Published on 2014/10/03

Is the Public Institution Business Model Viable in the Long Term?

AUDIO | Is the Public Institution Business Model Viable in the Long Term?
Public university leaders must look for ways to re-imagine the public higher education model to ensure they can remain competitive.
This is the conclusion of a two-part interview with Javier Miyares, president of the University of Maryland University College (UMUC). In the first piece, Miyares outlined some of the challenges UMUC has navigated in recent years as the market has become more competitive. In this conclusion, Miyares discusses strategies to transform the public institution into one that meets the needs of today’s marketplace.

Click here to read key takeaways.

3. In July, a UMUC advisory board suggested that one way to close the enrollment gap would be to convert UMUC to a non-profit, public business entity with defined ties to the University System of Maryland. How would this move benefit UMUC in the short term?

The recommendation is not related to the short term. We’re beginning to see a rebounding of the declining enrollments. We have implemented many changes to increase our enrollment here stateside. We’ll be making some changes overseas, particularly in Asia, to increase our enrollment overseas. Those changes and the ways they’re becoming more efficient, doing better recruitment — they have to be done now no matter what business model.

I asked them to look into the future, to look five to 10 years from now, and be very future oriented and to tell us what would be the best way to be organized in structure in terms of our business model.

Stateside, for example, our military enrollment has been increasing. We already see a growth in our military students stateside. This is the short term but just because it’s short term doesn’t mean it’s not important. When you’re leading a university, you need to keep an eye on what’s happening today and tomorrow but also keep an eye five years from now so you can be making the changes you need to adapt when you’re heading in certain directions.

4. What are the considerations that must be taken into account before such a move is made?

I like to say what’s on the table is conceptualizing a new way of being public. Our mission is actually spelled out in the laws of Maryland. It says very clearly that UMUC will be an open university providing access to quality programs to working adults in Maryland, the nation and the military. That is the heart of being a public institution. That will never change.

So what can change? The many rules and regulations that, when you function as a state agency, are imposed on you; rules and regulations that quite honestly make a lot of sense. They’re created typically for the state agencies because they use taxpayers’ dollars and the goal is to make sure the dollars are used wisely with all the protections.

The reality is that we have very few taxpayer dollars and what those regulations end up doing is holding us back from being able to compete and grow nationally, which will allow for an annual growing subsidy for the Maryland residents. Keep in mind, UMUC has the second-lowest tuition of any public institution in the state of Maryland. That doesn’t come free and that’s because we grow, we make revenues. It’s not that we’re suddenly going to walk away from our public mission. I have been very clear and I can tell you: our public mission will not change. [Any changes we make will be] within that framework. We also want to continue to be part of the University System of Maryland.

How can we conceptualize a new way of being a public institution? That will require imagination, going through a lot of issues; what can we be relieved from in terms of state statutes and policies? What are the flexibilities we can gain and all that?

5. What do you think would be the long-term, lasting impact of such a transformation?

My hope is that once more we may end up being the trendsetter of what will happen in higher education in the future. We’re not the only ones facing these challenges. I hope we’ll be charting new territory that may end up influencing the rest of higher education. For example, when we went online, we were among the very first in the mid-90s. I actually remember a good friend who told me point blank, “This is a fad and it will go away.” Well, here we are 20 years later and it isn’t a fad, it didn’t go away, and now almost every institution is moving to online for different reasons.

For a traditional college, it may be a hybrid because online provides avenues to do some innovative things. What we’re doing now on the academic side, those innovations — competency-based, open-learning resources, the use of analytics and adaptive learning — those are the full key elements. I believe, a year from now, all the institutions will say, “Those are some good things need to incorporate into our curriculum.” So, we will end up — both in terms of our business model and through a business model — generating revenues to invest in our academic programs. We will be innovating and we’ll likely influence and show possibilities for public higher education in the nation.

6. Is there anything you’d like to add about the importance of transforming the public institution to better meet the needs and demands of today’s higher ed marketplace, and some of the efficiencies and changes institutions can make in the short term to remain competitive during this period of change?

The challenge here for UMUC and for higher ed is we need to be careful that we don’t design a system for the challenges we face today. I always tell our folk here, I don’t want to fight yesterday’s battles. What we need is a model flexible enough to meet our future challenges that we can only at this point have a glimpse of.

Challenges to higher ed will only grow. With that, opportunities will arise. So what is the most flexible platform for an institution with a public mission to meet those challenges and seize the opportunities? I believe that functioning as a typical estate agency, by default, by definition, hinders the entrepreneurial spirit of meeting challenges and seizing opportunities.

This interview has been edited for length.

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Key Takeaways

  • It’s imperative that public institutions explore methods to transform the public model to ensure they can be competitive over the long term.

  • When designing new business models, higher education leaders must be careful to ensure they’re not simply solving the problems of today’s marketplace, but are looking to the future and long-term institutional stability.
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Readers Comments

Professor 2014/10/03 at 3:43 pm

This perception is one of the biggest problems we’re facing in higher ed. It’s not all about selling, competing and winning. It’s about serving the students! It’s about teaching!

Julie Matthews 2014/10/03 at 4:20 pm

That’s a really interesting discussion on the future of the public model. I think we’re fooling ourselves if we think public institutions can survive forever in their current format. I remember in a Feature some time ago on this website, an article was published by a President in one of the Colorado systems where he said they were preparing for a future completely without funding.

    Ian Mulder 2014/10/03 at 4:36 pm

    ABSOLUTELY! It’s so interesting that we’re here. It’s so clear in this piece that Miyares still cares about the future and serving the public mission, but there’s less and less public money available to do it. An alternate business model does not mean a departure from the public mission.

      Erwin Bedford 2014/10/06 at 9:49 am

      You got it. And ‘Professor’ would do well to learn that. It’s opinions like theirs that is keeping this industry from advancing.

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