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Business Leaders See Higher Education as Hampering Economic Growth

February 14, 2012, 2:09 pm

The rising cost of higher education, its indifferent quality, its resistance to change, and its lack of accountability are endangering the nation’s prospects for future economic growth, according to a report on the views of business executives that was released today by Public Agenda and the Committee for Economic Development. The report, which draws on focus groups last year with 27 executives in Ohio and Texas, and on telephone interviews with 12 others, echoes the concerns that business leaders have expressed in two other recent reports that cover similar terrain: one based on a survey of 500 business leaders released in January and one based on a survey of more than 1,000 employers released in September. In the new report, “Hiring and Higher Education,” the business leaders say colleges’ inability to control their costs, lack of adaptability, and meager accountability have resulted in a dearth of qualified workers for the jobs the leaders need to fill.

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  • tee_bee

    OK. So let me get this straight. Most of these execs, I bet, have MBAs or BBAs. We know that these students generally are not the top achievers in high school or college. They view colleges as vocational training. And they are taught methods of cost accounting and management that, while appropriate for private firms, make no sense whatever in colleges and universities. But we are to take their opinions–for this is what they are–seriously? 

    There are significant problems in higher ed, including the quality of our graduates. While “business leaders” are an important constituency, they are not particularly qualified to make these pronouncements.

  • jthelin

    The business world is “the real world?” Hmmm . . .

  • laker

    The real hypocrisy I see here is that the same business leaders fight tooth and nail for tax breaks that diminish the quality of education from pre-school through college and then they have the stones to decry “its indifferent quality”. Regardless of their own levels of intellectual attainment, it is pure hubris to sit in judgement of a situation they have helped create.

  • repphd

    Actually many of them are.  Many still  have liiberal arts degrees from the better schools at the UG and then went on to take an MBA, many times at a top 20 or 25 school.  I wlll give you a case in point, a colleague of mine had a daughter at Yale who wound up with a degree in Art History and wound up at a law school, a very good one.  In   her senior year a major accounting firm with a strategy consulting practice approached here to  work for them.  Not unusual, good input, any process that is not negative will result in good output.  Everyone knows that;  Yale, has good processes even if they are not socialized into the business world so why not hire a young person with that background.  Previous peformance is the best predictor of future performance in most cases.

    I don’t know what data they collected as demographics in either of the studies quoted, but before you make these comments to ought to check out those issues.  And as far as what they are taught making no sense in colleges and universities, that is an interesting generalization that can be falsified with only one example.

  • eudaimon

    It is always a bit disconcerting when elitists turn on each other. Why should business leaders begrudge faculty their unmerited sinecures and their ability to employ the resources of donors, taxpayers, and students to their selfish uses. Country clubs and faculties have a lot in common. Executives and tenured faculty should find common cause and work together in support of privilege and inequality.

  • huntlambert

    This strikes me as an excuse.  Once upon a time businesses trained new employees.   I know, I used to be in business and hired and trained hundreds.  Since when are college graduates supposed to be ready to work without training?  We in higher ed can teach kids to learn adn thats what we do well.  Businesses are trying to outsource training to the university and federal government.  Instead of whining about bad results from their outsource decision, they should increase spending on training.  College at CSU is only about $8,000 a year.  Thats not much compared to the cost of a one day meeting for 8 in a buseinss setting.   

  • jthelin

    There may be some good that comes out of this report.  For example, the CEOs criticize universities for paying coaches high salaries (one CEO invokes the figure of $8 million for a coach — probably a little high).  At the same time, university presidents and boards invoke the model of corporations and business to justify paying a coach a multi million dollar salary.  How about if these two factions meet and resolve this — or, at least, get their stories straight. 

  • _perplexed_

    Exactly right:  Let them train their own.

  • 11122741

    It’s all about knocking down the wages of college graduates and keeping profits up and HE  could being doing the wost outstanding job in the world and for the future as well.  Unfortunately, I saw all of this in the early 1980′s when I was the finance person at an HE Board in the middle of the high tech industry, where i was told that 1/2 educated at 1/2 cost so they could be offered 1/2 pay was better than better educated as higher costs and educated enough to be a pain in the butt.  Higher ed costs too much but not for the reasons people think or claim; students loans have been the cash cow for the financial industry and have inflated costs bu allowing parents to be gamed by both sides in a wealth transfer scam.  the same is true of the other cash cow, expenditures on technology, much of which is unneeded and tossed away in a year or two and of course yuppie living quarters and life styles that make me laugh in terms of the closet I shared with 2 other students and learned perfectly well as an undergrad in nyc.  How much did that guy make managing Harvard’s endowment??  There was a time when that sort of thing was done pro bono and those profits went to keeping costs down; but alas it looks like HE may return to its origins;namely, Greece.  if one knows any education history, one will know that this is far, far, far from the first rodeo on this theme and the bail comes when the cash cow is not giving as much milk as before and the market is about to collapse because the jobs promised are not there and of course we know whose fault that is.

