Commercialising the academy?

Derek Bok, who was President of Harvard University between 1971 and 1991, wrote in 2003:

“Universities are approaching a critical juncture. They can try to create and enforce more effective limits on commercialization. Or they can temporize, compromise, rationalize, and continue the gradual slide into habits that could alter their character in ways detrimental to their teaching, research, and standing in the community.” (Universities in the Marketplace, 2003)

In his book, Bok bemoans the trend (which he believes began with the development of heavily resourced university sports and athletics programmes) for universities to sell things – to the point where everything in the university could be for sale ‘if the price is right’, To get an idea of what ‘commercial activities’ Bok dislikes, it is worth listing some of the ones he mentions (in no particular order): advertising to attract students; paying a salary to a football team coach which was as high as that of the President; ‘making money from intellectual work’; marketing lectures on the internet; consulting; outside corporate investment in scientific research; the sale of goods (such as mugs and t-shirts) with the university logo; universities holding stocks in companies; offering training courses to the public, including executive training; for-profit online education programmes.

The reason why Bok dislikes such activities is because he believes that the pursuit of money for its own sake compels universities to ‘make compromises with standards of behavior long considered important to a healthy process of inquiry’. Scholars should pursue knowledge and discovery for its own sake, not for its potential (and sometimes illusory) pecuniary rewards.

As the title of the book suggests, Bok does not feel comfortable with the idea of universities operating ‘in the marketplace’. But what is that? The market is where transactions take place on the back of supply and demand. Bok appears to suggest that university education should be supply-led only, because once you factor in demand you are in a market.

However, all of this needs to be placed in perspective. Bok spent most of his career in Harvard, a good deal of it as its President. Harvard charges its students a significant fee, currently in the region of $30,000 per undergraduate student (with some postgraduate courses – and more than half its students are postgraduates – considerably more expensive). In the fiscal year 2006-07 Harvard had an income from tuition fees of $656.6 million. And incidentally, the activities of the kind Bok dislikes (and many of which were practised under his Presidency) brought Harvard an additional $488 million in the same year, and the university had a total income of $3.2 billion. By contrast, the income of Trinity College Dublin (which is roughly the same age and size as Harvard) was approximately $300 million – from all sources – in the same year.

The point here is that, whatever view you take of commercial activities, universities need to have an income to fund teaching and scholarship. The resources needed for high value teaching and state-of-the-art scholarship are significant. Therefore, to meet an institution’s ambitions the search for revenues has always been a vital part of university management. At its most simplistic, this search addresses the taxpayer (though not in Harvard), in the form of lobbying and cajoling of government to hand out grants and subsidies. This in turn depends on students to justify money for teaching, and on some demand by the state for the outputs of research, where it sees this research as meeting the requirements of the common good. But even at this level the university activities are being ‘sold’, and moreover the ‘buyer’ (the state, or the government) is notorious for unpredictable and sometimes arbitrary behaviour, changing its ‘purchasing policy’ without warning and without any opportunity for negotiation. Furthermore, this is a buyer who can require policy shifts and changes from its customers, and then subsequently change these again at very short notice. The means at Derek Bok’s disposal when he was President of Harvard – to charge expensive tuition fees – are not available to Irish universities at all.

A significant impetus therefore in the development of commercialisation has been the need to diversify the sources of revenue and thereby minimise risk. Universities have therefore looked at the extent to which their activities can generate value and find customers, within the constraints of academic integrity. Broadly this has come under three headings: (a) offering university programmes to paying customers who fall outside the state’s free tuition framework; (b) developing value in the university’s intellectual property portfolio; and (c) selling services, including consulting services.

It would I think be hard to imagine how any university – even Harvard – could remain viable if they were to abstain from the deliberate pursuit of income. If Bok’s book has a value, it is that he reminds us to ensure that commercialisation has to be compatible with integrity, and must not work against the grain of academic excellence. In other words, it is good to develop a strong programme of commercialisation; but this should be based on the assumption that it can, in the short to medium term, develop real commercial value without interfering with excellence and integrity, and without compelling those who do not wish to participate to do so. A perhaps more realistic assessment of this agenda was set out by Frank Rhodes, another former university president (of Cornell University), in his book The Creation of the Future: the Role of the American University.

In the end, commercialisation should be a positive feature of the higher education landscape. Not only does it have the potential to diversify revenue, it also promotes appropriate networking between the university and the wider community of stakeholders. On the other hand, universities need to hold on to their identity as institutions that promote and defend a common good; they need to become more business-like perhaps, but they cannot altogether become businesses, or a higher education industry. Getting this balance right is one of the main tasks facing the sector.

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Tags: commercialisation, commercialization, Derek Bok, Frank Rhodes, universities and business

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