Business Education
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Europe
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Main Content
Macroeducation: The Real Value of University
Students of the future will need to change their thinking when it comes to higher education. University is about much more than increasing earning potential
What price a university education? That particular debate has plagued news and analysis websites everywhere in recent months, not least this one, with commentators on all sides engaging in lively discussions about what exactly the optimum charge should be for those hoping to gain degrees.
Of course, this issue is of ever increasing importance at a time when governments everywhere are looking to make cuts. Some have already ratcheted up their charges for higher education and others may well be forced to follow suit in the near future, particularly if the trio of credit ratings agencies which – for the moment – command the respect of money markets decide to push ahead with downgrades.
Yet whatever its merits, attaching a price tag to higher education is in many ways a fruitless exercise, at least as long as the real value of university remains a moot point. After all, before deciding what a degree should cost, isn’t is worth ascertaining exactly what it is worth?
Unfortunately, this question is in many ways even more vexing than the first, with many convinced that the only real value of university is in improving one’s employment prospects whilst others swear blind that it is impossible to quantify the subtle ways in which study improves an individual’s lot. Lofty ideals about education for education’s sake have been the primary motivators of study since the time of Confucians and many are uncomfortable with abandoning them for mere economic necessity.
It is not worth wading into this particular area of the debate. Much has been written about the subject, and the vehement (and ongoing) protests against an increase in tuition fees make it too much of a hot potato for any real contributions to be made. But at the same time, the large part of these analyses attempt to quantify university from the wrong perspective.
After all, the most heated of exchanges around this issue tend to focus on the micro rather than the macro, on the ability of more and better education to increase an individual’s earning capacity rather than on the ability of its impact on society as a whole. Yet the real value of higher education in general can only be measured from the top down and, indeed, even then it is difficult to spot.
On one very basic level, it has always been tacitly accepted by governments. Why else would they have continued to pay for such a privileged few to better themselves for so long if it didn’t have a positive impact on society? Leaders know that nations need certain types of professional who can only be nurtured in very particular environments – try conjuring up doctors, nurses, engineers and scientists without proper environments in which to train them. Governments, of course, should pay for this if they want to reap the benefits.
Until recently, this logic extended to the more nuanced contributions of historians, geographers and even economists. Nowadays however, it is being openly and regularly challenged by those at the top – only last week, a survey showed that one fifth of British employers prefer to hire school leavers rather than graduates. Similarly, it seems that financial support in England and Wales for universities not studying STEM subjects (Sciences, Technology, Engineering and Mathematics) may be withdrawn altogether in the not too distant future. The inference is that somehow society doesn’t need graduates in certain subjects anymore.
The attack on tertiary education, however, could prove disastrous in the long term if not managed correctly.
First of all, in theory at least, graduates are the wealth generators of the future and – in line with their increased earnings – should also end up as the most significant taxpayers too. Although the accuracy of this claim remains disputed when it comes to looking at the very richest (and, incidentally, many small business owners too) it is a fact that in general graduates end up paying more into the public purse over their lifetimes than their counterparts. As this may cause eyes to water amongst hard-up students already juggling tuition fees, rent and household bills (not to mention beer money), it is perhaps worth thinking of it as a donation to the common good.
Similarly, further and specialised education tends to facilitate the macro development of economies, allowing them to become more mature and diversify. It is no surprise that there is a positive correlation between membership of the OECD (a fairly exclusive economic club, by international standards) and the number of graduates in each country. Indeed, the top five nations with the highest number of people who have attended university all happen to be members of the OECD. Of course, it might just be that richer countries tend to invest more in graduates but even then, this reality belies the strategy that allows them to remain at the top.
Secondly, whilst university may not be the forum for generating the (marketable) ideas that governments crave, it encourages graduates to stand back and think strategically about their subjects (a skill which is inevitably applied to their future careers). This in turn translates into a more strategic approach in other areas – useful, when everyone in a society has a say in its future direction (when voting, for example).
But the real value of university – and the one which is so often forgotten in times of austerity – is that it improves social mobility for whole swathes of the population. Without the outlet valve of university, governments would struggle to find ways to give everyone a share of national wealth, leaving many people left behind in times of economic boom.
Indeed, whilst there may have been some worries eminating from China watchers last week that the country was now struggling to find appropriate jobs for all its university graduates, it is telling that the BRICS and their ‘3G’ counterparts have all been among the most enthusiastic investors in higher education. The mineral and manufacturing booms have created a pressure to give the people more, particularly in China where the authorities fear prolonged civil disorder above all else.
Of course, in highly individualistic liberal Western democracies it is hard to square such necessities with the desire for personal freedom. But Tony Blair famously used education to make Britain a fairer society during his premiership whilst the state college system in the US has long produced the same effect. It’s just that these two systems both highlighted the benefits of higher education to the individual rather than to society.
Nonetheless, analysts trying to understand the true value of organisation should consider the issue from the macro perspective. If they did so, they would see better developed economies, more forthright citizens and improved social mobility. They might even decide that more government spending is a price worth paying.