IN THE EARLY YEARS of the twenty-first century, the academic capitalist knowledge/learning regime is ascendant. It is displacing, but not replacing, others, such as the public good knowledge regime or the liberal learning regime. Although other knowledge regimes persist, the trend line in emphasis and investment is the academic capitalist knowledge/learning regime, as evidenced in public policy, in relations among market, state, and higher education organizations, and in the employment structure and work practices of the academy.
Many scholars acknowledge the changes to which we point, whether they refer to them as the commercialization of higher education (Bok 2003, Noble 2001); as entrepreneurial universities (Clark 1998); as a triple helix that weaves together higher education, state, and market (Etzkowitz, Healey, and Webster 1998); or as corporatization of higher education (Soley 1995). The contribution of our work has been to develop a theory of academic capitalism in the new economy. We track and explain how the change from one regime to another occurs; in contrast to much work in the field, we point to the active, sometimes leading role that the academy plays in marketizing higher education, rather than portraying it as the victim of external, encroaching commercial interests. In addition, we demonstrate the degree to which market behaviors have come to permeate almost all aspects of colleges and universities, from research to instruction, including administration; by contrast, most other work concentrates on the commercialization of research. Furthermore, we point to how academic capitalism in the new economy restructures work in colleges and universities in ways that mirror and diverge from patterns of professional employment in private enterprise. Finally, we conceptualize how higher education as an institution embodies the changing social understanding of what is “public.” The idea of an academic capitalism knowledge/learning regime captures the many ways and means through which market and marketlike behaviors as well as a market ethos and ideology have been incorporated in postsecondary education.
In this chapter, we offer a theoretical reprise that concentrates on how the theory of academic capitalism explains the shift from earlier knowledge regimes to an academic capitalist knowledge/learning regime. Rather than focusing on the macro level—the growth of global markets, the rise of neoliberal states in the world—we concentrate on borders between colleges and universities and external agencies, whether located in states or markets. Attention to the borders among market, state, and institutions of higher education lets us comprehend the complex networks and mechanisms that promote the academic capitalist knowledge/learning regime.
The theory of academic capitalism in the new economy sees groups of actors within colleges and universities—faculty, students, administrators, and managerial professionals—as using a variety of state resources to intersect the new economy. These groups of actors are drawn from different institutional segments and do not always act together. However, their organized activity is directed toward the opportunity structures created by the new economy, which channels their efforts in similar directions. They create new circuits of knowledge that link the university to and bring it into the new economy. They form interstitial organizations that bring the corporate sector inside the university. They join organizations that intermediate among public, nonprofit, and for-profit public sectors. They build expanded managerial capacity to supervise new flows of external resources, to invest in research infrastructure for the new economy, and to expand programs to market institutions, products, and services to students and other customers in the private marketplace. Their individual decisions to engage in organized activities that promote market and marketlike activities consolidate the academic capitalist knowledge/learning regime.
Although market language dominates discourse about entrepreneurial universities and academic capitalism, the state continues to provide the largest share of resources for the shift in knowledge/learning regimes. Colleges and universities are not seeking to become private enterprises; rather they wish to maintain the privileges of not-for-profit status while at the same time entering the private-sector marketplace. Academic capitalism does not involve “privatization”; rather it entails a redefinition of public space and of appropriate activity in that space. The configuration of state resources has changed, providing colleges and universities with fewer unrestricted public revenues and encouraging them to seek out and generate alternative sources of revenue. These new configurations and boundaries change our conception of what “public” means.
The new configurations and boundaries also represent new circuits of knowledge, which are the harbinger of knowledge regime change. Following the new circuits of knowledge points out the segments of the economy and the state to which college and universities are connecting and with which they are integrated, and gives us a diagram of the components of the academic capitalist knowledge/learning regime and how it is wired.
Interstitial organizations are the leaven for change in established organizations, the means through which actors with mutual interests related to yet not at the core of their institution join together to express new goals and purposes for the institution. When interstitial organizations are successful, they often intersect new opportunity structures that the institution comes to see as within its purview—for example, opportunities created by the rise of the new economy. The set of interstitial organizations that figure in the academic capitalist knowledge/learning regime were organized by the faculty as research centers and institutes and also by professionals who are neither faculty nor administrators, but are interstitial personnel who possess higher degrees and whose purpose very often is to manage the market dimensions of faculty work.
Like interstitial organizations, intermediating organizations (Metcalfe 2004) intersect new environmental opportunities, in this case, opportunities created by the new economy. Unlike interstitial organizations, intermediating organizations do not originate within colleges and universities and connect similar professionals at various colleges and universities. Instead, intermediating organizations are often composed of high level administrators and span the boundaries between public, non-profit and for-profit institutions, reshaping the boundaries that divide them, redirecting and revaluing organizational purposes. In working in such intermediating organizations, academic managers enhance the academic capitalist knowledge/learning regime by developing and facilitating market and marketlike activities across public, nonprofit and for-profit institutional and sectoral boundaries.
Expanded managerial capacity is a response to the increased market and marketlike activity generated by new circuits of knowledge, and interstitial and intermediating organizations. The exploitation of intellectual property, the expansion of endowments, and the marketing of educational services require staff able to compete with other institutions and organizations to capture market shares. The more the market activity, the greater the managerial staff; the more the managerial staff, the greater the institutional effort to expand markets, as these professionals become an interest group seeking to expand its domains and career opportunities.
All of these processes—creation of new circuits of knowledge, interstitial organizational emergence, intermediating organizational activity among public, nonprofit, and for-profit organizations, and expanded managerial capacity—contribute to restratification among and within colleges and universities and often to the restructuring of faculty work. Stratification among institutions is enhanced by their differential capacities to access segmented student markets and external revenue streams related to educational products, processes, and services. Stratification within institutions is increased by colleges’ and departments’ differential capacities in the same arenas, their perceived potential to intersect and capitalize on new economy student, employment, research, and service markets. Restructuring of faculty work is often undertaken to maximize educational efficiencies and to enable some faculty to attend more to research and technology transfer in fields believed to have revenue-generating potential in the new economy. Such restratification of institutions and restructuring of faculty work reshapes access for students. More institutional and faculty attention is directed to those student markets that can afford to pay more, and fewer opportunities are available to low-income and historically underserved students of color, who are less able to pay and less likely to be flowing into new economy fields of employment. As colleges and universities shift toward revenue generation through academic capitalism, they invest less in historic, democratic missions of providing increased access and upward mobility for less advantaged populations of students.
In the current context of apparent reduced public commitment to subsidizing higher education, the need for new revenues and the language of the market makes the ascendance and expansion of an academic capitalist knowledge/learning regime seem inexorable. Yet the market logic embedded in academic capitalism is problematic. For example, notwithstanding the connotations of academic capitalism, all of the markets we consider—ranging from markets in students to patents and start-up companies—depend heavily on state subsidies, whether in the form of federal and state student financial aid or federal and state subsidies for research from which college and university intellectual property is derived. Academic capitalism in the new economy involves a shift, not a reduction, in public subsidy. Moreover, despite the implications of applying market logic to colleges and universities, many, even most, are not particularly successful capitalists. Academic capitalism involves institutions picking, investing in, and betting on certain winners in the marketplace, in developing interstitial organizations, expanding managerial professions and managerial capacity, and in restratifying academic fields. Two particular patterns and problems define academic capitalist institutions: they move toward similar opportunities rather than to any niche competitive advantage; and they are not particularly effective as venture capitalists, investment bankers, or investors in the (stock) market. However, their market failures tend to be underwritten by consumers (in the form of higher tuition) or by state subsidy. Further, academic managers and policy makers are selling the appropriateness of market and marketlike competition in higher education to the public on the grounds that academic capitalism in the new economy will make colleges and universities more self-sufficient and will decrease costs to the public. Yet state allocations to public higher education continue to increase, and tuition continues to escalate dramatically in public and private higher education. Finally, making the students consumers was supposed to empower them, but institutional funds are increasingly concentrated less on teaching and more on research, public relations, and revenue-generating activity.
