Selected examples of citation errors in Rick O’Donnell’s paper “Is Academic

Research a Good Investment for Texas?”

From the article…

As university President George Dennis O’Brien observed, “Experimental
science…evolved basically outside and in opposition to the traditional
universities.”6

From the footnotes…

6 George Dennis O’Brien, “All the Essential Half-Truths about Higher Education”
(Chicago: University of Chicago Press, 1998) 3.

Comments…
It appears O’Brien was quoting someone else here, a “commentator.”

O’Donnell’s Explanation…
Overlooked in editing

From the article…

Also, private industry has been consistently increasing its spending on basic
research, growing from $5.4 billion in 1995 to $9.1 billion in 2006.8

From the footnotes…

8 Richard Vedder, “Going Broke by Degree, Why Colleges Cost Too Much”
(Washington DC: AEI Publishers, 2004) 122.

Comments…
Vedder’s book was published in 2004, data is from 2006 data. NSF data show
industry conducted $6.7 billion in research in 1995 and $10.3 billion in 2006. As a
percentage of total basic research, those numbers represent a decline from 23 to
16 percent.

O’Donnell’s explanation…
The year 2006 should have been 2000.

From the article…

At the University of Texas System, in the last 10 years, an estimated $3.8 billion
has been spent on research, yet income from this investment is less than $3.2
million, or an annual rate of return of less than one-tenth of 1 percent (.08
percent). At the Texas A&M System, an estimated $3.8 billion has been spent
over the last decade to generate income of less than $5.5 million, for less than
two-tenths of 1 percent rate of return (.14 percent).11
Overall, Texas universities have spent an estimated $9 billion on scientific
research that has generated a mere $8.3 million a year in income, a rate of return
of less than one-tenth of 1 percent (.09 percent).

From the footnotes…

11 College Board, “Trends in College Pricing 2005” (10 Oct. 2008)
http://www.collegeboard.com/press/releases/48884.html.

Comments…
Information in the College Board’s report on trends in college pricing. According
to the UT System 2011 Fast Facts,
(http://www.utsystem.edu/news/fastfacts.html), total research expenditures for
the UT System totaled $2.4 billion in 2009 and gross revenue from intellectual
property was $43 million.

O’Donnell’s explanation…
Wrong source, but cannot recall how he calculated the numbers

From the article…

Former Assistant Secretary of Education, Chester Finn: “Professors have
become specialized in their interests, which are ever more distant from what
ordinary citizens understand or care about. Academic presses now publish books
selling fewer than 300 copies. ‘The demands of productivity,’ a humanities editor
says, ‘are leading to the production of much more nonsense.”14

From the footnotes…

14 Harry R. Lewis, “Excellence Without a Soul, How a Great University Forgot
Education” (Jackson, TN: Public Aff airs, 2006) 9.

Comments…
It appears that Harry Lewis said this, not Chester Finn.

O’Donnell’s explanation…
Editing error

From the article…

Former Harvard University President Derek Bok notes that graduate students are
often unprepared for teaching: “Being thrown into teaching large undergraduate
courses with little to no training is good neither for the graduate students or the
students they teach. Presidents and deans of research universities could act
more boldly by urging revisions in their Ph.D. programs to include better
preparation for teaching.”30

From the footnotes…

30 Derek Bok, “Our Underachieving Colleges” (Princeton: Princeton University
Press, 2006) 340.
Comments…
First sentence of the quote is not from Bok.

O’Donnell…
Editing error

From the article…

Perhaps the market has finally reached saturation, as Ph.D.s issued leveled off
to 45,596 in 2006.41

From the footnotes…

41 “More Doctors of Philosophy and Science” Inside Higher Ed (21 Nov. 2007)
http://www.insidehighered.com/news/2007/11/21/phds.

Comments…
The article referenced, as well as the original press release, states the number of
PhDs issued that year was an all-time high.

O’Donnell’s explanation…
Not sure how that happened

From the article…

In the spring of 2006 at UT-Austin, the average tenured full professor taught an
average of 87 undergraduates for an average cost of $2,815 per student per
class. By contrast, the average non-tenured instructor received a salary of
$47,000 per year and taught 247 students, for an average cost per student
taught of $381.49

From the footnotes…

49 Texas Higher Education Coordinating Board, “Average Faculty Salaries -
Texas Public Universities - FY 2004” (10 Oct. 2008)
http://www.thecb.state.tx.us/Reports/.

Comments…
Information not found in source document.

O’Donnell’s explanation…
Numbers were gleaned from universities and the Texas Higher Education
Coordinating Board, but cannot point to one source
Õ
TEXAS PUBLIC POLICY FOUNDATION
PolicyPerspective
by Rick O’Donnell
President, Acton Foundation
for Entrepreneurial Excellence
& Senior Research Fellow,
Texas Public Policy Foundation
RECOMMENDATIONS
ƒ Place a renewed emphasis
on teaching in colleges and
universities.
ƒ Require all Texas colleges and
universities to sign a “learning
contract” with incoming
students.
ƒ Separate the teaching and
research functions to stop the
massive cross-subsidies that
flow from teaching and useful
scientific research to subsidize
the more esoteric academic
research favored by the tenure
faculty.
ƒ Evaluate and reform the current
system of Ph.D. fellowships,
rejecting the conventional
wisdom about academic
research and the promise of
“free money.”
900 Congress Avenue
Suite 400
Austin, TX 78701
(512) 472-2700 Phone
(512) 472-2728 Fax
www.TexasPolicy.com
PP21-2008
Is Academic Research a Good Investment for Texas?
EXECUTIVE SUMMARY
We live in the richest and most powerful
country in the world. We owe a great debt to
the scientists and entrepreneurs who provided
the scientific breakthroughs that won World
War II and the Cold War. An equal debt is
owed to those who created new technologies
that helped build the modern U.S. economy.
Given the modern miracles that science and
entrepreneurs have provided, who wouldn’t be
in favor of more funding for research on our
university campuses. Everyone knows that it
is scientific, academic research that fuels the
modern economy—except that it doesn’t.
In fact, 87 percent of the research and devel-
opment work in the United States is done by
private companies and independent laborato-
ries, not by universities (see page 2). Even in
the area of basic research, higher education’s
share of research funding steadily declined
from 1980 to 2000.1
The returns for investing in scientific research
at academic institutions are poor, and Texas
campuses are no different. An estimated $9
billion has been spent on scientific research on
Texas campuses in the last 10 years. At nine out
of 12 campuses, the income from patents does
not even cover the costs of running the technology
transfer offices the patents require. Overall, taxpay-
ers are earning less than two-tenths of one percent
rate of return (0.14 percent, to be exact).2
Additionally, a significant portion of academic
research costs are “off the books” and not in-
cluded in these numbers. When tenured fac-
ulty refer to “academic research,” they generally
are referring not to work done in scientific lab-
oratories, but esoteric scholarly articles written
December 2008
Center for Higher Education
i
for obscure academic journals. Over two mil-
lion of these articles are published each year,
diverting tens of billions of taxpayer dollars
that could be spent educating students.
Ohio University economist Dr. Richard Ved-
der has conducted studies showing that states
that over-invest in higher education have a
lower growth rate than states that do not.3
Perhaps this is one reason why California,
with its highly acclaimed higher education
system—and equally high tax rates to support
it—has been losing economic ground to Texas
year after year. At best, there is no evidence of
a correlation between state higher education
spending and economic growth.
The key to preparing the next generation of
Texans for more productive and meaning-
ful lives is not to pour billions of additional
dollars into higher education research, but to
return our colleges and universities to their
original mission—teaching students.
This shift in emphasis could not come at a more
critical time, for there is mounting evidence that
students are learning less and less. The most
prestigious universities selectively admit smart
students, so they produce smart graduates, but
too often add little value in between.
This isn’t surprising given that over the last
20 years, the investment in teaching students
has plummeted. Today, the majority of un-
dergraduate classes in American colleges and
universities are taught by non-tenure track
faculty, graduate teaching assistants, or part-
time adjuncts making as little as $1,000 per
semester. At the same time, we are investing
billions of dollars in research of questionable
value.
continued on next page
Is Academic Research a Good Investment for Texas? December 2008

