HESA

Higher Education Strategy Associates

February 11

Who Owns Courses?

After the preposterous CAUT report on the University of Manitoba’s Economics Department was released, President David Barnard offered a wonderfully robust and thought-provoking refutation of CAUT’s accusations.

One of the most interesting observations Barnard makes relates to a specific incident from the report, namely the request by a departmental council to review an existing Health Economics course after having approved a new Economic Determinants of Health Course taught by the same professor.  CAUT viewed this as a violation of the professor’s academic freedom (basically – she/he can teach whatever she/he likes).

In an age when we are all intensely aware of intellectual property rights issues, we have, over time, come to focus on the professor’s role as a creator of content.  And this is absolutely right.  The way in which Economics Macro 300 or Organizational Behaviour 250 gets taught is a reflection of a professor’s lifetime of scholarship, and many hundreds of hours of hard work in creating a pedagogy and syllabus that conveys the necessary information to students.  The idea that this “belongs” to anyone other than the professor is ridiculous – which is why there have been such fierce battles over the terms of universities’ involvement with private for-profit companies, like Coursera, with respect to online education.

Barnard responds to this line of thinking by reminding us of a very important truth: Macro 300 and OB 250 exist independently of the professors who currently teach them.  When they are approved by Senate, they become the property of the university as a whole (with the department in which the course is situated taking special responsibility).  After the incumbent of a particular course retires or leaves, someone else will be asked to takeover.  The course, in this sense, is eternal and communal.  It does not “belong” to the professor.

There’s an obvious tension here between the way a course gets taught (owned by the prof) and the course objectives and outcomes (owned by the university).  Usually – at least in Canada and the United States – we solve the problem by always leaning in favour of the professor.  Which is certainly the easier option.  However, this attitude, which gives total sovereignty to professors at the level of the individual course, inevitably leads to programs become disjointed –  especially in Arts and Sciences.  Students end up missing key pieces of knowledge, or have to learn it and re-learn it two or three times.

Universities own courses in the sense that a course is a building block towards a degree, (which the university very definitely owns – its entire existence is predicated on being a monopoly provider of degrees).  As a result, course objectives, how a course fits into the overall program goals, course assessment guidelines, and course delivery mechanisms (online, blended, or in-person) are all legitimately in the hands of the university and its academic decision-making bodies.  The actual syllabus – that is, what material gets taught in pursuit of the objectives – and the pedagogical methods used is what belongs to the professor.

The problem here is that, in Arts and Science at least (less so elsewhere), our smorgasbord thinking about curriculum makes us prone to assuming that courses stand alone, and do not contribute to a larger programmatic structure.  Hence the widespread fallacy that professors “own” courses, when the reality is that courses are a shared enterprise.

February 10

The Unbearable Mediocrity of Canadian Public Policy

A few months ago, I wrote a very harsh review of a paper written by the former head of the Canadian Council on Learning, Paul Cappon.  I was mostly cheesed off by Cappon’s mindless (and occasionally mendacious) cheerleading on behalf of an expanded role for the federal government in education.  But in one respect, Cappon had a point: though I disagree with him about what level of government should be doing it, we need someone in Canada setting goals for our systems of higher education.  Because as it stands, we effectively have none.

Take Ontario (please).  Here we have a government that will sanctimoniously tell you how much it cares about access.  My God, they love access.  They love access so much that they will hand out money to just about anyone in its name, no matter how preposterous.  But ask yourself: if the government cares so much about access, why does it not have a measurable access goal against which to evaluate progress?  In the absence of such a goal, one gets the sense that the Ontario government measures progress by how much money it spends, not by what it actually achieves.

Ontario’s Ministry of Training, Colleges and Universities publishes an annual “Results-based Plan”, which contains a list of “goals” that are laughable in their vagueness (the most specific goal being: “raise Ontario’s post-secondary attainment rate to 70%”, without either defining what is meant by post-secondary attainment rate, or attaching a date to the goal).  But none of the provinces to Ontario’s east have any targets for access, either; the closest we get is Quebec, where the ministry does have quite a list of annual targets, but they tend toward the picayune – there are no targets on access either in terms of participation rates as a whole, or for under-represented groups.

