massachusetts is engaged in a fierce, long-term competition for talent, investment, and jobs with other states, regions, and countries. Success is essential to the future well-being of our citizens and institutions. In this struggle, our world-class cluster of private and public universities and colleges is among our most important assets. Yet our state does not have-and never has had-a comprehensive strategy to leverage all our academic institutions for the benefit of the Commonwealth. We have taken our private campuses, and the benefits they bring our state, largely for granted, and we have scandalously neglected our public institutions. These complacent patterns were viable once upon a time. No longer. In today’s competitive environment, they place us on a glide path to decline.
We are not now in a crisis. Although we face worrisome and well-documented indicators of competitive weakness-including sluggish job growth, loss of corporate headquarters, and reluctance among local employers to expand locally-we also possess impressive underlying strengths. In addition, the causes of our immediate economic difficulties are complex, and most observers would count our academic institutions as points of strength rather than vulnerability. Yet we must also think about sustaining competitiveness over the long term as deep structural issues-our stagnant population, our weakened ability to retain talented young people, and the inevitable erosion of political influence in Washington as other states grow more rapidly—eat away at our position. The time to begin correcting our longstanding inattention to our academic industry is now, before worrisome trends turn into acute problems.
The right long-term questions for Massachusetts about higher education are these: First, where would the state be if we were to lose our position as a pre-eminent center for universities and colleges? Second, where would we be if we failed to provide our young people with access to quality academic programs? Either of these outcomes would lead to a disastrous erosion of our competitive position. Yet we are remarkably complacent.
To remain competitive, Massachusetts needs excellence in both private and public higher education. It is hard to imagine a time in which Harvard and MIT would not be world leaders, but nothing guarantees that the other private campuses on which the state depends will be able to sustain their positions. In addition, our weak demographics make it clear that we need to educate every young resident to make their full potential contribution to our economy, and achieving this goal requires a small but first-rate public higher education system. In the context of these concerns, we should think of the savings the state obtains because of our robust private institutions not as a justification of weak support for academia, but as a dividend to be reinvested to make sure that our entire system of universities and colleges, private and public, is supported at a level that assures the system’s ability to remain the solid foundation of our economic vitality.
The Patrick administration has appointed a task force to recommend future directions for higher education. This initiative represents a marvelous opportunity to think afresh about how to sustain the strength of our academic institutions. I would urge the task force to direct its efforts along the following lines:
- Reject the historical pattern of thinking about public and private higher education as two separate and even competitive realms, and instead craft policies and organizational mechanisms designed to take maximum advantage of our unique mix of campuses for the overall well-being of the Commonwealth;
- Propose ways to link the capabilities of our total system of colleges and universities to a statewide strategy for economic development and, in this context, promote appropriate partnerships between public and private campuses and also between academic institutions, industry, government, and nonprofit institutions;
- Advocate a level of support for our academic institutions competitive with that provided by other major industrial states (not with national averages!) and base that funding on a redirection of some of the financial dividend we receive because of our unusually strong cluster of private colleges and universities.
IN SEARCH OF A STRATEGY
The right place to begin thinking about the effective use of our academic assets to promote economic development is with a series of basic questions: What must we do to persuade Massachusetts–based companies to expand here rather than elsewhere? How can we be more successful in attracting new businesses? How, and in what fields, can we most usefully promote technological innovation and new business formation? What priority should state government attach to each of these arenas of activity, and what are the critical elements of an effective program in each? Answers to these questions would tell us what we need from our universities and colleges, as well as from industry, from our hospitals, from state government, from cities and towns, and from our public schools to maintain robust growth.
The value of a strategic approach would seem obvious. No major enterprise would think it could succeed without a strategic plan tailored to its competitive arena. Yet Massachusetts has not been strategic about economic development. Consider the arena of technological innovation, which constitutes a critical element of our knowledge-based economy. As stated in a recent study by the Battelle Institute for Mass Insight, a Boston policy and research firm, “over the last twenty years, Massachusetts [has relied] on ad hoc relationships, market forces and the state’s entrepreneurial culture to fuel its technology-based economy.” More recently, state leaders have seen the need for strategic investments, as evidenced by the $100 million economic stimulus package passed in 2004. But our efforts are extraordinarily modest in comparison with competitor states.