In the first part of this chapter, we review the realms of federal policy, patenting, copyrighting, departmental entrepreneurial activity, administrator and trustee capitalism, and marketing in brands and to students. In the second part, we move from theoretical reprise and review to a consideration of fault lines in the structure of the new knowledge/learning regime, and of alternatives within and beyond academic capitalism in the new economy. We identify some of these fault lines in the academic capitalist knowledge/learning regime, and we close by exploring alternatives within and beyond academic capitalism in the new economy.
In chapter 2, we considered two major federal initiatives that provided a policy framework for what we call an academic capitalist knowledge/learning regime. The initiatives were federal student financial aid policy that gives money to students rather than institutions (student as consumer), and competitiveness policy—which includes patent law and policies, copyright law and policies, and information technology laws and policies—all of which created incentives for commercialization within colleges and universities.
The policies were the product of a bipartisan congressional coalition that promoted U.S. competitiveness in global markets. The coalition enacted policies in keeping with a neoliberal state that undercut welfare functions and supported programs and segments of the state that supported large, private-sector corporations. The neoliberal state concentrated funding in state agencies oriented to the production of economic growth, revenue generation, and private wealth—for example, research funding for corporations and academe. The neoliberal state worked to build the “new” knowledge or information economy and attempted to articulate national economies with global economies. To provide funds to reshape the economy, the neoliberal state instituted processes of deregulation, commercialization, and privatization, reregulating to create a state that no longer provided “entitlements” such as welfare, or that restructured and reduced general services such as health care and social security. The benefits of the neoliberal state tended to accrue less to the broad citizenry and more to large corporations, the wealthy, and the upper middle class closely associated with the growth of the new economy.
Although we begin with the federal government, we do not see the federal government as the sole policy driver for the academic capitalist knowledge/learning regime. Federal and state laws as well as institutional policies interact in complex ways to produce knowledge/learning regimes. They do not so much dictate a new academic capitalist regime as create opportunities for academic capitalism, on which new networks of academic managers, faculty, staff, and students act. States have an array of initiatives that promote economic development. Many of these initiatives, ranging from workforce preparation of students to fostering industries that contribute to the states’ economic base, feature participation of colleges and universities. Indeed, the states frequently devised innovative solutions to pressing national problems prior to the federal government’s involvement. So, too, colleges and universities are not simply acted upon, or “corporatized.” There are actors within them who participate in creating new knowledge/learning regimes by networking and partnering with external actors. Segments of the administration and faculty work to shape the politico-legal climate that fosters an academic capitalist knowledge/learning regime, and they actively and ardently engage in commercialization. Their activities are reinforced by judicial decisions, administrative law, executive orders, bureaucratic procedures, and institutional policies at the state and federal levels.
Chapters 3 and 4 deal with patenting. The changes in patenting policies and behaviors in colleges and universities dramatically illustrate the theory of academic capitalism. Although such changes occurred largely at research universities and in science and engineering, their influence extends beyond these realms. Moreover, changes in patenting were the precursor of changes in other forms of intellectual property—copyright and trademarks—that were adapted within all sectors of higher education and across a wide variety of academic fields.
The patent policies we analyzed provided strong incentives to faculty to patent. Over the years, policies elaborated their coverage to include other professional staff (revealing investment in managerial capacity to develop, market, and sell intellectual property) and students. Universities reduced exceptions to institutional claims to ownership, and policies increasingly specified use of institutional resources as a crucial factor in determining ownership.
The aggressive institutional pursuit of revenue generation through patents, as evidenced in institutional policies, was matched by faculty and students’ aggressive pursuit of academic capitalism. Appellate court cases and interviews with faculty and students involved in technology transfer revealed a move away from a public good model toward an academic capitalist knowledge/learning regime. Many faculty still held to some values of the public good regime—for example, the importance of publishing and the corresponding value of the free flow of information—but they were willing to alter those values, sometimes delaying publication, sometimes “sanitizing” data to preserve opportunities to patent. Professors straddled two different worlds, retaining a place in the public space of the university but also assuming the role of state-subsidized entrepreneurs in the private marketplace, working as consultants, officials, or even presidents of their own companies. They were constructing new circuits of knowledge.
New Circuits of Knowledge
Patents precipitated new circuits of knowledge by connecting university actors to external actors and organizations intent on building the new/information economy. Historically, circuits of knowledge connected the Department of Defense to universities through federally sponsored research projects, the knowledge from which moved to federal laboratories, then to corporations that made defense and defense-related products, and sometimes serendipitously spun off civilian technology that reached nondefense markets. New circuits of knowledge, characteristic of the academic capitalist knowledge/learning regime, connect the National Institutes of Health, the National Science Foundation, and the Department of Commerce to universities through sponsored research, frequently in partnership with corporations. Not only are different agencies involved, but in recent years they have more directly involved representatives from business in defining research agendas and reviewing grant proposals. Companies themselves have expanded their support of academic research. Like the federal agencies, the corporations in the new circuits of knowledge are different. Rather than defense and aerospace corporations, the corporations in the new circuits of knowledge produce civilian technology: pharmaceuticals, medical substances and devices, biotechnology (NIH); information technology and telecommunications (NSF); and high-technology products for global markets (DOC). Faculty and university administrators also create new circuits of knowledge when they start up corporations in which universities hold equity and faculty hold administrative positions. These circuits are usually connected to the broader civilian technology grid that integrates colleges and universities with the new economy.
The new circuits of knowledge affect and are reflected in faculty work. The traditional tripartite faculty role of teaching, research, and service altered during the period from 1980 to 2004. In response to surveys, faculty indicated that they preferred teaching to research until the mid-1980s, after which an increased preference for research began to emerge (Finkelstein, Seal, and Schuster 1998). Concentrating on research allows faculty to give more time and attention to work that may result in discoveries that can be patented. In fact, the rate of faculty/university patenting has increased dramatically. Prior to 1980, about 250 patents per year were granted to universities; in 1998, the number was 3,151. “As a result, academic patents now approach 5.0 percent of all new U.S.-owned patents, up from less than 0.5 percent two decades ago” (NSB 2002). In addition, faculty publication patterns are more closely aligned with industry. In 1988, faculty coauthored 20.3 percent of their publications with industry. In 1998, approximately 25 percent were coauthored with industry. As the National Science Board (2002) notes, “The Federal Government has long sought to stimulate ...collaboration across sectors (e.g., industry-university ... activities)” (p. 544). As we have pointed out, universities also sought to stimulate such collaboration. Academic institutions were at the heart of cross-sector relationships, linking private nonprofits, private for-profits, the federal government, FFRDC’s, and institutions of higher learning (2002).
At the same time that faculty patenting has increased and faculty are publishing more often with industry coauthors, the number of scientific and technical articles by U.S. authors has declined. The national output across all research-producing organizations in 1999 was down by 10 percent from 1992. This trend diverged from growth in most other OECD countries during this period and is a reversal of three prior decades of consistent U.S. publication growth. The decrease in articles produced within academia was slightly less pronounced (9%), but, because of the sector’s high share of total output, it accounted for 64 percent of the overall decline. In academia, almost half of the decrease was in the life sciences, perhaps because they have undergone the most rapid commercialization and are the academic fields in which withholding of research results is most common (NSB 2002).
As scientific publications declined, the number of patents referencing scientific articles increased dramatically. In the mid-1980s, patents referenced about 22,000 scientific articles, but in 1998 they referenced 310,000 (NSB 2002). Many explanations can be offered for the rise in patent citations, from the growth of biomedical patents to changes in international patent law. However, patent citation of scientific articles points to creation of new circuits for academic knowledge. This knowledge no longer flows primarily among scientific communities but frequently through circuits that connect it to knowledge application and the corporate world.