Heading west, things hardly get better.  Ministries of Advanced Education in Manitoba and Saskatchewan have annual reports that track trends on key educational goals, but that offer no associated targets to meet.  British Columbia does have a target for “increasing participation and successful completion of all students”, but bizarrely, the indicator chosen for this is not participation rates, but rather unemployment rates for graduates (and the “target” – if we can call it that – is to have unemployment rates less than or equal to high school graduates, a bar so low it may actually be underground).  Alberta alone actually publicly sets itself goals on participation rates.

It’s more or less the same for other policy areas.  Retention?  Quebec has a couple of commitments with respect to doctoral students, but that’s about it.  Research?  Again, only Alberta.  Post-graduate employment rates?  Only those seriously unambitious ones from British Columbia.

Does it have to be this way?  I point your attention to this very useful document from the European Commission on the “Modernisation of Higher Education in Europe” (which in this case covers issues of access, retention, flexibility of studies, and transitions to the labour market).  It shows quite clearly how many governments are adopting specific, measurable targets in each of these areas.  Ireland has set a target of 20% of new university entrants being mature students.  Finland wants to increase male participation to equal that of women by 2025.  A few years ago, France set a target 31.5% of its undergraduates to come from disadvantaged socioeconomic groups by 2015.  Similarly, Slovenia set a target of reducing non-completion rates from 35% to 12% by 2020.

Goal-setting is important.  It encourages a focus on outcomes and not activities and, as a result, makes governments more open to experimentation.  But it’s also hard: it exposes failure and mediocrity. Canadian policymakers, for reasons that I think are pretty deeply etched in our national character, prefer a model of “do your best” or “let’s spend money and see what happens”.  It’s a model where there can never be failure because no one is asked to stretch, and no one is held accountable for results.

Policy-making in higher education doesn’t have to be this way.  We could do better; we choose not to do so.  What does that say about us?

February 09

Funding Universities’ Research Role

A couple of weeks ago, I wrote a series of pieces looking at the economics of teaching loads; specifically, I was focussed on the relationship between per-student funding and the teaching loads required to make universities self-sustaining.  I had a number of people write to me saying, in effect, “what about research?”

Good question.

The quick answer is that in provinces with explicit enrolment-driven funding formula (e.g. Ontario, Quebec, Nova Scotia), governments are not in fact paying universities to do any research, and neither are students.  They are paying simply for teaching.  There is nothing in these funding formulae or the tuition agreements with students that says, “this portion of the money is for research”.

Now that doesn’t mean governments don’t want faculty to conduct research.  It could mean that government just wants any research to occur after a certain number of credits are completed.  But I’m not sure this is, in fact, the correct interpretation.  In Ontario, for instance, universities sign multi-year agreements with governments.  Not a word can be found in these agreements about research – they are entirely about enrolments and teaching.  Admittedly that’s just Ontario, but I don’t think it’s substantially different elsewhere. British Columbia’s institutional mandate letters, for instance, do not mention research, and while Alberta’s do, they really only suggest that the institution’s priorities align at least somewhat with that of the Alberta Research and Innovation Plan, a commitment so loose that any half-way competent government relations person could make it appear to be true without ever bothering any actual academics to alter their programs of research.

So I might go further and say it’s not that provincial governments want research to occur after a certain number of credits have been offered; rather, I would suggest that provincial governments do not actually care what institutions do with their operating grants, provided they teach a certain number of credits.  Certainly, to my knowledge, there is not a single provincial government in Canada that has ever endorsed the formula by which professors spend their time 40-40-20 teaching/research/service.  That’s an internal convention of universities, not a public policy objective.

