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4
Threats and Weaknesses
While American research universities are a strong set of assets for
America, these institutions must have adequate resources, sound organi-
zational structures, and a vibrant intellectual community in order to con-
tinue to fulfill their obligations in the twenty-first century. They require a
renewal of the national partnership that was forged in the last half of the
twentieth century.
CHALLENGES AND OPPORTUNITIES FOR
OUR RESEARCH UNIVERSITIES
American research universities are facing critical concerns.1 Public
universities have experienced a long-term erosion of state support in
the face of increasing demands for expenditures in other areas. As state
budgets have tightened during the recent economic crisis, public research
universities have been further challenged by steep reductions in state
appropriations for higher education. (See figures under Recommenda-
tion 2 in Chapter 5.) Meanwhile, private and public universities saw
their endowments seriously erode in the recession, with 1-year returns in
2009 of –18.7 percent. There has been some recovery in 2010, but operat-
ing budgets may not recover for some time as institutions continue to
address both current needs and those postponed during the downturn
1 For additional background, see, for example, James J. Duderstadt and Farris W. Womack,
The Future of the Public University in America: Beyond the Crossroads. Baltimore, MD: The
Johns Hopkins University Press, 2003.
55
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56 RESEARCH UNIVERSITIES AND THE FUTURE OF AMERICA
(see Table 4-1). Meanwhile, demand for student aid continues to increase
while federal funding for basic and applied research at public and private
universities has, in real terms, declined in the face of competing priorities
for funding. (See figures under Recommendation 1 in Chapter 5.)
With these developments in mind, the committee has identified a set
of specific challenges and opportunities that a reasoned set of policies
must address in order to produce the greatest return to our society, our
security, and our economy. The first group identifies issues in the partner-
ship among the federal government, states, business, and universities:
• Federal funding for university research has been unstable and, in
real terms, declining at a time when other countries have increased fund-
ing for research and development (R&D), both in nominal terms and as a
percentage of gross domestic product.
• State funding for higher education, already eroding in real terms
for more than two decades, has been cut further in the recent recession.
• Business and industry have largely dismantled the large corpo-
rate research laboratories that drove American industrial leadership in
the twentieth century (e.g., Bell Labs), but have not yet fully partnered
with our research universities to fill the gap at a time when we need to
more effectively translate, disseminate, and transfer into society the new
knowledge and ideas that emerge from university research.
• Research universities need to be responsive to stakeholders by
improving management, productivity, and cost efficiency in both admin-
istration and academics.
The second group identifies issues that affect the operations of universi-
ties, the efficient administration of university research, the effectiveness
of doctoral education, and the robustness of the pipeline of new talent:
• Insufficient opportunities for young faculty to launch academic
careers and research programs;
• Underinvestment in campus infrastructure, particularly in cyber-
infrastructure, that can lead to long-term increases in productivity, cost-
effectiveness, and innovation in research, education, and administration;
• Research sponsors that do not pay the full cost of research they
procure, meaning that universities have to cross-subsidize research from
other sources;
• A burdensome accumulation of federal and state regulatory and
reporting requirements that increases costs and sometimes challenges
academic freedom and integrity;
• Opportunities to improve doctoral and postdoctoral preparation
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TABLE 4-1 Average One-, Three-, Five-, and Ten-Year Net Returns on University Endowments, By Endowment
Size, Fiscal Years 2009 and 2010
Numbers in Total Over $501 Million – $101 Million- $51 Million- $25 Million - Under
Percent Institutions $1 Billion $1 Billion $500 Million $100 Million $50 Million $25 Million
842 850 52 60 60 66 219 226 164 169 137 145 210 184
Fiscal Years 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010
FY2010 annual –18.7 11.9 –20.5 12.2 –19.8 11.9 –19.7 11.9 -18.6 11.8 -18.5 12.0 –16.8 11.6
total net return
3-year net return –2.5 –4.2 –0.8 –3.5 –2.0 –3.9 –2.5 -4.4 –2.7 –4.3 -3.2 –4.2 –2.3 -3.9
5-year net return 2.7 3.0 5.1 4.7 3.5 3.6 2.6 3.0 2.7 2.7 2.1 2.6 2.1 2.2
10-year net return 4.0 3.4 6.1 5.0 4.3 3.6 3.7 3.3 3.7 3.3 3.4 2.9 3.9 2.8
SOURCE: National Association of College and University Business Officers, “Educational Endowments Earned Investment Returns Averaging
11.9 percent in FY2010,” http://www.nacubo.org/Documents/research/2010NCSE_Full_Data_Press_Release_Final.pdf (accessed September 17,
2011). Reprinted with permission from the 2010 NACUBO Commonfund Study of Endowments, National Association of College and University
Business Officers (NACUBO), Copyright 2011.
