Archive by Author

Technology and the Failure of the University

June 22nd, 2018 by under Disruptive and Transformational Technologies, Education. No Comments.

I have had the opportunity to teach:
Traditional classes
Online classes with synchronous video interaction with students via Adobe
Connect
A MOOC, Massive Open Online course with 2000 students (not for  credit)

The Smith School is working on a Micro-Masters in which students will complete seven MOOCs without synchronous interaction with faculty. If students pass a proctored exam and are admitted to our Online MBA Program, they will receive credit for the MOOCs completed. Our challenge is to create a MOOC which is sufficiently rigorous and has sufficient content to qualify for college credit.

The technology that let’s us do all of this is incredible. However, it presents a double-edged sword to colleges and universities. While we can extend our reach geographically and expand our educational mission, there are schools which will be left out because they cannot afford the technology and/or do not have faculty and staff able to mount new technology-enhanced courses.

I have explored some of these issues in a book, Technology and the Disruption of Higher Education, World Scientific, 2016, and in an invited article in The Communications of the ACM.

There is a link to the ACM article on my home page under the “Publications” tab.

​​http://scholar.rhsmith.umd.edu/hlucas/home

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A Plan to Better Finance Our Schools

June 22nd, 2018 by under Disruptive and Transformational Technologies, Education. No Comments.

Recent teacher strikes have highlighted the lack of resources for K-12 education in many states. We have a huge defense budget, with Congress often providing more funding for various weapons systems than the Pentagon requests.

In an op-ed I propose that 10% of the defense budget be applied to funding education. We are well prepared for external threats, but I argue that our internal security depends on a well-educated electorate. We are falling short on that goal. Read more at:

https://morningconsult.com/opinions/concerned-about-national-security-fund-our-schools-better/

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A Matter of Fairness

May 31st, 2018 by under Business and the Economy, Uncategorized. No Comments.

Each year the New York Times works with Equilar, a compensation consulting company, to identify the 200 highest paid CEOs in the U.S. (NYTimes, 5/27/2018). For the first time this year public firms are required to publish the median pay of their employees. As might be expected there is a huge mismatch between these numbers. A Walmart employee would have to work more than 1000 years at a median salary of $19,177 to earn the pay of its CEO, some $22.2 million. Live Nation’s CEO made $70.6 million last year compared to the company’s median pay of $24,406. That median employee would have to work 2,893 years to earn the CEO’s salary.

The gross disparities between CEO pay and that of other employees has been a topic for critics of business for decades. And CEO pay continues to rise despite the criticisms. Are CEOs so valuable that they should earn tens of millions of dollars a year in salary and stock options? Are there highly qualified people who would fill that role for less compensation?

What is to blame for what many people consider to be outrageous pay packages for CEOs? There are many possible causes including competition for talent, interlocking board memberships where CEOs sit on each other’s boards and compensation committees, compensation consultants, and demands from CEOs themselves.

While all of the above probably influence the run-up in pay, my candidate for villain is the board of directors, especially board members on the compensation committee. These people are the only ones who have the ability to rein in CEO compensation because the committee recommends the CEO’s pay package to the board who then approves it. Inside directors who work for the company may feel they have no choice but to approve generous compensation for their leader so it is up to the independent board members to question recommended pay.

How might a CEO reduce the chances for anyone to object to his or her compensation? A clever CEO can choose friends and associates for independent board members. The CEO can arrange for director compensation to be very generous, hundreds of thousands of dollars a year, so that a director who loses favor and is not put up for re-election incurs a substantial financial loss.

How, then, can CEO compensation be brought into line with the value the CEO represents for the company? One could try to implement rules for board members, but there is a simpler solution now that firms publish median pay: establish a range of multipliers that apply to median pay when computing CEO compensation (including stock options). For example if the range of multipliers was 300 to 500, the board at Walmart could choose pay for its CEO ranging from (200 x $19,177 to 500 x $19,177) or between approximately $3,835,000 and $9,588,500. Certainly a living wage. The numbers above are arbitrary and there are those who will object to a CEO making 200 to 500 times the median pay of workers.

