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National CrossTalk Summer 2002
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Facing New Challenges
The higher education community must take the lead in addressing the dramatic pace of external change

By Roberts T. Jones

Former General Electric CEO Jack Welch once leveled a sobering warning at businesses that fail to adapt to external change: "If the rate of change outside your organization exceeds the rate of change inside your organization," he said, "then the end is in sight." Now more than ever, his words apply equally well to U.S. colleges and universities. Though Americans have long enjoyed the world's best system of higher education, that system faces unprecedented new challenges as it confronts the dramatically changing expectations of the world around it. Its continued strength and reputation depend on its ability to meet these changes head-on.

The business community is often the first to experience these changes. As it strives to succeed in an accelerating information-based economy, business is keenly aware of escalating global competition and technological innovation, as well as of the accompanying demand for new knowledge and skills. Business has also begun to observe social and economic developments that will affect higher education's capacity to respond to this demand-developments including changing demographics and the trend towards a more client-centered system of education. The combined force of these changes will have far-reaching implications for the business community and American higher education.

Global competition
As the global shift from a manufacturing to a knowledge economy continues to level the international economic playing field, those nations with the best-educated citizenry will enjoy a decisive competitive advantage. Countries across the globe are making rapid gains in educational and technological attainment, improving their productivity and thereby increasingly challenging U.S. economic strength.

Norway, Britain and the Netherlands have recently surpassed the United States in the proportions of their populations graduating from college, and other countries are quickly closing in on U.S. levels of educational attainment. While American postsecondary enrollments grew at an average annual rate of 1.1 percent between 1980 and 1997, for example, Chinese and Indonesian annual enrollment growth reached 15.6 percent and 19.1 percent, respectively. At these rates, enrollment levels in such countries may well exceed American levels within decades.

The gross domestic product of these countries is growing accordingly. At 5.8 percent and 11.1 percent respectively, China's and Indonesia's annual GDP growth between 1990 and 1998 far outpaced the American annual growth of 2.9 percent over the same period. As more and more countries develop their educational capabilities, moreover, this trend towards international parity-and stiffer global competition-will persist long into the future.

In this new world, market share is moving to countries most able to deliver skilled workers, particularly in the areas of science and technology. The business community has ample cause for alarm when it observes the number of college graduates in high-demand areas such as engineering and science increasing far more quickly abroad than in the United States. According to the National Center for Education Statistics, only 5 percent of all degrees awarded in the U.S. are in engineering, compared to 21 percent of German degrees and 46 percent of Chinese degrees.

Together with the rise of global competition, the rapid advance of technological innovation is incessantly transforming the definition of jobs, and the skills these jobs require. More importantly, the very nature of these skills is evolving continuously, requiring more and more Americans to seek further education and training throughout their lives.

Client-centered education
By 2011, more than 75 percent of Americans will engage in postsecondary study within two years of graduating from high school. As enrollments grow larger and far more diverse than ever, colleges and universities must accommodate not only more students, but a greater variety of student needs. Because increasing numbers of low-income students, academically under-prepared students, part-time students, and continuing education students require ready access to higher levels of education and training, traditional models of financing and delivering higher education are coming under mounting pressure.

Faced with this unprecedented volume and diversity of students seeking new skills, the higher education system is already becoming defined by consumer choice. As individuals and companies search for more "user-friendly" education and training options, they are exercising far greater control over what students learn, as well as where, when, and how they learn it. This new emphasis on client needs will only build momentum, radically challenging longstanding notions of institutional structure and educational delivery.

In light of these new conditions, colleges and universities can no longer rely on the traditional institutional practices or structures that have served them so well in the past.

Because the quality and availability of postsecondary education will grow increasingly vital to the nation's social and economic health, American colleges and universities have entered an era of great opportunity, tremendous responsibility and significant risk. To preserve the traditional values of liberal education while fulfilling this responsibility, the higher education community must take the lead in addressing the dramatic pace of external change.

