When will the university bubble burst?

A local business owner I know has hired several Rochester Institute of Technology students to write software. “Are they graduates?” I once asked him.  “Some are; some aren’t,” came the reply. He didn’t really care.  He only cares if they can do the job.

He’s not alone. “Coding boot camps” are popping up all over the country.  Venture Beat reports that the percentage of bachelor’s degrees in computer science has dropped by half since the turn of the century.  Meanwhile, the graduates of coding boot camps are growing at 280 percent per year. 

And, it’s not just computer science that is experiencing changes.  

Roger Martin, former dean of the University of Toronto’s Rotman School of Management, compares the state of our business schools to that of General Motors before their bankruptcy.  In his analogy, tenured college professors are stand-ins for UAW workers with lavish salaries and benefits.  Martin points out that enrollments in the nation’ B-schools are being propped up by an increasing percentage of foreign students.  The annual number of graduates has doubled in the last 20 years as tuitions skyrocket and demand for grads tumbles.

So, how are universities responding to these disruptive forces?  By raising tuitions, of course. 

A key driver of tuition increases – at least at public universities -- has been state budget cuts.  However, there are other forces at play.  Costs are spiraling upward as universities add amenities and build new sports stadiums.  So, students take out larger loans supported by federal government programs and graduate into a job market that doesn’t offer economic opportunity sufficient to pay back the loans. 

Meanwhile payrolls are increasing not because faculty salaries are on the rise but rather because administrative staff is growing at twice the rate of faculty.  As administrative expenses increase, colleges reduce costs by augmenting faculty with part-time adjunct professors.

So, the complete picture looks like this:  kids go away to college, pay exorbitant tuitions for an education delivered by less than qualified teachers in classes they can attend online from their posh dorm rooms.  All of it is supported by loans that banks wouldn’t make were it not for guarantees from the federal government. 

Does that sound like a sustainable model to you?

When I was at the Naval Academy, there was a cross-town curiosity called St. John’s College, a hippie haven “known for its distinctive curriculum centered on reading and discussing the Great Books of Western Civilization”.  To this day, St. John’s eschews costly amenities that attract a lot of students – intercollegiate sports, swimming pools, hot tubs and movie theatres – in favor of providing a great education. 

I grew up during the Cold War and the space race.  Engineering was the most valued degree.  A degree in liberal arts was then, as now, often derided as inapplicable to a demanding job market.

Yet, I have to say that St. John’s is on to something. 

The founders – among them Washington, Adams, Jefferson, Madison, Franklin and Webster – advocated for a national university.  In Washington’s words, “a primary object of such a National Institution should be, the education of our Youth in the science of Government. In a Republic, what species of knowledge can be [more] important … than to patronize a plan for communicating it to those, who are to be the future guardians of the liberties of the Country?”

The founders were well aware that government institutions decay over time.  A national university would provide for a common understanding of philosophy and history.  Should not graduates be prepared to contribute to our society based on a fundamental understanding of our institutions of government, our history and our social needs? 

And, yet, we hear more and more about students who don’t want to hear anything that might challenge their understanding, beliefs or feelings.  Students at Columbia objected to a classroom discussion about the origins of Ovid’s poetry because it included a summary of violence and rape in the times of the Roman Empire. 

Speakers have been shunned because their views don’t fit the social and political narrative of the students.  IMF president Christine Lagarde and former Secretary of State Condoleezza Rice were cancelled as commencement speakers by Smith College and Rutgers University, respectively, because they represented institutions and points of view that were deemed to be politically incorrect. 

A better response might be to demand a balance.  If the university invites Paul Krugman, demand John Mauldin.  If the special guest is Dick Cheney, insist upon John Kerry too. 

We should expect our universities to produce graduates with an understanding of how to contribute to our society by engaging in productive work and by having the perspective to constructively participate in our national dialog.

Otherwise, you might as well go to a coding boot camp.

WHO WILL LEAD?

Advice to give your kid in the age of AI

One of my sons graduated college with a business degree and a focus in Information Technology (IT).  At the time, the trend to outsource programming and other IT jobs to places like India was in its infancy.  When he asked for my advice, I told him he was in an industry that would likely grow for the duration of his career but it would be important for him to stay in jobs that required him to interact with customers face-to-face.  After all, no one can outsource human contact to another continent. 