Let’s have a discussion of the numbers, agree on a range, and then have the SEC recommend (require?) that CEO compensation fall with the defined range. While not popular with CEOs, I suspect there are board members who would welcome this kind of guidance. The world is not a fair place, but we should strive to improve fairness where we can.

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A New Role for MOOCs and Online Education

October 15th, 2013 by under Business and the Economy, Education. No Comments.

The Organization for Economic Cooperation and Development administered a series of tests during 2011 and 2012 to thousands of people aged 16 to 65 in 23 countries. The tests covered literacy and basic mathematics, and in 19 countries there was a third test of problem solving in a technology rich environment. The top country in all the tests was Japan with Finland, the Netherlands, Sweden and Norway near the top. Spain, Italy and France were at or near the bottom for literacy and math. The U.S. ranked near the middle in literacy and near the bottom in number and technology skills (New York Times, 10/8/2013).

To quote from the Times article:

“…the American results were among the most polarized between high achievement and low. …the United States in all three assessments usually had more people in the highest proficiency levels and more in the lowest. The country also had an unusually wide gap in skills between the employed and the unemployed.”

It is reported that a significant number of jobs that have been added since the peak of the 2008 recession have been in lower paying industries like food service and retailing. Others have expressed concern that the U.S. is developing an economy in which there are a relatively small number of highly educated workers with very good salaries at the top while there is a much larger group at the bottom working for low wages. Yet there are anecdotal reports of a shortage of skilled workers. Is this shortage due to an under-educated workforce as the OECD results suggest?

Enter MOOCs, online education and the flipped classroom. MOOCs have exploded on the scene in the last two years. Coursera has a reported 5 million students taking its courses. During the last iteration of my MOOC on Surviving Disruptive Technologies I estimate there were students taking the course from nearly 100 different countries. MOOCs come in many different flavors; some are offered to students who are just interested as well as those who want to do a little more work to obtain a certificate. There are even a few colleges giving credit for MOOCs, generally when they are combined with additional work and often with proctored exams.

Then there is the Khan Academy a site with thousands of short video-lectures about a variety of topics with an emphasis on math and science. The mathematics curriculum covers topics from grade school through college and some school systems have integrated it into their curricula. Salman Khan narrates the videos and draws on a tablet computer just as a teacher might write on a white board. The lessons are short and to the point for each topic. A teacher using this curriculum assigns the videos as homework and students work on problem solving in class creating the “flipped classroom.”

Do MOOCs and flipped classrooms offer a path to improving education for those in the U.S. who fall into the bottom ranks for the OECD tests and those who are at the bottom of the rung economically? The Khan Academy videos could be used now for remedial education in mathematics for a large number of people who have difficulty with basic math concepts. There are also a lot of instructional videos on YouTube for how to use products or complete some task, for example, there are a half-dozen on how to change a car tire. MOOCs could be designed to prepare people for various types of skilled jobs with the cooperation of employers and educators, especially those who teach in technical colleges.

With all of the resources available online, a student with help from an advisor could create a customized curriculum to study topics where he or she is behind as well as topics that would increase skill levels for employment purposes. Certificates from the courses would serve as proof the student has prepared for a new position. If these efforts could be combined with an internship or apprenticeship, the results would help improve the economic outlook for millions of Americans and help reduce the shortage of skilled workers.

None of what has been suggested will happen on its own. The U.S. Department of Labor and state agencies would have to design curricula, sponsor or find sponsors to develop materials, and most importantly, prepare advisors to work with students to develop and monitor their programs. And of course students would need regular broadband Internet access and a device like a tablet or PC. At a time of shrinking budgets finding resources for efforts like the one outlined here would be very difficult. But there is a cost of not doing so in terms of greater polarization of the work force, higher costs for the safety net for the unemployed and under-employed not to mention the opportunity cost of lost economic output. Can the country afford to ignore the OECD test results and the plight of those whose lack of educational qualifications puts them at risk?

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A Tale of Two Organizations

May 3rd, 2012 by under Business and the Economy, Ethics. 2 Comments.

