Posts tagged with personnel.

When the carrots are all the same, the schools will be, too

Alex Usher, April 12, 2010 at 3:48 PM

Last week, I mentioned how the competition for academic superstars was skewing institutional priorities to the detriment of undergraduate education.  This week, I thought it would be useful to take a look at the other factors that are influencing institutional priorities. 

Incentives, as economists never tire of saying, matter quite a bit - they condition the way that individuals or institutions will choose to spend their resources.  In the private sector, incentives are pretty clear - either you satisfy consumer tastes and demands or you go under.  But in higher education, things are somewhat more complicated: Governments control most of the income stream and institutions need to respond to a variety of stakeholders beyond the most obvious "customer" (i.e. students).  

To understand the incentives facing Canadian universities one needs to focus on government policy. This is because even though governments only contribute about half of all funds to institutions, they actually control about 90% of institutional income.  The reason for this is tuition fees; although institutions collect this income from non-government sources, governments of all stripes in Canada are very careful to control the amount that institutions can receive from this source through tuition fee freezes, caps, etc.  

What this means is that although institutions may look like they are under market discipline when "competing" for domestic students, in strict financial terms this is a mirage because institutions do not have the freedom to alter their prices.  Imagine what the cellular phone industry would look like if the government, in the name of greater communications access, limited the price of handsets to $50.  There would be no Blackberry, no iPhone - and probably not a whole lot of innovation, either.  

And so it is with undergraduate students.  Institutions cannot get more money out of individual undergraduates through higher fees for specialized programming, so they have no incentive to innovate in undergraduate education.  Instead, they are restricted to a flat amount of income per student, comprised of tuition plus the per-student grant received from the provincial government.  The economic incentive here is therefore for institutions to increase income by packing in as many students as possible while at the same time lowering marginal costs.  This, in turn, is what has been fuelling the long-term shift towards an increasing casualization of the academic work force; tenured profs are simply too expensive to "waste" on undergraduate teaching, given the incentives currently in place.

But wait, you say.  Why would institutions reduce marginal costs like this?  Surely that kind of search for net income is the behaviour of a profit-making enterprise, not a non-profit.  Well, yes and no.  If universities were only in the business of teaching, then this would be puzzling behaviour.  But they're not.  They're also in the business of research.

Research is much more attractive to universities than teaching.  But it's not really because of the money. Yes, individual researchers might make a lot of money off research (either through commercialization or future work/consulting opportunities which arise because of knowledge gained), but institutions as a whole actually lose money on research.  Research overhead is expensive, and no government in the world funds overhead properly.  So institutions have to use the surpluses earned off undergraduates to subsidize the research.

Anyone versed in economics is by this point scratching their heads.  Why do institutions go through all this trouble just to subsidize a money-losing activity?  The answer is that extrinsic incentives like money are only part of the story.  One also needs to think about the intrinsic motivations in academia.

Academics like research - it's what they are trained to do.  The PhD (a non-negotiable prerequisite to employment in most faculties) is everywhere focused on building research skills, not on building teaching skills.  So institutions as a rule only hire as teachers a group of people who have been taught to think that teaching is a second-rate activity.   Within academia, those institutions that can attract "great professors" (i.e. great researchers, or the "HQPs," or Highly Qualified Personnel, of last week's column) will gain prestige.  Those that can't will be considered a second- or even third-rate institution. 

Now, if you think of universities not as revenue-maximizing institutions but as prestige-maximizing institutions, it all starts to fall into place.  Government policies offering money to universities to develop and attract HQPs is like offering crack to an addict - they are so hard-wired to favour research to begin with that there is almost nothing they won't do to get it.  And yes, this skews institutional priorities.

Though at the margins there are a couple of other incentives in the system (mostly small bonuses here and there favouring higher graduation rates), this is essentially it; the only two incentives in the system are to perform more research and to take in more undergraduate students.  Educational quality simply doesn't enter into it.  If it happens, great.  If it doesn't, it's no skin off anyone's nose.

So it comes as no surprise that Canada increasingly has a monoculture in higher education.  Instead of having dozens of institutions trying out different models and offering different programs and services, we have dozens of institutions trying to be identical miniature, for instance, McGills.  To some extent institutional isomorphism is inevitable because of the norms of the academic profession and the way institutions compete for prestige.  But governments aren't obliged to aid and abet them; with only a little wit, they could create incentives that would create a more diverse system. 

Just imagine what would happen, for instance, if the Government of Ontario set aside $50-million each year to be given to the institution that got the best ranking in a teaching satisfaction survey.  Or for one that had the best demonstrated ability to improve student engagement, or for receiving the highest satisfaction ratings from local employers with respect to graduate quality. 

Imagine what institutions would do to get hold of these prizes, and how they would change their internal processes and curricula to compete for those funds.  What kinds of exciting innovations in teaching and educational delivery might occur?  What kinds of new educational choices would students have?

As long as Canadian governments remain too witless to incentivize anything other than growth and research, we'll never know.  But if even one government began experimenting with a more sophisticated use of incentives - or even a program of gradually liberalizing tuition fees in at least a few areas to fuel innovation - it could be the start of a whole new age in education. 

Governments that want to achieve something more than the "same old, same old" in higher education, take note.  Something better is possible, if you pay attention to incentives.

