- The federal government should spend lots of money on research.
- We’d also like the government to fund a bunch of specialized programming that either provinces should be funding, or we should be doing on our own (study abroad, reconciliation, work-integrated learning), but only after spending money on research.
- This is all about economic growth and prosperity and the middle class, we swear.
Over the next month or so, I will be analyzing various parties’ manifestos with respect to PSE, but I thought it would be interesting to start by evaluating the platform of what we might call the “University Party”. In particular, let’s ask the question: would a policy consisting of points 1 and 2 actually improve the economy, make it more dynamic, inclusive, etc? The answer here is less clear than you’d think.
Broadly speaking, the niche initiatives are mostly about students, and to the extent that they improve human capital they are probably growth-and-public-welfare enhancing. They may not, however, be especially cost-effective at doing so. For instance, all those purported benefits of a term of study abroad…how many of them could be achieved by studying in another language within Canada at a fraction of the price? We don’t know, and universities seem notably reluctant to do any research to find out.
The research question is similar: right in general but possibly not on specifics. We know there is a link between research and economic dynamism; we can’t prove (or at least no one has yet done so) that there is a link between publicly funded research in universities and growth. The best we can do is note that communities with universities on the whole grow faster than those that don’t. However, the vector by which universities stimulate local growth is unclear. Is it simply by virtue of spending lots of public funds in an area? It’s possible. Is it – as universities desperately want you to believe – because all that research leads to lots of little discoveries which (insert lots of handwaving here) leads to innovation and growth? Maybe. Or is it that business tends to locate near talent and what really drives them to situate near universities (big ones, anyway) is all the highly-trained graduate students? All of these possibilities suggest that spending money on research is probably a good idea, up to some unknown saturation point, but they have different implications for what universities should be prioritizing with the money they receive.
But the problem with all of this as a sectoral manifesto is that while higher education/research/etc. is a necessary condition for inclusive growth, it’s also an insufficient one. We’ve had very good recent reports in Canada make the point that we’ve hit the limit for supply-side solutions to innovation (i.e. paying for research); what’s actually needed is demand-side solutions like government procurement reform, product de-regulation and cartel-busting. Fair enough: so why aren’t universities and colleges arguing for it? If they care about innovation, they should care about creating the conditions for innovation, no?
Or, take another problem – that is, the tendency for graduate standards of living to fall over time due to the increased price of housing. One of the less-anticipated outcomes of the early 21 st
century knowledge economy is that as economic growth has concentrated in large cities and land values have shot up, many of the gains of the knowledge economy have ended up not in the hands of knowledge workers but in the hands of landowners/landlords who rent or sell them housing (hence the renewed fashion for the works of Henry George
and the sudden attraction of wealth taxes). The discontent of recent graduates is not so much that they are earning less than previous generations but that they have less disposable income after shelter. So, one of the obvious ways that universities could fight for their graduates would be to fight for looser zoning controls and anything else that could encourage the housing supply and bring down prices.
I could cite other policy examples, but you get the idea. Well-funded and well-managed higher education systems are essential to inclusive growth, but in the absence of other measures in other parts of the economy, funnelling money into the university sector in the hope of igniting growth is a little like pushing on string. If universities want to argue that they are integral to an inclusive growth agenda, maybe they ought to actually, you know, stand up for inclusive growth . All of it, not just their narrow, self-interested part of it. Forge coalitions. Join up with anyone interested in making dynamic economies that work for all. Fight for science, sure. But also for housing and competition and against oligopolies and innovation-stifling regulations. The rest of the economy matters, and universities’ government relations strategies should act like it does.
So how does the University Party’s platform look overall? I’d probably give it a B or a B-minus. It’s too narrow, and while the main policy planks are, in principle, good, the details on how specific initiatives line up with economic growth are sometimes quite vague. It could certainly do better.