Most people think that Apple’s headquarters is in Cupertino California, but for tax purposes the company has established a number of offices in places like Reno Nevada, Ireland, the Netherlands, Luxembourg and the British Virgin Islands (New York Times, 4/28/2012). California’s corporate tax rate is 8.84% while Nevada’s is 0. Analysts expect Apple to earn as much as $45.6 billion this fiscal year-a record for any American Business. Last year Apple paid 9.8% of its profits in taxes, $3.3 billion taxes on profits of $34.2 billion.

There is nothing illegal about Apple’s efforts to minimize its tax bills. It seems that the U.S. tax code for business harkens back to an earlier day when a U.S. company manufactured a product and sold it mostly in the U.S. In the digital age with products being downloaded and in an age of outsourcing with products built by contractors in foreign countries, it is hard for the tax code to keep up. Apple’s accountants managed to allocate about 70% of its profits overseas.

When profits overseas are repatriated to the U.S. there is a tax bill. But Apple has joined a coalition including Google, Microsoft and Pfizer to lobby for a “repatriation holiday” that would permit business to bring money home without incurring a huge tax bill; a Congressional report estimates this holiday would cost the federal government $79 billion over the next decade.

California, which really looks a lot like Apple’s home base, is struggling with more than a $9 billion deficit. De Anza Community College a mile and a half from Apple’s headquarters has cut more than a thousand courses and 8% of its faculty since 2008. It is estimated that Apple has over $100 billion in cash.

Apple is not alone. In 2010 GE reported global profits of $14.2 billion of which $5.1 came from U.S. operations. It paid no U.S. income taxes and claimed a tax benefit of $3.2 billion (New York Times 3/14/2011).

Now for the second organization, Brown University, which announced that it would increase its payments in lieu of taxes to Providence R.I. An agreement from Colonial days says that the University is “freed and exempted from all taxes” (New York Times, 5/2/2012). The School will voluntarily pay $31.5 million to Providence over 11 years. This commitment is in addition to the current $2.5 million in voluntary payments and $1.6 million in taxes on commercial property the University owns. Brown, with a $2.5 billion endowment, owns over $1 billion of property which would generate taxes of $38 million a year. Providence is at serious risk of bankruptcy.

What’s the moral of this story? All of us enjoy the benefits that are provided by local, state and federal governments. It is very easy to start a company like Apple in the U.S. We have venture capital, orderly financial markets, a highly efficient transportation system, and are relatively free of corruption. There is a robust patent and legal system to try and assure fair competition among companies. Why are companies like Apple so reluctant to help finance these benefits? Is the goal of profits or shareholder value driving their behavior? Is it executive compensation? Maybe managers at these firms that go to such great lengths to avoid paying taxes in the U.S. could learn something from Brown University that they did not learn during their college days.

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Why Are We Adrift?

April 10th, 2012 by under Education, The University Today. No Comments.

The latest book to take a critical look at American Universities is Academically Adrift: Limited Learning on College Campuses by Richard Arum and Josipa Roksa, University of Chicago Press, 2011. In addition to reading the book, I attended a lecture when the Smith School invited Professor Roksa to present her findings to our faculty.

The authors looked at a large group of college students, following them over time. Much of their data came from the administration of the College Learning Assessment (CLA) which attempts to measure critical thinking skills rather than factual knowledge. This assessment is very much in tune with the teaching in business schools where we encourage students to think about issues and engage in problem solving. We also make extensive use of case studies, and the CLA test presents a problem to the student in the form of a short story with a problem to be solved like the longer cases in our classes.

I won’t summarize the book here, but the general tone is that there is less learning going on in colleges since the 1960s. Professor Roksa mentioned one finding that highlights this decline; a number of “B” students reported that they needed to study only an hour a night. Of course, there was wide variance, the students in selective colleges are studying more. And college is about more than learning facts or performing well on a single test. But I think a lot of us feel that the study has provided evidence that the rigor of college education in general has been declining in the U.S. (with the exception of some of our top universities?)

There are undoubtedly many reasons for this decline, and everyone has their favorites ranging from the quality of K-12 education to television and the Internet distracting students starting at an early age.