The Battelle study points to New York, Pennsylvania, North Carolina, and California to highlight how far behind we are in promoting technological innovation and in reaping its benefits for business growth. Each of these states has well-established programs to foster university-industry collaboration in research and development. These efforts reflect a shared recognition that a laissez-faire approach can no longer be relied upon to achieve maximum benefits. Results increasingly depend on strategic alliances involving universities, industry, and state government—with government playing a facilitating and coordinating role.
What is true in the high-tech arena is even truer in the broader realm of economic development: We have not done an effective job of building a coordinated approach to this challenge. This is not because thoughtful leaders are unaware of the need. In addition to the Mass Insight effort and the economic stimulus package, we have seen the creation of the Massachusetts Technology Collaborative, the Harvard-MIT life sciences summit, thoughtful discussions across institutional lines through the LaWare Forum and the Massachusetts Business Roundtable, and useful work by former economic development secretary Ranch Kimball. Valuable as each of these efforts has been, however, none constitutes the kind of robust mechanism that could bring together all the critical participants to craft a statewide competitiveness strategy.
Our universities and colleges will play two critically important roles in any statewide competitiveness strategy: conducting the research that will drive technological innovation and producing the skilled workforce required to translate innovations into significant economic enterprises. The capacity of our academic institutions to play these roles —and in the case of private institutions, their willingness to do so—will be contingent on the state’s readiness to invest in this work. Yet when we evaluate our approach to supporting our academic institutions, it becomes obvious that a statewide strategy for economic development needs to be accompanied by fundamental changes in our habits of mind and patterns of behavior.
Nowhere is the gap between the demands of regional competitiveness and the record of Massachusetts more evident than in promoting university-based research and development. In fiscal 2004, the most recent year for which comparative statistics are available, Massachusetts spent $41.7 million to support R&D at the state’s universities and colleges. This allocation compared with $355 million by Texas, $266 million by California, $196 million by New York, and $123 million by North Carolina. Massachusetts ranked 24th in the nation by this measure, roughly tied with Wisconsin and Washington and outdistanced not only by major industrial states like Pennsylvania, Ohio, and Michigan, but also by ambitious regions newer to the game like Florida, Georgia, and even Louisiana. Arkansas spent more than Massachusetts did in fiscal 2004 to support university-based research and development.
When one looks at total federal dollars awarded to Massachusetts universities and colleges to support research and development, one sees a very different story. In this competition we ranked 6th overall in fiscal 2004, but were essentially tied for third with four other states. Only California and New York did significantly better. Most of these funds, of course, were attracted by our private universities and colleges. This is eloquent testimony to the way in which Massachusetts has relied on the strength of our private higher education sector to conduct the research that drives large parts of our economy. These dollars constitute a significant component of the overall financial dividend we receive from the work of private higher education.
If we are doing so well, despite a minimal state effort, what’s the problem? As the Battelle study noted, Massachusetts has steadily lost ground to competitor regions in attracting federal research dollars since the mid 1980s. This should not be a surprise, for three reasons. First, other states have been investing heavily in higher education for a long period of time in order to challenge our historic leadership in this field.
Second, state-level contributions are an increasingly large factor in federal deliberations about competitive grants for R&D. Third, as other regions grow, and as the political influence of Massachusetts wanes, our ability to attract federal dollars is going to diminish. Before gradual erosion turns into an irretrievable loss of competitive strength, we need to put in place the attitudes, policies, and funding mechanisms that can protect our position.
An essential part of any state effort to support university-based research must be opening eligibility for dollars on an equal basis to both public and private institutions. The Battelle study stresses the importance of building UMass into a top-tier research university. This is a priority that I heartily endorse, but Battelle’s emphasis also reinforces the historical pattern of thinking that only public institutions are ready to focus attention on the well-being of the state. We have seen this pattern enacted in the allocation of dollars from the economic stimulus appropriation. It is a too-political approach that badly underestimates the awareness among private institutions that their futures are linked to the vitality of Massachusetts. Moreover, it is not good public policy. UMass will not be strong enough anytime soon to carry the major responsibility for promoting our state’s economy. The only way Massachusetts is going to stay competitive in R&D is by the combined efforts of our private and public institutions. State policies to encourage these activities should take advantage of all our academic assets.