The scope and speed of this change raises educational issues of great concern to the business community. Faced with daunting external challenges, higher education has an obligation to become more responsive to rising demands for certain types of degrees; more inclusive at a time when all students must attain higher levels of academic proficiency; more user-friendly to accommodate the rising importance of lifelong learning; and more capable of communicating student competencies at a time when shifting skill demands have diminished the reliability of institutional prestige. In addition, the time has come to fashion a funding mechanism adequate to an age when all people will have to return to the postsecondary system repeatedly throughout their lives.

We face a growing mismatch between external skill demands and the degrees colleges and universities currently award. While jobs requiring technical degrees are projected to increase by more than 50 percent over the next decade-more than four times as fast as the overall increase in jobs projected for the same period-the number of Americans earning degrees in corresponding fields has been declining sharply over the past 15 years.

Between 1987 and 1998, the number of engineering degrees dropped by 19 percent; that of mathematics degrees fell 25 percent; most surprisingly, the number of computer science degrees declined by a staggering 32 percent. While colleges and universities certainly do not bear the sole responsibility for this mismatch, they do need to take more aggressive measures to respond.

Most importantly, their means of addressing external requirements must anticipate the inevitability of change. As knowledge and skill demands continue to evolve, current measures to address degree shortages will likely become inadequate to future needs. Such unavoidable changes will challenge colleges and universities to continually develop innovative ways of responding to these demands. They might use financial or academic incentives to encourage participation in certain degree programs, or work with the elementary and secondary system to improve the academic preparation of all students to study in high-demand fields.

The academy's long-standing emphasis on identifying and promoting the very best students directly conflicts with the growing moral and economic imperative to maximize the academic achievement of all students. Even the most rigorous programs and courses will be judged less by the numbers of students they "weed out" than by their ability to educate the greatest number to the highest standards.

The current academic "culture of exclusion" often exacerbates skills shortages in areas of particularly high demand. In science and engineering programs, for example, student attrition rates typically stand at 50 percent or higher. University policies and practices frequently contribute to these high levels of attrition. Some departments set quotas that prescribe high failure rates, for example, and many reward top-tier professors with small groups of elite students. Such departments are facing growing pressure to demonstrate their ability to promote high academic achievement in all students, including those who lack proficiency upon enrollment.

This will admittedly be a daunting task, especially at a time when so many high school graduates are under-prepared for the rigors of college study. The American system of higher education therefore will have to assume a central role in improving elementary and secondary education by strengthening teacher preparation programs while helping to set appropriate standards for high school graduation.

Increasingly diverse educational needs
The demand for more "user-friendly" colleges and universities is challenging traditional structures of postsecondary education. A "one-size-fits-all" approach to higher education cannot survive in an era of increasingly diverse educational needs.

Driven in large part by an increasingly dynamic labor market, student demand for frequent and varied lifelong learning opportunities does not respect institutional or curricular boundaries. In the course of their careers, Americans will move between jobs, technical schools, two-year colleges, and four-year colleges, often assembling disparate courses and learning experiences into recognized credentials.

This trend is compelling the higher education community to forge more articulation agreements between institutions long separated by different missions and institutional identities. In doing so, higher education must acknowledge the rising importance of community colleges in accommodating students with a wide range of educational and professional backgrounds.

Distinctions between different degrees or even different institutions will continue to blur as e-learning technologies enable learners to shop for courses without regard to geographical or institutional borders. Because new e-learning technologies encourage self-paced learning, moreover, fixed requirements for classroom hours will no longer dictate how long it takes to finish a course or earn a credential. Long-accepted assumptions about the two-year associate's degree or the four-year bachelor's will yield to time frames that more closely suit both student learning needs and fast-paced labor market demands.

The demand for such flexible "user-friendly" learning opportunities has already encouraged for-profit competitors to enter the postsecondary market, and these proprietary schools often respond more quickly to new professional skill demands than do not-for-profit institutions. As their long-held regional monopolies succumb to the spread of distance learning technologies, some more traditional institutions are being forced to address the competitive pressures of a far more client-centered post-secondary education system.

