Are Public Universities Going Bankrupt?

11/29/2017 11:05 pm ET Updated Dec 04, 2017

Harvard Business School Professor, Clay Christensen, has reported a concern that “half of colleges could close in a decade, driven by the spread of online learning.”

It should not be a surprise to anyone.

First look at the cost. Look at student debt. Add in the difficulty of 4 to 6 years of trying to make ends meet and ask yourself if it is really worth it to get a college degree.

Almost 10 years ago, The Conference Board, a major international business research organization, issued a report called “Ready To Innovate: Are Educators and Executives Aligned on the Creative Readiness of the U.S. Workforce?”

The report was the first time that the vital link to a creative and innovative economy was made clear, and the road to America’s success and survival was spelled out for all to see — particularly in the business community.

In summary, the report asked three questions:

“Are U.S. businesses and K-12 school systems making the link between creative skill sets in the workforce and innovation? Are businesses finding the creative talent they need to generate the innovative solutions and products demanded by the marketplace? And what efforts are both of these groups making to train employees in the needed creative skills?”

The survey revealed that “both the superintendents who educate future workers and the employers who hire them agree that creativity is increasingly important in U.S. workplaces (99 percent and 97 percent, respectively), and that arts-training — and, to a lesser degree, communications studies — are crucial to developing creativity.

Yet, there is a gap between understanding this truth and putting it into meaningful practice. Not just between superintendents and K-12 schools. It’s between College Presidents and their Universities too. Maybe worse so.

Most higher education institutions do a credible job distinguishing themselves so that students and their parents can pick and choose, but they provide no reliable statistics about whether real learning takes place, or whether the student is prepared to enter the emerging workforce.

Therein lies a large part of the problem

In a rather controversial book, Academically Adrift: Limited Learning on College Campuses by professors Richard Arum and Josipa Roksa, it was reported that 45 percent of the 2300 students included in the study “demonstrated no significant gains in critical thinking, analytical reasoning, and written communications during the first two years of college.”

Because of the worldwide spread of technology — particularly the Internet — and the globalization of markets, it is a new ballgame. As Business Week Magazine said at the time : “The game is changing. It isn’t just about math and science anymore. It’s about creativity, imagination, and, above all, innovation.”

The fact is, most of the manufacturing jobs were lost over the last 30 years. Now with globalization in full bloom, America is beginning to see the outlines of yet another out-migration of American jobs. Unlike the earlier shift of manufacturing jobs to less developed East Asian countries, the loss of the latest round of high-tech software and service jobs will have dramatic, some say devastating, impacts on America’s economic wealth and well-being.

According to the MIT Technology Review, we are witnessing, “Tectonic Shifts in Employment (where) information technology is reducing the need for certain jobs faster than new ones are being created.”

The Second Machine Age by Erik Brynjolfsson, director of the Center for Digital Business at MIT’s Sloan School of Management and Andrew McAfee, its principal research scientist, concluded, that “nearly half of all jobs are vulnerable to machines — to applications using information technology.”

Thirty years ago, it was fashionable to blame foreign competition and cheap labor markets abroad for the loss of manufacturing jobs in the United States, but the pain of the loss was softened by the emergence of a new services industry. Now, it is the service sector jobs that are being lost. This shift of high tech service jobs will be a permanent feature of economic life in the 21st century. And AI or artificial intelligence will eliminate even more jobs. The robotic and AI future could be devastating to the workforce.

Today, the demand for creativity has outpaced our nation’s ability to create enough workers simply to meet our needs. Our schools and our businesses need to rethink the needs of the nation, and rethink the important roles of creativity and innovation.

Are we ready to innovate as the Conference Board asks? Hardly.

Little has been done at most universities to reinvent itself and to provide the “new thinking skills” demanded by a new economy. Not project-based learning. Not design thinking. Not interdisciplinary courses that merge art and science. Many teachers teach the way they always have and the students who should be learning how to learn are regurgitating facts at mid-term and final exams that they could easily google.

Technology to deliver courseware at more reasonable costs, as Christensen argues, is not evident either. It certainly doesn’t take place on campus in a 500 seat classroom.Blended learning where face to face discussions are mixed with online coursework is not nearly as evident as it should. The aggressive use of technology to offer online courses is even rarer.

These techniques and more, for example, “flipping” the classroom, will reduce the cost of a college education. As it is, the costs of attending a university are a worrisome expense. And even if students get into college, the experience is bewildering.

A lot is happening at college across the country. The issues confronting most universities, most deans and presidents, are not new. They are well aware of what needs to done but stymied by their own organizational structure and the bifurcation of responsibility between the faculty and the mission of those responsible for change.

Maybe Christiansen has under estimated how dire the situation really has become.

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