  • zizi1177

    Or better yet, how about businesses collaborate with universities in creating training programs and certifications. Businesses can endow universities with money and universities can send graduates ready for the workforce. This can be a win-win for both if they put their pride aside and work together to resolve the problems.

  • rocket47

    No more liberal arts education? Just “mouse-clicking” education? I thought we already had this.  It’s called vocational education.  Colleges can accomplish more with rigorous high school curriculum.

  • terracerulean

    Small sample. Narrow focus. And Higher Ed is definitely not their day job. Big Yawn.

  • hmcleaver

    Nothing new here, just another call to FURTHER subordinate education – primary, secondary and “higher” – to the needs of business. Business leaders have been at this for well over 100 years. For a some historical perspective , read Friedrich Nietzsche, “The Future of our Educational Institutions” (1872), Thorstein Veblen , The Higher Learning In America: A Memorandum On the Conduct of Universities By Business Men (1918), Upton Sinclair, The Goose-step: A Study of American Education (1922) and The Goslings: A Study of American Schools (1924), Raymond E. Callahan, Education and the Cult of Efficiency: A Study of the Social Forces that have Shaped the Administration of the Public Schools, Chicago: University of Chicago Press, 1962, and John Gato, The Underground History of American Education (2006). Not only have capitalists long sought, and largely succeeded, in getting the KIND of education they want but they have also largely succeeded in transferring the COSTS of that education to the rest of us. In recent times, there was a brief period in the 1960s and 1970s, when this subordination was questioned, even fought – by students all across the country, from Berkeley and Stanford on the West Coast to Columbia and Harvard in the East. In the process, the chains of subordination were loosened and business influence was at least partly delegitimized. But since the 1980s corporations have spent billions overcoming such questioning, reestablishing their grip and jacking up their demands. Fortunately, the “occupy” movement is beginning to spread from Wall Street and the business community to campuses, so who knows – maybe there is hope for some effective disruption of the drumbeat of business demands.

  • goodeyes

    I see “tee_bee” as part of the problem.  Business leaders and others in the public are very qualified to evaluate our graduates and even us.   In addition, I would rather as a parent see my son graduate with a vocational “real skills” degree instead of unemployment or minimum wage training.   

  • bizdean

    One word: Bankers.
    If any were in this small survey sample, then “inability to control their costs, lack of adaptability, and meager accountability” is nothing but the pot calling the kettle…

  • sages

     The business leaders need to look in the mirror to see who is unaccountable. Bankers  and all those market players who sunk the economy a few years ago…

  • csgirl

    If industry wants to have a say in how higher education works, they need to have some skin in the game – that is money. I don’t mean the random feel-good donations that they make now. I mean actual committed funding streams. Right now, students and the federal/state government fund education for the most part, so administrators in colleges listen to those voices. That is why we have such a “the student is our customer” mentality.  Money talks. If companies want to be a customer too, they need to pay.

  • drdwilliams

    Right!  You have to pay to play.  If employers want highly trained critical thinkers, then they must become payers.  Capitalism works best when most direct.  Producers are incentivized to give the buyer what they want.  

    Students want a little learning, not a great deal of work, some good opportunities to socialize and a diploma at the end.  Often If made to work too hard, they drop out.  

    Poor retention is a hit on the university budget, so the incentive is to reduce the demands on the primary consumer to the point of satisfaction. If businesses want something different, then they need to step into the role as primary consumer.  When they pay colleges directly to provide them with educational services designed to achieve the outcomes they are looking for, colleges will provide exactly that.  There won’t be nearly the kind of confusion created by Higher Education acting as intermediary between potential employers and potential employees.

    That said, the fact that we do serve in this role is in large part our fault.  We keep trying (and have been doing so for a very long to time as hmcleaver points out above) to convince the public that our existence and what we provide is socially beneficial by touting direct tangible benefits to the student consumer (come to college, get a great job when you finish).  

