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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).