To successfully tackle the problem with higher education
in Texas, we must develop incentives in our colleges and
universities that encourage investment in teachers, cur-
riculums, and classrooms rather than the production of
endless streams of academic research.
During the 1960s, “social scientists,” well aware of what
federal funding had done for academics in the hard sci-
ences, began to apply for government grants that would
allow them to apply “scientific” methods to the study of
human behavior. Soon taxpayer money began to flow for
academic research in a multitude of disciplines.

Ironically, before World War II, the rigid orthodoxy

A SHORT HISTORY OF HIGHER EDUCATION RESEARCH
Beginning in World War II, the federal government in-
vested massive amounts of money into research on Ameri-
can campuses. By 1947, government spending for research
at colleges and universities was three times the combined
income of all institutions of higher education in 1941.4
Poorly paid professors found the allure of government
funding irresistible. Suddenly scientists armed with gov-
ernment money were more powerful than university pres-
idents. Dr. Robert Nisbet noted, “Suffice it to say, begin-
ning just after World War II, the locus of authority in the
university was, and continues to be, profoundly muddled,
fragmented, atomized as the case may be.”5
Federal government research funds soon became the driv-
ing force behind the recruitment, hiring, and promotion
of faculty. The money continued to pour into college cam-
puses throughout the Korean and Cold wars, and with
little concern for efficient administration of the funds,
higher education costs began to soar.
of academia had not ever favored the pure sciences. As
university President George Dennis O’Brien observed,
“Experimental science…evolved basically outside and in
opposition to the traditional universities.”6 Now the sci-
entific method dominates college campuses.
Over time, academic researchers gained significant control
of the modern American university, profoundly changing
the mission of higher education.
SCIENTIFIC ACADEMIC RESEARCH
America’s Universities Have a Small and Diminishing Share
of the R&D Pie
Despite rhetoric to the contrary, colleges and universities
fund only a small part of scientific research and develop-
ment in the United States, as demonstrated by National
Science Foundation (NSF) data.
Universities and federally funded university research cen-
ters performed only 16.6 percent ($56.8 billion) of the

U.S. Research & Development Spending

$342.9
2006 Expenditures

$350
($Billon/yr)

$300
($Billion/yr.)

$250
$200
$150
$100 $56.8
$50
$0
Universities Total R&D
Source: NSF
Source: National Science Foundation (NSF)

2 TEXAS PUBLIC POLICY FOUNDATION

December 2008
approximately $343 billion in research and development
in the United States in 2006 and less than a third of all
research.7 The majority of research funds are spent by pri-
vate industry and independent laboratories.
Although universities continue to perform more than
half of the nation’s basic research, two-thirds are funded
by federal grant money that could be redirected to other
recipients. Also, private industry has been consistently in-
creasing its spending on basic research, growing from $5.4
billion in 1995 to $9.1 billion in 2006.8 Most importantly,
the basic research performed by universities is almost en-
tirely the province of science departments, and therefore
it does not justify the emphasis on research over teaching
that is also common in the liberal arts, business schools,
law schools, and other disciplines. Some of the resources,
including faculty time, allocated to non-scientific research
that does not produce measurable returns could be used
for teaching more students or lowering tuition, either of
which would make higher education institutions more
productive.
Richard Vedder notes, “In sum, universities are not the
dominant institutional means of carrying out research,
even basic research, in the United States.”9
Texans’ Poor Returns on Investments in Scientific Academic
Research
The rate of return on investment (ROI) produced for the
citizens of Texas from investments in scientific academic
research on state campuses is dismal. In fact, at nine of
the 12 campuses reporting, the cost of running the technol-
ogy transfer offices exceeded the revenue from patents. In other
Scientific Academic Research ROI
10.0 percent
8.0 percent
Rate of Return 6.0 percent
4.0 percent
2.0 percent
0.14 percent 0.08 percent
-0.01 percent -0.01 percent
0.0 percent
Texas A&M Texas State UT System
System System
Source: Texas Higher Education Coordinating Board
TEXAS PUBLIC POLICY FOUNDATION
Is Academic Research a Good Investment for Texas?
words, the overhead associated with filing patents exceed-
ed the revenue received from those patents.10
At the University of Texas System, in the last 10 years,
an estimated $3.8 billion has been spent on research, yet
income from this investment is less than $3.2 million, or
an annual rate of return of less than one-tenth of 1 percent
(.08 percent). At the Texas A&M System, an estimated
$3.8 billion has been spent over the last decade to generate
income of less than $5.5 million, for less than two-tenths
of 1 percent rate of return (.14 percent).11
Overall, Texas universities have spent an estimated $9 bil-
lion on scientific research that has generated a mere $8.3
million a year in income, a rate of return of less than one-
tenth of 1 percent (.09 percent).
Had these funds instead been invested conservatively, earn-
ing 5 percent a year, the return would have been enough
to provide a four-year college degree to more than 50,000
additional Texans a year (assuming the $6,900 per year an-
nual costs of a for-profit university).
Revelations of Waste in Scientific Academic Research
Low returns on investments in scientific academic research
are not the only concern. There is also ample evidence of
waste.
Stanford has one of the highest overhead rates in the busi-
ness; for every dollar of received funds, it tacks on an ad-
ditional 74 cents for “overhead.” One observer “estimated
that the university may have overcharged taxpayers a stag-
gering $480 million for research costs.”12
4 Year College Degrees in Texas
250,000
200,000
150,000 108,696
Degrees per Additional Degrees
Year Currently awarded
100,000
50,000
92,000 92,000
U of Houston 0
System
Degrees Degrees
awarded in possible
2003-04 using
research
funds
Source: Texas Higher Education Coordinating Board
3
Is Academic Research a Good Investment for Texas?
More evidence surfaced in 2003, when a number of leading
universities including Northwestern University, Harvard
University, Johns Hopkins University, and the University of
Alabama at Birmingham agreed to settle complaints by the
federal government that the schools misallocated research
money.
In a recent survey of 3,300 research scientists, researchers
at Minnesota-based Health Partners Research Foundation
and the University of Minnesota found that more than 50
percent of established grant-receiving scientists used grant
money designated for one project on a different project,
often for undisclosed research that might lead to future
grants.13
These problems were discovered by the National Institutes
of Health, a federal agency not known for its careful over-
sight, suggesting that forensic audits by other donors and
research partners could be even more revealing.
SCHOLARLY JOURNAL ARTICLES—THE REAL RESEARCH
GOAL FOR ACADEMICS
When most people think of academic research, they think
of scientists in white coats in state-of-the-art laboratories,
but in fact, most academic research in the United States
consists of scholarly research articles written for narrow
academic journals. This research, subsidized with taxpayer
dollars, costs American taxpayers tens of billions of dollars
annually, money that could have been spent on students and
teaching.
Questioning the Value of Scholarly Research for Taxpayers
Many commentators, both inside and outside academia,
have questioned the value of much of the scholarly research
performed today. Here are a few examples:
Former Assistant Secretary of Education, Chester
Finn: “Professors have become specialized in their
interests, which are ever more distant from what or-
dinary citizens understand or care about. Academic
presses now publish books selling fewer than 300
copies. ‘The demands of productivity,’ a humanities
editor says, ‘are leading to the production of much
more nonsense.”14
Lynne Cheney, Chairman of the National
Endowment for the Humanities: “If we are
4 TEXAS PUBLIC POLICY FOUNDATION
December 2008
completely honest about it, we must admit that the
over-emphasis on research has, in the humanities
as in other fields, meant a lot of useless activity, a
lot of publishing that serves no purpose, beyond
expanding the author’s CVs. Many publications
will mainly gather dust on shelves in libraries.”15
Walter Steward, a National Institutes of Health re-
searcher: “I have never met a scientist who did not
believe that 80 percent of the scientific literature
was nonsense.”16
Science reporter David Hamilton concluded that
‘an unfortunately large percentage of what passes as
the bedrock of academic achievement more closely
resembles intellectual quicksand.”17
William Broad, a senior editor of the Journal of the
American Medical Association, said “There seems
to be no study too fragmented, no hypothesis too
trivial, no literature citation too biased or too ego-
tistical, no design too warped, no methodology too
bungled, no presentation of results too self serving,
no argument too circular, no conclusions too tri-
fling or too unjustified, and no grammar and syntax
too offensive for a paper to end up in print.”18
Not only is the value of academic research questionable,
but it may be becoming more and more trivial. Martin An-
derson, a former professor from Columbia, and a current
Senior Fellow at the Hoover Institution at Stanford Uni-
versity, writes “As fields of intellectual study aged, it became
more and more difficult to discover new, important ideas,”
noted one scholar, “It is difficult to improve on Aristotle,
Shakespeare, or Adam Smith. We do make discoveries and
advances in many areas of intellectual thought, but rarely of
the fundamental nature of the ones we inherit.”19
The Cost of Academic Journal Articles
Today there are tens of thousands of refereed academic
journals publishing an estimated two million articles a year,
with many more articles submitted but not published. This
means taxpayer money that could be better spent on stu-
dents goes toward paying for over 5,500 academic journal
articles a day; 228 an hour; almost 4 per minute. At a cost of
up to $60,000 per article, the drain on university resources
is staggering.
December 2008 Is Academic Research a Good Investment for Texas?

