The Ideas Economy

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America’s research universities represent 80 percent of the top 20 and 65 percent of the top 100 universities in the world. Their faculty members dominate the receipt of Nobel Prizes and produce discoveries and scholarship that receive the lion’s share of citations in the published literature. Perhaps the only American industry with a favorable balance of trade today, these universities have become the engine of the nation’s national prosperity; key to the fate of the global economy in the twenty-first century.

Why, then, are they poorly understood by American legislators and much of its educated public to the point that American dominance in higher education could be short lived? When most Americans think about our great universities, they think of undergraduate education, not the research discoveries that have changed their lives and made our universities truly great. They don’t realize that lasers, FM radio, magnetic resonance imaging, the algorithm for Google, the fetal monitor, the nicotine patch, the discovery of the insulin gene, the origin of computers, scientific agriculture, public opinion surveys, the concept of the self-fulfilling prophecy, and thousands of other medical miracles and scientific and technological innovations had their origins at our great research universities.

These truly distinguished universities were built on a set of values that evolved through interactions between universities and the larger society. A strong belief in meritocracy, an incessant questioning of claims to fact and truth, a commitment to free and open communication of ideas and free inquiry were among those core values. These universities also achieved a high level of autonomy from government control, welcomed exceptionally talented people from anywhere in the world, had a set of enlightened early leaders, vigorously competed among themselves for talent, and took off after a vast infusion of taxpayer dollars by the federal government following World War II.

Each of these ingredients was needed for preeminence. The economic payoff of these discoveries is mind-boggling. Stanford University faculty members, students, and alumni have founded, for example, more than 2,400 companies, including Cisco Systems, Google, and Hewlett-Packard. In 2008, they generated $255 billion in total revenue – equivalent to one of the top 40 economies in the world. Yet, California is currently disinvesting in its world-class universities – spending more on its prisons than on higher education. Legislators don’t get it: it is far more difficult to recreate world class universities once destroyed than to maintain their excellence once achieved. Throughout the twentieth century, the “American Century,” our schools fostered social mobility by increasing individual and collective human capital. The United States was able to generate a skilled labor force that was required for new, more technologically and scientific advanced industries—built on discoveries, many of which had their origin at our universities. But our international lead in education has all but vanished and there are strong signals that our K-12 educational system is rapidly falling behind others in the world. We are at risk of creating an under-educated population, given our technological needs.

The threat to American preeminence in higher education does not, for the moment, come from foreign competition. To paraphrase Walt Kelley’s wonderful cartoon character, Pogo, “The enemy is us.” Here are some of the threats I will discuss in future postings: the effects on our nation’s productivity of the quality of K-12 education; the poverty of many of our undergraduate programs; the wholesale disinvestment in higher education by state governments that threaten the quality of their great universities; the need for a new models for funding undergraduates at state universities; the government’s ideological interference (such as prohibitions and restrictions on stem cell research) that undermine the university’s core values; the attacks on free inquiry; the consequences of intellectual conformity on the free exchange of ideas; the governmental restrictions placed on the recruitment of talented students and faculty members because of poorly applied national security policies; the structural rigidity of American universities and the imperative to create new intellectual structures that do not impede the growth of knowledge; the misguided features of American science and technology policy; the consequences of ignoring humanistic disciplines; the unintended consequences of academic free agency; and the hazardous growing inequality of wealth among our best universities.

If American universities are to remain preeminent in the world of higher learning, the organism will have to adapt to a new set of environmental constraints that threaten their excellence. If European and Asian universities are going to compete with us, they will have to significantly change their current models of higher education.

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