There’s a case to be made that the research component of provincial funding needs to be made more transparent – a case, for instance, made by George Fallis in a recent book.  But universities will resist this; if research subsidies are made transparent, there will inevitably be a push to make institutions accountable for the research they produce.  That way lies assessment systems, such as the UK’s Research Excellence Framework (formerly known as the Research Assessment Exercise), or the Excellence in Research for Australia.  Both of these have driven differentiation among universities, in that institutions have tended to narrow research foci in response to external evaluations.  This, of course, is something universities hate: no one wants to have to tell the chemistry department (or wherever) that their research output is sufficiently weak that from now on they’re a teaching-only unit.

To put this another way: sometimes, ambiguity benefits universities.  Where research is concerned, it’s probably not in universities’ interest to make things too transparent.  Whether this opacity is actually in students’ and taxpayers’ interests is a different question.

February 06

Accusations About Operating Surpluses

One interesting development in labour-management relations over the past few years has been the increasing tendency of academic unions to claim that administration is spending “too much” on capital, and is raiding the operating budget (i.e. salaries) to pay for it.  It’s possible that there is some truth to this in some places, but on the whole there seems to be a misunderstanding about the difference between how the terms “operating” and “capital” are defined in budgets, and how they are used in formal financial accounting systems.

Let’s take, for example, the situation at the University of Manitoba, where President Barnard recently laid out a case for a 4% cut to operating budgets, and asked for suggestions on implementation.  The University of Manitoba Faculty Association (UMFA) responded saying no cuts were necessary because, according to the financial statements, the operating fund was consistently generating $40 million or more in Net Revenue, which was then being transferred to Capital.  If only the institution would stop diverting these surpluses to new buildings, the argument goes, there would be no need for a 4% cut.

It is certainly true that if you look at the U of M financial statements, you will regularly see inter-fund transfers in the eight-figure range ($40-50M, often), which do not appear in the institution’s annual budgets.  But the reason for this is that the term “operating expenses” means something different in budgets than it does in financial statements.  In a budget, operating expenses means “what we need in order to keep things ticking over”, and includes salaries, benefits, heating, new computers, library acquisitions, as well as day-to-day repairs.

However, in a set of financial statements, the definition changes somewhat.  Here, “operating expenses” means “whatever we spent money on this year that has no depreciation value”.  So when you look at a budget, or if you look at CAUBO reports, there are a whole bunch of things from the operating budget that suddenly appear in the capital budget when you see them in financial statements.  In particular, things like debt payments, renovations, library acquisitions, furniture, and ICT equipment.  At the University of Manitoba, for example, once you add up the various operating budget categories that cover those items, you find you can explain well over half of the “surplus” that’s been “transferred” from one budget to another.  It’s not a question at all of “profits” and “diversions”, it’s simply a question of accounting conventions.

If this were something that happened at a single university, I wouldn’t be writing about this: I’ve got no particular beef with UMFA.  But it’s not.  Allegations about management taking huge operating “surpluses” and making them disappear into capital budgets has been a feature of labour-management confrontations at a number of schools in the past few years.  Just from memory, it was a significant point of contention at Windsor, UNB, and St. FX – it may well have been an issue elsewhere, and I didn’t notice.

But my brief meander through this topic raises an important question: if I can figure this stuff out (and I’m definitely not an accountant), why can’t faculty associations?   Are all of the faculty unions that dispute this point genuinely making the same honest error?  If so, wouldn’t it be good to apologize for the error and false insinuations, and move on to more productive matters?

Or: is there a deliberate strategy at work of delegitimizing management by accusing them of fiddling the numbers, while knowing that these accusations rest, at least in part, on a confusion of accounting terms?

I really hope that latter possibility isn’t true.  But the next time you hear a story about management plundering the operating budget for capital funds, just remember to ask some questions about definitions before you swallow the story whole.