by some estimates, are taught by part-time adjuncts, gradu-

Allocation of Faculty Time ate students, or non-tenure track faculty.

79% The average salary of a full professor at an extensive four-

80% 74% 73%
Percentage of Time

60%
40%
21%
26%
20%
0%
Full Associate Assistant
professor professor professor
Source: National Center for Education Statistics (NCES)
There are two ways to estimate the cost of scholarly research.
The first is to calculate the time spent by professors on activ-
ities other than teaching: time spent on academic commit-
tees, time spent training new Ph.D.s to perform scholarly
research, and time spent on individual academic research.
According to National Center for Education Statistics
(NCES) data, full professors at four-year doctoral universi-
ties now spend only 21 percent of their time teaching un-
dergraduates. Tenured and tenure track faculty represent by
far the largest cost to a university, yet as a group they spend
barely 25 percent of their time teaching undergraduates. The
majority of undergraduate students, as many as 75 percent
Teaching Undergraduates
year doctoral college is $106,182. Add fringe benefits and
other income from the university and outside sources, and
the total compensation increases to over $160,000 for a
Research, Training
27% Researchers; Faculty nine-month year. Add one dollar of indirect costs for each
Committees
dollar of direct costs to cover staff, building, and miscella-
neous expenses, and the average full professor costs approxi-
mately $320,000 per year to support.
Source: NCES The average full professor at a doctoral institution will spend
79 percent of his time on activities other than teaching and
write just under four refereed scholarly research articles a
year. This gives a fully allocated cost per scholarly article of
$63,000.
Multiply this cost per refereed article by the two million
printed each year, and academic research costs taxpayers
over $125 billion each year, almost half of the $292 billion
spent by colleges and universities in 2000.20
Another way to calculate the cost of academic research is to
compare the average $22,325 per year cost at a four-year pub-
lic college versus the average $6,900 per year cost at a for-
profit college that focuses on teaching rather than scholarly
research. This suggests that 70 percent of the cost of the aver-

U.S Higher Education Expenditures

Teaching vs. Academic Research
Billions of Dollars per Year

$350
$300
$250
Undergraduate teaching
$200 $154 $167
$150 Academic research and
other
$100
$138 $125
$50
$0
Based on per article Based on
costs comparison to for-
comparision
profit schools

Source: U.S. Department of Education, NCES Digest of Educational Statistics

TEXAS PUBLIC POLICY FOUNDATION 5

Is Academic Research a Good Investment for Texas?
age college degree comes from the costs of academic research
and other inefficiencies supported by government subsidies.
In short, we could afford to provide perhaps twice as many
students in America with a college education if we just
reduced the wasteful spending on scholarly academic re-
search, and returned the university to its rightful mission
of teaching.
IS INVESTING MORE MONEY IN HIGHER EDUCATION A
GOOD IDEA?
It is generally accepted that society should invest more in
our colleges and universities, but given the massive cross
subsidies that flow from dollars meant for teaching to aca-
demic research, is this still true?
Work by Dr. Richard Vedder suggests that providing more
money to higher education establishments is a bad invest-
ment. “The notion that expanding university support is a
good ‘investment’ in the economy is not supported—in-
deed, the results would suggest we are already ‘over invested’
in colleges.”21
Vedder says the results of his study “clearly reject[s] the
claim that state and local spending on universities promotes
economic growth, finding it far more likely that the reverse
is the case. The claims that more funding materially im-
proves student access to college are, at the minimum, hugely
exaggerated if these results are valid.”22
“Statistical evidence suggests that, holding other things
equal, there is a net out-migration from ‘university-intensive’
states into ones where less effort (measured in various ways)
is put into higher education.”23
Calls for increased funding for higher education are also
based on the notion that investment in academic research
provides better teaching for the students. Martin Anderson
challenges this assumption. “In 1987, Kenneth A. Feldman,
a sociologist at the State University of New York at Stony
Brook, reviewed and analyzed 42 separate studies, conduct-
ed over 20 years, on the relationship between the research
productivity of professors and their effectiveness as teach-
ers. The consensus of these 42 studies was stark and simple:
There was not a clearly discernible relationship between re-
search productivity and teaching skill.”24
6 TEXAS PUBLIC POLICY FOUNDATION
December 2008
Given that nearly half of the money going into higher edu-
cation today is directed toward research, an area dominated
by tenured professors, tenure track professors, and Ph.D.
programs, an examination of this system is in order.
THE FALSE PROMISE OF A Ph.D.
Martin Anderson, a scholar at Stanford University’s Hoover
Institution, explains some of the problems with the Ph.D.
process in many major universities that produces candidates
for tenure positions: “What [Ph.D. students] need most is
time to pursue their advanced course work, time to master
their field of study, time to learn how to conduct original
research, to write, and to finish a dissertation. Instead, the
professors rob them of that time, demanding that students
free them from much of their teaching and research respon-
sibilities.”25
This process is expensive, for the graduate students and tax-
payers. The average time to earn a Ph.D. is over eight years.
State funding formulas provide over 14 times as much
funding per hour of instruction for graduate classes as for
undergraduate classes, but even this may be understating
the true cost of a Ph.D. for taxpayers, because many Ph.D.s
are taught by expensive full professors in classes of five stu-
dents or less.
What Do Graduate Students Learn in the Classroom?
Graduate students will do their coursework in seminars,
classes that often have no more than a handful of students.
But what actually goes on in a seminar? John Silber, the for-
mer president of Boston University, provides some insight
from his time as the Dean of the College of Liberal Arts at
the University of Texas. “The teaching load of many profes-
sors consists solely of one or two small seminars each week,”
Silber noted, “seminars for which they rarely prepare, at
which they rarely do more than audit or at most comment
briefly in an atmosphere of relaxed cordiality or hostility.”26
Silber concludes: “You can learn more in two hours’ ran-
dom reading in the library than you can in a semester-long
seminar. But if you take five or six seminar courses plus a
colloquium or two you can get to be a master of something,
with a degree to prove it.”27
December 2008 Is Academic Research a Good Investment for Texas?