Thinking about my own career I can contribute two causes to the list of reasons for the findings in Academically Adrift. When I was an undergraduate, I was never asked to evaluate a class or a professor or to complete a survey about teaching. When I went to graduate school the story was the same. I asked our sons who graduate from college in the 90s and by that time things had changed; at the same undergraduate school I attended they completed course evaluations for their classes.

Because it is easy, we tend to choose one or two numbers from course evaluations, often the average of several items, and use them as indicators of faculty teaching quality. This simple measure and its importance motivates a lot of behavior which may not be the best for educational outcomes. For example, an instructor has to be careful not to demand too much work because if the workload is too far above average students will be critical on the evaluations. A faculty member has to worry about how entertaining she is as well as the material being presented. And grading too harshly will also elicit a poor response from students on the course evaluation survey. I suspect that the demands and rigor of our courses for many of us who have taught for several decades have declined over time.

The other trend that might impact academic drift is the pressure from research universities to publish research in “A” journals. This process has become more and more difficult as the journals have become more demanding. In my own field of Information Systems, the peer reviewers spend most of their time looking for reasons to reject a paper rather than figuring out how to help the author improve it. Time devoted to research has to come from someplace; if that is from committee work, no problem. But if the time comes from teaching, then students and education will suffer.

Is there a solution that mitigates these two problems? One would be to change the course evaluation process to try and measure learning rather than the entertainment value of the instructor. Deans could have faculty members known for the rigor of their courses evaluate course syllabi and faculty innovation.

Solving the research problem is more difficult because research universities obviously have to emphasize research. One strategy would be to allow a faculty member post tenure to change the weights given to research and teaching in her annual evaluation. Many universities have teaching only faculty who are not on the tenure track. A school could increase the status of these positions and their remuneration so that a teaching position was seen as being as valuable as a faculty position that involves research. Some schools have research associates who work only on research and have no teaching responsibilities. Adding these positions to the mix would provide more flexibility for faculty who want to emphasize their teaching.

When you are adrift on a sailboat, the captain can raise the sails or start the engine and set a direction. We need the captains of academia to choose a new heading and get U.S. universities back on course.

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The Virtual University is Possible; Are We Ready?

October 31st, 2011 by under The University in the Future, The University Today. No Comments.

A popular Stanford Professor, Sebastian Thrun, is offering an online course, Introduction to Artificial Intelligence, free of charge to about 130,000 students around the world. If students complete the exams, they receive a certificate of accomplishment, not college credit. Thun thinks that the virtual University is the way of the future because the cost of the current University model is so high. The idea is that in a setting with a smaller number of students, teaching assistants could meet virtually with students in smaller groups for discussions of lecture material (New York Times, 10/3/2011).

The idea of star faculty teaching across the country or the world online has been possible since the dawn of the Internet, but except in limited instances it has not happened yet. Maybe no one can agree on who the best instructor for introductory economics would be. Possibly faculty are afraid of becoming unnecessary if a few hundred of the country’s best lecturers teach all the intro courses in the University. What tenured faculty member wants to be relegated to leading discussion sections for a star from another University’s online lectures?

The article mentions some problems with online teaching, for example, it would be easy for an online student to cheat or to have someone else take the course for him. Will students sit at their computers, but tune out during the lectures? If there are hundreds of students, where will the teaching assistants come from? (Thune’s course would need 5200 TAs to have 25 person sections for discussion.) If the virtual model takes hold, we will need fewer faculty and that means fewer graduate students preparing to be faculty members. Would there be enough graduate students to staff discussion sections? Would faculty members be willing to do so just to have a job?

The economics of virtual are orders of magnitude more favorable than the bricks and mortar university. In other domains it appears that consumers have already decided that virtual is better than physical, for example, think of recorded music, newspapers, photography, video distribution, online commerce and book publishing. What does the physical university have to offer? The president of Stanford, John Hennessy, is supporting Thune, but he also argues that there are huge benefits, especially for undergraduate education, from having students together physically to be immersed in a culture of exploration, discovery and hopefully, critical thinking. The author of the Times article describes our University system as “a wonder of the world.” But how long can we afford this wonder?