57
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58 RESEARCH UNIVERSITIES AND THE FUTURE OF AMERICA
that increase both its productivity and its effectiveness in providing train-
ing for highly productive careers;
• Demographic change in the U.S. population that necessitates
strategies for increasing the success of female and underrepresented mi-
nority students; and
• Competition for international students, researchers, and scholars.
We will need strong leadership from the federal government, our state
capitals, business, and our higher education institutions to overcome
these hurdles, address our challenges, and capitalize on our opportuni-
ties and the partnerships that will allow our research universities and,
through them, our nation, to thrive.
PUBLIC RESEARCH UNIVERSITIES: A SPECIAL CASE
America’s public research universities, in scale and breadth, are the
backbone of advanced education and research in the United States today.
They conduct most of the nation’s academic research (62 percent) while
producing the majority of its scientists, engineers, doctors, teachers, and
other learned professionals (70 percent). They are committed to public
engagement in every area where knowledge and expertise can make a dif-
ference: basic and applied research, agricultural and industrial extension,
economic development, health care, national security, and cultural en-
richment.2 In fact, it was the public research university, through its land-
grant tradition, its strong engagement with society, and its commitment
to educational opportunity in the broadest sense, that was instrumental
in creating the middle class, transforming American agriculture and in-
dustry into the economic engine of the world during the 20th century, and
defending democracy during two world wars.
Yet today, despite their importance to their states, the nation, and the
world, America’s public research universities are at great risk. There is
ample evidence from the past three decades of declining support that the
states are simply not able—or willing—to provide the resources to sustain
growth in public higher education, at least at the rate experienced in the
decades following World War II. Despite the growth in enrollments and
the increasing demand for university services such as health care and
economic development, most states will find it difficult to sustain even
the present capacity and quality of their institutions. In the wake of the
recent global financial crisis, many states have already enacted drastic
2 Paul N. Courant, James J. Duderstadt, and Edie N. Goldenberg, Needed: A national
strategy to preserve public research universities, The Chronicle of Higher Education, Janu-
ary 3, 2010.
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THREATS AND WEAKNESSES 59
cuts in state appropriations ranging from 20 percent to 50 percent. Lead-
ing public research universities such as the University of California, the
University of Colorado (Boulder), and Pennsylvania State University have
been pushed to the brink by deep and permanent reductions in their state
appropriations. In this budget-constrained climate, state support of higher
education and research is no longer viewed as an investment in the future
but rather as an expenditure competing with the other priorities of aging
populations, for example, health care, retirement security, safety from
crime, and tax relief.3
In fact, many states are encouraging their public universities to reduce
the burden of higher education on limited state tax revenues by diver-
sifying their funding sources, for example, becoming more dependent
upon tuition, particularly that paid by out-of-state students, intensifying
efforts to attract gifts and research contracts, and generating income from
intellectual property transferred from campus laboratories into the mar-
ketplace. Yet such efforts to “privatize” the support of public universities
through higher tuition or increasing out-of-state enrollments also subject
public universities to strong public outrage and political intrusion. Fur-
thermore, since state support is key to the important public university
mission of providing educational opportunities to students regardless of
economic means, shifting to high-tuition funding, even accompanied by
increased financial aid, usually leads to a sharp decline in the socioeco-
nomic diversity of students.4
While several public research universities might be able to survive
as “privately funded but publicly committed” institutions (the Univer-
sities of Virginia and Michigan provide interesting case studies), most
will be unable to accomplish such a transition from public to private
support with their quality and capacity intact. Their key public missions
to their states—including broad educational opportunities and economic
development—will go unfulfilled. Furthermore, their capacity to conduct
research and graduate education at the world-class levels required by our
nation will rapidly erode without adequate state support.
