What’s Wrong with Universities?

At my university (Rhodes University in South Africa), we have a policy of not outsourcing things a university traditionally does itself – even if that sometimes adds to our costs. We may be paid slightly lower than average, but we are also a happier campus than average.


Our outgoing Vice-Chancellor (president, in US terminology) Saleem Badat is rare among university leaders in understanding the character of a university and maintaining it against outside pressures. We are in a small town and account for a large fraction of the local economy – if we outsourced basic services to out of town companies, we may save a little money, but at what cost? Our local community is depressed as it is, and being an island of plenty in a sea of poverty is an unpleasant situation for those in both places.


You could argue this is no different from corporate social responsibility taken seriously. A mine, for example, could also source all its supplies as locally as possible.

But it goes further than that.

Universities around the world have made the same mistake: hiring expensive business consultants who tell them to run more like a business. Universities have been around a lot longer than the modern concept of a business, and have not caused major financial meltdowns, wars or corrupted the political system. At very modest cost to society, they have spearheaded curing disease, inventing revolutionary technologies and transforming society in more ways than I can think of.

Academics of  course, do sometimes cause major problems – but not operating as academics, where they have limited scope to do damage. Academic economists, for example, have at times spread highly dysfunctional ideas but, even there, it is not universities that have done the damage, but politicians who are ready to take bogus advice if it suits their agenda. On the whole, when ideas are kept within academia, the bad ones are eventually rooted out. And an academic who is not subject to commercial pressures is more likely to be honest about such mistakes.

Why is it that places that are supposed to be the home of the smartest people on the planet take advice from people who have no clue about how to run their institution, when the people who know most about how to run a university are those already there?

The only reason I can think of is that, having paid big money to corporate consultants, you would feel a right idiot if your didn’t take their advice.

What is wrong with all this?

A university has aims that are hard to quantify economically. Sometimes it is necessary to maintain a discipline that does not cover its costs because it is required for other subjects, or is at the core of research initiatives. Or maybe it is a discipline that no one else supports, and it has to exist somewhere. Achieving equity in the face of an unequal school system also has costs and a simple bottom-line based accounting system cannot adequately capture the value of that kind of redress.

The real difference though between a university and a business is the time horizon. A university aims to build for the long term. There may be no immediate return from a PhD or even a slightly better quality undergraduate curriculum. The value may only be seen years or decades later when a graduate cures a disease, invents a new technology or discovers a new way of economically empowering the poor.

We recently held a farewell for Dr Badat, who moves on to a major private funding agency. I hope Rhodes continues with his philosophy because that is one of the things that makes this place special – I have done the big city university trying to be a “business” too often to want to repeat the experiment.