Conference on Global Entrepreneurship: Economic Development for Asia and the U.S. – Lunch: Global Entrepreneurship and the Challenge to Education in the U.S.

Terrence Martell: Thank you ladies and gentlemen. Please continue to enjoy your lunch. We’re going to continue our program. It is my pleasure to turn the podium over to Thomas Tam, the Director of AAARI, and the person who put this program together and who deserves a round of applause for his excellent organizational skills. Thomas.

Thomas Tam: Thank you very much, Professor Martell. Distinguished speakers, honorable guests, ladies and gentlemen, welcome back to the luncheon portion of the conference program. This is co-sponsored by the White House Initiative on Asian American and Pacific Islanders, the Committee of 100, the Chinese Association of Science and Business, and, of course our host, the Weissman Center for International Business at Baruch College. I’m Thomas Tam and I have the honor and privilege of introducing to you our next keynote speaker, Dr. Matthew Goldstein, the visionary leader of higher education. He is the Chancellor of the City University of New York, the largest American urban university, with 19 campuses and over 200,000 students. In response to the growing population of Asian Americans in New York City and the increasingly important role that Asia plays in the world economy, he boldly established the Asian American Asian Research Institute four years ago. And to pull together the tremendous resources of expertise within CUNY to address the multi-faceted issues of the most diverse community. With his ardent support in the short span since its creation, the Institute has organized more than seven international conferences and festivals and a countless number of workshops and seminars and more than 100 lectures on issues that are of interest to this community. All of this could not have been done without the vision, the courage, and the commitment of a leader who has supported the causes of Asian Americans more than twenty years ago. Ladies and gentlemen, please welcome the Chancellor of the City University of New York and a friend of the Asian American community, Dr. Matthew Goldstein.

Matthew Goldstein: Thank you Dr. Tam for that more than generous introduction. It’s always good to be here at Baruch College, a place that I spent several years at. It’s just wonderful to see it becoming a more vibrant and exciting place. This is just another example of the success of this extraordinary institution. I would like to acknowledge the very good work of Terry Martell. Dr. Terry Martell, who heads up the Weissman Center. Betty Lee Sung, who is a wonderful friend, and who has really kept my feet to the fire on issues that are of concern to all of us and so many of you who are doing very important work.

I’d like to start my relatively brief remarks with telling you a story that is about 16 hours old. So it’s a fairly new story, but something that you probably all have experienced yourselves. Last night, I was getting into a tuxedo, waiting for my wife. I had two events to go to, which was a relatively light evening for me because typically I have more than two events to go to. One of the events, she was going to accompany me and the other I was going alone, and so I just had to arrange things so that we would meet at the appropriate time. She was on the phone with a client while I was anxiously waiting to leave the house, when the other line rang. The woman on the other end of the line asked for Margaret Sedlis Goldstein, my wife. And I said, I’m sorry, she’s occupied right now. Can I tell her what the topic of the call is, being very polite, as I typically would be. She said, “I’m with American Express Security Fraud division, and I need to speak to your wife on a very urgent matter.” Well that sounded like a pretty ominous thing to convey, and I said, “May I place you on hold and I’ll see how long it will be until she gets off the line?” And I motioned to my wife and told her what the issue is and she said, “I’ve got to finish this phone call.” So I get back on the line with this woman and I said, “Would you mind calling back within five or seven minutes; she’s anxious to take your call.” And she said, “Oh that’s fine, I’ll hold.” I said, “You really want to hold for this amount of time?” “No problem.” I went back and seven or eight minutes elapsed and my wife could still not get on the line. I get back on the line, the woman is still waiting. And I said, “Look, I feel terribly sorry. It sounds like an important subject that you have to discuss with my wife. Please let us call you back or would you call back?” “No I don’t mind waiting.” And I just found this to be incredible and I said, “Let me ask you a question: you’re not calling from the United States, are you?” And she said, “No.” I said, “I suspect that you’re calling either from India or Bangladesh.” And she said, “I’m calling from Bombay.” And I said, “Is the Fraud and Securities area based in Bombay for American Express?” and she said, “Largely, it is.” By that time, my wife got on the phone and they conducted their business: it was one of those instances where somebody uses your credit card and they knew about her buying history and this was outside the realm of what she typically did. And it just again reinforced to me how small the world has become, that a whole division of American Express is now operating out of an area outside the United States.