It turned out to be good advice (at least so far).  Indeed a working paper authored by David Deming for the National Bureau of Economic Research suggests that social skills, especially when combined with math skills, are the most important element in adapting to a future where Artificial Intelligence (AI) replaces people doing routine work.  The study’s conclusions are backed up by a parallel study at University of California, Santa Barbara by Catherine Weinberger who concludes, in part, that the combination of social and cognitive skills has been important in career progression at least since the 1970’s and that a combination of the two has become more important to career earnings over time.

So, what does all this mean to today’s students?

Many experts tell us we shouldn’t worry about robots or other forms of AI taking our jobs.  But others – even those who promote the benefits of the AI revolution – worry that the pace of innovation will be too quick for the workforce to adapt. 

Already there is a hotel in Japan that is staffed entirely by robots and a factory in China that is similarly operated.  And, a 2013 Oxford University study predicts that 47% of workers in the U.S. will lose their jobs to automation over the next 20 years. 

You don’t have to look very hard to find analyses of how automation and AI have and will eliminate jobs. However, to project a future world of work, you have to look at how business strategies will change when enabled by these advances. 

Much of the improvements we shall see in the quality of products and services will not be the result of robots running the show but rather by virtue of the use of advanced sensing devices and data analysis.  In a manufacturing environment for example, such technology will better identify quality issues on production lines or monitor supply networks.  They will increase the demand for industrial engineers and people managing the supply chain. 

Businesses will use these advances to evolve their offerings consistent with the concept of ‘Shared Value’ advanced by Harvard’s Michael Porter.  For example, a manufacturer that sells industrial equipment like generators or turbines could offer its products as a service, installing and then remotely monitoring them to identify repair and maintenance issues before a breakdown occurs.  Maintenance and upgrades would be the responsibility of the manufacturer rather than the customer. 

The ability to interpret digital data and manage machinery to optimize availability and cost would be among the new skills required of technicians.  Like supply chain coordinators, industrial engineers, robot coordinators, simulation experts, data analysts, accountants and sales people, jobs that already exist will require new skills to accomplish them.  The careers of the next generation will require these skills. 

A traditional 20^th Century college education – particularly the now overabundant undergraduate business degree – will not serve us well.  Where and how will these new skills be acquired?  How will the workers of the future know what skills to learn?

Moreover, what advice will you give to your kid when he or she graduates from college?

WHO WILL LEAD?

What's Russia really up to?

With ISIS and the Syrian refugee crisis on the news so often, it’s hard for some Americans to relate to the comments of General Joseph Dunford, the new Chair of the Joint Chiefs of Staff.  Testifying before the U.S. Senate during his confirmation hearing in July, he identified Russia – not Iran, North Korea, China or ISIS – as the greatest threat to US national security.

Many analysts and journalists have speculated on the motives of Russian President Vladimir Putin.  Following the Russian incursion into Ukraine, the Los Angeles Times ran an op-ed piece titled ‘Is Vladimir Putin Insane?’  In it, German Chancellor Angela Merkel is quoted as saying that Putin lives in “another world’.  Other pieces have described him as a tyrant and compared him to Hitler.   Meanwhile, General Lloyd Austin, Commander of U.S. forces in the Middle East admitted to Congress that he was completely flummoxed by Russia’s military actions in Syria. 

Yet, I have seen very little said or written about Russia’s compelling national security interests as a key driver of their behavior.  As I see it, there are two geographic factors driving Putin’s and Russia’s behavior. 

Russia is a vast plain that is easy to attack from every angle, except the sea.  So, they have been attacked throughout their history from both the East and West.  Their compelling interest is to create buffers between themselves and potential attackers.

 That said, Putin knows he doesn’t possess the military strength stand up the US.  So, he exploits the vacuum we created in the Middle East to his advantage by becoming the enabler of Iran’s compelling interest.  The consolidation of Shia power from Iran through Iraq to Syria serves them as well as it does Russia, which gains a buffer zone to its south.  It also threatens both Turkey (a NATO member) and Saudi Arabia, an American ally and, like Saddam’s Iraq, an Arab nation ruled by a Sunni minority.  

