?
In this month’s issue of Harvard Magazine, in direct answer to Christensen and Horn, an article by Richard P. Chait, education professor at Harvard, and Zachary First, director of the Drucker Institute at Claremont Graduate University raises the Summers point once more The article focuses on private institutions, where the trend holds most firmly. They note that in the U.S. News & World Report’s top ten rankings of liberal arts colleges, only one change occurred from 1991 to 2011 (Haverford replaced Welseyan). Not only stable rankings, but sheer survival in the face of monumental historical and technological change has prevailed in private higher ed institutions. On average, liberal arts colleges in the top 25 were founded 179 years ago. Those placed in the top 25 universities began, on average, 185 years ago. Compare that longevity to the creative destruction and “merciless” change in the for-profit world once occupied by American Motors, Bethlehem steel, Borders, Montgomery-Ward, PanAm, Polaroid, Pullman, RCA, and Woolworth’s (Chait and First’s examples).
These figures apply, of course only to the very top schools, but for every 20 of them there are 200 next-level institutions that emulate them. This fixed condition means that the latest calls for drastic reform of higher education are misconceived, Chait and First argue. The very endurance of higher ed institutions shows that they adapt to new conditions quite well, and that the “lens of business” applied by putative reformers distorts our understanding of the sector’s future. If we widen the lens to admit business practices beyond those recognized by Christensen and Horn, we find that private institutions have, in fact, cleverly “adapted to new demographics, adjusted (for better or worse) to students as consumers with unlimited appetites for amenities, and acclimated to the explosion and commercialization of science and technology.” In the list of U.S. leaders in licensing income, for instance, four of the top six and six of the top ten are private schools.
Be they business theorists who regard the university as an abomination of fiscal principles, or conservative/libertarian critics who have managed to embarrass the campus in the public square with
