Corporate Higher Education Partnerships Connecting Higher Education to Industry

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Corporate - Higher Education Partnerships
Connecting Higher Education to Industry
Marketplace Needs Presented by
Doug Lynch, Vice Dean, Penn State Graduate School
of Education
Alan Todd, Chairman, Corporate University Xchange
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What is a university?
a place for the communication and circulation of
thoughtIn the nature of things, greatness and
unity go together excellence implies a centre
and such is a University. It is a seat of wisdom,
a light of the world, a minister of the
faith...- Cardinal Newman It has few peers
in the preservation, dissemination and
examination of eternal truths no living peers in
the search for new knowledge, and no peers in all
history in advancing civilization. Clark Kerr
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Types of Colleges
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Types of Colleges
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In terms of students compared with 1972

• 72 more students than in 1972 13 million
  enrollment in 2002
• More Women than men (56 percent )
• Older (40 over 25)
• More part time (40)
• Indeed, only 27 are traditional
• More diversity (from 15 to 30)
• 5th largest service export estimated that for
  every student who matriculates, there are 10 who
  because of price and/or visa cannot attend (IIE)

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Revenues sources 2004 220 billion
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Expenses
For Profit
Public
27.4
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32.5
Private
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Institutional Revenues

• Annual Percentage Change in Instructional
  Appropriations and Tuition and Fees at Public
  Four-Year Institutions,
• 1980-81 to 2003-04 (Constant 2003 Dollars)

Source Table 3a and data online
(collegeboard.com/trends) State Higher Education
Executive Officers, 2004, State Higher Education
Finance Survey, Table 4b.
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Total Student Aid by Type

• Estimated Student Aid by Source for Academic
  Year 2004-05 in Current Dollars (in Billions)

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• Median Earnings and Tax Payments
• by Level of Education, 2003

Note Includes full-time year-round workers age
25 and older. Source U.S. Census Bureau,
2004a, PINC-03 Internal Revenue Service, 2004,
Table 3 McIntyre, et al., 2003 calculations by
the authors.
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Health

• Multiple Risk Factors for Heart Disease
• Percentage with Two or More High Risk Factors by
  Education Level

Notes Adults with two or more of the following
high blood pressure, high cholesterol, diabetes,
obesity, current smoking, or physical inactivity.
Source CDC, 2004b.
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The Increasing Importance of Higher Education
Years of Schooling Completed by People 25 and
Older, 19402004
Source U.S. Census Bureau, 2005, Table A-1.
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Family Income and College Enrollment

• College Enrollment Rates by Family Income Levels,
  1982 -2003

Note Enrollment rates correspond to the
percentage of high school completers who are
enrolled in college in October of the year of
high school graduation. Family income quintiles
for 2003 lowest quintile 16,399 or less
second quintile 16,400?31,099 third quintile
31,10048,399 fourth quintile
48,40078,799 and highest quintile 78,800
and higher.
Source NCES, unpublished tabulation using data
from the Current Population Survey, U.S. Census
Bureau, 1982?2003.
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Confidence Level in US Institutions
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Why is this conversation important?
For employers

• In a knowledge economy recruitment, retention,
  and development of people 1 business strategy
• ROI paramount for companies
• Learning not a core competency for most companies

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Why is this conversation important?
For colleges

• Money - Corporate Training 60-90 billion dollar
  a year industry and the average Fortune 1000
  company spends 2.5 of operating budget on
  training - often 8 figures
• Students - NCES - 90 million adult learners (50
  of adults, 70 of all students) and Corporate
  Universities also represent the fastest growing
  segment of the adult education market.
• Mission - workplace often last chance for
  people whom traditional education failed!

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What is a Corporate University?

• Any entity that calls itself a corporate
  university is a corporate university.
• a centralized workplace learning initiative that
  coordinates and integrates a variety of learning
  opportunities and align them to organizational
  missions and goals.
• The strategic umbrella for developing and
  educating employees, customers, and suppliers in
  order to meet an organizations business
  strategies.

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To Whom do employers outsource?

• Boutique Training Companies
• Technology Companies
• Consulting Firms/Aggregators
• Publishing Companies
• Higher education about 5 of the market
• i.e., Not higher education!

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What services could colleges provide?

• Content - either custom or off-the-shelf
• Conversion to e-learning (cheap)
• Consulting (e.g., needs assessment)
• Evaluation
• Teacher training
• Instructional Design
• Technology
• Codification of content

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What services could colleges provide?
Continued

• Facilities
• Tuition remission
• Student loans
• Customized degree programs
• Eclectic Cross-fertilization

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Examples
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Obstacles to Partnering

• Retail model not appropriate for employers
• Employers perception of higher education
• Colleges Ivory Tower Attitude
• Navigating University
• University AND Corporate bureaucracy
• Tough economy
• Some employers feel burned by vendors

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What employers look for

• Brand
• Curriculum
• Costs
• Faculty
• Customer service
• Customization

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Tips

• Acknowledge differences.
• Maintain strong lines of communication.
• Establish clear and concise goals.
• Negotiate business terms.
• Adjust formats and delivery not standards.
• Outcomes customized but not diluted.
• Expectations at same level as internal programs.
• Stay flexible.
• Become a student of corporate learning.