    Leading with that claim invites expectations related to direct preparation for employability. That claim + push for greater access (perhaps something created by people who believe our marketing claims) + diploma inflation for employment (perhaps created by people who believe our marketing claims) = lots of students, ill-prepared and under-motivated hitting the door expecting to pay their money and get their employability certificate (perhaps in response to taking our marketing claims seriously).

    If we base operations on what students are willing to pay for, then we will give them what they want.  If businesses want something different, then they will have to directly engage colleges as their educational service providers and they will get what they are willing to pay for.

  • teachergriff

    Of course we’re hampering economic growth. We’re teaching critical thinking, and they can’t stand it, because so much of their economic model is based on an ignorant populace that can be easily manipulated.

  • jthelin

     Goodeyes, and where in your spectrum would you place those unemployed or underemployed recent graduates of prestigious law schools? 

  • chaucer1350

    27 business “leaders,” from two conservative states, with 12 more phone interviews?

    There’s a representative sample. Were these small businesses or large? Energy companies out of Houston or manufacturers in San Antonio?

    In the bigger picture, business leaders seem to want highly skilled workers with the drive to reeducate as needed and the creativity to envision new efficiencies and work flows as markets and production technologies evolve.

    As at-will contract workers, with wages and benefits determined by 3rd world competition.

    I don’t blame them for thinking such a reality would make them rich beyond belief. It would. I do wonder why they think that anyone else would find that scenario attractive.

  • Prof_truthteller

    Oh, yeah, of course higher ed should take advice from businesses such as the auto industry, airline industry, financial services industry, the coal industry, the railroads, meat packing, agribusiness, insurance companies ….

  • alancontreras

    Here is what the conservative British philosopher Michael Oakeshott had to say on this subject in his book The Voice of Liberal Learning:

    “[Such things as advanced training]…belong to a world of power and utility, of
    exploitation, of social and individual egoism, and of activity, whose meaning
    lies outside itself in some trivial result or achievement—and this is not the
    world to which a university belongs; it is not the world to which education in
    the true sense belongs. It is a very powerful world; it is wealthy, interfering
    and well-meaning. But it is not remarkably self-critical; it is apt to mistake
    itself for the whole world, and with amiable carelessness it assumes that
    whatever does not contribute to its own purposes is somehow errant. A
    university needs to beware of the patronage of this world, or it will find that
    it has sold its birthright for a mess of pottage… “

  • jamesebryan

    That claim is the reason why the first lecture of every semester in every class I teach is about why my class is taught even though it won’t lead directly to greater employability and higher incomes for my students.  All of us, on a regular basis, should be countering the popular misconception that a baccalaureate degree is meant to amount to vocational preparation and nothing more, so that by the time they graduate our students will have heard more than once, and perhaps learned, that what their parents, their political leaders, their future employers, and countless others have led them to believe about the purposes of a college education just isn’t entirely so.  How many faculty ever actually discuss what the larger enterprise is all about as compared to simply launching into the specific material to be covered in their courses?  Now I’m not so naive as to believe we will convince every student that there are higher gods than Mammon, but I do think we can persuade many if we bother to address the topic. 

  • 12080243

    Until faculty wrest control from mindless administrators, whose practices are exemplified in 02.15.2012 usmnews.net report, “Cost Per Flight Hour,” they’ll not be able to effectively address views of business and government leaders. They get their information from the public relations juggernaut of colleges and universities which are controlled by the same administrators who control faculty. And administrators will not willingly give up their power.

    Chauncey M. DePree, Jr., DBA [BA Philosophy, MS Accounting, DBA Accounting, Ethics, and Logic], Professor, School of Accountancy, College of Business, University of Southern Mississippi

  • S P Dudley

    Translation: universities are turning out overqualified fluff.

  • http://www.facebook.com/people/David-Pittelli/1157577837 David Pittelli

    It’s a rather tenuous connection from tax breaks to lower quality education. For one thing education spending has increased considerably over the past several decades. It is not the fault of business leaders that most of that increase has gone to the growth of administrative costs and amenities, rather than to faculty.

  • Micha_Elyi

    Of course, because those industries fund your ivory tower existence and almost all your students expect to make their livelihoods working in them.

  • Mike T

     Correction: Universities are producing, for obscene amounts of money, uneducated and indoctrinated twats for large amounts of money.

  • Micha_Elyi

    Nice try.  Now name 10 bankers who lack a bachelor’s degree.  That’s right, that “inability” you decry is the fault of youself, your colleagues, and the morally deficient, grade-inflating, and over-priced institutions you’re defending.  (And I’m not just talking about the B-schools – heads up, philosophy professors!)