Is there a way to preserve tradition and at the same time reverse the constantly increasing costs of college? The four-year college of the future has to change if it is to remain economically viable. In an earlier blog I presented ideas on how to restructure the University into four parts, an undergraduate college, a graduate school (for a university), a research division and a franchised athletic operation. Here I want to concentrate on the teaching side that affects the first two units.

Consider a University offering undergraduate and graduate education. It will draw on some national courses, probably of two types, to be offered online with local faculty and graduate students running discussion sections. The first type of course will be the very large lecture that might have hundreds of students; this course like intro Economics, Psychology, Political Science, etc. will feature lectures from the leading teachers in the country. These teachers will earn modest revenues for their university. Local faculty will organize the classes and supplement the online lectures with their own material. In a sense, they will co-teach the course with the remote, star faculty member from another institution.

The second type of course will be specialized like Thune’s lectures on AI; he is the designer of Google’s self-driving car which means he can offer a course that few others could. Having specialized faculty and courses like this will enrich the offerings of any college and expand choice for students.

In an earlier blog I suggest that the nature of the college experience will change. Some, probably a relatively few, will spend four years on a campus getting an undergraduate education. A much larger number will spend various periods of time on the campus, taking the rest of their courses virtually. The technology exists to have much of this online teaching done with synchronous video and audio interaction over the Internet; we are not talking about the University of Phoenix asynchronous online courses. Instead the faculty member and students see all of the others in the class on their screens so that the interactivity of a physical class is captured online.

The technology is just about ready for this kind of model; unfortunately universities in general are not. At some point in the not-too-distant future, cost pressures and student demand will force us to move in this direction. It might make sense to start that movement now to be ready for an environment in which the competition among colleges for students will exceed the competition between their athletic teams.

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To Tax or Not to Tax

October 11th, 2011 by under Business and the Economy, The American Aristocracy. No Comments.

To Tax or Not to Tax

While people have probably complained about taxes since someone levied the first tax, the debate seems to be getting more strident every day. I wonder if when Moses came down from the mountain there was an 11th Commandment, lost over time, that said “The Maximum Tax Rate shall be 10%.” When are taxes too high? What is the benchmark?

In the 1950s the U.S. had marginal income tax rates over 90%, though they did not apply to very many people. Today the maximum bracket is 35% and there are substantial numbers of citizens and Congressmen who say that this rate should never be increased.

On the corporate side, companies complain about how a 35% tax burden is higher than competitors face in other countries. Yet in the mid-1950s corporate taxes made up 30% of federal revenues while the number was 6.6% in 2009 (New York Times, 3/14/2011). How does this happen? G.E. is a great example. This same article says that in 2011 G.E. made $14.2 billion in profits of which $5.1 billion came from the United States. And what was its U.S. tax bill? Zero, none, and the company claimed a tax benefit of $3.2 billion.

GE reports a U.S. tax burden of 7.4%, about a third of that reported by the average multinational. GE has a large, very successful tax department and lobbies aggressively for tax breaks. It also keeps a lot of profits offshore and does not pay taxes on them until they come back home. (Companies are now lobbying for a reduced tax to repatriate their profits saying they will create jobs; the last time they received tax relief for foreign profits the money was used primarily for stock buybacks.)

If one has traveled extensively or lived abroad, the fact that in general the United States “works” is very obvious. It is still the easiest place in the world to start a new business; there is both venture capital and a well-developed infrastructure. This infrastructure includes the obvious like transportation, roads, railroads, air and shipping companies. But it also includes a banking and financial system that makes it easy to accept and make payments. And until the financial crisis of 2008, credit was easily available to small businesses and startups. Broadband access to the Internet is not as fast as in some other countries, but it is widely available. We have a strong legal system that provides patent and trade secret protection.

Yes there are regulations that companies must follow, many of which are designed to protect consumers. We want to buy food that we know is safe to eat; we want an air traffic control system that operates without flaws. We want companies to minimize the pollution they create and not poison the environment.

How do we pay for all of these services? While there are some fees such as those on air tickets, I believe that it is mostly through taxes, especially the income tax. Is it not a little disingenuous for companies to arrange to pay no taxes in the U.S.? They benefit greatly from the supportive business climate in this country.