And of course, we wonder why some of this is happening and what it means for the changes. The world is really getting very small. It’s symptomatic of a book that Tom Friedman just wrote, which I highly recommend to all of you. It just came out. It’s called, The World is Flat, and by the way, the cover of the book is a beautiful artistic description of boats falling off a river going into a deep ravine. The reason that we are seeing so much change in the United States—outsourcing and companies looking for opportunities abroad—I would say really are two major factors. One, obviously costs. Companies are making judgments about conducting some of their businesses, service businesses in particular, because of lower costs. Obviously that is a very driving force when one wants to secure a very good balance sheet. But the other I would submit is that companies are making judgments with respect to the quality of the workforce. And that to me is a real clarion call for we in the United States to be much more attentive to ensure that what we are doing in this country is equipping our young people with the kinds of skills that are going to enable this country to continue to be a world player of great consequence in global markets. We have transitioned from an agrarian to an industrial to a knowledge-based economy. The countries that are now being major competitors to the United States, not only in the manufacturing area, which is becoming explosive, and has been for some time. But it is largely being driven now by service areas of people who are being trained outside the United States in ways that are eclipsing the kinds of skills that American young people are experiencing today in secondary education and I would submit in higher education as well. Today, scientific literacy, from where I stand, is a sina qua nom for an educated citizenry. Unless one has an educated citizenry, we are not going to be able to maintain positions in the competitive forces that are driving not only this economy, but world economies, forward. I think it’s something that we have to be deeply concerned about. When we think about not only skills, and I’m going to get back to this in just a minute. We really ought to see that entrepreneurship is becoming an area that is of great interest to not only universities, but to young people, especially to people coming to the United States who have not had a tradition because they don’t have families, they don’t have friends connected with the large companies that introduce them to the culture of work in these large companies. There is a major problem going on now if you speak to many corporate executives—and I do on a regular basis—about this issue. The overriding concern that many CEOs have today when they speak to educators is, “our mangers,” they say, “don’t know how to deal with diversity.” And diversity becomes an important issue for companies to be able to manage their workforces in the most efficacious ways. So, those kinds of environments that some young people, especially people new to this country, are experiencing are driving them away from companies and looking to establish their own little positions in life that turn out to be really formidable.

Let me give you some data that demonstrates this quite profoundly. A recent issue of the Chronicle of Higher Education, which is a newspaper that some of you may not have heard about, but it covers all aspects of higher education, noted that the number of colleges offering at least one course in entrepreneurship has more than tripled in the last year. This explosion in the entrepreneurship education in America has led to more than 2200 courses at over than 1600 universities and colleges, 227 endowed positions, 44 refereed academic journals, and over 100 established centers and institutes at universities. We have one that is here at the University that Terry Martel does. Universities are reacting to market conditions largely driven by people who want to get out there and be part of a new movement. There are two things that are really moving in parallel now. The notion of the drive to get away from the mega-corporation and establishing something that is nimble, where your ideas can surface rather quickly, and where you don’t have the cultural connections to a large company. That is one driving force. The other driving force is the notion that scientific literacy is continuing to be a problem here in the Untied States and let me give you some data on that. Let me see if I can bring these two ideas together and then make some suggestions about how universities can operate more effectively in this particular arena. Several years ago, when data were starting to be collected about the number of scientific positions that are being created in the United States; and those of us who are in universities started to pay attention to this. Let me show you how profound this problem is today. In 1996, nine years ago, the United States was number three in the world in producing engineers and scientists, at all levels, baccalaureate, masters, and PhD. Today the United States is number 17 in world markets… in nine years. You talk about a profound change that has happened in the world’s economy. That is a result, I would say, of more and more poor performance at lower levels of education, and when people then come to university life, they’re just not ready to do the kinds of university work that we require. The other aspect of this is that those subjects are hard. Other countries are waking up to the notion that a real investment needs to be made in higher education, especially in the areas of science and technology. We’re seeing this in clarion terms in places like India, China, Taiwan, Korea, Australia, Great Britain, Germany. We’re seeing it all over the globe. The United States is moving backward where other countries are moving forward. The United States is pulling away from the support of higher education, in particular, public higher education, and other countries are moving further ahead. The United States is being perceived by some people around the world as being unfriendly to immigrants. The United States has made it difficult with immigration changes for people to study in the United States. All of these factors are being put together in a group that’s having an effect on our laboratories here at the universities, with not getting enough graduate students, and at the same time not getting as many students interested in these subjects. Then, with a knowledge-based economy really making the difference in the kinds of markets that we want to participate in, we’re just not getting the kind of educated workforce to do the work. That, I think, is a real driver, getting back to the point, of so many companies now looking to invest elsewhere because they’re getting better educated people.

