For the last several years, when people asked me what industries I thought had the most exciting futures, I have said, “travel, education, and health care.” And sometimes added “financial services.” My own ventures have been related to the aging baby boom – which drives all of those industries – and focused on education, broadly defined (bookstores, business education, travel education, museums).
Education is not only one of the largest and fastest growing parts of the economy, it is one of the most important if not the most important. Earlier this year, I read a Wall Street Journal piece on the top picks of “specialty retail analysts.” I expected the article to list dress shops and shoe shops and Best Buy, but instead almost all the recommendations were for-profit educational institutions such as Apollo Group (University of Phoenix), DeVry, ITT, and the like. I understand that the University of Phoenix, with over 400,000 students, recently surpassed the University of California system to become America’s largest University.
While some of these companies and their activities are controversial, their impact and innovation cannot be argued with. And higher education – and other parts of the education “industry” – are bound to go through further dramatic changes in coming years.
My near-total devotion to my alma mater, the University of Chicago, and my more recent employment by the great University of Texas have only heightened my interest in the higher (or “post-secondary”) education industry.
If you would like to know more about this business, there are a ton of books out there. Two of the most interesting ones I have found are noted here.
Saving Alma Mater: A Rescue Plan for America’s Public Universities by former Miami University of Ohio President James C. Garland (University of Chicago Press, 2009) is a very thought-provoking look at where the big state universities stand today. Garland points to the almost-unmanageable complexity of these giants, cornerstones of America’s world-admired higher ed system. He also points out that they get less and less support from state and other governments each year, with many of them getting 20% or less of their funding from the states.
At the same time, their admissions policies and pricing policies are often dictated by state legislatures and other government or government-appointed bodies, so they give up a lot of control for decreasing amounts of money. Their private university competitors, sometimes with very strong brands like Stanford, Duke, and Princeton, suffer no such limitations. If you don’t know much about what is really going on in the big state universities, here is a current book which will open your eyes, and also lead you to other books to read, including:
Going Broke By Degree: Why College Costs Too Much by Richard Vedder (American Enterprise Institute, 2004), which has a lot of excellent numbers and other data on the productivity levels of universities (both in research and in teaching) and why the costs of a college degree have continued to rise faster than inflation in the overall economy. This book opens the doorway to understanding why our great university system faces so many challenges, including new competition from the for-profit world, which is only going to grow in coming years.
It would be hard to beat these two books as a starting point to getting your hands (and mind) around the opportunities and challenges facing higher education in America. If we are to continue to have a strong, vibrant economy and nation, I believe it is imperative that we not lose our historical leadership role in this critical industry, whether we do it through state institutions, private universities, or for-profit ones. Likely any real victory will come from a broad combination of, competition among, and perhaps even coalition of the three.