Colleges & Universities
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Industry Overview
The US colleges and universities industry includes about 4,400 degree-granting institutions with combined annual revenue of about $360 billion. About 80 percent of industry revenue is generated by state-operated public schools, 20 percent by private schools. Some 1,600 schools are public, and 2,800 are private. Close to 75 percent of students are enrolled in public schools. A majority of students (including graduate students) are enrolled in four-year schools; about 40 percent are in two-year (junior or community) colleges, which are covered in the Community Colleges industry profile.
About 30 percent of people of traditional college age worldwide are enrolled in a college or university, according to the World Bank. North America boasts the highest percentage of enrolled college-age students at 84 percent, followed by Europe and Central Asia (58 percent).
Competitive Landscape
Demand for higher education services is largely driven by population dynamics, but also by employer requirements. The financial success of schools is closely related to the number of students enrolled, because many costs are fixed. Public schools have the advantage of public funding and are typically larger than private schools. Small schools can compete effectively by providing a superior education. The industry is labor-intensive: average annual revenue per worker is about $90,000.
Products, Operations & Technology
Colleges and universities provide educational instruction leading to the granting of a degree that testifies to the student's competence. Many also provide room and board for students and a variety of other services. Some schools also operate hospitals and research facilities. About 20 million students are enrolled in colleges and universities, many on a part-time basis (more than 40 percent of all undergraduates and 60 percent of those attending public two-year colleges are enrolled part-time). US schools annually award 790,000 associate degrees (two-year colleges); 1.6 million bachelor's degrees; 650,000 master's degrees; 92,000 professional degrees; and 67,000 doctoral degrees.
The operations of colleges and universities involve both instruction and administration. Instruction includes hiring and managing teachers, establishing academic programs of study, and providing necessary educational equipment. Administration includes providing classroom facilities, managing support staff, providing student services such as room and board, and maintaining facilities. Costs for instruction are about 25 percent of total expenses at four-year public colleges and about 35 percent at two-year public colleges. To manage expenses, schools pay close attention to the student/teacher ratio; the national average student/teacher ratios for public and private degree-granting institutions are about 17 to 1 and 11 to 1, respectively.
Colleges and universities have been among the leaders in using computer technology for administrative management functions, instruction, and communications. Many colleges have built campus-wide wired or wireless networks that allow students to sign up for courses, communicate with teachers, get classroom materials, see taped lectures, and communicate with administrative offices and other students. A growing number of schools offer distance learning via the Internet. Schools also use Internet sites for recruiting, admissions, alumni, and fundraising functions.