    Try again.

  • Mike T

     Only an idiot wouldn’t want to take advice from Toyota, Honda, BMW, Southwest Airlines, etc., etc.

    Alternatively, someone who is perfectly happy fleecing gullible young minds for a relaxing livelihood would not want to actually be measured on their results as the successful companies in those markets are measured each and every day (unless they have a pal in Washington DC, of course).

  • Mike T

     Ah, yes. “Critical thinking”. The codephrase for progressive claptrap that is imposed upon the truly ignorant and trusting population–your students.

    Every time someone such as yourself spouts off it provides yet more incentive for Home Schooling and vouchers.

  • http://thefunemployed.blogspot.com/ rance

     Yes, that’s the reason.  Universities are teaching too much “critical thinking”.  Of course, they weren’t teaching any “critical thinking” 20 years ago, so everything was great and companies would hire ignorant people.

    Make all the excuses you want.  The reality is we live in a global economy.  There are at least 20-25 other countries producing better educated students.  guess who are getting the jobs?

  • http://thefunemployed.blogspot.com/ rance

     actually they don’t – not in the sense you are talking.  They can go to India, China, Singapore, Korea, Japan, and any other number of countries and get a higher educated person to work for them.

    But last I checked, companies do pay taxes and provide the means for citizens to make money so they can pay taxes.

  • http://thefunemployed.blogspot.com/ rance

     You need to look in the mirror and see who provides your livelihood.

  • http://thefunemployed.blogspot.com/ rance

     I keep seeing all these people on here blaming bankers.  But tell me…where do Bankers learn moral relativity?  Where is it they are taught there is no right or wrong, only shades of grey?  Where are they taught that “judging” others behavior is a bad thing because there is no universal moral standard by which to judge others, we need to tolerate the behavior of others?

    I believe that non-sense is what passes as a college education today. 

    You reap what you sow.  And this is what that looks like.  So maybe all you educators should start practicing what you preach to your students and tolerate these bankers and their immoral ways…since there is no universal moral standard.

  • http://thefunemployed.blogspot.com/ rance

     Companies do still train…but you have to have a baseline of info for them to work with.  For example, a company will train an employee who to use a piece of machinery.  They will not train them how to do algebra.  Most jobs require that employees have knowledge in algebra so they can train them on how to use the machinery.

  • http://thefunemployed.blogspot.com/ rance

     are you the same person who gets upset because people like Bill Gates has become involved in education?

  • chaucer1350

     And here’s Exhibit A

  • tardigrade

    College students are not blank slates.  If you want relatively maleable students who are almost ethical blank slates, go to the primary schools.

  • tardigrade

     Says the feudal lord to those they patronize.

    Oh, wait, it’s the labor of the serfs that supports both patrons and the patronized.

  • tardigrade

     Yeah, yeah, yeah…and consumers provide purchasing power which funds companies to pay taxes and employ citizens.

    This is ultimately circular reasoning which has been bootstrapped from agrarian roots.

  • tardigrade

    ” guess who are getting the jobs? ”

    Those who work for the lowest wages.

  • tardigrade

    Really.  What we don’t see is how the present workforce compares to prior workforces.  Are business leaders merely demanding more now than then because of a sense of entitlement?  Are they comparing public school graduates who graduated from strained K-12 systems, got insufficient sleep during formative years (which has been shown to have a truly significant impact on growing minds***), etc… to their Ivy League student cohort when they went to school?

    I question whether these executives are close enough to “the floor” to adequately evaluate this.

    *** – The book Nurture Shock cites research and claims a 2-year deficit in functioning on aptitude tests from a 1-hour sleep deficit in 6th graders.  It also cites an improvement of 212 points on the SATs from one graduating class to the next at a high school which pushed back start times by an hour (increase in average score for the top 10% of the graduating class from 1288 to 1500).

  • rod2312

    In related news, the higher educational system wanted to inform the business leaders that the use of the business model in university systems plus the overtaking of state and federal governments by business interests has contributed toward the rising cost of higher education, its “indifferent quality,” and some other unmentionable things.

  • jamesebryan

    How many home schools award baccalaureate degrees?  What colleges have tuition paid by vouchers?  Your response doesn’t even address the point made by teachergriff, much less refute it.  Maybe if you understood what critical thinking is you could have used it effectively to argue against teachergriff, instead of just spouting off conservative talking points.