The Marmot’s Hole

Warning — really long post ahead. I transcribed most of Robert Laughlin’s white paper on how to transform KAIST into a “world-class science university” ™ to give those interested a better idea of what Laughlin was really up to.

Laughlin handed out this document Dec. 1, 2004. He states in the opening that the paper was only to generate discussion, although KAIST faculty members have told me that the opening statement was not in the original document, and that Laughlin only added it later, for spin control.

I should point out that, since the beginning, his plan was not going to fly. A member of the faculty committee responsible for his reforms laughed about it, back in late 2004 when I asked him about it. He said the proposal was interesting, but said (words to the effect that) “there’s no way in hell it’s going to pass.”

Not helping Laughlin’s cause was his calling a senior KAIST official an “asshole” in a meeting (or rumor has it… Laughlin never confirmed saying any such thing, although he did say conversations had been vigorous).

Even now, it is “through the glass, darkly” trying to figure out exactly what went on. The government has asked Laughlin to be quiet on the matter, and it looks like he is being a good soldier.

Anyhow, here’s the white paper:

Proposed KAIST Investment Strategy

R. B. Laughlin
Korea Advanced Institute for Science and Technology
December 1, 2004

[DRAFT: This document is intended to be the starting point for discussions about future KAIST investment strategy, not a policy statement. I have deliberately written it in a strong, controversial language to sharpen the issues and stimulate discussion. I expect forceful criticism. I am hoping that a modified version of the document – one that sits comfortably with everybody – can become a policy statement, but that will depend on what happens in the discussions, - RBL] Like many other universities in the world, KAIST is presently trapped in a funding squeeze from which there appears to be no exit. KAIST is not supported adequately by the state for achieving the ambitious goals of world leadership mandated for it, nor is any relief in sight. Indeed the Korean government, like those of many other countries, is now showing outward hostility to scientific entitlement and institutionalized funding privileges, in part due to issues of private-sector competition. I argue that the only way forward now is to fundamentally restructure KAIST’s business plan along the lines of MIT or Stanford. The current model is to contract with the government to supply highly intelligent, well-trained workers to industry at low cost. The new model is to contract with parents and students to create an excellent, general-purpose educational environment weighted toward science and engineering. In this model the graduate program exists to serve the undergraduate program, rather than the other way around, and is focused on the generation of intellectual property, fundamental discovery, and profits rather than the generation of PhDs. I propose a strategy for achieving this goal.

A Familiar Problem

The precarious situation in which KAIST presently finds itself is sadly familiar. It is admittedly a special spicy Korean version of the problem, but nonetheless something I have seen in technical universities all over the world, including my alma mater Berkeley, the University of Michigan, and University of Tokyo, the Ecole Polytechnique, the Technische Hochschule in Munich: the people doing the paying don’t believe they’re getting their money’s worth, and are demanding either vastly greater research productivity (measured by tangible benefit to the economy) or a parting of the ways. There is always talk about using public relations (e.g. my Noble Prize) to fend off this assault, but I think it is whistling in the dark. People in Korea may pay homage to the Prize more than is customary elsewhere, but that’s only when we’re not asking for money. Deep down people here are no different from those anywhere else, and ask exactly the same questions inside their heads.

[…snip…]

Let us now examine what the government really means when it says it wants Korea to become a high-wage country. My elementary economics textbook begins by reminding me that the genius of many people working independently in their own interest is vastly greater than the genius of planners. That is also my experience. As low-margin industries are sloughed off to low-wage countries, new, high-margin replacements for them are generated out of thin air by people’s creative power. For example, it has now come to pass that the value of the content carried by the Internet is vastly greater than the value of the net itself. This is why jobs are plentiful in content creation, even as network equipment makers are attacked by cheap Chinese knock-offs and fixed-wire telecom falls into recession. The opportunity on the lips of investors in New York is not Silicon Valley but Silicon Alley, the area south of Houston Street where computers are used extensively to make advertising copy. Thus what the Korean government really means by “high-wage” is “incredibly creative.”

Obviously when a dynamic of this kind is a work, any institution, including a university, decoupled from market forces becomes obsolete over time. That, in a nutshell, is what our governments think has happened to us.