Today, many nations have recognized the positive impact that their
public research universities can have in a world increasingly dependent
upon advanced education and research. They are investing heavily to
upgrade the quality of their institutions to world-class levels. America
already has such leading public research universities. They are one of our
3 Duderstadt and Womack, The Future of the Public University in America, p. 127.
4 Danette Gerald and Kati Haycock, Engines of Inequality: Diminishing Equity in the Na-
tion’s Premier Public Universities. Washington, DC: The Education Trust, 2006. Available
at: http://www.edtrust.org/sites/edtrust.org/files/publications/files/EnginesofInequality.
pdf (accessed April 20, 2012).
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60 RESEARCH UNIVERSITIES AND THE FUTURE OF AMERICA
nation’s greatest assets. However, preserving their quality and capacity
will require not only sustained investments but also significant paradigm
shifts in university financing, management, and governance. It also will
likely demand that many of our public research universities broaden their
public purpose and stakeholders far beyond state boundaries. Preserving
the quality and capacity of the extraordinary resource represented by our
public research universities must remain a national priority, even if the
support required to sustain these institutions at world-class levels is no
longer viewed as a priority by our states.
GLOBAL THREATS
Meanwhile, the global leadership of the United States in higher edu-
cation, unassailable for a generation, is now also threatened. Our research
universities have attracted the most outstanding students and scholars
from abroad who have contributed substantially to our research and our
innovative capacity, but, as they return home, to universities of their own
countries as well. Indeed, other nations have recognized the importance
of world-class research universities and of university-driven research and
advanced education to economic prosperity and social well-being. They
are strategically and rapidly strengthening their research universities to
compete for international students and faculty, resources, and reputation
and, in some instances, have closely tied university research to business.
These countries have developed national strategies for education and re-
search with the aim of both offering attractive opportunities to repatriate
their citizens who are graduates of U.S. universities and attaining world-
class levels, where they will strongly compete with the United States (see
Box 4-1).
As Jonathan Cole has written, “China aspires to the excellence that
wins Nobel Prizes just as they aspired to gold medals at the 2008 Olym-
pic Games in Beijing.”5 In order to increase its competitiveness, China, in
particular, has implemented plans to increase scientific and technological
innovation and to develop, attract, and retain highly skilled individu-
als in six broad sectors of the economy.6 Evidence of the results of these
aspirations is already apparent in data. Figures 4-1 through 4-5 show
5 Jonathan Cole, The Great American University: Its Rise to Preeminence, Its Indispensable
National Role, Why it Must be Protected, New York: Public Affairs, 2009, p. 3.
6 Dieter Ernst, China’s Innovation Policy is a Wake-Up Call for America, East-West
Center, Analysis from the East-West Center, No. 100, May 2011. Available at: http://www.
eastwestcenter.org/fileadmin/stored/pdfs/api100.pdf (accessed September 17, 2011).
Wang Huiyao, China’s National Talent Plan: Key Measures and Objectives. Brookings
Institution. Available at: http://www.brookings.edu/~/media/Files/rc/papers/2010/1123_
china_talent_wang/1123_china_talent_wang.pdf (accessed September 17, 2011).
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THREATS AND WEAKNESSES 61
increases in postsecondary educational attainment in the natural sciences
and engineering, doctoral degrees in the natural sciences and engineering,
science and engineering article output, and research and development
expenditures, each figure showing relative advances of countries and
regions compared to the United States.