Working as a Teaching or Research Assistant for Tenured An Increasingly Longer Apprenticeship

Faculty
Martin Anderson describes how graduate students spend
the bulk of their time: “Graduate student apprentices per-
form two critical tasks that many professors consider me-
nial, boring, or repetitive: (1) teaching undergraduates and
(2) undertaking much of the drudgery of research.”28 Mar-
tin criticizes “the university practice of paying graduate stu-
dents a pittance to teach undergraduates.”29
Former Harvard University President Derek Bok notes
that graduate students are often unprepared for teaching:
“Being thrown into teaching large undergraduate courses
with little to no training is good neither for the graduate
students or the students they teach. Presidents and deans of
research universities could act more boldly by urging revi-
sions in their Ph.D. programs to include better preparation
for teaching.”30
When not working as teaching assistants, graduate stu-
dents usually perform research for the tenured faculty.
Economist Gary North explains how this benefits tenured
faculties: “The brightest graduate students may be asked to
do unpaid or grant-paid research for senior professors. The
professors then publish the results of this research under
their own names, thereby advancing their careers. It’s the
division of labor at work.”31
Martin Anderson believes that “the entire course of study
should normally involve no more than three or, at most,
four years beyond the baccalaureate” and adds that “the
four-year norm has been affirmed by most writers who
have analyzed the situation.”32
Yet, the average length of Ph.D. programs is well beyond
four years. The Survey of Earned Doctorates found that the
time taken to earn a Ph.D. in 2005 was 8.3 years.33
According to Martin Anderson, the cost to Ph.D. candi-
dates is high: “The gap between what should be and what is
exacts a fearsome price. When young men and women are
forced to spend not three or four years, but 10, 12, or even
15 years to earn the Ph.D., the entire process becomes cor-
rupting. Those extra years are critical ones that are ripped
out of the productive life of young scholars. The average
graduate student is 34-years old before he or she breaks
free of the cocoon of dependency that is the Ph.D. pro-
cess.”34
Once fully understanding the process, many graduate stu-
dents quit. “Fewer than half of all students who enter Ph.D.
programs ever get the degree—more than half drop out
along the way.”35
Yet universities have strong incentives to grow their gradu-
ate programs. Gary North explains: “The more Ph.D. stu-

Ph.D.
P.h.D.ProductionRisesandLevelsOff
50,000 46,024 45,596
44,408
45,000
38,317
40,000
33,615
35,000 30,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1975 1980 1990 2000 2003 2006
Sources: NCES, Gary North, InsideHighered.com.
P.h.D.sIssued
Ph.D.s Issued

Source: NCES, Gary North, InsideHigered.com

TEXAS PUBLIC POLICY FOUNDATION 7

Is Academic Research a Good Investment for Texas?
dents a department can attract, the faster the growth of that
department. This is the iron law of academia. All other eco-
nomic laws are sacrificed for it. This fact of academic eco-
nomic life creates an incentive for departments to enroll lots
of graduate students. It also rewards those departments that
persuade M.A. students to go into the Ph.D. program.”36
The more years each graduate student must spend to earn
their Ph.D., the greater the enrollment at any given time.
Unfortunately, the reward for those who finally earn a Ph.D.
is often less than hoped for. Gary North explains the prob-
lem:
“In response to the ever-growing glut of Ph.D.s,
the American university system turned out about
30,000 Ph.D. graduates per year, 1969 to about
1975. Since then, it has increased the output. In
1980, it was 33,615. In 1990, it was 38,371. In 2000,
it was 44,808. In 2003, it was 46,024.”37
“A ‘Ph.D. glut’ has existed ever since the fall of
1969. The number of entry-level full-time profes-
sorial positions has remained stagnant. Few new
universities have been constructed. Legislatures
have resisted additional funding. This has led to a
reduction of the number of tenure-level positions.
Universities and community colleges have been able
to staff their entry-level positions with inexpensive
instructors.”38
UniversityFacultyHaveShiftedtoNonͲTenureandNonͲTenureTrack
80
70
60
56.8
50
Percentof
40 43.2
OverallFaculty
30
20
10
0
1975
TenureandTenureTrack
Source: U.S. Department of Education, AAUP website
8 TEXAS PUBLIC POLICY FOUNDATION
December 2008
William Hayes, author of So You Want to Be a College Pro-
fessor? agrees with North. “There were almost no college
teaching jobs when they finished. That was before the
glut.”39 Now “an English vacancy” draws “133 candidates.”
“In many disciplines, the placement rate is as low as 25 per-
cent.”40 Perhaps the market has finally reached saturation, as
Ph.D.s issued leveled off to 45,596 in 2006.41
THE DECLINE OF TENURE TRACK FACULTY
The poor return on investment for many Ph.D. recipients—
especially in the case of teaching positions—comes about
because of a collision of two trends in higher education: the
strong emphasis on research for tenured professors and the
marked decline in tenure-track positions.
Tenured and tenure track faculty have consistently lost mar-
ket share to part-time and non-tenure track teachers on
American campuses, falling steadily from 56.8 percent of
the faculty in 1975, to 42.4 percent in 1995, to a new low of
35.1 percent in 2003. If the trend continues, by 2011 fewer
than 28 percent of the teachers at American universities will
be non-tenure track or part-time adjuncts.42
Adjuncts and graduate students now teach most students
because the tenured faculty spends so little time teaching
undergraduates. In fact, the average full professor at a research
university spends 21 percent of his or her time teaching un-
68.1
64.9
57.6
42.4
35.1 31.9
1995 2003 2006
NonͲTenure
Source: US Department of Education; AAUP website.
 December 2008 Is Academic Research a Good Investment for Texas?