As for Ukraine, Russia’s actions — from annexing Crimea to carving out a swath of land that gives them access to it — are driven by another compelling interest, access to the sea.  Like all nations, access to sea routes is essential to commerce.  Securing Crimea provides them with access to the Mediterranean.  

There was a bit of coverage about the Arctic Ocean when President Obama visited Alaska a few months ago.  Our Coast Guard has only one icebreaker to Russia’s 27 securing their access to the sea routes that open up as the ice floes melt.  

Americans tend to take our security for granted.  We are geographically too far from Europe and Asia to have suffered from the ravages of war in the last century.  Very few are aware that the US Navy has secured 100% of the world’s waterways since WW II.  We ensure peaceful commercial sea traffic for every nation in the world.

Now, we are reducing our military presence throughout the world and downsizing our navy.  Is it any wonder that Russia sees an advantage and takes it?  Their incursion into Ukraine tests NATO’s resolve while their support of Syria’s Assad advances a refugee crisis that tests the EU’s economic resilience. 

The Obama administration has been criticized in the press for lacking a cohesive foreign policy. Yet, there may be long-term benefit to the U.S. letting the Middle East and Russia be Europe’s problem.  Our so-called ‘pivot to Asia’ will have greater economic benefit through stronger trading and security relationships that challenge China.  Our Asian allies seem to care about that.  

Does Europe care?  Will they stand up for themselves?  They are already sounding like Chamberlain. 

WHO WILL LEAD?

#Tweeting this blog a la #Trump

When writing this blog, I endeavor to be provocative from time to time and usually get an earful from one end of the political spectrum or the other – or sometimes both at the same time.  However, the biggest complaint is that the blog is “too long”.  I now limit it to 800 words but that is still too long for many whose attention span is no longer than it takes to read the screen on their smartphone without scrolling. 

Perhaps I should emulate Donald Trump.  The New York Times reports that Trump thinks of Twitter as his own personal newspaper.  With a 140-character limit, a tweet has no room for any qualifiers.  You can’t say, “Some may disagree with me and I hope this doesn’t offend anyone; however, I believe….”  You just type the words after “believe”. 

Here are a couple of Trump tweets:

“I have never seen a thin person drinking a Diet Coke.”

“So many ‘politically correct’ fools in our country.  We have to all get back to work and stop wasting time and energy on nonsense!”

He gets his point across without all the research and attention to composition that typically takes up about 6 hours of my time.  Here’s his latest (as of this writing):

“For all my FANTASTIC supporters, and for the U.S.A., we are going to WIN AND MAKE AMERICA GREAT AGAIN, maybe even greater than before.”

I notice that he doesn’t use any hashtags.  He doesn’t need to.  He’s his own hashtag. 

So, I thought I should give it a try (notice it took me more than 300 words to get this far).  Here is my best effort to summarize five years of blogging in 140 (or less) character snippets:

#Capitalism = #prosperity = #freedom

For the long version, check out:  ‘Let’s just understand what socialism means to us’ or ‘Progress or Greed… Which Is It?’

Or how about this one?

#Economics: You don’t get it!  No, really, you don’t!

Long version… here you go:  ‘Robert Reich, the corporate income tax and the middle class’ or ‘One Issue and One Issue Only’

Lest you think I am a dogmatic, right wing conservative, I offer the following quite liberal views:

My tweet: Open the #border with #Mexico, no really… I mean it!

My blog:  Open the border… Wait! It’s already open

Or how about this?

My tweet: I don’t care who you #marry

My blog:  It’s not religion… It’s not politics… It’s personal

Are you ‘pro-life’?  This will piss you off:

My tweet:  My body, my #choice

Well, I am not a woman, so I wrote:  Orphan Black, Margaret Atwood and a Woman’s Right to Choose

From time to time, I get philosophical.  I have to work hard to clarify my thoughts and even harder to articulate them.  One of my favorites got virtually no response:  Hope, Love, Forgiveness… Can Society Achieve It?  Yet, another struck the right chord:  Leadership and the Space Between the Notes.  The first title could be a tweet, the second, not so much.

I could go on.  (I usually do.)  I’m just wondering… should I just tweet it a la Trump?  If you’ve read this far, please let me know.

WHO WILL LEAD?