- A movement is gaining ground in the advertising industry to pay agencies based on value (results) instead of hours worked (The Economist, "Clock-watchers no more", May 16, 2009) This follows a trend among lawyers, who have begun to implement flat-fee structures instead of billing by the hour (see this post).
- The movie industry doesn't need cinemas any more - or at least producers of independent films don't. Bringing such films to cinemas has always been a challenge, but the difficulty has become particularly acute this year. Some of these films are now released via "on-demand television" instead, building on the long-tail effect documented by Chris Anderson in his book of the same title. (The Economist, "Saved by the box", May 21, 2009)
- The media industry is slowly realizing that charging only advertisers isn't sustainable, although "general news is likely to remain free on the Internet." (The Economist, "The News Business", May 14, 2009) Some outlets have attempted to combine advertisement- and subscription-based revenues: the Financial Times let casual readers browse its site for free, while anybody wanting to read more than ten articles a month needs to pay; as for the Wall Street Journal, "rather than charging certain types of user, it charges for certain types of news." In particular, it charges for what the Economist calls "the dry, obscure stuff", because most people won't care, but "those who are interested in such information are very interested." That approach has also been implemented by ESPN - readers get charged only for information they can't find easily elsewhere on the Internet.
According to the New York Times, Harvard researchers have come to the following conclusion: "Finance [for people trying to combine work and family] is worse than law and worse than academia. It is far worse than medicine, which emerges from the research as the highly paid profession with the most flexibility. Near finance at the bottom of the list is consulting, another field that became more popular in the last two decades." (NYT, "Financial Careers Come at a Cost to Families", May 26, 2009) Later in the article, we read: "People who take time off in [finance and consulting] suffer large penalties, both in terms of money and career opportunities, once they return to full-time work."
I found the study interesting, although unsurprising; it is well-known finance and consulting are time-intensive industries, which is why they pay entry-level college graduates much more money than other fields, and why so many young hires decide to change occupations after a few years, especially in consulting. (There's probably a lot of attrition in finance too; the system strikes me as very pyramid-like with a large base that narrows drastically with seniority, but I'm not sure where those people go if they realize finance is not for them. Maybe they all enroll in business schools for a career change.)
Medicine is touted in the article as offering the greatest work-life balance, because of the flexibility in choosing one's schedule; that also applies to academia, although the pay scales are vastly different. In disciplines that do not appear to lend themselves to flexibility, such as obstetrics, group practices have helped physicians keep control of their time at work.
The journalist misses the point when he focuses on Wall Street's reluctance to implement such practices - there is a massive difference between finance and medicine, and that difference is called barrier to entry. The years of training required to practice medicine, and the penury of certain types of doctors, create incentives to accommodate practitioners. The large numbers of college graduates, not always with finance backgrounds, who learn the ropes on Wall Street, make any burnt-out employee easy to replace. If the investment banks needed more experienced workers, like the mothers who come back on the job market after taking a year or two off, they would make it more attractive for such people to return to the workforce, and they would accommodate their schedule more. The fact they don't suggests finance and consulting are fields you'd better enjoy while you're young.
The New York Times ran an op-ed last month entitled "End the University as We Know It", authored by the chairman of the religion department at Columbia University. The author points out issues with the current system, and then advocates change that is so radical that I wondered whether he wasn't simply trying to get attention, which is one way to make people take notice - after all, religion departments aren't exactly central to the functioning of universities, and one can legitimately ask why his advice is pertinent enough for the NYT to print it.
Professors in the humanities receive little research funding, and hence cannot fund graduate students through research assistantships. As a result, the main funding option for students is a teaching assistantship - students hold recitations and office hours; in some cases, they also teach courses. (How often this happens depends on the department and the university.) Teaching does take time away from one's dissertation, and is one reason students in the humanities often need seven or eight years to graduate, while their engineering counterparts can become PhDs in four or five years - faculty members in engineering have more grant money, and therefore more research assistantships.
This becomes, in the author's words: "The dirty secret of higher education is that without underpaid graduate students to help in laboratories and with teaching, universities couldn’t conduct research or even instruct their growing undergraduate populations. That’s one of the main reasons we still encourage people to enroll in doctoral programs. It is simply cheaper to provide graduate students with modest stipends and adjuncts with as little as $5,000 a course — with no benefits — than it is to hire full-time professors."
While there's certainly some truth to the fact that adjuncts are cheaper than full-time professors, I doubt graduate students would be thrilled if they were told there was no longer any teaching position available for them, because they would need to sustain themselves on loans only. (Few banks would provide that much funding for grad students in the humanities, which also means faculty members would have fewer students to do research with.) Also, because graduate students in the humanities end up mostly in faculty positions, it does make sense to have them teach during their graduate years, so that the ones who do get academic jobs are prepared from day one - and the universities who consider hiring them can see their teaching evaluations and judge their performance.