Direct Teaching Costs

(Tenure/Tenure Track versus Adjunct)
The average number of classes taught by tenured and tenure
$2,000
$1,787 track faculty has declined to just over three classes per year,
$1,800
or less than 4.5 hours per week in the classroom. A Texas
Cost per Student per class

$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
Tenure/tenure track
dergraduates, in all teaching fewer than 4.5 hours per week
each semester, despite a salary, benefits, and other university
income that averages over $150,000 per nine-month year.43
According to the NCES, 21.7 percent of the faculty at four-
year doctoral universities do not teach a single class.44
Because adjuncts and teaching assistants teach larger classes
than the average tenured or tenure track professor and often
do much of the teaching in labs and discussion sessions in
classes normally taught by tenured faculty, some experts es-
timate that over 75 percent of undergraduate contact hours
are taught by non-tenured faculty at some major research
universities.*
It’s Simply a Matter of Economics
So why are the vast majority of undergraduate students now
taught by non-tenure track and part-time faculty? It’s sim-
ply a matter of economics.
The average adjunct teacher is paid between $1,000 and
$3,000 per course and receives little to no fringe benefits.
Some teaching assistants are paid less. The average tenured or
tenure track professor—averaging full professors with lower
paid associate and assistant professors—is paid $124,690 in
compensation and benefits for a nine-month work year45—
whether they teach many classes each year, or none.
Performance Review found tenured and tenure track pro-
fessors at the state’s research universities teach 1.9 courses
per semester.46
Courses taught by a tenured or tenure track faculty member
require $1,787 in direct costs per student per class versus
$50
just $50 per student in direct teaching costs using an ad-
Adjunct junct.† In other words, tenured and tenure track faculty are
over 30 times more expensive on a per student basis.
WHY DOES THE COST OF A COLLEGE EDUCATION CON-
TINUE TO RISE?
Despite this move towards less expensive teachers, college
tuition has continued to increase at a faster pace than infla-
tion. By 2005-06, the average cost of tuition had risen to
$5,491 per year at four-year state universities and to $21,235
per year at private four-year colleges, in both cases almost a
900 percent rise over a 30-year period.47
To make matters worse, tuition covers only a small part of
overall college costs. By some estimates, tuition provides less
than 20 percent of the total revenue for major American
public universities. This means that for every dollar spent by
students and parents directly, taxpayers or donors are paying
another four dollars in costs.
One of the primary reasons college costs continue to rise is
because while many tenured faculty are being replaced in
the classroom, they remain on the payroll of the universities
doing research.

*College administrators like to quote the “student-teacher ratio” that compares the FTE (full time equivalent) faculty to the total number of students.
This misleading statistic is used to justify hiring more tenured faculty even though it tells nothing about the average number of students in each class.
As an example, a university could double its tenured faculty and dramatically cut the student/teacher ratio, but if all these professors were dedicated to
academic research, the average class size would not change at all.

†This assumes the adjunct teaches an average of forty students per class and the average tenured and tenure track teacher an average of twenty
students per class. This is a reasonable assumption since adjuncts and teaching assistants tend to focus on larger, lower--division classes while tenured
faculty members tend to teach much smaller graduate school classes.

TEXAS PUBLIC POLICY FOUNDATION 9

Is Academic Research a Good Investment for Texas? December 2008

Rising College Tuition Annual Cost of Higher Education

(Four Year Public College)
$6,000 $30,000

$5,000 $25,000 $23,063

Dollars per Year

Cost per year

$4,000 $20,000
$17,026
$3,000 $15,000

$2,000 $10,000
$6,900
$1,000
$5,000

$0
$0
19 77

19 79

19 81

19 83

19 85

19 87

19 89

19 1

19 93

19 95

19 97

20 9

20 01

20 3

5
-9

-9

-0

-0
-

- Private Public For Profit

76

78

80

82

84

86

88

90

92

94

96

98

00

02

04
19

Source: College Board website Source: Texas Higher Education Coordinating Board

HOW TO REDUCE THE COST OF A COLLEGE EDUCATION In the spring of 2006 at UT-Austin, the average tenured
full professor taught an average of 87 undergraduates for an
The inefficiency of university governance and time spent on
average cost of $2,815 per student per class. By contrast, the
academic research make traditional universities far less effi-
average non-tenured instructor received a salary of $47,000
cient than for-profit universities, which have demonstrated
per year and taught 247 students, for an average cost per
an enviable track record of educational success for far less
student taught of $381.49
money.
The non-tenure track faculty teach the majority of students
Business and political leaders continue to discuss reform-
at the University of Texas. They teach much less expensively
ing higher education, but are often hesitant to introduce the
and by many accounts have higher student evaluations. For
efficiencies found at for-profit universities because of the
less than 18 percent of the fully allocated teaching costs, the
threat that tenured faculty members might flee institutions
non-tenure track teaches over half of the student hours.50
that pass far-reaching reforms.
And these numbers are almost certainly weighted heavily
in the tenured faculty’s favor because they do not include
Given that up to 75 percent of lower-division undergradu-
the thousands of hours that teaching assistants spend in-
ate students are already being taught by non-tenured and
non-tenure track faculty, having non-tenured faculty simply
teach a few more classes would not represent a dramatic University of Texas
change to the university’s teaching model. However, reduc- Fully Allocated Cost per Student Taught
ing the number of tenured and tenure track professors would
have a notable impact on the costs of a college education. $2,815
Cost per student per class

$3,000
$2,434 $2,374
$2,500
The University of Texas is a case in point of how the cost of
$2,000
the tenured faculty—and their lack of teaching productiv-
ity—affects costs. The average full professor at UT-Austin $1,500

makes $110,000 per nine-month year. Assuming the na- $1,000

$625
tional averages for benefits and other university income, and $500
$381 $358
adding one dollar of indirect costs for every dollar of direct $0
costs to cover the cost of support staff, offices, and miscel- Full Associate Assistant Instructor Lecturer Teaching
laneous expenses, the fully allocated cost for a full professor Professor Professor Professor Assistant

is $311,000 per year.48

Source: Texas Higher Education Coordinating Board

10 TEXAS PUBLIC POLICY FOUNDATION

December 2008 Is Academic Research a Good Investment for Texas?

structing students face-to-face in labs

and discussion sessions where a ten-
University of Texas ured faculty member is the teacher of
Tenure/Tenure Track vs Non-Tenure Track record.*
Teaching Costs
So what would happen if the tenured
100% faculty went on strike and the non-
82% tenured teachers taught all the under-
80% graduate classes? Total allocated instruc-
Hours Taught tion costs would drop by 65 percent.
60% 51% 49%
Percent of Teaching While the $5,900 per year cost to edu-
40% cate a student in a public four-year
18% Costs
20% college who is taught entirely by non-
tenured faculty is a rough estimate,
0% it compares reasonably to the $6,900
Non-tenure Track Tenured and per year cost of for-profit universities
whose instructors focus on teaching.
Tenure Track
Source: THECB
Higher education in Texas doesn’t
Source: Texas Higher Education Coordinating Board need more money. What it needs is
to spend the money it has been given
on students instead of on the research
Annual Cost of a Four Year College Degree whims of tenured faculty.