As new circuits of knowledge emphasized entrepreneurial research and university-industry partnerships, universities shifted their research expenditure patterns. In the period 1977–1996, all institutions increased their research expenditures from 19 to 21 percent. At public colleges and universities, the share rose from 17 to 21 percent; the increase was greatest at public doctoral granting I (6–13%) and II (16–25%) universities, suggesting that they were eager to intersect the academic capitalist knowledge/learning regime, perhaps to capture increased streams of external revenues to emulate research I and research II public universities. Alternatively, they may have received lower shares of state resources and charged lower tuition rates, which pushed them toward research activity as a means of leveraging external resources. As all public institutions increased expenditures devoted to research by roughly four percentage points, they decreased expenditures for instruction by approximately six percentage points.
Private institutions behaved somewhat differently. During the same period, research declined from 24 to 21 percent of their expenditures. The most dramatic declines were in private research I and doctoral granting II. Private research I university expenditures declined from 42 to 36 percent, and the private doctoral II expenditures from 18 to 14 percent. However, private colleges and universities did not expend increased funds on instruction, which remained relatively constant. Rather, as a group private institutions increased their expenditures on public service, a category “established primarily to provide non-instructional services beneficial to individuals and groups external to the university” (NSB 2002).
Thus, as they engage in the academic capitalist knowledge/learning regime, colleges and universities are either decreasing instructional expenditures or holding them constant, even as they are significantly increasing tuition.
Interstitial Organizations
As universities became more involved in patenting, and as federal legislation encouraged the development of organizational structures within universities to manage patenting, professionals with law and science degrees were hired in new or expanded technology transfer and/or intellectual property offices. These new professionals joined the Association of University Technology Managers (AUTM), an intermediating organization that operates outside of universities but that intersects technology transfer managers from various public and private sectors. Formed by “seven visionaries” as the Society of University Patent Administrators in 1975, AUTM has dramatically grown in membership and has broadened its focus beyond patents (AUTM 2003a). In 1986 its membership was only 381, but it had grown to 771 members by 1990 and 3,200 by 2003
(AUTM 2003b). These numbers reflect the expansion of patenting and other technology transfer activity among a wider range of universities and the increase in size of technology transfer offices within those institutions.
The national association collects data on university patenting and has a journal that provides information on patenting, licensing, royalties and start-ups. The association and the journal created a normative discourse that emphasized the degree to which intellectual property contributed to university generation of external revenues as well as the contributions university intellectual property made to the new economy and the welfare of the citizenry. Because the success of their offices depends on increased streams of revenue, technology transfer officers make every effort to expand the numbers of faculty disclosures and to patent the promising ones, linking faculty and administrators directly to corporations in the new economy. In short, AUTM illustrates how professionals other than faculty within colleges and universities respond to opportunities created by the new economy.
Yet faculty and academic units have also created interstitial organizations. Various sorts of centers and institutes in the sciences and engineering have been designed to facilitate the interaction and intersection of higher education, state, and market organizations. Such centers are in considerable part a response to a push by federal funding agencies to promote closer cooperation and partnerships between universities and business.
Intermediating Organizations
In spanning public, nonprofit, and for-profit entities, mediating among the sectors and often reshaping their boundaries, intermediating organizations play a significant role in the postsecondary community during regime shifts. In the case of patents, another important intermediating organization (in addition to AUTM) was the Business-Higher Education Forum (Slaughter 1990). It was made up of CEOs primarily from large corporations and research universities, who met on a “principals only” basis. The explicit purpose of the forum was to increase U.S. productivity and ability to compete in global markets for civilian technology. The forum circulated its policy documents widely, and spokespersons met regularly with members of the executive and legislative branch of the federal government to advance their positions.
Research university presidents committed to these goals at least in part because corporate leaders affirmed research universities’ right to hold patents to discoveries faculty made when working on federally sponsored projects. The first widely distributed forum report was written about the same time (1983) that President Reagan signed an executive order that altered Bayh-Dole (1980), allowing large corporations as well as small business and universities to patent discoveries their scientists made when working on federally sponsored research. Although the change benefited research universities, it also benefited large corporations, which engaged in far more federally sponsored research than universities.
The Business-Higher Education Forum spanned the boundaries between public, nonprofit, and for-profit entities and engaged in reshaping them, working to allow corporations and universities to take out patents on research that was previously publicly held. The Business-Higher Education Forum was committed to creating a new economy rooted in civilian technology that was based on intellectual property. Corporations were able to use federal funding of research to make profits from patents; universities were able to use federal funding to generate external revenues from patents. The presidents of institutions of higher learning worked with the Business-Higher Education Forum to create a policy climate in which federal funds for civilian technology would be plentiful for corporations and universities. They reshaped public/private boundaries so that universities could easily participate in economic activity with corporations or on their own.
Enhanced Managerial Capacity
In order to more aggressively pursue the promise of patents, colleges and universities greatly expanded their internal managerial capacity to participate in external markets. The new functions were generally handled by technology transfer offices and included reviewing and evaluating faculty disclosures; technology licensing; supervision of royalty flows; reinvestment of funds in new market opportunities; litigation to defend intellectual property; evaluation of intellectual property for institutional equity investments; monitoring and occasionally administering corporations in which the institution held equity; overseeing initial public offerings (IPOs); and handling bids for downstream research related to patented technology already in the market. As institutions become more involved in academic capitalism, they hired more managerial professional staff. College, university, and state system patent policies gave professional staff the managerial capacity to run intellectual property activities like businesses. The growth of such managerial capacity is evident in the growth of technology transfer offices, economic development offices, trademark offices, and corporate relations offices.
Chapters 5 and 6 deal with copyrighting. Like patenting, changes in copyrighting dramatically illustrate the growth of the academic capitalist knowledge/learning regime. Unlike patenting, which deals primarily with intellectual property discovered by faculty during the research process, copyrighting covers the instructional aspect of faculty work. After the advent of digital technologies, the possibilities of generating external revenues from instructional materials transformed the academic capitalist knowledge regime into an academic capitalist knowledge/learning regime.
New Circuits of Knowledge
Traditionally, faculty owned copyrights to their scholarly and creative works, or traded royalties for copyrights from third-party organizations, in the form of publishing companies. Other than textbooks, these works had relatively small audiences, made little money, and did not figure in revenue generation strategies of colleges and universities. As digital telecommunications technologies grew more sophisticated, colleges and universities began to see instructional materials offered via distance education as a source of external revenue from off-site student tuition. Many institutions developed copyright policies from the mid-1980s through the 1990s. These policies often let faculty retain ownership of scholarly and creative work but made institutional claims to instructional materials, particularly when these were produced with the use of university facilities or resources. These instructional materials were often used in distance education.
Prior to the 1990s, most colleges did not have distance-education programs other than correspondence, audio tapes, or closed circuit television. The Internet technology and telecommunications revolution of the 1990s stimulated enhanced distance education. By 2001, 48 percent of all college and universities offered distance-education courses, and 22 percent offered graduate-level courses (NCES 2003). In 2000–2001, 2,876,000 college-level credit-granting distance-education courses were offered, 82 percent at the undergraduate level. Forty-eight percent of public two-year, 31 percent of public four-year, and 19 percent of private four-year colleges’ enrollments were via distance education. Public four-year institutions (48%) are most likely to offer virtual degrees, taken entirely through distance education, followed by private four-year (33%) and public-two year (20%) (NCES 2003).
Participation in distance education often inducts administrators and faculty into the academic capitalist knowledge/learning regime. Administrators have to purchase or lease and maintain the physical infrastructure that makes distance education possible, construct teams of producers and content providers, and market the product to student consumers. They often work in partnership and consortia with private-sector partners. Sixty percent indicated they worked in consortia, most often statewide (NCES 2003). Unfortunately, national data on how many consortia members are corporations was not available. However, we know from Schiller (1998) that many colleges and universities have corporate partners, as discussed in chapter 6.
Faculty who develop instructional materials for distance-education courses often receive generous royalties for use. However, the nature of their work changes. Rather than being in charge of a classroom where they interact face-to-face with students, they become content providers on teams of distance-education producers. In this process, nonfaculty academic professionals who participate in the teams do not receive royalties even if they contribute to course design because their work is considered work for hire.