Meanwhile, the rise of Indian universities has been so remarkable that
science-focused high school students in India are now increasingly less
likely to seek education in the United States. Thus, the United States is not
benefitting from the intellectual capital of those students who might have
come here, nor are the students themselves benefitting from ours, except
via publication. And while electronic Web-based intellectual interaction
is increasing, unless universities themselves become internationalized
or virtual, there is no substitute for direct intellectual engagement. The
remarkable investments by Singapore in the National University of Sin-
gapore, Nanyang Technological University, and Singapore Management
University push the agenda one step further, demonstrating that the
United States may actually lose significant numbers of the best members
of our academy, and perhaps students as well, if we are seriously under-
supporting our research universities and faculty and students choose not
to come to our institutions but rather to others where investment contin-
ues to grow. This loss in brain circulation and the benefits from it for all
is of great concern.
The U.S. form of doctoral education is now being adopted by many
countries, and the global growth in doctoral education via the American
model contests the preeminence of U.S. doctoral education. To elaborate
on just one data point, the number of doctorates across all fields in China
has increased from a few hundred in 1990 to 49,698 in 2008 and, in so
doing, surpassed the number awarded by U.S. institutions that conferred
48,763 doctorates that same year. There is a distribution in the quality of
these Ph.D. programs, to be sure, but some of the institutions that gradu-
ate doctorates in science and engineering are highly ranked. Tables 4-2a
and 4-2b speak to this point: While U.S. research universities dominate
global rankings of such institutions, it is clear that other countries are
making strides in particular fields. Chinese programs are highly ranked,
particularly in engineering and technology (in both the Academic Rank-
ing of World Universities [ARWU] and the QS World University Rank-
ings) and also in the life sciences and medicine and the natural sciences
(in the QS World University Rankings). Several universities have climbed
into the top 25 globally. Peking University is ranked 21st in the life sci-
ences and in the natural sciences in the QS World University Rankings
and Tsinghua University is 11th in engineering and technology. In the
ARWU, Hong Kong University of Science and Technology is 39th in en-
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62 RESEARCH UNIVERSITIES AND THE FUTURE OF AMERICA
BOX 4-1
Strategies of Countries to Strengthen Research Universities
Europe: The Bologna Process
“At its inception, the Bologna Process was meant to strengthen the competi-
tiveness and attractiveness of the European higher education and to foster student
mobility and employability through the introduction of a system based on under-
graduate and postgraduate studies with easily readable programmes and degrees.
Quality assurance has played an important role from the outset, too. However, the
various ministerial meetings since 1999 have broadened this agenda and have
given greater precision to the tools that have been developed. The undergradu-
ate/postgraduate degree structure has been modified into a three-cycle system,
which now includes the concept of qualifications frameworks, with an emphasis on
learning outcomes. The concept of social dimension of higher education has been
introduced and recognition of qualifications is now clearly perceived as central to
the European higher education policies.”
—European Higher Education Area.
Available at: http://www.ehea.info/ (accessed September 17, 2011).
China: National Mid- and Long-Term Talent Development Plan
“China’s National Talent Development Plan was jointly issued by the Central
Committee of the Chinese Communist Party (CCP) and the State Council on June
6, 2010. It is remarkably unusual that these two leadership bodies would jointly
endorse a plan on such a high note. The announcement of this plan was also very
unusual in that President Hu Jintao and all of the other eight Politburo Standing
Committee Members attended its formal release ceremony, where President
Hu, Premier Wen Jiabao and Vice President Xi Jinping all delivered important
speeches. . . . During the meeting, President Hu stated that ‘talent is the most
important resource and it is a key issue that concerns the development of the
Party and country’ . . . . Among the plan’s goals is the transformation of China
from a manufacturing hub to a world leader in innovation, a grand objective that,
according to the targets laid out in the plan, will be met in part by an increase in
the pool of highly skilled workers from the current total of 114 million to 180 mil-
lion by 2020, with government-allocated spending on human resources increas-
ing from 10.75 percent of the country’s gross domestic product (GDP) now to 15
percent by 2020.”
