OECD Conference Focuses on How Colleges Can Contribute to Economic Recovery

September 13, 2010

Higher education can play a critical role in helping both individuals and economies recover from the global recession, and colleges are being called on to meet such demands even as they face mounting financial constraints.

Academics and policy makers gathered here this week for a conference of the Organization for Economic Co-operation and Development, "Higher Education in a World Changed Utterly: Doing More with Less," are wrestling with how higher education can contribute to a sustainable recovery.

In some sense, the challenges are perennial: to develop high-level research capacity and to produce a highly skilled work force.

But the depth of the downturn has complicated and quickened the need for a response. The share of people out of work reached nearly 10 percent in the United States and topped out at 20 percent in even harder-hit countries like Spain. Youth unemployment approached 19 percent in industrialized countries in 2009.

"When we were planning, the conference theme might have seemed melodramatic," said Marijk C. van der Wende, chair of the OECD's Institutional Management in Higher Education governing board, in opening the conference. But now, she said, "it is a reflection of reality."

Speakers at the conference's opening session on Monday noted that investing in higher education pays off. In fact, the net public return of investment in higher education is more than $5,000 per student, according to an OECD working paper that highlights conference themes

"Investment in higher education will reap long-term dividends for economy and society," said Charles B. Reed, chancellor of the California State University system and a speaker at the conference.

Now, more than ever, colleges can play a critical role, speakers suggested. They can better link academic course work and short-term training to industry needs and employment opportunities, expand access to previously underserved students, provide lifelong learning opportunities, and advance research that spurs economic expansion.

In California that means seeking out more business and community partners and clearly demonstrating the university system's value on a Web site that highlights its "public good," Mr. Reed said.

Driven by Demand

Australia, which has been spared the worst of the recession's bite, has set a national goal of increasing, to 40 percent, the number of its adults with a bachelor's degree by 2025 and of improving the collegegoing rate among low-income Australians. The country is also moving to a demand-driven system, in which student and employer interests drive university enrollment in degree programs, said David Hazlehurst, group manager of the Higher Education Group of the Department of Education, Employment, and Work Relations.

Even institutions in developing countries are trying to better respond to economic needs. The College of the Bahamas, for one, changed its mission to tie it directly to national development, said Janyne M. Hodder, who was the institution's president until July 2010.

Yet recent economic troubles have complicated colleges' ability to respond. As they wrestle with debt, countries are scrutinizing spending, including education. Already, France has announced a budget freeze through 2013, and the British government is undertaking an austerity plan.

Private colleges are also fiscally fragile. In the United States, 114 private colleges failed a Department of Education financial-responsibility test because of unstable balance sheets at the end of the last fiscal year, noted Joe Asthroth, chief education officer of Autodesk Education and a panelist at one of the morning sessions. The stakes of not investing properly in higher education are great. Outdated policies, neglected institutions, and an exodus of the best graduates can whittle away at a country's global competitiveness, warn the authors of the conference working paper.

Higher-education leaders said it can be a struggle to attract financial support and maintain connections with business. In the Bahamas, there is not yet a recognition of the importance of innovation to economic growth and diversification, Ms. Hodder said.

And Andrée Sursock, a senior adviser with the European Universities Association, said that efforts to leverage university know-how to spur economic growth in the European Union have lost momentum, and that the downturn's impact on companies' profits may have led to an "erosion" of the links between academe and industry.

But Jamil Salmi, postsecondary-education coordinator at the World Bank and a panel moderator, said the financial crisis should spur higher education to think more creatively. "It's not only about doing more with less," he said, "it's about doing it differently and innovatively."