Distance-education courses offer the promise of new student markets, increased tuition revenues, revenues from educational products, and enhanced efficiencies in the delivery of educational services. As in the dot.com debacle in the private-sector economy, so too, many of the for-profit ventures undertaken by colleges and universities often fail to fulfill the promises of the new economy. However, other strategies and ventures have been more successful. The efforts of community colleges to market courses and programs to international students and of science and engineering departments to market “professional masters degrees” to employed businesspersons have often succeeded. These efforts mark a substantial change in orientation to education, shifting the focus to the efficient delivery of educational services. For a price, circuits of instruction now encompass campus, state, region, or world, encouraging even “community” colleges to direct attention away from local students and employers in an effort to intersect with the global, new economy.
Interstitial Organizational Emergence
A number of organizations have emerged to manage, promote, and regulate distance education. As with patenting, AUTM stresses strategies for institutions to capture and exploit faculty copyrights. Among the many associations that deal with distance education are the United States Distance Learning Association and the International Association of Distance Educators. There is also an accrediting agency for distance education, the Distance Education and Training Council, which works with the U.S. Department of Education. Web resources for distance education are too numerous to list.
Many established organizations in higher education have also developed copyright and distance-education policies, and undertaken conventional interest-group activity around these issues. For example, the American Association of University Professors, the American Federation of Teachers, and the National Educational Association have issued statements about copyright and distance education. These organizations generally seek to retain faculty copyright ownership of new, digital forms of intellectual property, including instructional materials used in distance education. Although they articulate some traditional stances concerning professional control of work and standards of quality, by endorsing faculty claims to new forms of intellectual property these organizations also promote faculty complicity with and commitment to the academic capitalist knowledge/learning regime.
Important new players in distance education are for-profit, postsecondary institutions. The lobbying by these entities of state boards of education and regional accrediting associations has served to legitimate and advance an academic capitalist knowledge/learning regime. Their lobbying efforts have relaxed restrictions and created exceptions to professional quality standards regarding the percentage of classes that are taught on campus, the percentage of staff who are part-time, and the involvement of faculty in curricular matters. For-profit distance education treats education as an information service like any other service.
Intermediating Organizations
Many organizations intermediate among public, nonprofit, and private entities concerned with copyrighted intellectual property. Members from the educational and corporate sectors in these intermediating organizations are committed to improving education through information technology. Their education goals operate in tandem with commercial objectives. EDUCAUSE and the League for Innovation in the Community College are among the most well-known organizations that link colleges and universities to corporations that market information technology hardware and software, often in packages that can be sold to campuses as discounted systems.
As its mission statement says, “EDUCAUSE is a nonprofit association whose mission is to advance higher education by promoting the intelligent use of information technology.” EDUCAUSE membership is composed of colleges and universities, professional associations, and corporate members, largely from the information technology sector. For corporations, the EDUCAUSE meetings are a venue for marketing their information technology products. For educators, who are generally managerial professionals rather than faculty, EDUCAUSE meetings are a place to learn about and purchase products to incorporate information technologies into campuses and the delivery of educational services. Both parties work through EDUCAUSE to develop strategies for increasing the use of information technology on campuses. These strategies are legislative, to commit more state and federal resources to information technology; interinstitutional, to build consortia promoting information technology use; and institutional, to enhance the capacity of individual institutions with regard to information technology.
The League for Innovation in the Community College serves many of the same purposes. Organized in 1968, it works to integrate community colleges with corporate labor markets. In the 1990s, it turned increasingly to information technology. Like EDUCAUSE, the league has corporate partners and offers programs at which these partners have vending rights, depending on their partnership status. Among recent partners are 3dimensional Holographic, Avenet, eFolio, Citrix Systems, College Collaborative Network, CompTIA, Condensed Curriculum International, Cyberlearning Labs, Elsevier-Evolve, Endeavor Information Systems, Hawkes Learning Systems, Learner’s Library by Knowledge Ventures, School Web Services, Silicon Chalk, Soft Chalk, and Sun Academic Initiative. The league’s corporate partners are purveyors of products that are used within the information systems developed by colleges and universities.
These intermediating organizations span the boundaries of public, nonprofit, and private entities, and expand higher education institutions’ commitment to information technology. They pursue legislative strategies that increase public monies for information technology, subsidizing tighter connections between colleges and universities and corporations. They support distance and on-campus education delivered through more advanced information technologies, which encourages new economy corporate production and sales. It also encourages colleges and universities to market distance-education and educational materials to new student markets, as a new information and educational service intended to generate new revenue streams. Intermediating organizations, then, support the commitment of colleges and universities to an academic capitalist knowledge/learning regime.
Enhanced Managerial Capacity
Like patents, copyrighted instructional materials must be managed to enhance revenues. Although technology transfer offices often manage copyrighted intellectual property along with patents, college and university commitment to distance education and to copyrighting of instructional materials has also resulted in the creation of new offices to manage these initiatives. For example, many institutions have distance or continuing education offices that manage virtual education, including its many physical manifestations—networking infrastructure, computer labs, one- and two-way video equipment—and marketing. In addition, most institutions now have offices that encourage the use of technology in on-campus education, from teaching centers to professional development centers that develop or help faculty develop and incorporate information and multimedia technologies into their instruction.
Enhanced managerial capacity also means expanded managerial capacity. The use of information technology generally calls for more support professionals to operate, repair, handle, and conceptualize educational materials and curricula. Part of what is driving the increase in support professionals is the establishment of a new production process for the delivery of information and educational services, which involves a matrix of professionals rather than a single professor in constructing and delivering a course. Faculty are being decentered not only in absolute numbers, and by the increased numbers and percentages of part-time faculty, but also in the educational process itself. Because managerial professionals report to administrators rather than to the faculty as a collectivity, whether in departments or senates, there is a shift toward expanded administrative authority.
In a related development, many colleges and universities have established the position of CIO (chief information officer) in the past decade. The CIO manages infrastructure for information technology, ranging from technology-infused classrooms to high-speed computer wiring systems for dormitories. These officials also develop forward planning for the institutional information technology system. Furthermore, they represent a new force promoting the increased use of and investment in information technology.
Enhanced and expanded managerial capacity links colleges and universities to the new economy and commits them to academic capitalism. Very often CIOs are involved in partnerships rather than simple procurement relations with corporations. They join in strategic alliances with information technology firms in which they act as test beds for new products, perfecting products for the corporations in return for discounted technology. Distance-education offices, teaching centers, and professional development offices market new instructional technologies to faculty and students in ways that increasingly directly intersect education with new economy corporations that redefine educational materials and processes. They are shifting the academy from an era of chalk and blackboards to one in which Blackboard is a new economy corporation marketing its information technology platform to colleges and universities, which themselves are developing their own products and platforms to market in the private sector. In the process, colleges and universities are becoming further integrated into an academic capitalist knowledge/learning regime in the new economy.
Chapter 7 deals with departmental involvement in the academic capitalist knowledge/learning regime. We found departments very involved in academic capitalism, but in unanticipated ways that speak to the complex and sometimes conflicted nature of academic commitment to entrepreneurial activity. Although most departments we studied generated external revenues by competing for grant and contract funding, we were somewhat surprised at the relatively limited collective initiatives to pursue entrepreneurial research markets. More common were educational initiatives designed to generate external and internal revenues through new programs that articulate with the new economy.
New Circuits of Knowledge
Several examples of new circuits of knowledge were evident in the activities of academic departments. New masters programs targeting prospective students in business were established. These “professional masters’ degrees” were terminal and did not require a thesis. The idea was to make them more attractive to employed persons who would not have time to do thesis work and who would be neither interested in nor able to pursue a doctorate in the field. Such programs were cheaper to run because there was no provision for tuition waivers or assistantships for students, and little was needed to hire additional faculty since the courses could be taught by doctoral students. The new programs represent a substantial shift from past practices, which treated masters’ degrees as a step on the way to a doctorate, which was largely a step on the way to academic employment. Traditional academic departments that are reconfiguring their professional masters’ degrees can be seen as providing a form of continuing education that trains and upgrades employees for the new economy.