February 05

It’s Not Just Demographics

The Council of Ontario Universities (COU) released an amusingly defensive press release last month, just after the high school applications deadline.  After a glancing acknowledgment that applications to university are down in the province for the second year in a row, we are earnestly told: DEMOGRAPHICS!  APPLICATIONS WAY UP IF YOU USE 2000 AS A BASE YEAR!  JOBS!  DEMOGRAPHICS!  MORE JOBS!  DID WE MENTION DEMOGRAPHICS?

I guess COU views itself as a prophylactic against negative press coverage that secondary school applicants to university are now down more than 5% over the past two years (actual applications are down only 2%, but that’s because students, on average, are applying to more schools than before).  And maybe that’s fair enough, because most of the decrease is due to demographics rather than a fall in the actual application rate.  But this attitude is only semi-productive, because while the overall decline in applications may not reflect a change in the public’s view of universities, the changing application numbers are going to produce some pretty dramatic alterations in the province’s higher ed landscape.

Let’s start first at the institutional level.  The only institution where first-choice applications are definitively above where they were two years ago is Nipissing.  Which, you know, thank God because after the way the province screwed them on funding for Education, they could use a break.  On the other side,  seven institutions in Ontario are looking at declines in first-choice applications from Ontario secondary schools of 10% or more: Brock, Guelph, Laurentian, Western, Ottawa, Lakehead, and Windsor.  Ottawa can perhaps afford this since it’s recently had an offsetting surge in Quebec applications, but elsewhere those declines are going to directly impact the bottom line, and result in cuts.  At Lakehead and Windsor, where application drops are 18% and 19%, respectively, the scope of impending cuts looks positively savage.

The numbers are perhaps even more portentous if you look  on a faculty basis.  In most fields of study, numbers are relatively flat.  Science, Business, and Nursing are all fluctuating within a 2% band.  Fine and Applied Arts are up a little bit over 4%, and Engineering is up by over 13%.  But Arts.  Oh my Lord, Arts: down nearly 16% in two years.

No, that’s not a typo.  Sixteen.  One-six.  In two years.

The implications of this are huge.  In the very short-term it’s good news because class sizes will decrease.  But in the medium-term, institutions simply will not be putting money into units where revenue is falling.  So Arts faculties should expect hiring freezes, loss of positions through attrition, reductions in budgets for sessionals, etc.

And remember, this won’t be because Visigothic neo-liberal governments don’t respect Social Sciences and Humanities; it will be because young people simply aren’t interested in studying in these fields.  And the reason they aren’t interested is because starting wages are down 20% or more over the past six years.  Decry their utilitarian approach to education if you must, but the simple fact is that unless Arts faculties get serious about changing program offerings to respond to students’ shifting interests, there are going to be deep program cuts ahead.

That’s something worth talking about, and soon.  The longer we tell ourselves this is just about demographics, the worse things are going to get.

February 04

The “Skills for Jobs Blueprint”

I don’t pay as much attention as I should on this blog to matters British Columbian, mostly because I don’t get out there often enough.  But the province’s “Skills for Jobs  Blueprint” cries out for some critical treatment, because frankly it’s not all that smart.

Turn back the clock a bit: in April 2014, the BC government rolled-out a series of policies that were collectively branded as the “Skills for Jobs Blueprint”.  Much of it consisted of relatively sensible changes to trades training in view of the upcoming Liquid Natural Gas (LNG) mega-project.  However, included in this package was some other stuff that sounded like it had been dreamt up on the back of a cocktail napkin.  These included: more generous student aid to students enrolled in disciplines related to “high-demand” occupations, and requiring institutions to spend at least 25% of their budgets on disciplines related to “high-demand” occupations (to be phased in by 2017-18).

The student aid pledge was just silly: if these are truly high-demand occupations, they’ll pay more, and students will have less problem re-paying loans.  Why would you give more money to these people? The requirement for institutional spending had the potential to be ridiculous, but wasn’t necessarily so.  Whatever purists might think, public authorities spend money on higher education mainly to improve the local economy; and besides, depending on how broadly “high-demand” occupations were described, they might already be spending 25%.  There was the possibility, in other words, that it would require no change at all on institutions’ part.  But that would depend crucially on how BC defined “high-demand”.