I'm surprised that a department chair would make statements such as "That’s one of the main reasons we still encourage people to enroll in doctoral programs," speaking about the need to staff courses and labs. A good faculty member will advise undergraduates to apply to a different school, because the student will benefit from being exposed to different professors and different teaching styles. Therefore, good advisors won't even think about using a good student to teach a course - they will hope he goes elsewhere.
On the "emphasis on narrow scholarship": yes, it's sad to read that "[a] colleague recently boasted to [the author] that his best student was doing his dissertation on how the medieval theologian Duns Scotus used citations." But the author also complains that his department has "10 faculty members, working in eight subfields, with little overlap." Let me think. This is a religion department. Does the chairman seriously believe the research program is strong enough to sustain two research advisors in the same field? He should be glad research doesn't overlap. Faculty members will naturally gravitate to an area that builds upon their skills but which they can also make their own. Nothing wrong there.
On "Faculty members cultivate those students whose futures they envision as identical to their own pasts, even though their tenures will stand in the way of these students having futures as full professors": Departments rarely hire a graduate student they have trained, because the dissertation supervisor and the former student would be working on similar topics. (Because of tenure, the former student can be certain his supervisor isn't going anywhere.) It is not a healthy situation for the former protege to be in, as he attempts to develop his own research program - most incoming students would gravitate toward the more established faculty member anyway. That's a very good policy. I can't believe any faculty member would take issue with that.
It would have been much more relevant to discuss the appropriateness of recommending graduate school to undergraduate students - there, professors are indeed biased, since they went to grad school themselves, and undergraduate students trying to decide what to do after graduation should recognize that bias. The fact that grad school was the right career path for the professors when they were talented undergraduates doesn't mean it's the right career path for every talented undergrad.
It's true that "there will always be too many candidates for too few openings" in the humanities, and that issue - because it affects the life of many graduates - deserves a more thorough discussion than what the op-ed columnist comes up with. His fantasy solutions include abolishing departments (to be replaced by problem-focused programs), using technology to allow universities to focus on their strengths (university A teaches French, university B teaches German, students at university A who want to learn German will take a web course with teachers from university B), producing dissertations in alternative formats, abolishing tenure (good luck with that).
While some people give the fact that tenured professors have no incentive to continue being productive as a reason to get rid of tenure, they also fail to notice tenured professors, because they indeed tend to be less research-active, also shoulder more of the department's teaching responsibilities, enabling tenure-track (junior) faculty members to have a somewhat lighter teaching load. If people had to worry about being on the job market every seven years, they would have an incentive to do a lot of research at the expense of preparing their courses. Tenured professors also sit on many (possibly extremely boring) university committees, while tenure-track professors are shielded from that chore, at least when they have a good department chair.
Expanding the range of professional options for grad students was one of the more sensible recommendations the columnist made, although any good advisor should make sure his students hold reasonable expectations regarding the job market and prepare a Plan B if the recruiting process doesn't work out. So maybe the op-ed shouldn't be about the end of the university as we know it, but about improving faculty advising and showing more concern for students as people. Maybe some faculty members have focused too much on increasing their scholarly output at the expense of their students' development.
For instance, sometimes a professor is reluctant to let a senior student graduate because the student has become so valuable to the professor - he has evolved in an independent researcher in his own right, and it's much less time-consuming to have him work on this or that project rather than train a junior student to take his place. I've heard that this occasionally arises in science departments, where the principal investigator prefers to entrust senior students with experiments rather than new hires. Good departments now have procedures in place to identify students who are staying on too long and make sure they finish in a reasonable amount of time.
In addition, universities do encourage cross-disciplinary research. (Lehigh certainly does.) That doesn't mean departments should be abolished. Civil engineering students interested in water - an example the op-ed columnist gives - don't need to have their department be replaced by a program including philosophy and religion courses (and candidate for deletion every seven years - apparently, it's no big deal to the author that college graduates would have to market their skills in the workforce with a temporary degree and without an alumni network). The students who do not know how to fulfill their breadth requirements - humanities and social sciences courses that engineering students have to take to show they're well rounded - should be encouraged to take ethics or philosophy courses. Again, it's simply a matter of good advising.
In summary, the op-ed columnist was so out-of-touch with reality, and the remedies he offered were so unlikely to ever be implemented, that the whole piece was useless. A much more valuable message would have been: "Good advising is crucial to make students' training relevant in the 21st century. Students should be as much a focus as scholarly output."