Intermediating and Interstitial Organizations
In the mid-1980s most public universities began large capital campaigns. Some years later, colleges within these universities began to hire their own development officers and to appoint advisory boards. Such initiatives were initially most common in business and engineering colleges but have since expanded. Now, we are finding evidence of academic departments within the colleges developing these sorts of links to the private-sector market. Essentially all of the academic colleges in our sample had development officers, and some departments had undertaken fund-raising activities. One of the organizational mechanisms for pursuing such efforts was advisory boards, which included members who represented or were connected to large corporations and potential donors. These boards mediated between the worlds of academe and industry. Although they were largely focused on fund-raising, their existence also made possible a more direct flow of feedback from the external world to the department in regards to employment needs.
A more longstanding organizational form in universities is centers and institutes. In the past two decades, new types have emerged, with more direct partnerships and connections with private enterprises. At the initiative of federal funding agencies such as the National Science Foundation, many such centers and institutes require and promote university/industry partnerships. These entities facilitate the movement of faculty and students between academic and business worlds. Like advisory boards and development offices, they normalize and expand universities’ managerial capacity, to some degree displacing long established but uncoordinated faculty networks with corporations.
Despite the ascendance of the academic capitalist knowledge/learning regime, elements of and some commitment to old (public good) regimes and prestige systems persist. Even those department heads who sought aggressively to intersect their units collectively with the business world were clear that they had to maintain and expand federal grant and contract revenues. Such peer-reviewed grants were considered by almost all heads and faculty as more prestigious than private-sector support and as key to the tenure and promotion process of individuals, as well as to the collective prestige of the department. Some resistance to the academic capitalist knowledge/learning regime was grounded in a continued commitment to alternative conceptions of the functions of a university.
In this sense there is clearly a coexistence of academic capitalist and other knowledge regimes. At the same time, it would appear that the prestige system is increasingly being defined in academic capitalist terms. That is, grant-revenue rankings are increasingly important relative to National Research Council prestige rankings, and the prestige of the institution as well as the academic unit is increasingly being defined by how much money it can command from external markets. Such developments, in our view, speak to the ascendance of the academic capitalist knowledge/learning regime.
Chapters 8 and 9 study how administrators and trustees intersect the academic capitalist knowledge/learning regime. Their networks are distinct from faculty’s. Senior academic administrators, such as presidents, and trustees of colleges and universities advance the academic capitalist knowledge/learning regime and intersect the new economy directly through intermediating and interstitial organizations that foster the development of new circuits of knowledge and involve expanded managerial capacity.
Intermediating Organizations
We analyzed Internet2 as an intermediating organization that networks public organizations and private corporations. Internet2 was initiated by presidents of research universities but now encompasses postsecondary institutions from across the spectrum. The purpose of Internet2 was to create new Internet infrastructure that was not overly burdened by commercial traffic and that tested and deployed hardware and software for new economy telecommunications corporations.
The network unites its participants around the electronic infrastructure and commercial purpose that play a part in building the new economy. Internet2 enables corporations and public and nonprofit entities to adopt the others’ practices, enhancing potential profit/revenue streams and expanding markets. Corporations benefit from the network in that new infrastructure is constructed which may be privatized, allowing corporations to benefit from public- and nonprofit-sector resources. Colleges and universities benefit in that they build infrastructure that expands their telecommunications capacity, furthering research and educational service delivery goals that depend on that capacity. Colleges and universities are able to reduce the costs of Internet2 through corporate contributions. Corporations are able to deduct their contributions as either research tax credits or charitable donations, yet are often given contracts to construct components of Internet2. As colleges, universities, and corporations build Internet2, they create intellectual property in which they hold shares according to their agreements, and they profit from the marketing of knowledge economy products that are by-products of Internet2 construction. Colleges and universities serve as test beds for corporate information technology products, often receiving deep discounts. Corporations benefit from the knowledge generated by student use and faculty expertise.
The networks created by intermediating organizations such as Internet2 normalize corporate-university relations around commercial activity. They create new organizational fields across very different sectors (DiMaggio and Powell 1983), operating through fluid networks rather than stable fields. These new networks create common ground for actors to develop shared values and norms, and the organizations within the networks become more similar.
Interstitial and Intermediating Organizational Emergence
Many of the organizations affiliated with Internet2 have emerged from the interstices of public entities to connect them to for-profit entities, often through intermediating boundary-spanning organizations such as Internet2. For example, Media Center North Carolina (MCNC) was founded by the North Carolina General Assembly in 1980 to drive technology-based economic development by partnering with universities, business, and government (MCNC 2003). The public entity promotes economic development in North Carolina through three lines of business—research and development, venture funding, and grid computing and networking services. Many Internet2 affiliates are other boundary-spanning organizations located at state higher education systems level and devoted “to enhance[ing] the educational, social, and economic development of. . . citizens through effective and collaborative use of telecommunications and information technology,” as the Indiana Higher Education Telecommunication System (IHETS) puts it (2003). Other affiliates with a similar mission are LaNet (Louisiana), NYSERnet (New York State), and the University of Florida System. In other words, Internet2 replicates itself through its affiliates, expanding the networks that experience commercialization as normative in higher education.
Intermediating and Interstitial Organizational Emergence: Trustees and Fund Raising
As faculty academic capitalist networks are distinct from but related to presidential networks, so presidential networks are related to but distinct from trustee networks. The trustee networks are another form of intermediating organization. Historically, trustees may not have been tightly networked. Currently, private-sector trustees at elite research universities directly connect those institutions to the new economy. Many of the corporations represented on private university boards of trustees are new economy corporations. Such boards are likely to make policies that enhance the directions in which they are expanding—for example, building biotechnology research facilities, approving partnerships with corporations in a variety of businesses generally related to the new economy, expanding Internet and telecommunications facilities, and approving litigation strategies that strengthen intellectual property. Their work may frame the forward planning in which presidents participate in their own intermediating organizations, such as Internet2.
Public university trustees, aware of private trustees’ network and resource advantages, may engage more aggressively in commercial endeavor in an effort to compete successfully. Despite not participating directly in the private trustee network, public university trustees may embrace academic capitalism more closely in hopes of generating external revenues to keep the resource gap between private and public from further widening. Although we found that elite public research universities are not directly linked to new economy corporations through their boards, they are indirectly connected through other networks they share with private universities. Moreover, direct connections very likely can be found in interstitial fund-raising entities that have emerged and expanded within public universities since the mid-1980s. Public universities aggressively have taken on development activities, which are coordinated not only by central offices and foundations, separate on paper from the university but directly connected, but also through advisory boards of the academic colleges. These boards link colleges directly with the external world, particularly with large companies and potential donors. Although the records of the central offices and the college boards are difficult to access, there is good reason to believe that they have numerous connections with new economy corporations, particularly in the boards of professional schools such as agriculture, architecture, business, engineering, and medicine.
New Circuits of Knowledge
Presidents networked in intermediating organizations such as Internet2 create new circuits of knowledge, different from but aligned with those created by faculty, technology transfer officers, and corporate licensees or partners, or faculty, distance-education officers, and corporate licensees or partners. The presidents, in organizations like the Business-Higher Education Forum, EDUCAUSE, Internet2, and biotech consortia, create new circuits of knowledge when they engage in forward planning for research, deployment and testing of infrastructure, and developing products, processes, and services for the knowledge economy. In effect, these new circuits of knowledge lay the groundwork for orienting faculty research and teaching in commercial directions. They augment, expand, and enhance opportunities for faculty and staff to become academic capitalists.
New circuits are evident as well in the activities of trustees and development officers in their interstitial and intermediating organizations. At the central level, as well as at the level of colleges and departments, boards and donors open up new economy opportunities that encourage and channel faculty research and educational activity in directions seen as potentially generating new revenues. These new and expanding organizations create opportunity structures, realized through closer interaction with and direct engagement in the market.
