Title: “Universities’ Rapid Growth May Not Align with Productivity Gains, Suggests Study”
In recent decades, universities globally have experienced substantial growth, employing around 15 million researchers, a significant increase from 4 million in 1980. Despite the surge in research output and increased government spending on higher education, a new study proposes that the productivity slowdown observed in the rich world could be linked to the tremendous expansion of universities.
While the economic rationale behind expanding higher education suggests that universities should be catalysts for productivity growth by producing intellectual breakthroughs, the reality seems different. The study, conducted by economists Ashish Arora, Sharon Belenzon, Larisa C. Cioaca, Lia Sheer, and Hansen Zhang, argues that the explosive growth of universities and the stagnation of productivity might be interconnected.
Historically, post-war higher education played a modest role in innovation, with businesses taking the lead in achieving scientific breakthroughs. However, as corporate labs dwindled, and universities saw significant growth, the synergy between public science and corporate research and development (R&D) weakened. The paper suggests that the old big-business model of science, with its corporate labs, may have been more effective in delivering productivity gains compared to the current university-led approach.
The loss of corporate labs, which once housed interdisciplinary teams of thinkers and doers, is a contributing factor. In contrast, universities, liberated from corporate demands, often prioritize research for its own sake, focusing on satisfying academic curiosity or boosting citations rather than driving breakthroughs with real-world impact.
The study indicates that breakthroughs from public institutions may not prompt a substantial response from established corporations for several years. Universities’ focus on research for its own sake, combined with the decline of corporate labs, might explain why companies struggle to utilize ideas generated by universities. The paper suggests that the vast fiscal resources allocated to public science may unintentionally hinder business innovation across the developed world.
In the quest for sustained economic growth, it remains to be seen whether universities and the corporate sector can forge more effective collaborations. Tighter competition policies could encourage businesses to revive internal research efforts, resembling the post-war era. However, governments may need to reevaluate the extensive public support for universities in a scenario of weak economic growth.