$20,000 As the chart on the next page shows,

$17,026 the Texas Higher Education Coor-
$17,500
dinating Board goal of 210,000 de-
Annual Cost

$15,000
grees annually by 2015 could easily be
$12,500 achieved with today’s levels of spend-
$10,000 ing if our higher education dollars were
$6,900 spent to teach students.
$7,500
$5,959
$5,000
One reform that should not be pur-
$2,500 sued in increasing the number of de-
Average Four For-Profit Tenured grees awarded is forcing tenured and
Year Public University Faculty on tenure track teachers to teach more.
Degree Strike While this sounds reasonable, it has
been tried before and failed.
Source: Texas Higher Education Coordinating Board

*It is important to note that all of the estimates above for the University of Texas may be heavily biased in favor of the tenured and tenure track
faculty because of incomplete and misleading reporting. According to NCES nationwide statistics, there are 300,000 TAs nationwide compared to ap-
proximately 380,000 tenured and tenure track faculty. Approximately 66 percent of these TAs nationwide are involved in teaching. At the University
of Texas, only 465 TAs were reported in the Fall of 2005 versus 1,899 tenured and tenure track faculty. Apparently, TAs who teach lab and discussion
sections for senior faculty are not always reported, thus overstating the actual number of hours taught by senior faculty. It is possible that senior
faculty only teach half or less of the hours reported above, the rest actually being taught by teaching assistants. This would mean that 75 percent
of undergraduate teaching at the University of Texas is being performed by non-tenured and/or tenure track faculty, and that the costs per student
taught per tenured/tenure track faculty are twice what is reported above.

TEXAS PUBLIC POLICY FOUNDATION 11

Is Academic Research a Good Investment for Texas?
Degrees Awarded in Texas
300,000
Degrees per Year 250,000
200,000
150,000
100,000
50,000 92,000
0
Currently For-Profit
Source: Texas Higher Education Coordinating Board
Unfortunately, forcing tenured faculty members to teach may
do more harm than good. Tenured and tenure track teachers
are often not hired to teach, not trained to teach and many
do not like to teach. They know that their status in academia
depends on publishing in academic journals and will resist
any attempt to force them back into the classroom. When
forced to teach, with no consequences for teaching poorly,
many will take the path of least resistance.
RECOMMENDATIONS
The problem with higher education in Texas isn’t a lack of
money, but rather an incentive system in our universities that
encourages the production of academic research instead of
spending money on teachers, curriculums, and classrooms.
Harvard President Derek Bok calls for far-reaching reforms:
“Until Ph.D. programs include a serious prepara-
tion for teaching and convey a deeper understand-
ing of the complexities of student learning, facul-
ties will not only have little inclination to change
their ways, they will not even perceive much need
to do so. Without more prodding and encourage-
ment than they are currently receiving, presidents
and deans are also unlikely to challenge the status
quo. In the present environment, then, it would be
12
December 2008
170,862 60,000
135,013
150,000
92,000 92,000
Tenured THECB
faculty on 2015
strike Target
myopic simply to wait in the hope that reform will
emerge spontaneously from within.”51
The first state that overhauls its higher education system to
attract the best teachers, most productive researchers, and
brightest students from around the United States, will gain
a real educational advantage that will be almost impossible
to overcome.
(1) Place a renewed emphasis on teaching in colleges and
universities.
Set aside the majority of new tenure appointments for profes-
sors who have proven that they can teach well as junior fac-
ulty members by teaching large numbers of students and
receiving superior ratings on student evaluations. Though
university administrators assure us that good teaching is a
necessary qualification for tenure, the evidence suggests that
this isn’t true.
Prominently post all teaching evaluations at each school. We
need to celebrate extraordinary teaching and provide poor
teachers with an incentive to improve. Prominently display-
ing the teaching effectiveness scores from student evalua-
tions in all buildings on campus is one way to encourage
faculty to improve their teaching methods.
TEXAS PUBLIC POLICY FOUNDATION
December 2008 Is Academic Research a Good Investment for Texas?

(2) Require all Texas colleges and universities to sign a information about the fully loaded cost per Ph.D. student,
“learning contract” with incoming students. graduation rates, and placement rates.

Our universities need to be clear about what they promise to If large numbers of graduate students are going to teach, they
deliver and sign a “learning contract” with each applicant should be trained to teach well. This should include being
that discloses: (a) the graduation rate, placement rate and mentored by a teacher who has received high student evalu-
starting salary for a student with the same SAT score and ations.
major; (b) the average class size and teaching evaluations for
the faculty who will be teaching their classes; (c) the skills, Graduate teaching assistants should be paid based on the num-
tools and lessons that the curriculum is designed to transmit, ber of students they teach and judged based on their student
and (d) how any educational value added will be measured. teaching evaluations. Those who teach well should be paid
well. Those who do not teach well should be dropped from
(3) Separate the teaching and research functions to stop the graduate programs.
massive cross-subsidies that flow from teaching and useful
scientific research to subsidize the more esoteric academic Graduate research assistants should not be required to work on
research projects unless paid by those funding the research
research favored by the tenured faculty.
projects, and any such work should be disclosed to those
paying the bill.
Pay for good teaching—whether by adjuncts, teaching assis-
tants, or tenure track faculty. Pay on a per student basis to
Graduate school tuition should better reflect the full cost of a
encourage teachers to teach as efficiently as possible. Reward
graduate education.
good teaching by paying bonuses based on student evalua-
tions.
Those applying to graduate school should receive a “learning con-
tract” from the university that discloses in detail the learn-
Encourage productive researchers by reducing the overhead
ing that will take place in class (with appropriate measure-
taken out of outside research grants and establishing inde-
ment), average time to degree, placement rates and salaries
pendently funded and organized research institutes.
on graduation, and teaching and research obligations that
will be expected.
Centralize and reduce the funding of all other academic research.
Encourage scholars either to raise funds to support such re-
Community and business leaders of Texas should partake in de-
search or to conduct it during their own time.
fining a more market-based Ph.D. system, one that clearly de-
fines and measures goals, sets incentives aligned with these
Insist that all academic research either be overseen by those fund-
goals, and fully discloses to students what they can expect
ing it and fully reimbursed or done on a faculty member’s own
to learn.
time. Each research project should be fully funded and over-
seen by the person or institution funding the research. At
the end of each year, and on final completion for each proj-
ect, customer satisfaction reports should be collected and CONCLUSION
reviewed by the board.
The evidence indicates that Texas universities and their
counterparts throughout the nation are emphasizing re-
Business leaders should reject the idea that all research and de-
search, much of which has few tangible benefits, over teach-
velopment spending is equal and hold universities accountable
ing. The significant resources that are diverted to research
for providing empirical proof of the value of each and every
that is unproductive could be used to make higher educa-
research project.
tion more affordable for students. By taking steps such as
separating research and teaching budgets and compensating
(4) Evaluate and reform the current system of Ph.D. fellowships, faculty based on the results they achieve through research
rejecting the conventional wisdom about academic research and teaching, Texas universities can produce better returns
and the promise of “free money.” for students and taxpayers. Õ
We should recognize that not all graduate programs are equally
valuable and demand that colleges and universities release