—Wang Huiyao, China’s National Talent Plan: Key Measures and
Objectives, Brookings Institution. Available at: http://www.brookings.edu/~/media/
Files/rc/papers/2010/1123_china_talent_wang/1123_china_talent_wang.pdf
(accessed September 17, 2011).
Singapore: Government Investment in Principal Universities
“The IAAP [Ministry of Education’s International Academic Advisory Panel]
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THREATS AND WEAKNESSES 63
commends the excellent progress made by the existing autonomous universities
(AUs)—the National University of Singapore (NUS), Nanyang Technological Uni-
versity (NTU) and the Singapore Management University (SMU)—in continuously
innovating in their education and research programmes to produce high-quality
graduates and research outcomes. The IAAP supports the healthy balance of
competition and collaboration among the various educational institutions, even
as each institution seeks to distinguish itself in its offerings and competes for
students and faculty.
“The IAAP applauds Singapore’s continued commitment to invest in re-
search, innovation, and enterprise. Research funding from agencies, such as
MOE, the National Research Foundation (NRF) and the Agency for Science,
Technology and Research (A*STAR), have helped universities to grow their re-
search enterprises. The IAAP endorses Singapore’s steps towards establishing
a more sustainable model of university funding, with appropriate support coming
from multiple sources, including Government grants, student fees, research grants
and income from endowment funds.”
“The IAAP notes that since its last meeting in 2008, NUS, NTU and SMU
have made remarkable progress in becoming world-class research-intensive uni-
versities, without neglecting their key mission of providing a strong foundation in
undergraduate education through a student centric approach. Individually, each
AU has succeeded in bringing talent into the system—be it students or faculty,
both local and international. As a system, it has generated intellectual and social
capital which has contributed to the vibrancy of Singapore and drawn top talent
to the country. In pursuing their development strategies, each AU would need to
distinguish itself from the others and continually assess its progress against vari-
ous metrics, including benchmarking its progress against peer institutions.”
—Singapore Government, Ministry of Education, International Academic
Advisory Panel, press release, November 12, 2010. Available at: http://www.
moe.gov.sg/media/press/2010/11/advisory-panel-endorses-continuing-
investments-in-higher-education.php (accessed February 22, 2012).
Saudi Arabia: Creation of King Abdullah University of Science and Technology
“It is my desire that this new University become one of the world’s great
institutions of research; that it educate and train future generations of scientists,
engineers and technologists; and that it foster, on the basis of merit and excel-
lence, collaboration and cooperation with other great research universities and the
private sector. The University shall have all the resources that it needs to pursue
these goals.”
—King Abdullah Bin Abdulaziz Al Saud, Message on the Creation of King
Abdullah University of Science and Technology. Available at: http://www.kaust.
edu.sa/about/kingsmessage.html (accessed September 17, 2011).
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64 RESEARCH UNIVERSITIES AND THE FUTURE OF AMERICA
FIGURE 4-1 Ratio of first university NS&E degrees to 24-year-old population, by
selected country/economy, 1975 and 2000 or most recent year.
Figure 4.1.eps
Source: National Science Board, Science and Engineering Indicators 2004. (NSB
bitmap
04-01) Arlington, VA: National Science Foundation, 2004, Figure 2-34, page 2-36.
FIGURE 4-2 Natural science and engineering doctorate awards, selected coun-
tries, 1993-2006 (thousands). Figure 4.2.eps
Source: National Science Board, Science and Engineering Indicators 2010. (NSB
bitmap
10-01) Arlington, VA: National Science Foundation, 2010, Figure 2-27, page 2-35.
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THREATS AND WEAKNESSES 65
Figure 4.3.eps
FIGURE 4-3 S&E article output, by major S&E publishing region or country/
economy, 1999-2007.
bitmap
Source: National Science Board, Science and Engineering Indicators 2010. (NSB
10-01) Arlington, VA: National Science Foundation, 2010, Figure 5-20, page 5-32.
Figure 4.4.eps
FIGURE 4-4 Location of estimated worldwide R&D expenditures, 1996 and 2007.
