Friday, December 10, 2010

 

Startups

Last week I heard a story on Marketplace that struck me as helpful in understanding the chronic shortage of tenure-track faculty jobs.

It mentioned that a recent study found that over the last several years, there has been a net of zero job growth in companies five years old or older. All of the job growth – all of it – can be accounted for by startups. “Mature” industries don't power growth.

And I thought, hmm.

How many colleges can you name that are under five years old? And of those, how many are nonprofit and tenure-granting? How many are slated for opening in the next year or two?

A very different world is in the living memory of many of the people at the top of the profession. In the 1960's, community colleges opened across the country at a rate of one per week. Many of the people who entered the field then are still around. An astonishing number of college presidents got their start in the 1960's. (A few weeks ago I attended a workshop with a big muckety-muck and high-level administrators from colleges and universities in my area. The big muckety-muck made a comment that started with “in the sixties, when we were in college...” I coughed.) If you got in when things were expanding, opportunities were thick on the ground.

Obviously, this is no longer the case.

My own career got a jump start when I signed on to a for-profit during a growth spurt. The growth spurt opened administrative opportunities much more quickly than would have been the case elsewhere. In this part of the country, it was one of the only academic settings that was actually growing. There, the 'startup' part was indirect: when the company started another campus not terribly far away, it raided my campus to staff it. The resulting staffing gaps created opportunities. In the nonprofit sector, moments like those have become vanishingly rare.

Since public higher education is basically a mature industry in the U.S., any efforts at growth are already swimming upstream. There will be programmatic and geographic pockets of growth, but they'll be matched (or exceeded) by other areas trimming. Retirements will help here and there, but the unrelenting cost pressures on colleges limit what can be done there.

I've seen some of that on my own campus. We have plenty of position requests, the vast majority of them more than worthy, but we can only afford to fill a few. Saying 'yes' to one necessarily involves saying 'no' to several others. At this point, new requests can only be approved by bumping off other requests in the queue.

Because I am a giant nerd, I used to play SimCity from time to time. I always enjoyed the beginning, when things were growing rapidly, but tended to lose interest when the city went from youth to maturity. There usually came a point at which the best you could do was to maintain, and that just wasn't much fun. Public higher ed is looking like that now.

IHE reported a couple weeks ago that half of the academic jobs created in the past few years were at for-profits. That sounded both right and shocking. That’s where the growth is -- or was, until very recently -- so that’s where the jobs are.

The Chronicle's story a few weeks ago on the brief life and death of Founders College gave me hope, oddly enough. For about ten minutes, Founders College was a shot at a niche I consider the next big thing: the upscale proprietary. It botched the attempt in any number of ways, not the least of which was grafting an overlay of Ayn Rand on top of the ‘upscale proprietary’ concept, thereby muddying the brand. But if you take out the Randian stuff, and staff and market it correctly, I could see an upscale proprietary really taking off.

In a way, I hope that turns out to be true. If nothing else, some area of growth would at least open up some opportunities. And growing on the high end of the market would get around many of the issues faced by the schools that compete with community colleges but charge five times as much. Mercedes U is lighting waiting to strike. I’m just sayin’.

Without startups, the prospects are bleak. Here’s hoping...

Comments:
I won't question your economic analysis, which overlooks the unemployment that follows the frequent failure of startups, or the little detail of accreditation.

I question the following assertion:

"In the 1960's, community colleges opened across the country at a rate of one per week. Many of the people who entered the field then are still around."

Many? There are ZERO people left from the founding faculty and staff of our college, which started in the mid 60s. (Even the last few people hired in the 60s at the R1 I attended have finally retired, and they had a 1/1 load.) The few faculty who STARTED college in the 60s are retiring in the next year or two.

You are forgetting about selection bias. The reason Big Muckety-Muck is 60+ is that the people who got a PhD before 1965 are long gone, and their positions filled by people who managed to get an academic job despite graduation in the mid 70s or early 80s. That is the (rapidly thinning but highly talented and experienced) pool that much college leadership comes from today, as you have noted in the past.

Our college leadership will be completely replaced in the next 5 to 10 years, and the new leaders will be from your generation. You won't be an anomaly in the room for long, but you will be managing people who will be growing old as fast as you are. There won't be many new faculty hires once this wave of retirement replacements is complete.
 
