I've been pondering this for some time. Universities have become "sausage factory" businesses that take in as many fee paying students as possible into all University courses and then flood the market with graduates who have little chance of finding employment in their chosen field. The surplus of graduates over the number of available jobs drives wages down and amongst other things leads to a disenfranchised workforce. Up until the mid 19990's a Degree was pretty much a guarantee of a well paying and secure job; but it seems to me all that it guarantees now is a massive HECS debt and little else.
My boys are just beginning their school years and although they have a long, long way to go I am not so sure that a University education is as essential as it was for me. I am all for further education; but only if the benefits outweigh the time and costs.
So what are other parents views?
An interesting article from BRW on the subject:
DROP OUT AND CASH IN: WHY A UNI DEGREE COULD BE HOLDING YOU BACK
Peter Gregory, a character from HBO’s Silicon Valley TV series based on PayPal founder and the first investor in Facebook, Peter Thiel is rabidly anti-college.
Last month, one of Australia’s most senior businesspeople, Catherine Livingstone, made a somewhat unusual claim. Livingstone said that many people are better off not going to university and instead undertaking vocational training. Livingstone’s claim bucked conventional wisdom, which made a fair bit of sense, as often conventional wisdom is pretty dumb and set by people with vested interests.
This is not intended to be a blanket criticism of everyone who attended or works at university (I did a double degree at a leading university). And in some fields, like sciences or engineering, tertiary education is essential. That said, in many areas, especially creative or commercial ones, going to university can be a bad idea.
It can’t be a coincidence that almost all of the world’s most successful people didn’t finish university. Bill Gates (and his business partner Paul Allen) dropped out of Harvard, as did Mark Zuckerberg. Steve Jobs felt guilty wasting his parents’ money studying at Reed and dropped out, as did Oracle founder, Larry Ellison (who actually dropped out twice). Michael Dell, casino magnate Sheldon Adelson, record boss David Geffen, Ted Turner and even Ralph Lauren didn’t make it through college. Nor did Zara founder Amancio Ortega or Ikea founder, Ingvar Kamprad or Asia’s richest man, Li Ka-shing.
Many of Australia’s most successful business people also shunned higher education. Rupert Murdoch fled England’s Oxford University upon his father’s death to save the family’s teetering newspaper business, while Lang Hancock (who created the fortune of Gina Rinehart, Australia’s wealthiest person) never attended university at all, nor did Frank, Kerry or James Packer. Australia’s wealthiest property owner Frank Lowy started a small goods delivery business after arriving in Australia in 1952, while second-placed Harry Triguboff did go to university but studied textiles before becoming a developer.
One of the exceptions is Warren Buffett, who undertook post-graduate study at Columbia under the legendary Benjamin Graham. However, Buffett is a vocal critic of most of what is taught in conventional finance courses.
Not playing by the rules
So how is it possible that so many successful business people didn’t go to or dropped out of university?
I can think of a few reasons. The first is obvious – time. There is huge cost to attending university or college and it’s not only financial. In virtually all cases, the über successful business people mentioned above took a huge risk at a young age. But they didn’t have to face the hard decision of leaving a high-paying job, nor did they have school fees or a large mortgage to pay every month. They weren’t held down by the fear of losing a career track, such as not becoming a partner in a law or consulting firm. Instead, they were able to pursue what would become multibillion dollar enterprises by taking a risk in their business life but not necessarily their personal life. In short, by not taking a more traditional career path, those billionaires had a lot less to lose. (The riskiness of starting a venture is increased given the huge cost of tertiary study, which often means students finish with not only a degree but also a $40,000-plus debt).
The HBO series Silicon Valley perhaps put it best. Peter Gregory (a character in the show based on PayPal founder and the first investor in Facebook, Peter Thiel), said “Gates, Ellison, Jobs, Dell. All dropped out of college. Silicon Valley is the cradle of innovation because of dropouts. College has become a cruel, expensive joke on the poor and the middle class that benefits only the perpetrators of it: the bloated administrators.”
But not only do universities rob students of time, they also teach bad habits. While learning about things such as efficient market hypothesis, students are required to adhere to strict rules. But to become a great entrepreneur you need to operate outside the rules – not by breaking the law, but by creating processes and products which don’t exist. Breaking the rules of how things work – this is completely inconsistent with what is taught at university.
But perhaps the greatest folly of studying is that you’re not doing. Or as author and businessman Bill Bonner noted, “By going to a university you open yourself up to a whole world of knowledge. Yes, perhaps you do gain easy access to a whole world of simplified knowledge and politically correct opinions. But you also cut yourself off from a larger world of real knowledge . . . the kind you get by doing and observing.”
Am I suggesting every student reading this should drop out and create a start-up? Not at all. But an expensive and long tertiary education is far from a guarantee of success, especially in business, and the costs in time will often far outweigh the ever-growing financial burden of university study.
Adam Schwab is the founder and CEO of the AussieCommerce Group, which owns Luxury Escapes, brandsExclusive, TheHome, TheActive, TheGourmet, Cudo, pop and DEALS.com.au.