“My generation decided it was great not to give young people the opportunities we had because it makes our assets, our homes, our degrees, our stocks all more valuable. It’s bad for society and it reflects badly on the generation in charge What is happening in higher education is just one manifestation of this selfish mindset.
So says Professor Scott Galloway, who has a long reputation as a pioneering thinker and controversial truth-speaker. Since earning an MBA from the UC Berkeley Haas School of Business in 1992, he has predicted future trends and spoken out against socially harmful systems and organizations. He founded Prophet, a marketing and brand consulting firm. He launched RedEnvelope, one of the world’s first e-commerce sites. Along the way, Galloway created a digital intelligence firm and an activist hedge fund. More recently, there have been influential books, podcasts, and digital newsletters. In 2019, he opened an online higher education startup, Section4.
Since 2002, Galloway has also been a Clinical Professor of Marketing at New York University’s Stern School of Business. There he teaches brand management and digital marketing to MBA students. Much of his research focuses on the so-called Big Four – Apple, Facebook, Google and Amazon – and specifically how the ambition of these tech titans sparked seismic social and economic change.
Undoubtedly, business leaders can learn a lot from Galloway’s forceful opinions and predictions. In April 2021, he published his thoughts in a controversial newsletter, No pity/no malicelaying out his thoughts on what’s wrong with higher education – “America’s most important industry. It’s the vaccine against capitalism’s inequality, the lubricant of upward economic mobility, and the midwife of therapies genes and search engines.
Today, post-Covid confinements, he deplores a “huge missed opportunity”. Top universities have largely refused to pursue a hybrid education model that would increase admissions, giving more students a better education and greater career opportunities.
The disappointment of universities constraining the offer
“The most disappointing thing is that elite universities have decided to double down on their luxury positioning and limited supply,” says Galloway. “If they embraced the technology, they could put half their sessions online and theoretically multiply the offer overnight. However, they discovered early on that online learning looks and feels the same, which which means that differentiation does not exist.
He suggests that America’s elite universities are “the ultimate luxury brand for the wealthy in China, the Gulf and Europe”, who will pay large sums of money to increase their children’s chances of attending.
“By creating the illusion that an association with a brand – like Bottega Veneta, Ferrari or Tequila Ley – makes someone a better, more successful person, you can create irrational margins. The strongest brands in the world don’t are not Amazon or Apple, but brands like Oxford, Stanford or MIT, because no one is paying $300 million to put their name on the side of Apple’s headquarters,” he says.
These generous endowments have led to what Galloway calls the Rolexification of some college campuses, with higher salaries attracting supposedly better teaching staff and no expense spared for facilities. Moreover, to maintain this exclusivity, admission rates have eroded in recent years, he argues.
“When I applied to UCLA in the 1980s, the acceptance rate was 74%. This year it’s likely to be around 6%,” Galloway continues. of their brands, resources, and technology during the pandemic to soak up the market. But I couldn’t have been more wrong.
He points to a worrying ripple effect. “Now there is so much overflow of people rejected by elite universities that second-tier universities demand similar prices, effectively charging a Mercedes price for a Hyundai.”
Paying a heavy price for a university education
Galloway donates his entire NYU salary to the university and has donated millions of dollars to NYU and Berkeley for immigrant student scholarships. “Here’s the thing,” he said. “These universities are technically private organizations, but they are not-for-profit. And non-profit organizations generally have a societal mission of public service.
“These companies no longer have a public mission because they are not increasing their number of first-year students despite the money coming in. Therefore, they should lose their non-profit status. It’s like a homeless shelter that rejects 90% of people because it decided to limit the number of beds when it has the resources and skills to accommodate everyone.
But with greater diversity increasingly prioritized by business leaders, a growing list of organizations have identified the modern problem with a college degree – most graduates will be in debt and need training anyway. – and looked for alternative avenues to tap into a much wider pool of talent. .
“The biggest thing that’s happened in higher education in recent years hasn’t actually happened in higher education,” says Galloway. “Companies ranging from Google to [the private equity firm] Apollo at Xerox said, “We’re going to create a significant number of positions for people who don’t have a traditional college certification.”
“It is encouraging to see that many large companies have recognized that if they only recruit from elite universities, they have effectively decided that they are not going to, for example, hire single mothers. There just aren’t many single moms graduating and crossing the stage at Harvard or MIT.
Urging business leaders to be more open-minded about their approach to hiring, Galloway admits he too was “guilty of fetishizing and recruiting from elite universities” early in his career. “We loved it, it made us feel good about ourselves. But as long as the best organizations continue to fetishize these places, we will never break this cycle.
Changing mindsets around higher education
Then there is the question of the high cost today to attend an elite university.
As Galloway notes, “My seven years of college cost $7,000, so it was a no-brainer for me, the son of a single immigrant mother. It meant that a mundane kid got a remarkable certification and brought about prosperity and opportunities that I didn’t have access to before.
“There is a general feeling that the university is not the return on investment that it once was.
But while some people will start doing the math, the certification that prepares you for life, making you more attractive to potential partners and employers, is still very powerful.
Section4 could be a viable and cheaper alternative to university. Certainly, it scores well on the cost and acceptance fronts, says Galloway, offering “courses at 10% of the price of an MBA and with 1% friction because there’s no application process. complicated”.
And while Section4 has thrived during the pandemic, when people had more time to study online, he admits the platform has become more suited to mid-career professionals looking to develop their skills alongside colleagues. “We have moved from a B2C business to a B2B business and have seen post-pandemic that universities have become more exclusive about their professors lecturing for us.”
So what is Galloway’s key message? “There’s a larger issue here in the United States and in Europe about whether we want to continue to have this rejectionist — almost nimbyist — mindset,” he says. “Regulators and university leaders need to start planting trees whose shade we may not enjoy. Admission rates need to be increased, as do housing options for young people.
Business leaders would do well to heed Galloway’s warning.