After all this, I read the stories of five MBA students at Kellogg, who are struggling to find a job or an internship in this recession, on the Economist's website just to convince myself I hadn't completely wasted my time on the Internet tonight. At least that article (five vignettes, one about each student) was worth reading. Economist 1, NYT 0.
The June issue of Harvard Business Review has a short communication on "Too Big to Fail? How About Too Big to Exist?", by Duncan Watts, a professor of sociology at Columbia who is an expert in cascade dynamics and argues: "The solution may therefore be to make the system less complex to start with, in order to reduce the chance that any one part can trigger a catastrophic chain of events. In the financial system, this means limiting how big companies are allowed to become."
The over-complexity of financial systems is an issue Richard Bookstaber touches upon in his book, "A Demon of Our Own Design" and in his blog. For instance, he states in his post dated May 15: "Complexity is one of the demons that makes our financial markets crisis prone. Much of the complexity arises in the specter of derivatives and other “innovative” products. To reduce the risk of crisis we must exorcise this demon. We need a flight to simplicity." He advocates a central regulatory agency collecting position and leverage data to anticipate crises (see his post dated February 28, 2009).
But others contend the issue is not about being "too big to fail" - instead, it's about being "too interconnected to fail." On his blog, Sebastian Pokutta summarizes a talk by Columbia's Rama Cont, who emphasizes the importance of understanding banking networks and proposes an indicator called the Systemic Risk Index, "which combines a traditional factor-based modeling of financial risks with network contagion effects resulting from mutual exposures". The techies out there can browse through Cont's slides (for a similar talk at ENPC in France) here.
The June 2009 issue of Harvard Business Review has an article about the role B-schools have played in the current debacle: "The Buck Stops (and Starts) at Business School", by Joel Podolny, who is now the dean and vice president of Apple's "Apple University", which he founded, and the former dean of the Yale School of Management as well as a former professor at Harvard Business School and the Stanford Graduate School of Business.
He states: "Unless America's business schools make radical changes, society will become convinced that MBAs work to serve only their own selfish interests" and "In order to reduce people's distrust, business schools need to show that they value what society values." He then proceeds to make outlandish recommendations, such as (1) B-schools should stop advertising rankings because that supposedly only "reinforces the idea that their only goal is to teach students how to make a lot of money", and (2) they should "withdraw the degrees of those who break the manager's code."
I've never thought of the rankings as reinforcing the money issue (although US News does publish graduates' average starting salary including bonuses as one item of its rankings table for the business schools) and Podolny, who has left a traditional academic career, as mentioned above, does sound surprisingly disgruntled at times, for instance when he says: "Seasoned MBAs commend higher starting salaries, so if a business school admits students with more experience to begin with, its ranking will automatically rise. Not coincidentally, the average age of students entering business school increased throughout the 1990s."
That paragraph left me speechless. By what stretch of the imagination can anyone find it a good thing that students used to apply to B-school with only one year work experience (making that two by the time they enrolled), eager to become leaders at the ripe old age of 24? This encourages students to take the easy way out when they don't like their first job - they never have to confront challenges, deal with a project's failure, or do any kind of growth in their job right after college. This is one area where B-schools' self-interest pushed them in the same direction as the common good. Besides, it makes sense that the students would factor in their future salaries to decide - a MBA education costs a lot of money. Ultimately, people go back to school to further their own career, not to help society. Of course they're going to be selfish.
But you can be selfish and yet not misuse shareholders' money - a point Conrad Black apparently lost track of: "Conrad Black and his associates at the top of Hollinger International transferred more than $400 million to themselves at the expense of shareholders over a seven-year period, an investigation has found." (The Telegraph, September 1, 2004) In particular, Black spent $8 million of shareholders' money to buy Franklin Delano Roosevelt memorabilia, which he displayed in his own home. (New York Times, September 1, 2004)
Black is also given as an example in the HBR issue, although I don't remember if his name appears in the Podolny article or in another of the section on regaining investors' trust. The facts are: Black never earned a MBA degree and, according to his Wikipedia page, has a well-documented history of unethical behavior and embarrassing failure when he was a youngster. Would he care about a manager's code? about a degree he doesn't have being withdrawn? His family should have taught him right from wrong when, according to Wikipedia, he was expelled from school at age 14 from selling stolen exam papers. While B-schools are apparently eager to remain relevant in the current conversation, 20-something is much too old to be taught ethics.