The forward planning that takes place in intermediating organizations like Internet2 makes university presidents central actors in planning the economic future of the nation. Internet2 named its backbone Abilene and frequently compares the construction of the net to the building of the railroads. However, nineteenth- and early twentieth-century university presidents and their institutions were not involved in planning and financing the railroads. Rather, they were beneficiaries of railroad wealth, as was the case with Johns Hopkins and Stanford. In the late twentieth and early twenty-first centuries, university presidents have been involved in the design, financing, and deployment of new information superhighways, and have contributed to corporate profits by developing shared commercial products and financing infrastructure that corporations are likely to use in the future. The managerial capacity of twenty-first-century university presidents (and of their CIOs) has been greatly enhanced, in large part through the many opportunities for commercialization presented by the new economy.
In the case of fund-raising and development, we see an expanded managerial capacity that is comparable to the growth of personnel managing patents and copyrights. In the past twenty years, development offices have increased substantially in size and activity, and have emerged at the level of academic colleges, expanding the number of personnel there as well. Increasingly, these managerial professionals, focused on generating entrepreneurial revenues from closer connections to the private sector, have a role in and impact on the strategic direction and initiatives of private and public universities.
Chapters 10 and 11 deal with college and university marketing to students and alumni as well as institutional competition for student markets. The theory of academic capitalism explores new levels of marketing and consumption within the institution by focusing on school logos as brands. It also moves beyond students as consumers to institutions as ever more sophisticated marketers, increasingly able to capture the student markets they target. Student markets are heavily state subsidized, whether through state block grants or state and federal student financial aid funds. Nonetheless, the greater the degree to which tuition dollars constitute a share of colleges and universities’ annual operating budgets, the more aggressive institutions’ marketing behaviors. Moreover, as the academic capitalist knowledge/learning regime intensifies, students, once recruited, are transformed into captive markets to which institutions market branded products as well as an array of other revenue-generating products and services.
New Circuits of Knowledge
Branding is a new economy marketing strategy that colleges and universities use to sell goods and services to matriculated students, who are captive audiences. Colleges and universities brand products and services with trademarked college and university logos, which they sell to students and alumni to increase external revenues. Like for-profit and nonprofit marketing activities, the stores and websites that sell logo-ed paraphernalia are virtually indistinguishable from their commercial counterparts.
When college and universities are constructed as new economy consumption goods rather than educational institutions, their circuits of knowledge increasingly intersect external, but connected, for-profit entities. For example, entities such as the Princeton Review sell books, live and on-line courses to prepare students for college, and tools for guidance counselors. They also sell on-line tools for “prospect management,” a euphemism for students interested in specific colleges and universities. Other for-profit corporations, such as GDA Integrated Services, provide additional services, including admissions operations assessment and consulting, branding/positioning, financial and program assessments, and packing packaging/leveraging consulting, market research, and fund-raising communications (GDA Integrated Services 2003). Commercial college guides, such as Peterson’s, and college-rating systems, such as U.S. News and World Report, are important in establishing institutions’ consumption value. These new circuits of knowledge, based around marketing colleges and universities to students, bring postsecondary institutions closer to commercial entities marketing similar educational goods and services. Of course, colleges market themselves as consumption items, offering a range of consumption and leisure items to prospective students. Some of these services and amenities are provided through contracts with businesses, others are run by the colleges themselves.
However, college and universities have gone beyond marketing to students; they also market their students. Many regard their study bodies as negotiable, to be traded with corporations for external resources through all-sports, test-bed, single-product, and information market (names, addresses, telephone number) contracts. When students graduate, colleges and universities present them to employers as output/product, a contribution to the new economy, and simultaneously define students as alumni and potential donors. Student identities are flexible, defined and redefined by institutional market behaviors.
Interstitial and Intermediating Organizations
Trademarking groups have their own interstitial organizations that emerged in the 1980s, including the Association of Collegiate Licensing Administrators, which is more comprehensive than the older, less commercially oriented licensing groups. Their work is augmented by Royalty Management Associates, an organization led by a former Disney auditor, which provides compliance review services to licensors, including colleges and the Collegiate Licensing Group. Sometimes interstitial organizations and intermediating organizations overlap. In 1992, the Collegiate Licensing Company, which licenses logos for a number of universities, joined with professional sports leagues (MLB Properties, NBA Properties, NFL Properties, and NHL Properties) to form the Coalition to Advance the Protection of Sports Logos (CAPS). Since its establishment, CAPS has developed a network of private investigators and law enforcement officials that brings civil or criminal actions against trademark violators, protecting college and university commercial assets.
For-profit, nonprofit, and public organizations have emerged around post-secondary marketing opportunities. For example, the Independent Educational Consultants Association (IECA) is a national, private, fee-for-service organization of counselors who aid high school students applying to colleges and universities. In 1994, the National Academic Advising Association, the nonprofit counterpart of the IECA, emerged to share information about how to help prospective students choose colleges and universities. The University Marketing Professionals Association was established in 1999 and performs functions similar to associations organized by for-profit marketers. Xap, a for-profit corporation, provides on-line application services, intermediating among educational associations, colleges and universities, other companies, and the U.S. Department of Education. Xap enhances college and university marketing by making it easier for students to apply. Xap’s functions do not differ greatly from those of the College Board, a nonprofit that also helps (for a fee) students apply to college and write on-line essays. The line that distinguishes among for-profit, nonprofit, and public entities shifts depending on the tax status and profit-distribution requirements of organizations rather than their functions.
Enhanced Managerial Capacity
The new circuits of knowledge, interstitial organizations, and intermediating organizations call for enhanced managerial capacity in colleges and universities. If institutions increase their enrollment management capacity, they hire staff, just as they do if they develop stores to sell products branded with trademarked logos. When colleges and universities develop facilities and services to recruit students to campus and sell products to them after they arrive, they hire new support professionals. Recreation centers and mini-malls require personnel. Even when business opportunities are outsourced—to Starbucks, McDonald’s, or Barnes and Nobles—colleges and universities have to manage the licenses and external revenues. Enhanced managerial capacity creates a stratum of on-campus professionals who are committed to expanded commercial opportunities.
Several fault lines are evident in the academic capitalist knowledge/learning regime. These undercut its market logic and claims of increased efficiency. First, academic capitalism blurs the boundaries between public and private sectors, but it sustains a substantial level of public subsidy of higher education. Second, there is simultaneously a redefinition of public space in the academy, and a shifting of public monies to subsidize different activities, fields of work, and professionals. Third, in many cases, academic capitalism is not very successful in generating net revenues, and it leads to unanticipated, undesirable practices and outcomes. Fourth, in the context of a conception of institutional purpose that is reduced to revenue enhancement, the academic knowledge/learning regime leads to an expanded range of educational services geared toward a reduced range of traditional-aged students. Finally, as colleges and universities seek to enhance revenue by intersecting global information systems and markets, they reduce distinctive involvement in local communities.
The federal policy changes we reviewed in chapter 2 created new opportunities for public and nonprofit entities to engage in commercial activities. In redefining public space in ways that foreground and feature market activity and logic, these federal policies continue a pattern of substantial public subsidy in various forms. When the neoliberal state withdraws broad support for social services and promotes entrepreneurial activity, ironically, nonprofits proliferate. U.S. nonprofits tripled in the past three decades, growing from about 300,000 in 1970 to approximately one million in 1998. In 1975, their total revenues were less than 6 percent of the GNP, while in 1990 they exceeded 10 percent. Between 1980 and 1990, paid employment in nonprofits increased by 41 percent, more than double the growth of employment in other sectors.
Perhaps even more ironically, nonprofits are turning to commercial activity to expand their operations. The legislation enacted by the competitiveness coalition created commercial opportunities not just for colleges and universities but also for the majority of nonprofit organizations (Weisbrod 1998b). Commercial activity increased across nonprofits, from gift shops in museums to health clubs in hospitals. Many nonprofits are forming for-profit subsidiaries. Public and private colleges and universities have led the nonprofits that have engaged creatively in commercial activity.