This is actually a really interesting perspective. On the flipside of this could be that higher ed could be stagnant and even "too big" in an economic sense. Look at GM, Lehmann Bros and similar large organizations; they grew, stagnated, rested on their laurels and now are facing problems.

For example, look at tenure. This hasn't changed for decades, and arguably has caused some major problems at some colleges and universities. The fact that it's taken as a given and even discussing getting rid of tenure is ridiculed shows a lack of innovation. Ditto with distance ed, which has been around for over a century (at least in Canada), and structure of graduate degrees and the PhD. A related topic is the relevance of undergraduate degrees/diplomas in today's society, something that also could use some innovation.

The issue isn't that these things are inherently bad or problematic. They could be really great in some cases. The problem is a lack of innovation and some overgrowth. There's an oversupply of, say, BA holders and PhD holders, and yet there has been slow response to this. Adjuncts are everywhere, and professors still encourage students to go to grad school. The "wave of retirements" leading to new faculty positions not only hasn't happened for the at least 15 years it was promised, but arguably can't given basic economic considerations.

Sure, startups can lead to unemployment as well as employment, but temporary work (gaining new and valuable skills and experience) is better than no work at all. Ultimately, it's a part of a capitalist business cycle, and is beneficial for everyone involved.
 
Adjuncts are everywhere, and professors still encourage students to go to grad school That and granting agencies like NIH and NSF are giving out big grants to R1s for training more PhD students and to Master's granting institutions to encourage STEM students, especially minorities, to go to grad school. Sometimes, I wonder if we're really doing them a favor, encouraging them to pursue a course of study that won't lead to employment.

Some start-ups fail, but others succeed spectacularly - Goggle anything lately? Ever buy an HP computer? Have an iPhone? I think the key here is that we can’t afford to have institutions like colleges come and go – continuity is assumed. Workforcewise, this means that for the foreseeable future, without additional public funding, we will be looking at a crappy job market in academia. People should be encouraged to plan accordingly.
 
Since our economy is currently drowning due to "innovation" based on reasoning from first principles instead of empirical testing, perhaps we should take a moment before dismantling an educational system which is still the envy of most of the world.

The reason the for-profits are expanding over CC's is that they can accept Pell grants to cover student costs and CC's can't. That's it. There's no great mystery or huge trend. There is, in fact, nothing other than a stupid loophole in Federal funding.

If Community Colleges could apply for Pell grants on behalf of their underprivileged students, the for-profits would collapse.
 
The issue is not that colleges are mature industries. The issue is that the *market* for college degrees is mature. In a mature market, the only way to obtain growth across the board is to expand the market. This is what happened in the 60's: the growth of financial aid expanded the market to those people who would have otherwise been unable to afford college.

That's also the strategy of for-profits: they are at least attempting to expand the market for degrees (or classes, or services) to people who were otherwise not in the market for college. This can include people with difficult schedules...and it can also include people who should not have been admitted in the first place.

But for-profits haven't done anything a not-for-profit college couldn't do on its own (although they have perhaps done something that a NFP college shouldn't have done on its own). And, as PM suggests, many of the for profits seem to basically be in the business of exploiting both students and loopholes in our financial aid system.

Founder's College, on the other hand (if we assume for purposes of argument that it wasn't intended to be a scam), was different from the Univ. of Phoenix and its clones, and did seem to be trying to offer a college experience that was notably different from what was otherwise available. But of course it didn't succeed, and AFAIK, there are no successful upscale proprietary colleges.

But with the exception of Founder's (which did end up like 90%+ of startups), most for-profits aren't like startups. They are like the small grocery/ convenience store that open in bad parts of urban areas and (often from behind bulletproof glass), offer overpriced grocery and other items to people living in these areas because it is too difficult for them to patronize traditional grocery stores.
 
The for profit colleges are growing to take advantage of government aid in the form of loans and grants. As one might expect, they do a crummy job of actually educating, since their primary concern is getting the check cashed. They aren't counting on alumni contributions or anxious parents ponying up tuition.

Of course, now that they exist, they have good lobbyists and propagandists, so it will take a miracle to get rid of them. Too many people believe in the Free Market Fairy when they'd actually do better believing in the Tooth Fairy.

