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Building Human Capital


Published Oct 1, 2009 8:00 AM

As I travel the state advocating for our university, I am often struck by the view many people seem to have that unless they are a student or a parent, an alum or an employee, the University of California is not relevant to their lives. In other words, they regard a UC education as what economists would call a "private good," something that enhances only the life of the individuals who are directly associated. Nothing could be further from the truth. By creating jobs and economic growth, discovering new medicines and pioneering patient care, by supporting our state's rich cultural resources, UC touches the lives of every Californian, every day.


A University of California education is every bit as much a "public good," one that benefits not only the individual, but also society at large. For this reason, we must all do a better job of telling our story in the face of unending budget crises. As proud Bruins, this is a conversation you can help to lead with those you know — and with your elected officials in Sacramento and Washington. Maintaining and growing a world-class research institution in the midst of a recession is not a luxury: It is a necessity. UC is one of California's economic engines, creating research and spinning off companies that create tens of thousands of jobs and generate billions of dollars in economic productivity.

Almost all of the industries in which California leads the world grew out of university-based research: agriculture, biotech, computers and semiconductors, telecommunications, multimedia and environmental technologies. In the last decade, UC campuses reported more than 2,600 inventions that led to new technologies and products. For every dollar in state-funded research funds, UC researchers bring in an additional $4.93 in public and private investment.

In addition to teaching and research, UC has a vital public service component. UC researchers are at the forefront of advances in science and medicine, and technologies to combat climate change. Thanks to UC science, California's farmers and ranchers produce more than half of the nation's fruits, nuts and vegetables, allowing California agriculture to generate 1.1 million jobs and more than $60 billion in income.

It's impressive. But these facts were not enough to spare UC from the knife in the most recent budget cycle: After raising student fees by nearly 10 percent for 2009-2010, we still had to absorb an $813-million state funding shortfall, which led to employee furloughs for the coming year.

We know fee increases burden our students and their families at the worst possible time. The furloughs are a stopgap measure and I am committed to finding a way to avoid them next year mdash; but it will not be easy or painless. These are tough times for California and we, along with all other educational institutions, must share the load. But there is an even more detrimental trend at work, and that is California's ongoing disinvestment in human capital.

Aid for Education

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Learn more about the campus' financial situation at the UCLA budget page.

At the University of California, we were already underfunded before this crisis came along. By my calculations, our core operating budget was underfunded by at least $1 billion. On top of that, since 1990, the state's investment per student has dropped from just under $16,000 to $7,600 this year.

For the first time, we were forced this year to cut our incoming freshman class by 2,300 students. The chancellors are reporting the first troubling signs of "brain drain" among top faculty who are lured to other institutions with better salaries and research budgets. At a time when the knowledge-based global economy is getting more competitive, California is letting its economic engine go without so much as an oil change.

Building human capital is at the heart of our mission. Yet some lawmakers tend to treat UC as they might a Wal-Mart. They want to know what we pay workers, with what benefits, and what we charge our "customers" (i.e., students). Their inquiries stop there. There is no recognition of the fact that we are in the knowledge business and little sensitivity to educational quality, research, public service and all of the rest of the things we do. Good universities change the lives and prospects of their students, and of the societies they serve.

Lawmakers and taxpayers deserve to hear the truth about UC. With a great deal of effort on your part and mine, we can hopefully stop, and ultimately reverse, the destructive funding trends that threaten UC's ability to serve California and the nation as we have for the past 140 years. The university is all about people, and we must be competitive nationally and internationally if we are to maintain quality and all of the other good attributes of UC.

At the same time, we must also face some hard facts as we seek to distribute scarce resources in a recessionary climate. UC's prized attributes have always been accessibility, affordability and exceptional quality. Now we have to make tough choices among competing goods at a time when we simply do not have the resources to maximize them all simultaneously. No one wants to sacrifice a core value. But we are going to have to adjust the fuel mixture.

To position the university for a new era, Board of Regents Chairman Russell Gould and I have appointed a UC Commission on the Future. Comprised of the brightest minds in education, industry, science and the arts, the commission will seek creative solutions to a number of questions. How can UC best meet the needs of California at a time of diminishing resources? What is the size and shape of the university going forward? What is the optimum balance of teaching, research and service? How should enrollment grow (or decline) in what disciplines and at which campuses? What alternative educational delivery models will both maintain quality and lower costs? What is the appropriate role of technology?

By asking ourselves hard questions and making adjustments where needed, we will ensure that UC emerges from this trying period as a more viable, sustainable and flexible institution. Yes, we find ourselves in a time of crisis. But I have every confidence that the innovative spirit that has seen this university through more than a century of progress will prevail.