Tagged with personnel, highly, qualified, government, incentives, undergradutate, teaching, research | Comments (13) |

The battle for academic superstars

Alex Usher, April 8, 2010 at 4:14 PM

Since the late 1990s, one of the most interesting examples of global policy convergence has been in the field of higher education.   Pretty much regardless of where you go, you'll find that higher education is higher up the policy priority scale now than it was fifteen years ago.  Partly, that's due to an enormous increase in demand for higher education on the part of the citizenry and a concomitant increase in access (global enrolments have basically doubled since the late 90s).  But it also has to do with a profound change in elite perceptions of how the economy works, and how universities feed into innovation and economic growth.

 The recessions of the 1990s - which started and ended earlier in North America than in Europe - finally put paid to any lingering fantasies that public borrowing and tinkering with macro-economic demand-management were sufficient on their own to maintain economic growth.  What emerged instead was a policy consensus in the developed nations on the centrality of innovation to economic growth.  Apart from a number of regulatory issues around product competition and taxation, the innovation agenda meant improving general skill levels of the work force, and it meant increasing the number of "Highly Qualified Personnel" (HQPs) - which is essentially a euphemism for PhDs in science, engineering, medicine, finance and economics. 

HQPs are thought to be essential to economic growth because of their position at the cutting edge of knowledge.  Put a lot of these people together in a place near some venture capital, it is thought, and you've got yourself an economic bonanza; a steady stream of new discoveries, many of which are commercializable and hence capable of generating new jobs and growth.  Of course, venture capital is actually quite tricky to attract and commercialization is nothing like straightforward, but no matter - the policy imperative has been to amass HQPs.

On this view, HQPs are an enormously important - and notably scarce - factor of modern economic production.  As recently as a few decades ago, major powers would go to war over scarce resources like this.  But there is no question that state power is being increasingly organized to produce, attract and effectively hoard HQPs. 

An intriguing thing about HQPs is that although they are very important economic actors, for many of them, economic output is a distinctly secondary pre-occupation.  It is the production of knowledge that matters, not the production of widgets.  What they really care about is being in an environment where they can produce as much knowledge as possible.  What's more, HQPs are a lumpy resource.  You don't tend to find them in ones and twos spread thinly around a country; rather, they tend to cluster near one another, where they can interact, learn from one another and multiply their effectiveness.   

The foci of these clusters always involve universities; either it is the universities themselves, or research parks or districts that have grown up as a result of universities (think of Stanford and Silicon Valley or MIT/Harvard and Route 138).    Therefore, as countries become more concerned about attracting and hoarding HQPs, universities - and in particular their research functions, which are of greatest importance to HQPs - are increasingly becoming instruments of state power. 

The idea of research universities as instruments of state power is not new; indeed, the research university originated in Germany 200 years ago for precisely this purpose.  But back then, the idea was simply that local HQPs (who back then were simply called scholars) would produce scholarship that would benefit the state.  What's changed is that institutions are expected to play this role by becoming honeytraps for foreign HQPs.  That means that the focus is increasingly on not the overall production of scholarship, but on increasing the attractiveness of institutions to the very, very top scholars of the world.  This is the Geopolitics of Higher Education; the absorption of institutions into a concerted attempt to fight over the globally scarce resource of HQPs.

How scarce?  There is probably something on the order of 100,000 truly high-profile scholars and academic scientists in the world - people that reasonable quality institutions would bother fighting over.  Canada's share of these is in the region of about 3% of the world total (based on our overall weight in major citation indexes) - about 3,000 in total or maybe about 10% of our full-time academics.  Our higher education system is gradually being re-shaped to meet the needs of this elite, so that institutions can more effectively compete in this "War for Erudition."

Hence the large increases in granting council funding over the past decade.  Hence the Canada Foundation for Innovation.  Hence the Canada Research Chairs Program.  It's all about competing for that top 10 per cent, and attracting more professors of similar calibre to Canada, because policy makers believe that they hold important keys to our economic future.  And academic institutions - which have always associated research with prestige - are happy to agree with them and act as their handmaidens.

Though Canada was among the first wave of countries to understand higher education in this way, we're hardly alone.  The Canada Research Chairs Program has been widely noted and in some cases copied.  Countries like Germany, France and China are all pouring money into various types of "excellence initiatives."  And these tend to focus on a very small number of institutions. By international standards, Canada spreads its research dollars much more thinly than other countries.  This has some benefits in terms of ensuring that excellence is well-distributed, but it has the drawback that it is probably less effective than it could be at enticing top scholars from abroad into a few genuinely powerful universities. 

As the size of the working-aged population stops growing across the developed world, the search for major leaps in productivity are intensifying.  As a result, the "War for Erudition" is only going to get worse.  But there are a lot of potential casualties in this war, the main one being the quality of undergraduate education.  There's not a province in Canada where this features in the current policy agenda and there's not even really an identifiable voice in Canada arguing for it any more.  That's a serious problem, given that teaching students is what most students and parents think their tuition and tax dollars are actually paying for.

Higher education is part of the geopolitics of the 21st century; that's a given.  But success in this game should not come at the expense of the traditional but still vital goals of access and quality at the undergraduate level.  Next, I'll look at what tools policy makers should be using to make sure that's not the case.

Tagged with superstar, for, phd, personnel, erudition, highly, qualified, undergraduate, scholars, education, quality, war | Comments (18) |