No profit in losing values of academe

June 29, 2007

Institutions that abandon scholarly integrity to pursue commercial market interests will ultimately fail, argues Chris Lawton

Working with business undoubtedly has many financial attractions for the modern university. After all, big business means big bucks. But over the past 30 years the drive to form partnerships with venture capitalists and multinational corporations has been revealed to be a root cause of much long-term institutional insecurity. In their attempts to ensure their survival in the knowledge economy, universities have introduced new systems of management borrowed from the business world - even though the managerial model that many appear to have embraced has long been discredited by business itself. As a result, universities now risk losing the lustre that originally made them such glittering prizes.

Derek Bok, interim president of Harvard University, once pointed out that "universities share one characteristic with compulsive gamblers and exiled royalty: there is never enough money to satisfy their desires". Thus, in competing for their slice of the diminishing national higher education budget (as well as for the best students, professors and researchers), modern universities have become increasingly forced to operate as if they were companies.

The form of managerialism adopted across the higher education sector dictates that if part of the company is losing money or is not regarded as being commercially viable then that division must be reorganised to make it more commercially sound. If not, it is dissolved.

But in the mid-1990s Robert Kaplan and David Norton of Harvard Business School showed that this purely financial accounting measure of performance was flawed. Finance is only one element of performance and, in particular, is inappropriate for institutions not primarily concerned with profit. In the wider business world, this form of managerialism has been steadily replaced by Kaplan and Norton's balanced score card approach, which looks at other aspects of performance and achieving steady growth by offering customised value-added services to customers.

But what does this mean at campus level? Well, as highly profitable business schools continue to expand and multiply, disciplines not deemed commercially profitable, such as women's studies, are disappearing. Others, such as philosophy, are forced into shifting their research focus towards bio-ethics or flavour-of-the-month disciplines. Staff find themselves increasingly compelled to surf the waves of academic capitalism.

What makes universities attractive to multinational corporations is the demand for scientific knowledge, expert advice and an educated workforce, which they hope will give them some form of market advantage. But as universities further embrace the values of corporate capitalism, they arguably become less capable of independent criticism and maintaining a neutral perspective. If Microsoft funds your £20 million business school, the use of Apple iPods for teaching is not going to be high on your agenda.

The reality of the 21st century is that filthy lucre is in short supply and universities are no longer autonomous institutions producing knowledge for its own sake. But by competing for the financial affection of corporate sugar daddies they risk compromising the values that underpin the continued loyalty and confidence of staff, students and the public. Creating a schism where students and academics are in conflict with managers and corporations is a retrograde step. This regression to the era of standardisation, mass production and commoditisation means that academic faculties are transformed into soulless education factories.

The answer is not to adopt myopic business practices focused on short-term research in exchange for quick financial benefits. Allowing a university's research focus to be dictated by the market is a dangerous strategy for traversing a fickle knowledge economy. Constantly following market trends will result in university research portfolios becoming increasingly homogenised. In the long term, market saturation of a narrow research spectrum will devalue what was once a unique selling point for business.

Although universities have become more businesslike in order to expand and secure their future, they must not lose sight of the values needed to pursue commercial interests while maintaining the high degree of integrity that once made them so attractive to business.

So where do we go from here? I feel the best approach for the future is a "fight fire with fire" strategy. The university needs to respond, at least in part, by being an autonomous firm that can also maintain those classical values that are allegedly so attractive to business. The higher up the academic league tables it is placed, the more attractive it will become.

Business schools and biotechnology may be the major cash cows, but universities will have to realise it is not just the commercial disciplines that contribute to an institution's security. Utilising funds from profitable departments to subsidise those less commercially attractive allows a university to increase research ratings across the institution as a whole. It will therefore be able to attract the best professors, researchers and students.

In future, I believe those universities best able to square academic integrity with pursuing commercial interests will enjoy the most academic success. And that is what will make them most attractive to business.

Chris Lawton is a researcher in the faculty of arts and sciences, Edge Hill University.

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