Massachusetts is no more competitive in educating our young people at the college level than in investing in research and development. Historically we have been among the stingiest states in supporting public higher education. In recent years this pattern has been particularly stark. On two separate occasions, first between 1989 and 1992 and then between 2001 and 2004, our public campuses lost approximately a third of their operating budgets as state government struggled to cope with cyclical downturns in public revenues. During the most recent of these cycles, Massachusetts led the country in making cuts to public higher education.
As our economic recovery has progressed, we have been among the slowest states to reinvest. One particularly unfortunate consequence of this has been a rapid increase in tuition and fees at our public campuses at a time when our young people desperately need access to educational opportunity. The University of Massachusetts has fewer operating dollars today than it had in 2001 and less financial aid to distribute to its students. Capital budgets have also been starved. The situation is no better at our state and community colleges. Little wonder that our public system of higher education has remained small and generally undistinguished, despite pockets of excellence and achievement.
Educating Massachusetts’s residents is not the work of public higher education alone. Indeed, we depend more on private institutions to educate our citizens than any other state except Rhode Island. Nearly 40 percent of our high school graduates who go to college in Massachusetts attend one of our private colleges or universities. Many of these students receive financial aid funded by the schools’ endowments and operating budgets. Here is another very significant source of the financial dividend the state receives from private higher education. Yet Massachusetts does less to support attendance at private colleges and universities than most other states. In fiscal 2005 we ranked 32nd in this respect, with an average grant of $224, compared with $1,936 in New Jersey, $1,384 in New York, $1,212 in Pennsylvania, and $1,168 in California. Among the 23 state-sponsored aid programs for high-performing high school graduates, the state’s much-heralded John and Abigail Adams Scholarship program is one of only three in which support is not portable to a private institution. These patterns are additional examples of the unfortunate tradition in state educational policy that links the pursuit of public purposes too exclusively to the work of public campuses. In education, as in research, both our public and our private campuses make essential contributions to the well being of the state.
In recent years the state has invested billions to improve our K-12 system. Business leaders have rallied to this cause. We are national leaders in addressing the challenge of the schools, ranked first in the nation by the National Center for Public Policy in Higher Education in preparing high school students for further education and training. Yet in the end, for most people and most jobs, a high school degree is no longer sufficient to ensure successful participation in the economy. Despite this fact, we have allowed ourselves to fall behind other states in producing associate degree holders in key technological areas. Important as school reform is to the future of the state, it makes no sense to focus attention and spending at this level while allowing our system of higher education to grow comparatively weaker.
INVESTiNG THE DIVIDEND
It is easy to point out the wisdom of greater state investment in our universities and colleges. The challenge is to find the financial capability for this task and then to put in place organizational mechanisms to assure that the state’s investment achieves its intended purposes. The funding problem is especially daunting given projections of budgetary constraint for the next several years.
As we search for additional dollars, it may be helpful to remember that Massachusetts ranks 48th in the country—above only Vermont and New Hampshire—in the percentage of the state budget allocated to higher education. If we had spent the national average among all states in fiscal 2004, the most recent year for which national numbers are available, we would have nearly doubled our investment in universities and colleges. More to the point, given the comparatively strong role played by private institutions in the Northeast, if we had supported higher education at the average level of New York, New Jersey and Pennsylvania, we would have spent 30 percent, or $300 million, more for higher education. We have been able to sustain a relatively successful economy while assigning a lower priority to academic work than even our Northeastern peers only because of the contributions of our private universities and colleges.
It is always difficult to debate the relative claims of different purposes on public funds, but budget choices are the most important decisions governments make. So here is a fair question: Given the economic importance of higher education, are we wise to divert the savings we gain from the contributions of our private universities and colleges to non-academic activities? Does it make long-term sense for Massachusetts to take the financial dividend we obtain from private higher education and use it to subsidize other parts of the state budget? Would it not be prudent to use these savings to support a unique strategy for academic excellence that links all our universities and colleges to a long-term program for economic growth?