There is already at least one high end proprietary school currently operating, but it's a non-profit. Brown, one of the lesser Ivies has set itself up as the school of choice for those of wealthy family but ungifted. Whether someone can create a for profit school on similar lines, without the appropriate "legend" is hard to say. Still, with the new hereditary aristocracy, I wouldn't be surprised.
 
For profit colleges are simply scams for taking advantage of government grants and loans. They do a terrible job of actually educating people, since their primary concern is getting the paycheck cashed. It's not like they are dependent on alumni contributions. Now that we have them, they will be hard to get rid of as they have good lobbyists. and all too many people believe in the Free Market Fairy when experience suggests they'd do better believing in the Tooth Fairy.

There is already one successful high end proprietary college, but it is a non-profit. Brown, one of the lesser Ivies, has made itself the school of choice for those of wealthy family but lacking academic gifts. I suspect it is possible to produce a for profit version, but it would have to provide cachet other than by means of old stone buildings and ivy covered walls.
 
Sometimes, I wonder if we're really doing them a favor, encouraging them to pursue a course of study that won't lead to employment.
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YOu do realize the unemployment rate for a person with a PhD in the STEMs is incredibly low right? Yes not all of them are going to be professors at R1 institutions. That is fine. There are lots of other jobs (many of them that pay better than being an assistant professor) that having such a PhD makes available.

Most of my cohort are working in industry, consulting, or involved in science policy not academia. None are unemployed in this economy. Yes a number who have stayed in academia are still post-docs but for many that is a choice because they haven't decided what they want to do yet & their positions are fully funded for the time being.
 
YOu do realize the unemployment rate for a person with a PhD in the STEMs is incredibly low right?

Because most are smart and will work hard to get a job - not because their degree helps them get work.

Yes not all of them are going to be professors at R1 institutions. That is fine. There are lots of other jobs (many of them that pay better than being an assistant professor) that having such a PhD makes available.

I would argue that a Master's degree and 5 years experience is better preparation for most industry jobs than a Ph.D - in fact, I always tell students to work for a couple of years in a biotech before grad school so that they will be employable when they graduate. I saw many of my friends really struggle after grad school because our school was hostile to any involvement with industry. Our grads were overqualified for all of the jobs they could actually do when they graduated. Postdocs don't really address this issue.

My assertions may be more true in biology than in other fields (I remember the Chemists doing tolerably well for themselves after graduation) but we produce far more grads in bio than are needed in academia and industry combined - grad students are cheap technicians, poorly trained, and have to fight to gain any kind of marketable skills. It felt abusive because we were punished for doing anything (teaching, getting part time employment) that would give us marketable skills but then were given no marketable skills.
 
Small question: How is it known that for-profits do a "crummy" job at educating their students? And if a student goes to a for-profit to land a job and does, then isn't this a bit of a moot point?
 
Ivory I don't know what field of biology you are in, but I am in the biomolecular end of things and people were hired into industry with ease into positions that require a PhD or a masters with many years of experience.

Those that got consulting jobs don't use their specific area of knowledge but were recruited because of their ability to think developed & further refined during graduate school. Once again, positions that required PhD.

Those in science policy right out of a PhD similar story.

Then there are those who have gotten into the publishing end of science. Once again those positions required a PhD.

None of my cohort has had difficulties finding positions and switching positions (from policy to industry; from consulting [where they made bank) back to basic research [their choice, missed the lab & the intellectual challenge]).

It is a matter of how you approach graduate education. Does your department have a narrow view that they are going to generate research professors or cultivate brilliant minds to be able to tackle challenges?
 
Higher education might be a mature industry in the US, but I wonder how many people consider that globally higher education is growing massively? Most young academics know they might have to move to an area of the US that is less attractive in order to get a job. So how many new PhDs are applying for tt jobs in emerging markets? China or India for example? I don't really know what the situation is, but English seems to be the language of instruction in many parts of the world.
 
Breena:

You are right. I worked for three years in Central Asia and start work in Africa next January. But, moving to and working in such environments is not always ideal. For instance I would not recommend any American take a job at my previous employer, American University of Central Asia even if they were to start hiring Americans again.
 
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