Boosting Productivity in US Higher Education (McKinsey)


America’s economic health depends on additional college-trained workers. Some universities are showing how to graduate more students at lower cost.

The United States needs more college graduates. Opinions vary on exactly how many, but McKinsey estimates that the nation will need an additional one million each year by 2020 to sustain its economic health. That would mean increasing today’s annual total—2.5 million—by 40 percent.

To meet this goal, universities and colleges would have to increase their output of graduates by 3.5 percent a year over the next decade. That’s a daunting task for two reasons. First, it would cost an additional $52 billion a year, based on 2008 costs to produce a graduate. Yet many states, plagued by fiscal woes, have recently lowered spending on higher education, a trend that’s unlikely to be reversed. Second, to achieve this increase, colleges would need to enroll many more than 3.5 percent more freshmen each year, because today, on average, only 40 percent of students who enroll go on to graduate.

To meet the target without spending more, colleges would simultaneously have to attract additional students, increase the proportion of them who complete a degree, and keep a tight lid on costs. Gaming the target by lowering the quality of the education or granting access only to the best-prepared students obviously wouldn’t count. Not surprisingly, many people within and beyond higher education say that colleges can’t possibly do all these things at once.

But McKinsey research suggests that many already are, using tactics others could emulate. In fact, the potential to increase productivity across the varied spectrum of US higher education appears to be so great that, with the right policy support, one million more graduates a year by 2020, at today’s spending levels, begins to look eminently feasible. The quality of education and access to it could both improve at the same time.

Boosting Productivity in US universities May 2011

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s