TEXAS PUBLIC POLICY FOUNDATION 13

Is Academic Research a Good Investment for Texas? December 2008

ENDNOTES
1
National Patterns of R&D Resources: 2006 Data Update” (10 Oct. 2008) http://www.nsf.gov/statistics/nsf07331/.
2
Ibid.
3
Richard Vedder, “Texas Higher Education: Success or Failure?” Texas Public Policy Foundation (29 May 2008) http://www.texaspolicy.com/pdf/2008-05-RR05-highered-vedder-final.pdf.
4
Charles J. Sykes, “ProfScam: Professors and the Demise of Higher Education” (Washington DC: Regnery Publishing, 1988) 19.
5
Robert A. Nisbet, “The Degradation of the Academic Dogma” (Piscataway, New Jersey: Transactions Publishers, 1997) 98.
6
George Dennis O’Brien, “All the Essential Half-Truths about Higher Education” (Chicago: University of Chicago Press, 1998) 3.
7
“National Patterns of R&D Resources: 2006 Data Update” (10 Oct. 2008) http://www.nsf.gov/statistics/nsf07331/.
8
Richard Vedder, “Going Broke by Degree, Why Colleges Cost Too Much” (Washington DC: AEI Publishers, 2004) 122.
9
Ibid.
10
Texas Higher Education Coordinating Board, “Average Faculty Salaries - Texas Public Universities - FY 2006” (10 Oct. 2008) http://www.thecb.state.tx.us/Reports/.
11
College Board, “Trends in College Pricing 2005” (10 Oct. 2008) http://www.collegeboard.com/press/releases/48884.html.
12
Martin Anderson, “Impostors in the Temple, A Blueprint for Improving Higher Education in America” (Palo Alto: Hoover Press, 1996) 170.
13
Bernard Wysocki Jr., “Cash Injections: As Universities get Billions in Grants, Some see Abuses,” The Wall Street Journal (16 Aug. 2005) A1.
14
Harry R. Lewis, “Excellence Without a Soul, How a Great University Forgot Education” (Jackson, TN: Public Affairs, 2006) 9.
15
Ibid.
16
Ibid., 97-98.
17
Ibid., 101.
18
Ibid., 119.
19
Ibid., 128.
20
U.S. Department of Education, NCES Digest of Educational Statistics (2004) http://nces.ed.gov/programs/digest/d04/.
21
Richard Vedder, “Going Broke by Degree, Why Colleges Cost Too Much” (Washington DC: AEI Publishers, 2004) 147.
22
Ibid., 141-142.
23
Ibid., xxi.
24
Martin Anderson, “Impostors in the Temple, A Blueprint for Improving Higher Education in America” (Palo Alto: Hoover Press, 1996) 118.
25
Ibid., 72.
26
Charles J Sykes, “ProfScam: Professors and the Demise of Higher Education” (Washington DC: Regnery Publishing, 1988) 75.
27
Ibid., 67.
28
Martin Anderson, “Impostors in the Temple, A Blueprint for Improving Higher Education in America” (Palo Alto: Hoover Press, 1996) 70.
29
Ibid., 67.
30
Derek Bok, “Our Underachieving Colleges” (Princeton: Princeton University Press, 2006) 340.
31
Gary North, “The Ph.D. Glut Revisited” (24 Jan. 2006) http://www.lewrockwell.com/north/north427.html.
32
Martin Anderson, “Impostors in the Temple, A Blueprint for Improving Higher Education in America” (Palo Alto: Hoover Press, 1996) 74.
33
The Survey of Earned Doctorates, NORC, University of Chicago (2005) 66.
34
Martin Anderson, “Impostors in the Temple, A Blueprint for Improving Higher Education in America” (Palo Alto: Hoover Press, 1996) 74.
35
Ibid., 75.
36
Ibid.
37
Ibid.
38
Ibid.
39
William Hayes, “So You Want to Be a College Professor” (Lanham, MD: Scarecrow Education Press, 2003) 150.
40
Ibid.
41
“More Doctors of Philosophy and Science” Inside Higher Ed (21 Nov. 2007) http://www.insidehighered.com/news/2007/11/21/phds.
42
American Association of University Professors, “Background Facts on Contingent Faculty” (10 Oct. 2008) http://www.aaup.org/Issues/Contingent/Ptfacts.htm.
43
U.S. Department of Education, National Center for Education Statistics, “NSOPF: 2004 National Study of Postsecondary Faculty,” (Washington: GPO, 2004).
44
Ibid.
45
American Association of University Professors, “The Annual Report on the Economic Status of the Profession 2005-06,”Academe March-April 2006.
46
Texas Comptroller of Public Accounts, Workload Issues and Measures of Faculty Productivity by Barbara K. Townsend and Vicki J. Rosser, and Legislative Budget Board.
47
College Board, “Trends in College Pricing 2005” (10 Oct. 2008) http://www.collegeboard.com/press/releases/48884.html.
48
Texas Higher Education Coordinating Board, “Average Faculty Salaries - Texas Public Universities - FY 2004” (10 Oct. 2008) http://www.thecb.state.tx.us/Reports/.
49
Ibid.
50
Ibid.
51
Derek Bok, “Our Underachieving Colleges” (Princeton: Princeton University Press, 2006) 324.

14 TEXAS PUBLIC POLICY FOUNDATION

 About the Author

Rick O’Donnell is president of the Acton Foundation for Entrepreneurial Excellence, which creates and distributes
cutting-edge entrepreneurship curricula, including case courses, sim games and Socratic teaching tools. Its curriculum
is fully implemented at the affiliated Acton School of Business, an intense, one-year entrepreneurial MBA like no
other. For the fifth year in a row, the Princeton Review’s Best Business Schools rank Acton as #2 “classroom experience,”
#3 “best professors” and #3 “most competitive students” in the country.

Previously, O’Donnell served in the Cabinet of Colorado’s Governor as Executive Director of the Colorado Department of
Higher Education. The Department oversees all 29 public institutions of higher education in the state that cumulatively
enroll nearly 270,000 students. His accomplishments included implementing the first voucher of higher education
funding in the country, establishing the nation’s leading performance accountability contracts for colleges and
universities, and launching the largest effort in state history to expand college access for under-served and
under-represented students.

About the Texas Public Policy Foundation

The Texas Public Policy Foundation is a 501(c)3 non-profit, non-partisan research institute guided by the core
principles of individual liberty, personal responsibility, private property rights, free markets,
and limited government.

The Foundation’s mission is to lead the nation in public policy issues by using Texas as a model for reform. We seek to
improve Texas by generating academically sound research and data on state issues, and recommending the findings to
policymakers, opinion leaders, the media, and general public.

The work of the Foundation is primarily conducted by staff analysts under the auspices of issue-based policy centers.
Their work is supplemented by academics from across Texas and the nation.

Funded by hundreds of individuals, foundations, and corporations, the Foundation does not accept government funds
or contributions to influence the outcomes of its research.

The public is demanding a different direction for their government, and the Texas Public Policy Foundation is providing
the ideas that enable policymakers to chart that new course.

900 Congress Ave., Suite 400 | Austin, Texas 78701 | (512) 472-2700 phone | (512) 472-2728 fax | www.TexasPolicy.com
March 25, 2011

Dear Regent Hall:

I‟ve been thinking about our several discussions regarding the accuracy of claims made about my
stance on university research. I appreciate your interest and have been delighted to answer your
questions. Please let me elaborate a bit on what we have talked about.

Based on recent news coverage, it is clear that most people have focused on one or two white papers
I wrote a number of years ago. That‟s understandable, especially since those papers represent not
only a small slice of life but a slice from an environment designed to stimulate dialogue and
encourage debate. However, there is also the evidence from my actual work in higher education
where my words and deeds clearly reflect my positive views about the role of research in the
university and the role of the research university in higher education in America.