The way out of this dilemma is therefore to rethink the university as a business problem rather than a political problem. Instead of blaming our troubles on the incompetence of the administration, short-sightedness of government officials, or the stupidity of the public (whose money we gladly take) let us take at hard look KAIST’s product portfolio and ask why it is no longer valued highly by its buyer, the Ministry of Science of Technology. The answer is both simple and obvious: private universities in Korea are undercutting the market. They provide the same deliverables – technically trained people and sponsored research – at less cost. They do this by tasking parents, through tuition charges, for faculty and staff salaries, upkeep of the grounds, and so fourth, thereby lowering the cost to the Ministry by about 30%. Thus KAIST is uncompetitive. It will continue to be so until it increases productivity by 30%.

There are too many counterarguments to this analysis to rebut individually in a short space, but let me discuss two particularly pernicious ones:

1) Korea is different, in that its most elite universities have the smallest enrollments and the largest governmental support. First of all, Korea is not different, for this is how the Ecole Normale works. But the physical science component of the Ecole Normale is under attack by the French government – which is why this really isn’t a counterargument. I think the Korean situation is not analogous to the French one but is instead a vestige of the dictatorship years that cannot last. The reason is simply that education for my kid is important to me, so I won’t vote for a candidate who promises to tax me to pay for education unless it’s for my kid. I’ll pay for someone else’s kid only if he or she is very needy. In a democratic country, state money is always targeted to the masses. There is no such thing as a state-supported Caltech.

2. Seoul National University, the leading research university in Korea, is well supported. […snip…] However, I think this misses the point. Seoul National is, in fact, in trouble too.

[…snip…]

The Buyer who Counts

From an ice-cold business perspective, the buyer who counts is not the government in Seoul but the parent. This is a key difference between the situation now and the one thirty years ago when KAIST was conceived. Even if Samsung Electronics, Hyundai Motors, and LG all relocated to China tomorrow, there would still be parents of bright, nerdy children who want them injected into economic life and will pay almost any price to accomplish this. To put the value in perspective, imagine expanding the enrollment of KAIST to 20,000 (which the campus would easily handle) and charging 6 million won apiece – the going rate at Yonsei and Korea Universities. The gross tuition income of KAIST would then be 120 billion won, or 30% more than the good-money budget KAIST presently receives from the government. If KAIST proved to have superior placement power, as Caltech does, it could charge more. […snip…]

[snip, snip, snip]

Graduate School Conundrum

In stark contrast to the rosy undergraduate situation, the demand for graduate education in science and engineering is at historic lows. In the US and Europe the situation is so bad that traditional engineering schools have seriously considered jettisoning their graduate programs altogether. A great deal has been written on this subject, and I need not rehash the details here. The important thing is that these schools decided in the end not to jettison their graduate programs because they were a draw for the undergraduates. In other words, schools with strong research programs had a greater undergraduate demand (and thus could charge higher tuition). Than schools in which such programs were weak or nonexistent. Thus keeping the graduate programs made perfect sense provided they did not lose money. That is why the graduate research programs in science and engineering at Stanford, MIT, and other research universities are now expected to be cash-neutral. The universities would actually like them to turn a profit, but the government sponsors do not want this because it would amount to subsidizing undergraduate education for the rich. […snip…]

I think the true economic situation in Korea is no different, although experiments would have to be conducted to tell for sure. I am reasonably confident that the only reason KAIST has a high throughput of graduate students is that their costs are heavily subsidized by the government. Were these subsidies be removed, the flow of science and engineering PhD candidates would dry up, since most parents do not consider this to be a good use of their money. Anecdotal information tells me that there is still a market for Masters Degrees in engineering, just as there is in the US, meaning that one could charge parents for this education without driving the number of students to zero.

Thus KAIST’s traditional emphasis on graduate education culminating in a PhD has come to be fundamentally out of tune with the market. As a result, KAIST has no viable business plan. In contrast to Stanford or MIT, which it aspires to emulate, KAIST would collapse if the government subsidies that now sustain it were withdrawn. Indeed I find its situation a textbook example of how destructive subsidies can be.

Getting Off Subsidies

The right course of action now for KAIST is therefore to get off the drug of public money as soon as possible. That cannot be instantly, since KAIST was born addicted and will suffer severe withdrawal symptoms if dried out too quickly. However, every investment decision we make from now on should be targeted to profit, even if it means abandoning plans already in the pipe. At the conceptual level this means repudiating the model of KAIST as a provider of industrial training and embracing the model of a general-purpose school for bright undergraduates with scientific interests. There are four kinds of action we must take:

1. Levy tuition
2. Increase enrollment.
3. Reconfigure the undergraduate curriculum and lifestyle to maximize its market appeal to parents and students. This includes:
a. Upgrade dormitories and grounds
b. Broaden the curriculum in the arts, language, and business.
c. Teach more classes in English
d. Institute pre-med and pre-law programs, coupling these with aggressive placement in medical and law schools. (Fully 2/3 of the undergraduates at Stanford are either pre-med or pre-law.)
e. Aggressively place students abroad, specifically in the US.
f. Aggressively recruit students from abroad, specifically from China.
g. Aggressively recruit new faculty from abroad, specifically from China.
h. Aggressively recruit more women.
i. Aggressively involve undergraduates in research.
j. Aggressively advertise these and other attractions of undergraduate life to prospective students.