As commercial activity expands in the not-for-profit sector, it may become an end in its own right. James (1998) suggests that there may come a point when nonprofits become “false nonprofits” or, as Weisbrod (1988) calls them, “for-profits in disguise”. That certainly is a possibility in private, not-for-profit higher education as well as in some sectors of public higher education. Public colleges and universities have no interest in becoming for-profits, but many public research universities make the case that they should become “private” entities because appropriations from the states in some cases provide as little as 15 to 30 percent of institutional revenues. However, they do not want to pay taxes, whether on property, the proceeds for their intellectual property, or their commercial revenue from an array of marketing activities, all of which are currently not taxed so long as they are used for institutional rather than individual purposes. Nor do not-for-profit colleges and universities want to forego public subvention in the form of state and federal student financial aid and loan programs. In short, they want the best of both worlds—the protections and continued subsidies of the public sector, and the flexibility, opportunities, and potential revenue streams of the private sector.
Although colleges and universities usually present their commercial activity as win-win, building the economy, generating external revenues, and expanding educational capacity, the commercial activities of institutions can be problematic in several ways. First, higher education institutions are often not very successful capitalists, and students and the public have to pick up the tab for their failures. For example, while technology transfer brings external revenue to colleges and universities, it also takes funds from them. Colleges and universities or state systems have to pay for legal fees and for technology transfer offices. Nationally, legal fees are in the hundreds of millions of dollars. The magnitude of nonreimbursed legal fees has increased about 250 percent over the eleven years that AUTM has surveyed technology transfer activities. (These costs could be substantially higher, since AUTM modified its definition of legal fees in 1999, omitting major litigation to better focus on benchmarking patent prosecution costs.) A relatively small number of universities are responsible for the lion’s share of patenting activity and run their technology transfer efforts in the black. In the 1990s, the one hundred largest universities received more than 90 percent of all patents awarded. Income from patents was also concentrated in the top one hundred institutions; the most recent survey indicates that two-thirds of the monies were generated by thirteen institutions. However, most doctoral granting institutions (RI, II, doctoral granting institutions I, II) maintained technology transfer offices, as did a few comprehensive universities. In other words, a number of universities bore the expense of technology transfer offices but reaped relatively few rewards. Similarly, many for-profit ventures in the realm of on-line and distance education have gone bankrupt.
Other undesirable outcomes can attach to the entrepreneurial activities of colleges and universities. For example, those who support patenting argue that it will contribute to economic growth beneficial to the citizenry as a whole. However, the overall pattern of the new economy, at least as configured in the United States, has resulted in greater income and wealth stratification within and outside the academy than was the case under the public good knowledge regime. Actors in patent networks often present commercialization as an activity that benefits taxpayers through new discoveries made through university-industry partnerships, which obscures the continued contributions made by federal tax revenues to pay for R&D. Similarly, the discourse in patent networks is about making up for lost state revenues, and glosses over the fact that patent income is often not used to offset education costs. Instead, most institutions dedicate patent income to generating more intellectual property. Despite an elaborated market discourse, the public sector continues to bear the lion’s share of the costs of technology transfer.
As more students and professors engage in entrepreneurial research markets, more knowledge becomes “propertized,” or owned. When information and knowledge are owned, they circulate less freely. Sometimes information is strategically incorporated into companies’ growth strategies and removed from markets. In a perverse inversion of purpose, patents are used to keep information from the market. Granstrand (2000) makes the case that “if the rate of knowledge growth is consistently larger in the private domain than in the public domain, then at some point in time privately held knowledge will start to dominate” (p. 24). If private knowledge control dominates, then public science and technology as well as education become more difficult to maintain. The academic capitalist knowledge/learning regime may contribute to this process.
We are not making the case that universities should not patent. However, the academic community needs to debate the question of where to draw the line between public, non-profit, and for-profit activities, as well as who should draw the line. Also of concern is what sorts of products are promoted. Currently, colleges and universities do not have policies about how they select discoveries to patent or exploit commercially. Some are more likely to patent when a corporation will pay the cost. Others are likely to patent when the market for the product looks promising. Because social utility is not a criteria, colleges and universities are as likely to patent cosmetic properties, for example, Retin-A, as they are discoveries that might contribute broadly to the social welfare of the citizenry, for example, AIDS vaccines. Currently, college and universities follow a market rather than a social welfare logic. However, as nonprofit and public institutions, they might well increase their public support and legitimacy by commercializing in areas of great public utility and seeking less than the maximum profit the market will bear when selling products.
Commercializing copyrightable materials increases educational costs in terms of tuition and of educational materials. Institutions meet the cost of technology in part by raising tuition. Courseware packets, CDs, or other technology-enhanced educational materials are an added expense for students. Indeed, institutions sometimes generate revenues from selling students educational materials on which they hold the copyright.
Academic capitalism also restructures work in the academy, with some undesirable and unintended consequences. As in industry, colleges and universities have downsized and essentially outsourced their instructional production workers, replacing full-time with part-time and contingent faculty. The percentage of faculty who are part-time has doubled in the last twenty years despite research pointing to the significance of contact with faculty for student learning, satisfaction, and success. Part-time faculty are by definition and by working conditions (e.g., no office space) less available to their students than are full-timers.
In contrast to the pattern in industry, where the numbers of middle managers have declined, colleges and universities have greatly expanded middle management, whether to supervise commercial endeavor and engagement with various external communities or to support students and information technology. The managerial, nonfaculty professionals who manage infrastructure, economic development, endowment, and entrepreneurial activity are less directly focused than are faculty on teaching and research, and more closely linked to intermediating networks of senior administrators involved in promoting university-business cooperation and partnership, and new economy academic capitalism. Institutional expenditures for administration go up, while expenditures for instruction go down (see Figure 1.1).
In addition to restructuring professional work, the academic capitalist knowledge/learning regime brings restratification of and competition among academic fields. This can be a very healthy development, but it can also be problematic. Among the problems that stem from stratification and competition are a narrow conception of college or university education, a heightened and counterproductive sense of struggle between and within academic units, an orientation to short-term educational markets that prioritizes market share and revenue enhancement over educational quality, and internal resistance to some of the directions embedded in academic capitalism.
As institutions move more aggressively to intersect with new economy corporate and employment markets, conceptions of a college and university education are constrained by market opportunities. The idea of a college or university as a space for public discussion, debate, commentary, and critique is pushed to the background. Instead, colleges and universities focus increasingly on preparing students for new economy employment. Professional master’s degrees are one example of this trend, as are the contract education and certification programs offered by community colleges.
From the standpoint of academic departments seeking to survive and thrive in an environment that promotes academic capitalism, there is an increasingly short-term perspective that focuses on productivity measures in research, grants, and student credit hour production. Academic units are conceptualized as cost centers seeking to maximize their productivity. That can lead them to compete with each other for students in some counterproductive ways (Rhoades 2000b). It can mean reducing standards for general education students or majors, or expanding student numbers beyond those that make sense for local labor markets. It also can inhibit patterns of collaboration and interdisciplinary activity, pitting departments within the same institution against each other in a cutthroat and cannibalistic competition for internal university resources.
Academic capitalism is sometimes met with confusion or resistance at the department level, as was evident in our analysis of department heads and faculty in science and engineering. Heads responded unevenly to the possibilities of entrepreneurial activity. In some cases, they seemed unsure what to do strategically or how their department could possibly fit within the current agenda of their institution. In some other cases, heads were resistant to the push from central academic managers for more entrepreneurial activity and engagement with business in the area of research. One of the fault lines within academic capitalism is that there are often disjunctures between where presidents, provosts, and other senior academic administrators want to take an institution, and the commitments and interests of significant numbers of faculty within the institution.