When I served as Executive Director of the Colorado Department of Higher Education, I was
always a strong proponent of university-based research – both basic research and applied research.
In fact, during my career in Colorado state government, I advocated for and assisted in the passage
of financing for Colorado to build its new premier biosciences research center, the University of
Colorado Health Science Center at Fitzsimmons. At the time, I was recognized by the President of
the University of Colorado for the role I played in securing the Governor‟s support for debt
financing for this massive project of hospitals, research labs, classrooms and adjacent private sector
research park. My opportunity to help move this state-of-the-art health science center from the
drawing board to reality was then and continues today as a source of enormous pride and a
satisfying example of the many delights of public service.

Throughout my career in senior positions in Colorado state government I was always a strong
supporter of investments in science and technology institutions and programs. I was honored to
serve as chairman of the Colorado Institute of Technology, a public-private partnership to advance
undergraduate and graduate STEM education. My fellow board members, composed of the
presidents of every public and private research university in Colorado and high technology CEOs,
unanimously elected me to serve as chairman due to my commitment to the mission and ability to
advance it with both public and private sector leaders.

The white papers at the center of recent attention have been used to suggest I don‟t value university-
based research. In fact, I wrote the white papers to initiate a discussion about approaches to
assessing the value of research. That is the role of a white paper at any think tank, including the
Texas Public Policy Foundation (TPPF). As a Senior Fellow at TPPF (an unremunerated honorific
post), it was my responsibility to produce thought-provoking analytical pieces to advance a line of
reasoning to further debate and discussion on important issues. I decided to focus on ways of
measuring the productivity of dollars invested in research because I knew from experience that
many state legislators and governors raise questions about investments in research and how those
investments affect a university‟s teaching, training and public service functions. It was also my
responsibility in those papers to offer public policy options that are an outgrowth of the line of
reasoning put forward.

I knew my white papers would be controversial. The purpose, after all, was to generate debate. I
knew the application of cost-benefit measures would both spotlight the value as well as the
limitations of that methodology as well as point to areas where we need better measures of benefits.
I think my papers did that. Too often in cost-benefit analysis we measure what we can (i.e., where
data are available) rather than measure what is important – like the old story of the guy looking for
the keys to his car under the street light because that‟s where the light is. So, for example, I looked at
the return on scientific research as measured by available data – such as income royalties and
licenses on patents. Are these adequate measures of the contribution of research to university-based
innovation? No, I don‟t think so. But this is what budget analysts will measure in the absence of
other indicators.

I think my papers show clearly that we may be spending too much time under the street light – and
that, indeed, measures of what is important are sadly missing. For instance, there is evidence that
involving freshmen in research with primary investigators increases student engagement and
retention. These are valuable outcomes and thus it is worth creating metrics to evaluate how many
freshmen contact hours there are with primary investigators, if the trends are going up or down, if
student engagement and retention differs by discipline or type of research with which they are
involved, and what the costs are for these efforts. Measures such as these will provide guidance on
how to craft strategies with the greatest cost-benefit for students and research.

There are many ways to measure and value research beyond that done in my white papers. Research
capacity may attract technology-based companies and promote economic growth – one of the very
reasons I supported the creation of the Fitzsimmons Health Science Center referenced above.
Another value of research is that, particularly via graduate education, it helps prepare the next
generation of researchers who, in the private sector, will conduct the vast majority of research done
in America. But most of these lack ready metrics.

I hope my white papers and the discussions they have generated (including those over the past few
weeks) will help produce new indicators and new measures that will make it possible for taxpayers,
legislators, governors, university chancellors, deans, department chairs and institute directors to
develop a more valid dashboard of performance measures and thereby arm leaders at every level
with the information they need to be better allocators and managers of scarce resources.

But, when all is said and done, it is clear that the public through their elected officials will, whether
we like it or not, increasingly demand that we justify the way we allocate taxpayer funds that support
higher education. They have a right and responsibility to do so and those of us in the university
have an obligation to provide clear answers to questions that are being asked – especially if budget
cuts require a reassessment of priorities and a reallocation of resources. My papers at TPPF, which
are now so controversial, are one of many ongoing efforts to show the need for more refined ways
to assess the value of the state‟s investment in higher education. I am not the first to do this. In
fact, I quote many leading academicians who have raised and are raising similar questions. Nor will I
be the last. I think that many in leadership positions at every level in the U.T. System and its
campuses are to be commended for seeing the need to get a better handle on how we allocate higher
education dollars, not the least because there are inevitably going to be fewer dollars to allocate.

Put another way, it‟s clear that research investments to facilitate student engagement and retention,
advance knowledge, promote economic development or job training will not be free from
accountability, including closer examination of their costs and benefits. For instance, Charles O.
Holliday Jr., an elected member of the National Academy of Engineering, former CEO of DuPont,
and now chair of the National Research Council‟s Committee on Research Universities, a panel of
22 university and corporate leaders formed at the request of members of Congress to examine the
financial, organizational and intellectual health of the U.S. research university, said, according to
news reports, that “he wanted ways of measuring „the productivity of research universities.‟ It
wasn‟t clear he‟d be getting answers.” At the same meeting, M. Peter McPherson, president of the
Association of Public and Land-Grant Universities “at one point mused about the value of
developing hard figures on the cost of producing a graduate student. Mr. Berdahl [president of the
American Association of Universities] answered, „I‟m not sure we want to call attention to that.‟”

Whether we want the attention or not, it seems clear that questions on productivity, efficiency and
accountability for our research universities and research expenditures are being asked. These
questions may be controversial to some and seem to challenge the status quo, but they are raised
from time to time, even within the scientific community. Not only have I been an agent of higher
education reform as a state leader, I am very well acquainted with the literature. As long ago as the
early 1970s, the National Science Foundation and others wrestled with if there should be an explicit
focus on funding “research for national needs” and just how to evaluate that. Simply typing
“research funding accountability” into Google yields millions of links to studies, books and
conferences where others have raised similar issues for decades.

In a nutshell, I understand and support the value of research, including basic research, and the
central role of research universities in the science and technology eco-system that is the backbone of
America‟s economic role in the world. I also am unafraid to look at the data, ask hard questions
around productivity, cost-benefits and accountability because I think it is possible to measure the
value of research to our common weal. Perhaps the best sense of my overall approach to research is
what I said on my feet earlier this year as moderator of a panel discussion, where I mentioned that
research is an integral part of the university and economic resources of the state. You may watch
the short clip of my remarks here: http://vimeo.com/21526494.

Let me conclude by quoting a recent remark of U.T. Austin President William Powers Jr. “We are
committed to inventing and reinventing what it means to be a great public university. We want to
make sure that we do it in a way that also advances great public research.” I am in total alignment
with President Powers‟ comments. I believe that process of reinvention requires us to ask hard
questions that may challenge the status quo as we are held accountable for outcomes. That, after all,
is how any great organization, including public universities, continually improve.

I hope this letter provides some context and helps clarify my views on the value of research and the
research university. Please let me know if you have any further questions.

Like you, I look forward to strengthening the teaching, research and public service commitments of
the University of Texas System and its intuitions.

Sincerely,

Rick O‟Donnell