4. Recharter the graduate program to make money. This includes:
a. Zero out graduate student support from the general fund. Shift all such burden to research contracts, scholarships and students themselves.
b. Make merit pay and bonuses a larger fraction of faculty pay package. Tie these to teaching, citizenship and research quality but not for number of PhDs produced.
c. Change patent practices to give faculty more and better ownership of the intellectual property it creates.
d. Declare all research not leading to marketable publicity for KAIST or intellectual property owned by the researcher to be of marginal quality.
e. Sunset or merge departments generating meager amounts of publicity and property owned by the researcher.
f. Encourage creation of new departments and programs on a cash-and-carry basis (i.e. no support from the general fund for either operations or salary for new faculty except for seed).
g. Declare present 12-month salary to be compensation for 9 months of work, and allow faculty to get three extra months of summer salary any way it can (e.g. from consulting or research contracts).

Note that nowhere in this list does planning research from the President’s office appear. […snip…]

[…snip… some boring stuff about undergraduate extracurriuculars…]

The Technical Man

Let me conclude with an observation about the market we are serving, colored by my years of experience on the faculty of Stanford. The Stanford student body is often glorified in Korea for reasons I only partly understand, so it will no doubt seem shocking that I consider the KAIST student body to be quite comparable, at least in physical sciences. Over the years it slowly dawned on me that the people I was teaching were vastly more valuable than the research I was doing. It is actually easy to see once you get the idea, and also applies to KAIST.

[… blah blah…]

At any rate, given the situation I have described, the number-one need of our students is remediation of these weaknesses. […snip…]

The second great need of our student cohort is artistic outlet. This may seem an odd order of priorities in an engineering school, but it is quite correct. MIT realized this years ago, which is why it invested in theater, acquired extensive art holdings, built a big music library, and hired a professional concert pianist onto the faculty. […snip…] More generally, KAIST students are not just engineers but young people selected for powerful creative ability. This ability needs to be encouraged by all the means at our disposal. In the long run, it is worth more to them, and to us, than all the ability to balance equations or run computer programs there ever was.

[…snip…]

My vision for KAIST is that it become the center for such creativity in Korea – perhaps even in all Asia. The reputation of Seoul National University is that place you go to establish connections. The reputation of Postech is the place you go to become a responsible engineer. I would like the reputation of KAIST to be the place you go to make discoveries.

——-

ME AGAIN. Laughlin out.
As long as I am not getting any of my real work done, I’ll mention some of the reaction to this document. The Faculty of Electrical Engineering said (and I think they were representative of the general KAIST faculty reaction to this paper), basically that Laughlin’s ideas were fundamentally opposed to KAIST’s whole raison d’etre.

The EE response was

“1) Loyal to the founding objectives of our institution, we will continue to do our utmost as we have done in the past to educate…” blah blah blah. basically, no change.
3) We’re No. 37 in the world, according to a report published in the Korea Times. (paraphrase)
4) Opposed to privatizing and pre-med, pre-law stuff (paraphrase)
5) “we are in complete agreement with the President’s assumption that KAIST needs to change and reform.”

So, basically, they are totally open to reform and change, as long as nothing really changes. Point 6 was a favorite:

“6) We believe that in order to overcome the difficult problem of low popularity of science and technology career among our young people in a sensible manner, the entire industry, the Government and the educational institutions should combine their wisdoms for a search of proper solutions.”

Sorry, but “we need to find a solution” is not a solution, even when you try really, really hard.

Laughlin then bid a strategic retreat, regrouping and offering a softer set of objectives in a 1 Feb. 2005 press conference as he tried to square the circle of his reforms and the faculty’s insistance on not changing. He said that everyone was on the same team and reform was going well, but his words already rang hollow. He had tried an ambitious reform, but the faculty rebelled, insisting that there would be no substantial changes. The Ministry of Science made no significant effort to support Laughlin’s ideas. And from that point on, the end was just a matter of time.