In a competitive environment, convenience and quality are not mutually exclusive. Client demand for demonstrable learning results is becoming every bit as strong as the demand for user-friendly education. Postsecondary providers that do not combine quality and convenience risk succumbing to their competitors.

Demonstrable learning results
Demonstrated competencies are becoming more important than degrees or the institutions that confer them. In and of themselves, degrees seldom signify competencies in any reliable way. Unless accompanied by a clear and widely-recognized statement of competencies, a postsecondary credential offers employers little evidence that its bearer can satisfy the requirements of productive work in a fast-evolving world.

The half-life of an institution's or degree's reputation will in fact only become shorter as changes in skill requirements accelerate, and so the need to prove actual competency is assuming unprecedented importance. Rather than reflecting any desire for institutional accountability, the necessity of measuring outcomes arises out of the need to meet the conditions of a dynamic labor market. Indeed, a growing desire to emphasize student learning over institutional performance is fueling a spreading interest in "learning portfolios" that can document the competencies an individual has gained from multiple sources over the course of a lifetime.

Of course, colleges and universities cannot productively measure outcomes until they identify precisely what they should measure. It is as a result becoming increasingly important to determine what essential competencies all college students should possess. As new information continues to permeate every aspect of modern experience, the knowledge and skills required for success in both the job market and day-to-day life have begun to intersect. Regardless of their particular career trajectories, therefore, everyone will have to master a core of knowledge and skills which equips them for both immediate labor market requirements and the unavoidable necessity of lifelong learning.

Current financing systems are proving increasingly inadequate to support the growing demand for postsecondary education and training. The current maze of scattered loans, grants and tax incentives simply cannot support the educational needs of a society in which everyone will frequently move in and out of higher education over the course of his or her life. Originally designed for full-time students earning four-year degrees in bricks-and-mortar facilities, today's financial aid systems do not serve the growing majority of postsecondary students who do not fit that profile because they follow alternative trajectories towards a degree, or receive their education through alternative delivery systems.

The goal of universal access to higher education depends on a funding strategy that fully acknowledges the growing diversity of student needs.

Any funding strategy must also confront the severe imbalance between spiraling costs on the one hand, and strained financial resources on the other. While average college tuition measured in constant dollars has risen almost 110 percent since 1981, the median family income has risen only 27 percent. This has had the most dramatic effects on lower-income students, who must devote an enormous and growing share of family income to college expenses. Financial aid has not kept pace with these rising costs.

Projected enrollment increases will exacerbate these problems. College enrollments will rise 20 percent over the next decade, the National Center for Education Statistics projects, potentially overwhelming already insufficient funding mechanisms. Because low-income students will comprise a substantial share of this enrollment increase, the financial barriers to college attendance threaten to reach critical proportions. This crisis promises to become all the more severe as lifelong learners flood back into the postsecondary system.

Throughout its history, the American system of higher education has brought our nation enormous social and economic benefits. Now more than ever, nothing is more precious to individual and national prosperity than the quality of our colleges and universities. At the same time, that system faces greater, more complex challenges than ever before. In light of these challenges, colleges and universities must work to protect and nurture their value in a world marked by ongoing, radical transformation.

By providing an environment that promotes free and vital debate, the academy has long encouraged innovative thinking on issues of national and individual importance. It is imperative that the higher education community now bring this same tradition to bear on issues that will so profoundly affect its own future. In doing so, however, it cannot take refuge in familiar academic assumptions that this future will soon render obsolete.

Colleges and universities must confront the changing world with the honesty and intellectual integrity that have long been their hallmark, even if this process reveals the inescapable need for far-reaching institutional transformation. If they do not, they risk abandoning the very values that have sustained them for centuries.

Roberts T. Jones is president and CEO of the National Alliance of Business.

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