So, what is it that we have to do in this country and how is entrepreneurship feeding into this movement, I think is really quite important? The first challenge, I would say, is again that other countries are improving their educational systems and foreign graduate students’ enrollments are indeed dropping. In fact, the The Chronicle of Higher Education, going back to that publication, reported that applications for graduate study in the United States are down five percent this year, which follows last year 28% decline. Applications fell sharply in two countries, in particular, that send most students to the United States: China is down by over 13% and India is down by over 9%. But universities, I would submit, benefit from the presence of foreign graduate students, especially those in sciences and engineering for the reasons I just indicated. If international education and entrepreneurial opportunities improve elsewhere, the students’ reasons for coming to the United States is largely weakened. Of course, the three big causes, just to reinforce this point because it is important, for dropping graduate school applications are the increase in global competition for graduate students. It’s unbelievable the number of universities that have sprouted out around the globe with orientations in science and engineering. We’re seeing a stagnation here in the United States. Obviously, tougher visa policies were largely a result of the devastation of the events on 9/11 are something that is there. And again, the perceptions, because of some of these events of a less welcoming opportunity for foreign students, is driving as well.

The second challenge that we have is entrepreneurship by immigrants to the United States is starting to evolve. Let me talk about that for just a moment. Our own Pyong Gap Min has noted, and he’s connected with AAARI, has noted in his research, that more than nine million immigrants were admitted in the 1990s outnumbering those admitted in the first decade of the 20th century. These immigrants, particularly from Asia and are interested in entrepreneurship, in part as a result, as I said, of not having the connection with large companies, which has been the traditional route to these companies. These immigrants, in particular, from Taiwan, India, Iran, Korea, tend to have more education and capital, which leads to new kinds of businesses—not the typical sort of the Mom and Pop operations. Traditionally, often because of language limitations, immigrant entrepreneurs focused on—these are somewhat trite and may be a little uncomfortable to hear, but—the typical bodegas and food stands, or driving cabs. Today, because of certain changes in the culture of entrepreneurship, many of these individuals are taking middle man roles—for example, starting, say, an import-export business. Tom Friedman, in the book that I just mentioned to you, last year indicated that Wal-Mart, that mega retail store, imported 18 billion dollars in goods from over five thousand Chinese suppliers. Many Asian American entrepreneurs indeed are starting businesses that involve high skill occupations in professional industries, such as law, medicine, financial services, and real estate. So there is this change that we’re starting to see, the people that are here now from other countries.

