PERSPECTIVE ON HIGHER EDUCATION : Look Inward for Budget Solutions : The outside community, dealing with its own economic realities, is no longer willing to give automatic bailouts.

Like many institutions in California, the state’s higher education system has fallen on hard times. State general funds for higher education have been cut sharply since 1990, student fees have skyrocketed and enrollment has fallen off, even as the population of potential students increases.

Traditionally, when higher education feels the pinch, it has turned to the state’s leadership community. These influential citizens--corporate CEO’s, attorneys, editors, religious and civic leaders--have seen higher education as a major investment in the state and have bonded across party lines to protect higher education (especially the University of California) from the budget cutter’s knife.

A new study, conducted by Public Agenda for the California Higher Education Policy Center, suggests that leaders today may not be so ready to jump to defend higher education. This report, based on confidential interviews with 29 leaders around the state, found that higher education is still considered essential to the state’s social and economic future. But they are less inclined to think that more state support is either a realistic expectation or the only solution to higher education’s problems. What has changed?

If my own experience is any guide, part of the answer lies in the broad changes sweeping through industry. In the face of increasingly tough competition we have had to simultaneously improve our product and reduce our costs. This has forced organizations to rethink their strategic goals, cutting across traditional organizational lines, challenging old assumptions and reinventing our own organizations. This process is now at work in services and, indeed, even in government. It has been painful but in many ways highly salutary.

What happens, then, when higher education calls on private sector leaders for support? Although the need for higher education has never been greater, leaders are impatient with the current conversation in higher education that is primarily budget-driven, rather than focused on education. Higher education has not asked about the kind of education necessary for California’s future work force or citizenry; it has instead pushed to increase its base funding and maintain the status quo.

There is a sense that higher education and government leaders have not come to terms with the long-term economic and demographic realities affecting California. A sense of denial impedes higher education and the state from creating the process and forum for debate that business, civic and religious leaders so overwhelmingly believe is necessary.

According to the Public Agenda study, there is a widely shared sense that colleges and universities need to rethink their mission. Colleges and universities are characterized by disciplines and hierarchies when what is needed is thinking organized around problem-solving and cross-fertilization of knowledge. Although the phrase appropriate technology is as necessary in the mission of higher education as any other field, it is far from clear that educators have explored technologies in ways that will both enhance education and reduce costs. Higher education has been energetic in its critiques of other institutions; it has been slow to turn the lens on itself.

When times get tough, the higher education system has typically presented the state with the dilemma: Give us more financial support or we will have to raise fees, cut enrollments or lower quality. Public Agenda’s study suggests that this argument no longer resonates with leadership groups as it once did. Leaders who have survived the tough times of the past 20 years think that higher education must be part of its own solution.