Source: National Science Board, Globalization of Science and Engineering: A
bitmap
Companion to Science and Engineering Indicators 2010. (NSB 10-03) Arlington,
VA: National Science Foundation, 2010, Figure 1, page 1.
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66
FIGURE 4-5 Normalized growth in S&T globalization,Figure 4.5.eps ratio to 1996 = 100.
data indexed as a
Source: National Science Board, Globalization of Science and Engineering: A Companion to Science and Engineering Indicators
bitmap, landscape
2010. (NSB 10-03) Arlington, VA: National Science Foundation, 2010, Figure 3, page 4.
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THREATS AND WEAKNESSES 67
TABLE 4-2a Chinese University Programs in QS World University
Rankings, by Field
Life Science and Medicine Natural Sciences Engineering and Technology
21 Peking University 21 Peking University 11 Tsinghua University
37 University of Hong 27 Tsinghua University 26 Hong Kong University of
Kong (HKU) 56 University of Hong S&T
55 Tsinghua University Kong (HKU) 33 Peking University
62 Hong Kong University 77 University of Science 43 Shanghai Jiao Tong
of S&T and Technology of China University
67 Chinese University of 91 Chinese University of 52 University of Hong Kong
Hong Kong Hong Kong (HKU)
69 Fudan University 92 Fudan University 70 Hong Kong Polytechnic
94 Hong Kong University University
of S&T 71 University of Science and
Technology of China
79 Zhejiang University
85 Chinese University of
Hong Kong
Source: Presentation of Bill Berry, National Research Council, Policy and Global Affairs
Committee, November 2010.
TABLE 4-2b Chinese University Programs in Shanghai Jiao Tong
Academic Ranking of World Universities, by Field, 2010
Life Science and Natural Sciences and
Agricultural Sciences Mathematics Engineering and Technology
None None 39 Hong Kong University of S&T
43 City University of Hong Kong
45 Tsinghua University
52-75 Shanghai Jiao Tong University
52-75 Chinese University of Hong
Kong
52-75 Hong Kong Polytechnic
University Peking University
52-75 University of Science and
Technology of China
52-75 Zhejiang University
76-100 Harbin Institute of
Technology
Source: http://www.arwu.org/index.jsp (accessed September 17, 2011).
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68 RESEARCH UNIVERSITIES AND THE FUTURE OF AMERICA
gineering and technology, with City University of Hong Kong, 43rd, and
Tsinghua University, 45th.
In science and engineering, the United States still leads other nations
in the number of Ph.D.’s conferred each year, but at the present rate of
growth, the number of doctorates in China will soon rival the United
States in Ph.D. production (see Figure 4-2). Other countries, such as India,
Japan, South Korea, and some European counties have also increased the
number of Ph.D.’s they produce in these fields. The ramifications of this
for U.S. institutions are that the best and brightest students may no longer
come to the United States for study and may not stay here as much as
in the past. U.S. institutions will need to draw more heavily on students
coming through the U.S. educational system, with special attention to
minority groups that are making up a larger proportion of the population.
To be sure, both the United States and others will benefit from increas-
ing global investments in higher education and research as ideas and tal-
ent circulate globally. Indeed, the United States needs to consider actions
that allow us to continue to benefit and appropriate from global sources
of ideas and talent, such as changes in immigration law suggested in Rec-
ommendation 10. Meanwhile, just as the global rise in higher education
and research is multidimensional, so the response to these global changes
for the United States and its institutions should be considered, nuanced,
and varied. One key response must continue to be the increasing global-
ization of networks among researchers, which enhances research and its
outcomes for everyone. Institutions should continue to explore the estab-
lishment of overseas campuses and research centers either as stand-alone
entities or in partnership with local institutions. Yet a third response must
also be to ensure that our national investments in research and doctoral
education are responsive to both national needs and the realities of an
increasingly competitive world. Our research universities are the best in
the world. But a leadership position is easy to lose and difficult to regain.7
7 For more discussion on issues in the globalization of higher education and research
universities, see the series of reports that have emerged from the Glion Colloquium at
http://www.glion.org/ (accessed December 19, 2011).