This is where it gets maddening.  When the government finally released its definition of high-demand, it had nothing to do with a skills gap, and was not in any way based on analyses of supply and demand.  Instead, it was simply the 60 occupations with the most job openings.  Or, put differently: according to the government of BC, the highest-demand occupations are simply the 60 largest occupations.  Oy.

Now, it’s hard to tell whether institutions actually line up 25% of their spending on priority disciplines related to the “big 60”, since BC doesn’t work on any kind of funding formula.  However, it is possible to reverse engineer this kind of thing by looking at enrolment patterns, and assuming that spending weights are similar to what one would see in other provinces (read: Ontario and Quebec), as we demonstrated back here.  Which is what my colleague Jackie Lambert did.

The results were instructive.  Quite clearly, all colleges meet the test.  Among universities, it’s slightly more complicated.  If you simply take all enrolments in the academic programs most directly related to 59 of the 60 “most desired” occupations, and weight them in the ON/QC style, you find that province-wide, these programs already make up 32% of expenditures, and all universities except Emily Carr would meet the 25% cut.  However, the 60th occupation with the most “demand” is university professors (yes, really), which technically can be filled by doctoral students from any program.  Throw those in and you end up with almost 47% of all dollars being spent on “priority” areas.

Ideally, this result would mean the province could just declare victory (“Look!  25%! We showed them!”) and go home.  But these days, government can’t just be seen to be ordering institutions about; they have to actually be ordering them about.  So my guess is BC will avoid declaring victory, and instead use the ambiguity created by the lack of a funding formula to jerk institutions around a bit “(Spend here!  Don’t spend there!”), just to show everyone who’s boss.

Plus ça change…

February 03

Still No Skills Shortages

With predictably little fanfare, the Government of Canada recently released its Canadian Occupational Projection System (COPS) results for the years 2013-2022.  You may remember the last time they released their 10-year projections back here, which basically showed that, to the extent there were persistent labour shortages in the economy, they were by and large not in the skilled-trades areas the government claimed were in such desperate straits.

The 2013-2022 report has unfortunately been written in such a manner as to preclude easy comparisons with the 2011-2020 version.  Without getting too technical, the earlier one is based on 3-digit National Occupation Classification (NOC) codes, while this new report uses 4-digit codes.  That sounds like it would be more accurate and helpful, but since data on actual job numbers is suppressed at the 4-digit level, there is no accurate way to use the new data to discover how many actual positions a surplus or shortage might involve.  The best you can do – and what I do below – is to look at the summaries for 3-digit codes, and assume that all of the change at the 3-digit level is actually happening in the one 4-digit code you happen to be interested in.  Yes, that sucks, but this is what ESDC’s choice of methodology leaves us with.

COPS, it should be noted, is not a detailed set of sector-by-sector analyses; rather, it’s an algorithm that models job flows in an economy over time.  It occasionally produces some odd results, such as that the demand for legislators is going to increase, or that there is going to be a huge demand for university professors over the next decade (yes, really).  Basically, COPS isn’t very good at understanding how politics and public sector finances affect hiring in monopsonistic fields like education and health care.

Ok, caveats aside, what does the new COPS data say?  Some highlights:

  • Basically, we’re in balance –  172 of the 283 occupations examined are projected to have neither shortages nor surpluses in the next ten years.
  • Occupations that are in chronic shortage – that is, have been in shortage for some time, and are projected to remain in shortage – include: Registered Nurses (shortage of 46,000 over 10 years), Physicians and Dentists (36,000), Industrial Electricians (16,000), Management Consultants (10,000), Contractors and Supervisors for Heavy Construction Crews (9,000*), University Professors (5,000). Aerospace Engineers (3,000), Opticians (maybe 2,000).
  • Occupations moving into shortage – Administrative Officers & Property Officers (53,000), College/vocational Instructors (13,000), Health Care Managers (10,000), Elementary and Secondary Teacher Assistants (10,000), Contractors and Supervisors, Electrical Trades (9,000*) Insurance, Real Estate, and Financial Brokerage (7,000), Construction Estimators (3,000), Dental Technologists (2,000), Payroll Clerks, Chefs, Psychologists, Funeral Embalmers, Aircraft Assemblers (size of gap unknowable from available figures but presumed very small).