Another case in point: Bernie Madoff, aged 71, who, according to his Wikipedia page, started at Brooklyn Law School after graduating from college but later dropped out. No MBA for him either. Another one: Jerome Kerviel, age 32, the French trader responsible for billions of losses at Societe Generale in late 2007. He graduated from a run-of-the-mill university instead of the more prestigious French "grandes ecoles"; it is said his eagerness to outperform his colleagues from better-known schools led him to place his ill-fated trades. No MBA.
One hopes that negative publicity would make executives behave, but it seems they never believe they are going to get caught until they are escorted out of the building in handcuffs. The bonuses-related fiasco (and the shocking behavior of the auto executives who took their personal jet to ask lawmakers for money) shows a lack of common sense, many years after any executive got his MBA, which B-schools are unlikely to address. The idea that any 55-year-old would alter his behavior because his B-school, from which he graduated three decades earlier, threatens to withdraw his degree - if he gets caught not obeying the manager's honor code - is just laughable. A much more relevant question would be: how do we identify people at risk for this behavior, and prevent them from landing in positions where they can do harm or misuse shareholders' money?
The sad part is that the "good guys" who are caught in the middle will find themselves disproportionately affected by the bad PR, sometimes with terrible consequences. The Chief Finance Officer of Freddie Mac committed suicide after being hounded by the media, following the public outrage about the bonuses (New York Times, April 22, 2009).
Finally, Podolny advocates "qualitative (as opposed to quantitative) research" in B-schools as well as the appointment of teaching teams "from both hard and soft disciplines." Given how little emphasis there currently is in B-schools on truly quantitative skills, which led MBA-holding managers on Wall Street to make decisions based on models they didn't understand (Recipe for Disaster: The Formula that Killed Wall Street, Wired, February 23, 2009), it's shocking a former dean wouldn't want to educate business students not to be so afraid of mathematical models. With that kind of attitude, it's only a matter of time until the gullible MBAs get carried away by the predictions of the next number-crunching machine.
FICO is sponsoring the 2009 Data Mining Competition hosted by the University of California at San Diego. Here is the information from the website: "This year's contest consists of two classification tasks based on e-commerce transaction anomaly data. The first task is to maximize accuracy of binary classification on a test data set, given a fully labeled training data set. The performance metric is the lift at 20% review rate. The second task is similar to task 1, but provides a couple of additional fields that have potential predictive information." There's a total of $8,000 in prize money.
The contest runs until July 15 and is open to "all current undergraduate students, graduate students, and postdoctoral researchers studying full-time, in residence at an accredited university or college." Students rarely have the chance to manipulate real data and the contest offers them a unique opportunity to see what the real world of operations research looks like. Participation is very easy. This contest sounds like a lot of fun!
Earlier this month, the New York Times published an article about community colleges' push to grant a handful of four-year degrees, in disciplines such as nursing and culinary arts ("Community Colleges Challenge Hierarchy with 4-Year Degrees", May 2, 2009).
As the NYT journalist points out, "[c]ommunity-college baccalaureates challenge the educational hierarchy’s boundaries between the research mission of universities, the teaching mission of colleges and open admissions for community colleges." The article presents community colleges as geared toward the working population, often with family members to provide for; since their mission is to provide "educational, vocational and transfer programs" (to borrow from the California Community Colleges System statement at the bottom of this page), they should be allowed to train students for four years, if that is more appropriate given the skills students are supposed to acquire.
On the other hand, why four years and not three? Why does the degree have to be called "baccalaureate" like a four-year degree? This may mark the beginning of community colleges' evolution toward open-admission four-year colleges - a reason why colleges and universities have ferociously opposed the move. I find it hard to believe it takes four years to earn a degree in culinary arts, for instance. You learn the basics, and then you go into the world and cook.
The French vocational degrees - BTS [Brevet de Technicien Superieur, loosely translated as Senior Technician License] and DUT [Diplome Universitaire de Technologie, or University Diploma of Technology] - are also earned in two years. (It should be obvious from my first name that I'm French.) The short duration of the studies motivates students to earn an advanced degree with clear marketable skills that will land them a job in the workforce.
A requirement of the French so-called short-study degrees is that students do an internship, which helps graduates find jobs afterward. My mother used to work at a DUT-granting institution, called IUT (for University Institute of Technology); for the internship, each student had a faculty supervisor who would visit the internship location several times while the student was there, and after the internship the student had to make a presentation of his project to the IUT faculty. It was similar to a capstone project and a summer internship morphed together, but was tougher. (The internship wasn't in the summer, but during the last semester of study instead. Everything shuts down in France during the summer, especially in August, so there was no point in making the students work then.)
I remember some of the best students had the option to stay on for a third year, but there was never any talk of increasing the length of studies beyond that. If a job is so complicated that you need more than three years of vocational training to do it correctly, then maybe open admissions are not the way to go.