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Corporate - Higher Education Partnerships
Presented by Alan Todd, Chairman, Corporate
University Xchange
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The Problem

• Colleges are on a never ending quest for students
  and money
• Tuition has historically risen at twice the rate
  of inflation
• Businesses must change or risk extinction
• Learning is a critical component of change

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The Problem

• As the global economy becomes increasingly driven
  by knowledge, organizations must make learning
  strategically important to innovate and adapt.
• Learning must become a new core competency of the
  corporation.
• The perfect storm of technology, globalization,
  and the rise of democracy provide the opportunity
  for higher education institutions to step-up to a
  new role. In the knowledge economy of the 21st
  century, lifelong learning will be required.

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The Problem

• The World Is Flat - The perfect storm of
  technology, globalization, and the rise of
  democracy is causing unprecedented change in
  business
• Knowledge-Driven Economy
• Corporations must make learning strategically
  important to innovate and adapt to change
• Competition for talent continues acceleration

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The Solution

• Given the need to develop this new core
  competency, organizations can benefit by
  partnering with colleges who provide expert
  research and faculty in areas that can best serve
  the business.

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Assumptions

• Colleges are on a never ending quest for students
  and money
• Tuition has historically risen much faster than
  the rate of inflation. And this isnt
  sustainable.
• Businesses must adapt (change) or risk extinction
• A Learning Culture is a critical component of
  change

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Investigation

• For the business world
• Identify key learning challenges that business
  leaders believe can be improved upon with higher
  education partnering.
• Explore the business model for partnering from
  both the perspective of supplier and customer.
• Uncover the barriers to success by finding
  examples that did not lead to success.

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Investigation

• For the higher education world
• Uncover the pros and cons of partnering with
  corporations
• Explore the importance that they place on this
  market
• segment
• Delve into how partnering decisions get made at a
  University
• Define what is needed to successfully consummate
  a transaction.

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Facts and Figures

• Colleges are running out of students
• Zemsky, Shaman, Shapiro, 2001
• University of Virginias share of operating
  budget coming from the state declined from about
  28 in 1985 to 8 in 2004
• Economist 2005
• Our University has evolved from being a state
  institution to being state-supported, then
  state-assisted, next state-located and now
  state-annoyed"
• University President, Economist 2005

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Facts and Figures

• National Center for Education Statistics reports
  that over the past decade more than 500
  Institutions of Higher Education have closed
  their doors.
• During this same time, corporate universities
  have grown fivefold, to more than 2,000, compared
  with 3,600 accredited universities in the U.S
• Meister, 2003

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Facts and Figures

• 90 million adult learners in the U.S.
• 50 of all adults
• 70 of all formally enrolled students.
• The National Center for Education Statistics
• Simply put, universities looking for more
  tuition paying students
• should be looking to the adult learners in
  the workforce
• The National Center for Education Statistics

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Facts and Figures

• In 1990, less than half of the nation's community
  colleges offered training programs in conjunction
  with local businesses.
• By the mid-1990s, roughly 90 of two-year
  colleges had joined "the business of training
  workers for specific companies, rather than just
  teaching generic subjects or trades."
• Stamps, 1995

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Facts and Figures

• Educational institutions could become factories
  for commercial products
• Gary Ruskin, Executive Director of Commercial
  Alert
• Corporations should give to colleges only for
  philanthropy with no strings attached
• Gary Ruskin, Executive Director of Commercial
  Alert

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Description of Investigation

• Qualitative Interviews
• To gain an in-depth perspective on partnering
  from both higher education and corporations
• Total of 15 interviews, each 1 hour in duration
• Interview instrument included in handout

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Results

• Higher Education Corporate marketplace was
  crucial
• Revenues derived from corporate learning
  contribute to programs that simply could not
  exist without this extra revenue contribution
• Connecting faculty with corporations provides
  significant opportunities to strengthen
  relationships that ultimately lead to
  collaborations on research and other learning
  initiatives.

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Results

• Higher Education Customization is a nuanced
  issue
• Time to develop programs
• Potential loss of accreditation
• Ownership of intellectual property
• Brand dilution.