*Contractors & Supervisors, Trades, and Related Workers covers nine different occupations.  Seven of them are declared in balance, but the occupation as a whole is projected to have a shortage of 18,000.  This number was therefore spread equally over the two occupations, which were projected to be in shortfall – 9,000 each.

The chronic shortage positions are almost entirely taken up by positions that require university degrees – accounting for 80% of the 125,000 or so shortage positions in this category. Of the remaining 25,000, nearly all are in construction – and most of these are likely phantom jobs because the COPS projection assumes that oil prices will move steadily upwards to $150/barrel from 2013 onward.  In a world of $80/barrel, most of those shortages never happen.  Among the “moving into shortage” positions, nearly half of those jobs are accounted for by a single set of occupations (administrative officers); of the rest, roughly half require college-level credentials, and the other half university-level credentials.

In short, there’s not much to get excited about here.  If you take COPS literally, you’d probably hope governments are going to put a lot more money in health education over the next ten years.  If you look at it with a more jaundiced eye, you’d say “governments are never going to hire that many health professionals (or profs), and oil’s never going to $150”, and conclude there are virtually no skills shortages or the horizon at all.

February 02

Why is CAUT Cheapening Academic Freedom?

Academic freedom is precious; it’s not something you want to mess with  – which is why it is such a mystery that the Canadian Association of University Teachers (CAUT) permitted the Report of the Ad-hoc Investigatory Committee into the Department of Economics at the University of Manitoba to be published.

The back story, near as I can tell, is: for decades, the UManitoba Economics Department contained a fairly large squad of what are known as “heterodox” economists (i.e. political economy types who in the 70s would mostly have described themselves as Marxist or Institutionalist).  They were never a majority within the department, but they certainly gave the place an overall pinkish tinge.

Then, for obscure reasons around 2006, relations between heterodox and “mainstream” factions in the department seemed to deteriorate.  There appears to have been some seriously childish spats at departmental meetings.  There was a contentious departmental chair search, which one of the “hets” lost.  New hires tended to be reserved for mainstream economists, which hurt the hets’ feelings, as they wanted to maintain the “balance” between heterodox and mainstream.  Hets’ grad students tended to get the short end of the stick when it came to recommendations and funding, or would be told they were unlikely to get jobs after graduation. Etc., etc.

Now, this kind of stuff happens all over academia.  What a discipline believes collectively about itself and its methods changes over time.  Those  on the “winning” side tend to do pretty well; the other side, less so.  We’ve seen fights like this over post-modernism in History, critical theory in English, and in anthropology between its cultural and social wings (at Stanford, that fight got so bad in the 90s that they temporarily split Anthro into two separate departments).

In a decent workplace, management would have told everyone to shut up and get back to working together.  But in universities this almost never occurs; “collegiality” permits a lot of bad behaviour to go unpunished.  And so instead of everyone finding a way to work together like adults, someone went and convinced CAUT to send out a commission of inquiry to find out if the treatment of the heterodox amounted to a violation of academic freedom.

The thing is, if you get CAUT to “investigate” a claim, you can be pretty sure the answer will be “yes”; examples of “investigations” where the complainant is not found in the right are pretty much non-existent.  Everyone at University of Manitoba knew this, and so two-thirds of the department – basically everyone in the orthodox camp – simply refused to talk to investigators. This fact is largely glossed over in the report itself, but it’s significant both because the report is almost certainly unbalanced in the complainants’ direction, but also because it’s clear that a whole bunch of CAUT members believe that CAUT does not have their interests in mind.