What does the future hold? One, we have to stay future-focused and nimble even within the slow-moving framework of higher education. We did something here at the City University rather recently: we just inaugurated a new school of professional studies. Why? Because we have received requests from entrepreneurs, we have requests from major companies to do design kinds of curricula, and they want it done in two months and they want to be done with it and then they want to go onto something else. That is not the culture of how we work at a university. I could not find an academic home within this university and I would say, in any university, unless we had a structure that could incorporate that kind of nimbleness. Come in, design something, if you don’t have the talent, buy it someplace else, price it effectively, execute, and then go on to something else. That’s not what universities typically do. We are starting to become entrepreneurial as an organization now by creating the School of Professional Studies and we now have a huge inventory of services that we are providing, generating the revenue, and the revenue is now being funneled back to support doctoral students here at this university. So not only are individuals looking to become entrepreneurial because of some factors of culture, some factors of not having a sense of comfort with large organizations, but institutions are becoming entrepreneurial as well and we’re starting to see more and more universities becoming entrepreneurial. The two basic reasons: demand and the need to generate revenue, because, back to a previous point, all of us in higher education need to find ways of supporting our operations, given that our traditional support is starting to dry up. So, we are being forced to be entrepreneurial as well.

But global entrepreneurship, whether it is a university or whether it is an individual, whether it is connected with science and technology, provokes several questions of U.S. educators. First, are we offering something of value? Are we offering degrees that enhance a student’s ability to think critically and creatively, and give them the tools to make professional progress? That’s a very serious question that is a new kind of question traditionally to universities. Does our curriculum reflect a global perspective? You take a look around the United States: foreign languages have been deemphasized for a long time. That has to change. The notion of understanding other cultures and traditions has to change if we want to participate. That’s what the CEOs are complaining about. Their managers really don’t understand their workforce. They don’t understand the traditions that these people bring to work. They don’t understand the cultures. And we as a university have to be mindful of that or else we are going to lose a lot of the opportunities of the creativeness of the people who are now working and studying. Are our students educated in ways that allow them to analyze risk, something that is critically important? As these markets are changing, the whole landscape of risk is changing and the whole way of assessing risk is changing as well—something that he have to be mindful of. We have to encourage current and future generations of entrepreneurs in general through entrepreneurial activities. We must make sure that our curricula reflect the reality of globalization. That means more emphases on studying global issues, such as making sure students understand other economic systems. Most are different than ours. Other belief systems, human rights issues, political systems, population patterns, technology, and others. Encouraging entrepreneurship means making sure our students and others understand the concept of the market that they’ll be entering. Do students know what small business opportunities are best for a global market? Can students prepare an international business plan? Do they study communication and cultural differences? Today, valued employees will have to look beyond their disciplines and risk exploring and developing new opportunities. Higher education can reflect those blurring boundaries by encouraging more interdisciplinary and multidisciplinary work. In the field of entrepreneurship, in particular, we’re starting to explore the intersections of entrepreneurship, psychology, education, engineering, biomedicine, computer sciences, and other disciplines.

As Friedman points out in his book, our graduates will have to figure out how to move up the value chain. That is how we make better products and how we charge extra for them. A good example is UPS. When we used to think of UPS, it’s an organization that just delivers goods. But, UPS now has gone up the value train. How? By preparing computers now; by caring for lobsters not just shipping them, but knowing how to care for them; warehousing sportswear; supplying luxury car parts; even getting a minutely customized baseball bat for Derek Jeter when he needs it. That’s what UPS is doing. Our students will have to think and learn and act with validity. Both higher education and entrepreneurship offer the hope that you can direct your own life, that you have the power to advance yourself. That’s an extremely potent hope and has lifted millions of people to better lives for themselves and their children. We all have the responsibility of staying attuned to the changes in the world, so that those opportunities can continue to exist.

My many thanks to all the co-sponsors here for this important event and for all of you for attending on way to encourage both entrepreneurship and education in some of your discussions today. Tom Friedman may believe the world is flattening, but I believe that your work has shown that there are many opportunities to put some texture in that world. Thank you very much.

Thomas Tam: If there are any questions, then the Chancellor can take a few questions.

Matthew Goldstein: I used to teach probability theory, which was one of my disciplines, I would ask a class, are there any questions? When there were no questions, I would say, that’s either very good or very bad. But I’m not going to say what is very good or what is very bad. Thank you all again.