Education in the US
* Education is a State responsibility, not Federal
* $800 billion industry, second largest after healthcare. *For post-secondary, there are 10,000 institutions with
17 million students (2001), worth $300 billion.
* High school graduates expected to grow by 11%, 1999-08.
* Institutions have vast autonomy, little interference from the state * The for-profit sector represents 12% of the industry.
* Graduate enrolment is about 2 million in 2001.
The 3-Tier Higher Education System in
the State of California
* Community Colleges (Santa Monica College etc.)
* State Universities(Teaching)
(California State University, North Ridge etc.)
Interesting Features of the US University System
* Large amount of government budget allocation
* Fund raising role, endowments, external contributions * Great diversity in the system of management
* Freedom from interference by the state
* Strict system of accountability in the state schools
* Wide range of academic standards, accreditation is voluntary * Wide opportunity for creativity and talent development
Importance of Endowment
- Buys faculty, students and state of the art infrastructure - Measure of alumni loyalty and industry confidence
- Ensures quality of life on campus
- Measure of the wealth of the institution - Ability to weather lean times
University’s Endowment(2001)(in millions)
Harvard $17,951
Yale $10,700
Texas Univ. System $9,364
Princeton $8,359
Stanford $8,250
MIT $6,135
In the MIT Case:
Stanford Sources of Funds - 2001/2($1.9b)
36% Sponsored research
25% Endowment/Investment income
15% Student Income [14,000 students] 8% Healthcare services income
6% Expendable gifts 10% Other income
Expenditures - 2001/2
54% Salaries and benefits
20% Maintenance, utilities, libraries, student stipends, other services
Univ. of California, Berkeley(2000/1)
Income: $1,231 million.
State of California 35.6%
Student Fees 13.3% [33,000 students]
Auxiliaries and Sales 10.8%
Endowments 4.2%
Other Funds 5.7%
Federal Contracts and Grants 17.9%
State Contracts 2.1%
Percentage of Alumni who contribute
to their Alma Mater
Princeton 49%
Yale 36%
Caltech 35%
Stanford 32%
MIT 31%
Harvard 27%
Michigan 17%
University Management in US
(Freedom and Divestment of Powers)
Board of Trustee
President - External Relations, Fund Raising
Reporting to the President:
VP (Development) CFO
VP (Business Affairs)
CEO/Director of Companies VP (Communications)
Reporting to the Provost:
Deans of Schools
Dean of Student Affairs Dean of Admission
Director of Faculty/Staff Housing Vice Provost - Land & Buildings Vice Provost - Extended Education
Range of University Academic Standard:
Top Ivory League:
Harvard, MIT, Stanford , Princeton (Private, non-profit)
Most liberal, open system:
University of Phoenix (Private, for profit)
Accreditation:
Accreditation is entirely VOLUNTARY
However students are eligible to get state funding if institution is accredited.
Effect of Economic Downturn:
- State institutions: State grants for state institutions cut - Private Institution: left to management but
generally has to impose cuts
- Endowment value, external contributions have reduced
Effect:
- Increase of tuition fees (MIT - 4.7% in 2002/3) - Lower salary increases
- Less financial aid - Staff Lay-off
Entrepreneurship Development
- Silicon Valley best example
- Most universities have Incubator Centers, Technology Licensing & Patenting Office
- Entrepreneurship sabbatical(Stanford University)
Stanford Research Park
Secret of Success of Silicon Valley
* Long tradition of entrepreneurial spirit in the West coast * Conducive climate of the West coast
* Abundant venture capital
* Many companies operate in the area
* Stanford alumni are ingrained with entrepreneurship and the concept of entrepreneurship sabbatical
Issues in Malaysian Higher Education:
- Racial composition
- Distribution of Economic Wealth/New Economic Policy - Socio-Political Scenario
- National Policies on Education - Primary, Secondary, Post-Second - History of Higher Education
- The Current Language Debate
Governing Acts on Higher Education
in Malaysia:
University and University Colleges Act:
- Chancellor appointed by the King
- Vice Chancellor appointed by the Minister of Education - Members of BOD appointed by the MOE
- BOD meets every month
- VC is Chief Academic and Chief Executive Officer - Almost 85% of budget provided by the government - New courses need to be approved by MOE
Private Higher Educational Institution Act:
- University is private, for profit
- Chancellor appointed by MOE upon recommendation by BOD - President appointed by MOE upon recommendation by BOD - Setting up of university only by invitation of the MOE
- Government does not provide any funding
- Evaluation by LAN and approval by MOE compulsory before starting course
- BOD meets quarterly
Challenges Ahead In Managing MMU
* The expected changes in the country’s political scenario * The ever changing educational policies and scenarios * University’s role in the MSC
* Needs of the parent company
* To sustain university’s leadership position and company’s profitability
Prospective Areas For Malaysian Universities:
* Fund raising effort
* Accreditation of programs - Differing agencies * Program approval by MOE
* Academic promotion standards
Comparison between US and Malaysian universities:
- Cost of operation of US universities many times higher - Philantrophic spirit is significant in US
- Entrepreneurial spirit far higher in the US - Greater autonomy in US
Strength of US Sytem
- Availability of vast amounts of funds
- Freedom encourages entrepreneurship, innovation and creativity - Fertile ground for realizing ones potential and ability
- Nation of immigrants invokes spirit of ‘must work hard to succeed’ - Equal opportunities for all races and sexes
University Expenditure in Malaysia
University of Malaya (UM) : $75 million [23,000 students]
MMU : $25 million [14,000 students]
Magnitude of scale UC,B:UM is 16 times.
Source of fund:
University of Malaya : 80% from the government
