Economic and Social Roles of Higher Education

In an early analysis on the evolution and role of HE in a cross-national perspective, sociologist Burton Clark noted the maturation of such systems as independent and indispensable sectors of modern societies. The university presents the “social structure for the control of advanced knowledge and technique” (Clark, 1983, p. 11), and its core processes are the discovery, conservation, refinement, transmission, and application of such knowl?edge and technique. The growth of the sector is a response to the dramatic increase in scientific knowledge in academic fields and the commensurate growth of specialization and fragmentation of academic disciplines. In addition, the burgeoning of the sector corresponds to vastly expanded levels of specialization of expert labor and the increase of degree and cre- dentialing requirements in many skilled and semiskilled occupational areas (Friedson, 1988).

HE is viewed as a primary means to increase the stock of human capital at a time where “the current world economy is going to be increasingly dominated by knowledge-based industries over the coming decades” (Armstrong & Chapman, 2011, p. 1). HE operates differently in mature and emerging economies, in the former focusing on product and process innovation and scientific breakthrough, and in the latter on building a human capital base and skill infrastructure sufficient for transitioning from low value to knowledge-intensive modes of economic activity. In countries around the world, the past 30 years have seen explosive growth in HE (Armstrong & Chapman, 2011). As a result of high birthrates, near-universal participation in primary and secondary education, and the perceived career and life advantages associated with university degrees, demand has increased manifold. As detailed in a recent United Nations report (Institute for Statistics, 2014), HE systems in middle-income countries across Asia have “expanded out” by building new universities, hiring faculty, and encouraging the growth of private universities. At the same time, these systems have “expanded up” by increasing the number of graduate programs in professional fields to prepare future faculty, researchers, and advanced-level practitioners.

The growth of the sector has been accompanied by increasing size and complexity of its institutions and by commensurate challenges for their governance in areas such as administrative efficiency, transparency, and accountability. Dissatisfaction with the current level of performance of colleges and universities in countries around the world is ubiquitous and has led to demands for reform and transformation (e.g., Van Zanten, Ball, & Darchy-Koechlin, 2015). In light of an equally ubiquitous resource scarcity in the public sector, HE institutions have also become competitive, and this creates governance and leadership challenges that easily mirror those of large commercial organizations. In addition, demand for experienced and capable leaders far outpaces supply due to retirements, internal transfers, poaching, and expansion of organizational systems and structures (Charan, Drotter, & Noel, 2012). Failure rates among newly appointed leaders tend to be high. Two of every five chief executive officers in business and industry fail during the first 18 months in office, creating a host of organizational, economic, social, and personal difficulties and hardships (Ciampa, 2005). HE research points to a very similar situation in university leadership (American Council for Education, 2013), and this lends particular urgency for the focus on HE leadership described in this chapter.

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