The fact that we are not in a crisis is helpful in this regard. Our vulnerabilities in regional competitiveness involve long-term trends, not imminent threats. The goal should be to put ourselves on a path to where we need to be over a period of time. A phased redirection of state dollars to allocate a more competitive proportion of our resources to strengthen higher education is at least one way we might achieve this.
Second only to the challenge of funding a more robust program of higher education is the complexity of crafting an organizational and policy framework to connect the state’s academic capabilities to an overall strategy for economic growth. It is critical that we get the framework right at the outset so that, as dollars become available, we can invest them in programs and categories that are part of a comprehensive and thoughtfully constructed plan. In my view, the goals to which we should commit ourselves over the next several years include the following:
Support access for state residents to degree programs of high quality in both public and private institutions at levels competitive with other major industrial states. This means providing our public campuses with significantly increased operating and capital dollars and keeping student charges at public institutions as low as possible. It also means supporting programs of both need-based and merit-based financial aid, portable to public or private institutions, at substantially higher levels. Finally, to make sure our educational work is linked to our economic needs, we should promote programming and curriculum development in areas critical to the state’s workforce through targeted program support and financial aid, both available on a competitive basis to all institutions in the state.
Support university-based research and development at levels competitive with other major industrial states. The goal here is to invest in projects that promote innovation and technology transfer in areas of opportunity identified by the state’s competitiveness strategy. These dollars should be allocated on the basis of a peer-reviewed competition open on an equal basis to all institutions, public and private. Special emphasis should be given to projects that involve industry participation, have a high probability of leveraging federal dollars, and involve collaboration among public and private institutions.
Propose new mechanisms to coordinate the work of our academic institutions with each other and with other key participants in the state’s overall competitiveness strategy. We need to push for the establishment of a capability within state government to coordinate the work of all relevant state agencies and to involve non-state participants in the crafting and implementation of a statewide strategy for regional competitiveness. Within this framework, it makes sense to foster dialogue between different levels of higher education as well as between the public and private academic sectors regarding how our total system of higher education can best support the state’s development efforts. Finally, we need to review current organizational arrangements within public higher education in the context of the role that public campuses must play in promoting regional competitiveness. In crafting these policies, we should place maximum emphasis on incentives rather than bureaucratic controls to maximize entrepreneurship at the campus level.
Develop an enhanced system to monitor the strength of higher education in Massachusetts and to assure that our academic institutions are making a maximum contribution to the well being of the state. At the moment, no organization, public or private, systematically collects information on the strength of our entire academic industry. Given the importance of higher education to the Commonwealth, such a capability should be created and charged with producing an annual assessment of the overall performance of our universities and colleges in key areas of academic activity. Related to this, if we are going to increase our investment in higher education, we need to establish metrics of expectation for our universities and colleges in terms of their role in our competitiveness strategy and to make sure that performance with respect to these metrics has budgetary consequences for all institutions receiving state support.Massachusetts has gotten used to neglecting our universities and colleges while taking pride in their strength and benefiting from their work. We want to think of ourselves as the educational capital of the country without paying to maintain this status. We have always muddled through with half-hearted support for public higher education, inattention to the well-being of our private campuses, and weak mechanisms for connecting the work of our universities and colleges to state needs. In light of this history, some may feel that we can keep on as we have been with respect to all these matters. It would be nice to think we can remain competitive by doing so, but history is filled with stories of decline among communities that believed a successful past entitled them to a flourishing future. We ignore patterns that point toward erosion of our position at our peril. We have the resources and the brains to proceed in a very different way. I hope we have the wisdom and strength to do so.
Richard M. Freeland served as president of Northeastern University from 1996 to 2006, and served in several leadership positions, including dean of arts and sciences, at the University of Massachusetts–Boston from 1971 to 1992. He is currently a visiting professor of higher education at the Harvard Graduate School of Education.