Monday was Commencement Day at Lehigh and the temperature was barely higher than last year, but at least it didn't rain. I vividly remember the downpour a year ago on the students waiting to receive their degrees - including most of my students, since the graduates of the College of Engineering receive their degrees last. The poor kids were soaked wet by the time they made it up the ramp to shake the President's hand. I noticed quite a few Master's students who were Lehigh undergraduates in the crowd this year and was glad they got to attend a second time. I have this memory of walking back to my car after the 2008 ceremony and feeling neither my toes nor my fingers, which made it tricky to put the car key in the ignition.
This year the faculty was seated under the main tent with the "dignitaries", instead of being parked on the side where we couldn't see a thing of what was going on. I found myself a good spot to see my students graduate, since that's the reason I go every year (we're expected to show up every other year, but I teach most of the senior class in my department and I can never decide which ceremony I'm going to skip) and anyway it makes the ceremony go by a lot faster. I was able to see many of my students get their degree; sometimes I might even have been more excited than the students themselves, which might be due to their shivering in the cold or simply my ability to get excited at anything.
Next year it'll be sunny. Just like it was yesterday (Tuesday) when it no longer mattered.
When faced with a crisis or a disappointment out of our control, we all want to believe that something good will come out of it - or at least that it won't make us worse off. That is why I found the candor of this article in the Wall Street Journal absolutely remarkable; entitled "The Curse of the Class of 2009", it provides sobering data based on the study of the "wages of white men who graduated before, during and after the deep 1980s recession." Its message to this year's graduates is grim: timing matters. A lot. (I first learned of the WSJ article on Abi's blog.)
Here is an example mentioned in the article: "A man who graduated in December 1982 when unemployment was at 10.8% made, on average, 23% less his first year out of college and 6.6% less 18 years out than one who graduated in May 1981 when the unemployment rate was 7.5%." This represents a difference of about $100,000 over the 18-year period.
Of course, at some level, we all know that luck matters. Teenagers are a lot more likely to go to college if they were born in an upper-middle-class family than if their parents work for minimum wages, for instance. But the fact that luck still matters after people have become young adults clashes with the American "can do" attitude, where people hold their destiny in their own hands. It is particularly hard to swallow for students who have played by the rules - graduated at the top of their high school class, studied hard at a top-tier college, received plenty of As, and yet cannot find a job.
There's admittedly a bit of controversy regarding the type of graduates such articles report on - the NPR profile of a young graduate with a degree in art, entertainment and media management ("Fresh Out of College, But Can't Land Work," March 10, 2009) aroused a heated debate on the NPR website because a number of readers felt the woman's degree was not marketable, her expectations had been completely unrealistic, and she only had herself to blame for her current woes.
But it is difficult for nineteen-year-olds selecting their major to think in purely utilitarian terms. Undergraduates who force themselves to study a field they don't care about perform usually quite poorly, and the high grades they get in the handful of courses they do feel passionate about offer only a bittersweet glimpse into what could have been, if they had selected the other path.
I do get worried when I read sentences like: "She was supposed to be working toward the next big thing: dazzling her family and friends with her accomplishments, on her way to becoming a successful adult" (NPR), "I've pretty much given up on trying to find my dream job" (WSJ) or "Then she found her ideal job [...] but they need her only 20 hours a week" (WSJ again). This emphasis on finding one's dream/ideal job and on dazzling everybody right after graduation seems a bit unhealthy.
To go back to the WSJ article -- "College graduates remain better off than those with only high-school diplomas, in good times and bad," and while the author also cautions that "a college degree isn't an automatic ticket to upward mobility," some graduates are definitely better equipped than others to weather the crisis: a study found that "people who majored in fields that lead to high-paying jobs, such as chemistry, biology, physics and engineering, tended to catch up to other graduates more quickly, primarily by switching jobs during the economic recovery and landing at better firms." Finally, some good news.
Even then, it will be an uphill battle - 2009 graduates will compete fiercely for those jobs. The excellent "Dear Graduates" post in the InsideHigherEd blog offers the following bittersweet insights, under the disguise of a commencement address: "When circumstances conspire to flatter us, it's easy to lose sight of the breaks we've caught. Yes, we help create our own luck, but we do no more than help." And later: "If you're really good [...] you'll retain a memory of this moment as you plow forward. You'll remember the feeling of “now what?” and the sense of helplessness that comes from having done everything right and still coming up short. And you'll pause before passing judgment on people in bad spots, because you'll realize that, at some level, we're all just a few bad breaks away from there."