Predictably, the investigating team “found” that the hets’ minority academic rights had been infringed.  To correct this, they suggested (among other things) a new search for a department head, and ensuring that the next three appointments all be heterodox economists.  Their rationale was that mainstream economists have “persecuted” heterodox, just as the established church used to persecute free-thinking academics (and yes, really, that was the argument).

Now, possibly, there is an argument to be made that the sandbox fights have become so extreme that it’s time to take the Stanford route, and take the hets out of Economics by creating a Department of Political Economy.  But the idea that minority views within a discipline automatically deserve “protection” and guaranteed quotas of appointments?  Who would police this?  Would CAUT argue the same for climate change deniers in Environmental Sciences?  That way madness lies.

But more importantly, the idea that even the unbalanced parade of allegations presented in the report amount to an infringement of academic freedom is simply nonsense.  No one’s fundamental rights of expression or freedom of inquiry were eroded; at the absolute worst, what occurred amounts to ideologically-based intra-departmental sniping and score-settling.  To claim that this amounts to a violation of academic freedom is to deprive the term of all meaning.

And that’s bad, because academic freedom matters.  The last organization that should be cheapening this is CAUT, and the worst reason to do so is in helping out a few ideological fellow-travellers in a sandbox fight against other academics.  Yet here we are.

January 30

The Case of Southwestern Ontario

Yesterday I talked about ways universities can generate economic growth, and I promised to offer an example from Southwestern Ontario.

Southwestern Ontario has been in the news a lot recently due to its deteriorating economy, not least through the efforts of Western professor Mike Moffatt.  More recently, the Globe’s Adam Radwanski penned a feature article on what southwestern Ontario can learn from such economic revivals as has happened in the US rust belt.

Radwanski’s argument is a long one, but the bit relevant to post-secondary education just cites the examples of Pittsburgh and Akron, and says that universities should work more closely with industry to create new hi-tech centres of production.  Right off the bat, I think we can discard the Pittsburgh example.  For one thing, the city is in fact continuing to hemorrhage manufacturing jobs (3,000 last year alone), and for a second, the two institutions that have done the most to power the local economy are Carnegie Mellon (private) and Pittsburgh (semi-private), with a combined endowment of $5.6 billion.  Last I checked, the combined total for Western and Windsor was around $700 million.

Endowments matter because they allow institutions to take risks.  It’s probably not a coincidence that if you look at major US tech and innovation hubs where universities have served as a catalyst (e.g. Silicon Valley, Route 150 in Boston), the institutions at the heart are all private, and hence not worried about legislative scrutiny.  The only exception to this rule – UT Austin – just happens to be the world’s second-best endowed public university ($6 billion in assets, behind Michigan at $8 billion).

Ah, you say – but what about Akron?  That’s a public university, and it had a big role in helping the local rubber industry transition into a centre of excellence for polymers.  And yes, Akron is actually an excellent example, because it has a very close Ontario counterpart; namely, the University of Waterloo.

These days, people associate Waterloo with co-op, engineering, and integration with the local hi-tech economy.  But it’s worth remembering that when Waterloo started out in the late 1950s, the hi-tech economy didn’t exist.  Back then, Waterloo’s main industry – like Akron’s – was tires, and for the first decade or so of its existence, Waterloo was all about working with the tire industry.

Could Waterloo have worked harder to “save” the local tire industry, as UAkron did in Ohio?  Possibly.  But one big thing Akron had going for it was the fact that Goodyear had its corporate headquarters there.  Companies tend to do R&D close to home.  Even if Waterloo had tried some of the stuff Akron did, there’s no guarantee it would have had the same results because at the end of the day, Waterloo was a branch plant economy.  That matters.