Nevertheless, presidents and senior administrators operating in intermediating institutions have greatly enhanced managerial capacity. They direct the forward planning of their institutions by committing resources to projects such as Internet2, shaping future directions for decades to come. However, members of the intermediating organizations often do not consult extensively with their internal institutional constituencies, which may undercut local support and willingness to participate in the projects. Members of intermediating organizations often redraw the boundaries of public, nonprofit, and for-profit entities. In cases such as Internet infrastructure (Internet2), distance education (Educause, the League for Innovation), and start-up corporations (boards of trustees), the functions of public, nonprofit, and for-profit entities are indistinguishable. Nonprofit institutions, whether public or private, seek to maximize profits on market activity, ranging from taking their start-up companies public through IPOs to marketing computers to students in bookstores. For-profit corporations become deeply involved in the business of education, using colleges and universities as test beds and developing and marketing educational products. Only their designation, and the costs and benefits that stem from it, are different. When public, nonprofit, and for-profit entities combine in intermediating networks, each seeks to attain as many of the benefits and as few of the costs attached to the others’ status as possible. The greatest problem stemming from such intermediation is that public resources are transferred to private networks that underwrite the new economy. This transfer, which is not subject to broad public debate nor voted on, may undermine public trust in colleges and universities, manifesting itself in less public support for state and federal resource allocations to postsecondary education.
Densely networked boards of trustees who share information but whose institutions compete with each other may move colleges and universities from nonprofit to “disguised forprofits” (Weisbrod 1988). When we were writing the first draft of this book, the Chronicle of Higher Education featured an article on “the $500,000 club” for presidential salaries. More recently, the Chronicle documented million-dollar presidential compensation packages. Four presidents of private universities earned more than $800,000 in the 2002 fiscal year, and, if pay for serving on corporate boards is included, the compensation for three went over the million dollar mark (Basinger 2003a). James (1998) sees this as an indication of nonprofits becoming disguised for-profits: “nonprofits maximize profits and distribute them in disguised form (as higher wages and perks), or they may maximize revenues that lead to power and prestige for their managers” (p. 273). The trustees, who intermediate between universities and the corporate sector, normalize presidential salaries that far outstrip the salaries of most other U.S. professionals, making some university presidents salaries more like salaries in the for-profit sector than the nonprofit. Unlike heads of charitable nonprofits, no university presidents have gone to prison for violation of the charter of their organizations. However, Peter Diamondopoulos was removed as president of Adelphi University in the early 1990s for earning more than $500,000 (Weisbrod 1998b).
The compensation packages that put presidents in the $500,000 or $1 million club in the twenty-first century are justified by trustees on the basis of intense competition for leaders. However, these compensation packages raise the “disguised for-profit” issue and may be beginning to undermine public support for postsecondary education. In 2003, Florida legislators capped public university presidents’ state salaries after a number received large pay raises. In Ohio, a bill is before the legislature that prohibits state university presidential salaries from exceeding that of the governor, whose salary is considerably lower than $500,000. At Louisiana State University faculty and students have protested what they see as excessive presidential compensation packages (Basinger and Henderson 2003). In July 2003, the Internal Revenue Service ruled that stock-option plans for presidents “violated a federal tax law that prohibited such types of deferred compensation for executives of tax-exempt institutions. Presidents will now need to restructure those accounts or face paying interest, penalties, and back taxes” (Basinger 2003b).
Marketization of student recruitment raises questions of access. When elite public and nonprofit colleges and universities compete for students who score well on standardized tests and are able to pay high tuition, low-income and minority students are less likely to attend. The heavy attendance of low-income and minority students at community colleges is in part a reflection of the marketing strategies of elite colleges and universities. Marketing of distance education to nontraditional students, even when such projects are arms of elite schools, contributes to bifurcated access patterns, in which increasing numbers of students are educated off-site. Competition for student markets does not reduce tuition; on the contrary, it may have increased tuition as institutions vie to offer students more noninstructional activities.
The academic capitalist knowledge/learning regime is ascendant and, as we have argued, is embedded in a complex array and network of policies, intermediating and emergent interstitial organizations, and actors and practices. It is not inevitable, in its current configuration, and it does not stand alone. In this book we have mapped the general pattern that is in place. However, what academic capitalism in the new economy means concretely for the future direction and work of individual colleges and universities in the United States is yet to be fully defined.
Just as there are many forms of capitalism, so can there be many forms of academic capitalism. Academic capitalism does not have to take laissez-faire form. Rather than simply seeking to maximize external revenue generation, academic capitalism could seek to enhance the social benefits of intellectual property and educational services. Colleges and universities’ commitment to revenue generation could also encompass commitments to increased access for underserved populations and expansion of opportunity for women and minorities.
For many universities, a current principal target of investment is biotechnology. However, all universities are unlikely to succeed in the biotech arena; competition is too intense. Instead, colleges and universities could try to discover distinctive niches that build on their research strengths or their geographic locations. These niches might well be targeted because they provide opportunities for social benefits. For example, there is enormous potential in the realm of environmental engineering, sustainable environment, and clean energy alternatives, which are all significant sectors of the new economy. In the case of our own university, there would be great promise in an initiative that focused on environmental issues and enhancing the quality of life in the borderlands. Such an initiative would involve investing not only in the sciences but also in various social sciences, humanities, and fields of education, integrating in interdisciplinary ways that creatively cut across the divide between science fields and the rest of the university. The promise of such an initiative would be to intersect successfully with growth areas in the new economy and to impact positively the region within which the university exists. Such a strategy would play not only to the geographic location of our university in the southern Arizona borderlands but also to our academic strengths in environmental sciences, arid land studies, borderland studies, anthropology, sociology, American Indian Studies, bilingual education, linguistics, and higher education, among others.
In addition to biotechnology, many higher education institutions are seeking to intersect with the information technology sector of the new economy. Community colleges and comprehensive and urban universities see this general realm as a target for substantial investment. In pursuing such a strategy, colleges and universities are intersecting with a global economy in ways that do not always pay dividends for local economies and regions. They prepare relatively privileged students for computer-related careers or generate revenues through distance education that serves audiences far from their geographic locations.
We see an alternative for such institutions. They could focus on local needs, attending to issues of immigration and integrating immigrant and low-income populations into the middle layers of the new economy. What does that mean concretely? It could mean a community college combining a computer-tech program with an ESL program targeting immigrant populations. It could mean a comprehensive university combining an information technology program with a teacher preparation program, training educators who would contribute to enhancing urban populations’ ability to intersect with and work within the new economy. The point is to leaven the new economy focus on technology with the ongoing and emergent human challenges and opportunities that we confront in a globalizing world. We believe such an approach would yield substantial dividends for the higher education institutions as well as for the communities in which they are located.
Of course, these are not either/or choices. The issue in most colleges and universities is how to balance various alternatives. We are simply suggesting the foregrounding of possibilities that currently are very much in the background and that involve human sciences and services fields that are currently the target of disinvestment in many higher education institutions.
The educational mission of higher education could be reinvested in by judicious use of the proceeds from intellectual property. Alternatives to current patterns of faculty and institutional ownership of and claims to royalties from intellectual property could be explored. A share of revenues generated by intellectual property could be placed in a public trust that could have as its purpose directly aiding students and communities in a variety of ways, whether through scholarships, research internships, or direct grants toward community development.
Rather than focusing only on the revenue potential of intellectual property, colleges and universities could provide some discount for the sale of products developed by faculty, which, after all were publicly subsidized in their production. Faculty and university involvement in the production of goods and services could ensure that these goods be treated as generics, with less focus on maximizing revenues than on the wide distribution and availability of the products. The implications in the field of biomedical products would be enormous.
Each of the above alternatives requires a network of policies, organizations, and actors to become viable, as was the case with the academic capitalist knowledge/learning regime. We must imagine a new university with organizational structures, incentives, and rewards for the kind of society we want, and then create the new circuits of knowledge, interstitial organizations, and intermediating networks to achieve it. This is a task that will take time, patience, and commitment and will have to be linked to appropriate organizations and social movements outside the university. Perhaps we could begin by developing networks of citizens, faculty, academic managers, and students to formulate policies that frame the terms of engagement of colleges and universities with corporate partners, that create incentives for developing products that have socially productive purposes, and that work out ways for shares of revenues from intellectual property to be directed to undergraduate instruction.