If taxes are so distasteful to corporations, we should follow the lead of the airlines and introduce fees. Maybe what we need is a “participation fee” for being a part of our economy, a percentage of a company’s gross sales in the U.S. with no deductions or exemptions and no way for a firm to get out of paying that fee even if it is losing money. It becomes a cost of participating in and enjoying the benefits that the U.S. provides to business. No one likes taxes and fees, but it is important for the U.S. to keep on working, and that is not going to happen if companies feel they have no obligation to help finance the system that lets them succeed.

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Ohio State, Corruption and the Value of the Football Coach

August 11th, 2011 by under The University Today. No Comments.

Recent events at Ohio State provide further evidence that big college sports endanger what Universities should stand for. The Buckeyes football team played for the national championship in 2002, 2006 and 2007, winning the 2002 national championship for the first time in 34 years. In 2011, its coach, Jim Tressel was forced to resign for failing to tell University officials that players were trading memorabilia for cash and tattoos, breaking NCAA rules. Ohio State vacated last season’s 12-1 record and its share of the Big 10 title and will be on probation for the next two years. Was Tressler alone in this coverup? One has to wonder what University officials new and when they knew it.

During his ten years at Ohio State Tressel made $21.7 million, earning more than $3.5 million in 2010 according to the New York Times (8/10/2011). The article further states that $4.6 million of Tressel’s earnings came from an arrangement between Ohio State and apparel-maker Nike. Evidently the $4.6 million went to Tressel instead of the University for its exclusive arrangements with Nike. Does this sound a little like money laundering?

In the beginning of college sports, students up made the teams. Now at the big football and basketball schools semi-professional athletes constitute the teams and a staff of tutors and academic coaches tries to maintain the illusion that they are students, too.

The last four years may have been a new low in business and government ethics; our hope is for Universities to instill ethical behavior in students. It is hard to play this role with the huge sums of money at stake in athletic programs; it is unlikely that Ohio State is the only school where there are payoffs to players and money is laundered to pay the coach.

What does President Gordon Gee of Ohio State have to say? His salary last year was $818,167 with a $300,000 bonus. (During his career at Ohio Tressel had a $200,000 signing bonus and $835,000 in game bonuses.) At the end of the 2010 season Gee said that the football coach’s salary reflected his value to the university. “You think about coaches and you think about surgeons and you think about English faculty. These are investments and we need to pay them so they are worthy of that investment (New York Times, 8/10/2011).” These words may come back to haunt the President.

If we assume that the English professor is paid about $100,000 a year, a generous assumption, then by Gee’s reasoning the football coach in 2010 was 35 times as valuable. The English professor exposes students to our cultural heritage and encourages them to learn to think critically. The football coach presides over a large entertainment subunit of the University. If President Gee ever faces a life-threatening illness, I wonder if he will call on his highly valuable football coach, or go to see the less valuable surgeon from his example.

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Football Again

June 27th, 2011 by under The University Today. No Comments.

In 2011 Jim Tressel, Ohio State’s winning football coach was forced to resign because of an infraction of NCAA rules, his failure to report the violations, and for lying about his knowledge in a signed report to the NCAA according to Yahoo News and the AP (5/30/2011). The infractions involve players who purportedly received cash and discounted tattoos from a local parlor.

The NCAA suspended the players including a star quarterback for the beginning of the 2011 season, but evidently to teach everyone a lesson, it let them play in the Sugar Bowl which Ohio State won. The president of the University appointed a committee to investigate and reported his decision to the trustees.

One has to wonder why a university with the mission of education and research has to be distracted by the behavior of the players and coaches. Is it because they don’t really belong in a university? Are they really a professional sports corporation that happens to be located on the campus? If so, then we are close to my favored solution for these problems, that we franchise the name of the University to a corporation that hires players and coaches. The University can rent facilities including a stadium to the corporation. There will be no need for the NCAA and if local merchants want to give gifts to professional athletes who are not students, they will be free to do so. We can still have a college football team, but it will not corrupt the rest of the institution.

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