Instead, of course, Waterloo did something better: it invented a new local industry essentially from scratch.  This did not occur by “working with industry” as we traditionally think about it.  It happened by giving a lot of people advanced training in a particular area, letting them create and spin-out companies, and then wait for the local economy to develop the deep pool of managerial skills and venture capital sources required to take products from concept to market.

(The importance of this last bit is insufficiently appreciated.  Take UBC, one of the country’s leaders in technology transfer: its life sciences spin-offs had a miserable time in the 80s and 90s because back then the only thing the local VCs and entrepreneurs understood was how to cut down trees and dig stuff out of the ground.  There’s a domestic life-sciences business ecology in Vancouver now, but it took 20 years to develop the required knowledge and skills.)

So, could Western University play a role like U Akron or U Waterloo?  Yes.  But it would have to bet on an industry or two (and it’s not clear which ones would make most sense).  And for the moment it is unclear that they have the desire, the cash, or the political backing to do so.  And even if they did, results would likely take a decade or more to show.  It’s a fix, but not a quick one.

January 29

Universities and Economic Growth

If you read the OECD/World Bank playbook on higher education, it’s all very simple.  If you raise investments into higher education and research, growth will follow.

At the big-picture national level, this is probably true.  But it’s maddeningly inspecific.  What is the actual mechanism by which higher spending on a set of institutions translates into growth?  Is it the number of trained graduates produced?  Is it the quality or type of education they receive?  Does concentrating research in certain areas mean greater growth?  What about the balance between “pure” and “applied” research (insofar as those are useful distinctions)? What about technology transfer strategies?

Most importantly for a country like Canada: what about geography?  Is a strategy of widely distributing funds better than a strategy of concentration for spurring economic growth?  Should urban universities – nearer the centres of economic production – get more than universities in smaller conurbations?

Anyone telling you they have the definitive answer to these questions is lying.  Fact is, the literature on most of these topics is embarrassingly thin and provides little to no guidance to governments.  And the literature as it pertains to individual universities is even thinner.  Say you want an institution to “do better” at helping deliver regional economic growth: what do you ask it to do, exactly?  Here, the literature mainly consists of anecdotes of success parading as universally-applicable rules for university conduct (this European Union document is an example).  Which of course is tosh.

One solution you often see to the problem of decreased regional economic growth in smaller cities is for PSE institutions to “work more with industry”.  But if your local industry is in decline, there are limits to this strategy.  You can educate more people in a given field in order to lower the price of skilled labour.  You can get profs to work on upstream blue-sky research that will revolutionize the field, but the spillovers are enormous and the likelihood they will be captured by local business is small.  You can get your profs to work on downstream innovation with local business, but that’s not foolproof. Many companies won’t have the receptor capacity to work with you, either because they are too small or because they are too big and rely on a centralized R&D system, which more often than not is located outside the country (usually the US).

From a PSE point-of-view there’s two ways you can go from here.  There’s the route of “give us more money and we’ll give the local workforce a broader set of skills”.  But the fact that a local population has high levels of relatively generic skills does not necessarily make a region a particularly attractive place for investment.  I’m not an economic geographer, but it seems to me that one of the driving forces of the modern era is that the most profitable companies and industries are those that effectively capitalize on agglomerations of very specific types of talent.  And by and large, to get agglomerations of very specific types of talent you tend to need a large population to begin with, which is why big cities keep getting bigger.

The other option is a “place your bets” approach.  For emerging industries to find the right kinds of skills in a particular region, you have to place bets.  You have to say: “we’re going to invest in training and facilities to produce workers for X, Y, and Z industries, which at the moment do not exist in our region, and indeed may never do so.  Cape Breton University’s emphasis on renewable energy is a good example of this strategy.  It’s a bet: if they get good at this and produce enough graduates, maybe within a few years there will be enough of a talent agglomeration that business will go there and invest.

Maybe.  And maybe not.  Problem is, public universities and their government paymasters get nervous about “maybes”.  Higher education is a risk-averse industry.

Tomorrow, we’ll look at a case study in this: Southwestern Ontario.

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