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Results

• Higher Education The Perfect Partnership
• Strategic Relationship
• Global
• Consortia Approach
• Marketing To Employees

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Results

• Higher Education Institutional Difficulties
• Culture
• Getting faculty to share contacts (each faculty
  is CEO unto themselves)
• Paying enough to compete with commercial
  businesses for talent
• Incentives - Research Teaching, not
  collaborating / sharing
• Competition for resources

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Results

• Higher Education Example Stevens Institute
  Partnership With Verizon
• Business Requirements - Focus tuition investment
  dollars on areas that align with company
  strategic goals
• Offerings - Degrees in Business, Engineering,
  Project Management, and more
• Co-Marketing to employee population
• Started in NJ, then USA, Now Global

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Results

• Corporations Universities are vital in
  developing talent
• Reliance on Universities is increasing to educate
  corporate workers
• Universities are in a strong position to provide
  education to businesses because of scholarly
  research and networks

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Results

• Corporations Requirements
• Strategic Relationship
• Strong Project Management and Faculty Involvement
• Strong Administrative Management
• Communications
• Logistics
• Housing
• Mailings
• Customer Service

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Results

• Corporations
• Strong desire for customization to meet business
  requirements (crucial)
• Must impact business performance in a measurable
  way
• Want Institution to have skin in the game

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Results

• Corporations
• Limitations exist as to how much training can be
  outsourced to a partner
• Government Classified
• Company Proprietary
• Government Regulated
• Company Culture
• Small-Budget / Quick-Turnaround Projects

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Results

• Corporations Unsuccessful Examples
• Boeing - underperforming program lacked senior
  leadership support from both sides
• Textron - underperforming relationship lacked
  solid administrative support and customer service
• JetBlue - great relationship ended due to
  departure of Institutions Senior Leader

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Summary

• Partnerships represent significant opportunities
  for all (Company, University, Employee)
• Focus on Top 3 Critical Issues
• Developing senior relationships
• Monitoring performance
• Tending to administrative details

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Summary

• College Focus Areas
• Deep niche expertise
• Customization
• Customer service

• Corporation Focus Areas
• The Relationship
• Co-marketing programs
• Providing leader/teachers
• Collaborating on research

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Thank You

• Questions?
• A bit more literature follows

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Literature

• External forces such as the knowledge economy,
  just in time education, an increase in technology
  usage for learning, the rise of corporate
  universities, and globalization are causing
  businesses to search for better ways of adapting
  and growing
• Lynch, 2006
• Universities are teaming up with business to
  prepare students for the workforce. They are
  entering into agreements with business to
  commercialize faculty research and contracting
  out their strategic expertise
• Harney, J., Doan, L. 2003
• Businesses are providing scholarships and
  internships, funding university research programs
  and giving their execs time off to teach on
  campus.
• Harney, J., Doan, L. 2003

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Example

• Boeing engineers were charged with designing
  their new Dreamliner aircraft out of non-metal
  composite materials, rather than the metals used
  over the prior century. The opportunity to
  develop a next generation aircraft represented a
  unique competitive advantage for Boeing (against
  its main competitor Airbus), University of
  Washington (innovator in newest technologies for
  engineering), and employees (newest skills that
  would dominate the new century).
• Rather than hiring composite experts as employees
  to lead and teach Boeings engineers, the Learning
  Organization decided to partner with the
  University of Washington, thereby allowing each
  partner to focus on their core competencies.
• The intent was to create a theory to practice
  opportunity that would teach Boeing employees
  composite skills and attract new engineering
  students because of the innovative nature of the
  program. The partners decided the program would
  be delivered within higher education with the
  shared goal being to assist in the development of
  educational materials that would be
• Delivered to undergraduate engineering and
  technology students
• Used to create a program for professional
  development that could be replicated on-site
  within Boeing businesses,
• Disseminated throughout institutions of education
  on a global basis.

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Literature

• However barriers do exist impeding mass adoption
  of the partnering model. Companies fear that the
  university bureaucracy will be difficult to
  navigate and wonder if professors have a
  sufficiently pragmatic, decisive approach to
  solving business problems
• Lynch, 2004

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Literature

• What role does the faculty play in developing
  industry partnerships?
• Brewer, D., Gray, M. (1997) surveyed 3,500
  faculty to gather data on linkages between
  faculty, their institutions, and local
  businesses. Based on responses from 1,725
  faculty, they found that
• Vocational faculty were more connected to the
  labor market, largely because their programs
  depended upon enrollments and placements for
  survival
• Part-time faculty had generally weak connections
  to their institutions, as well as lower levels of
  connectivity to the labor market
• Faculty had very little available time to
  undertake intensive business linking activities
• A lack of institutional resources limited
  professional development and workplace placement
  opportunities for faculty
• Continued

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Literature

• What role does the faculty play in developing
  industry partnerships? (Continued)
• Institutions did not formally reward linking
  behaviors and faculty received little support
  from their colleges, with the exception of
  vocational faculty in career assistance
  activities
• Faculty in multi-campus districts generally
  showed lower levels of connectivity
• Strong boundaries existed between academic and
  vocational departments and between credit and
  noncredit programs in most colleges, limiting
  collaboration and information sharing
• Local conditions greatly affected the
  opportunities for faculty to build linkages