Report of the President

For the Academic Year 1991-1992

President Charles M. Vest's annual report to the MIT community, October 1992.

© Copyright Massachusetts Institute of Technology, 1992. To reprint or excerpt for publication, please contact the MIT News Office at, or (617) 253-2700.


"A slow sort of country!" said the Queen. "Now here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"

Lewis Carroll, Through the Looking Glass

Excellence in an Era of Change and Constraint

America's research universities are faced with a central challenge -- to retain and enhance excellence in a time of fiscal constraint and societal uncertainty. We are experiencing a deep sense of frustration because never in our history has the field of intellectual challenge and opportunity or the need for our services to the nation and the world been so great; yet never in recent decades have we experienced such fiscal constraint or sensed such a fall from grace with the public and the government. We are not in crisis, but we are in a precarious state, one that may be more difficult to grasp and respond to than crisis.

But respond we must, because this is a time in which we at MIT and our colleagues around the country should solidify and expand our roles as leaders in this increasingly complex world. We must define new disciplinary futures and invent new intellectual pathways to understanding the physical, biological, economic, and artistic universes. It is a time in which we must do our part in shaping the future.

The challenges before us are great. We must:

*continue to lead the revolution in molecular biology and advance the promise of biotechnology;

*come to understand the workings of the human brain and the nature of intelligence;

*bring the highest quality of mind to assessing and ameliorating humankind's effects on the earth's environment;

*secure the advances of computers, communications technology, and the information marketplace for the social good;

*better understand organizations and businesses and how to make them more effective in building vital and sustainable economies;

*combine the aesthetic and the technical in the design of the physical environment and in the creation of more livable cities;

*renew -- through our unique intellectual and creative environment -- the liberal, visual, and performing arts that in such large measure define what it is to be human.

University presidents, provosts, deans, department heads, laboratory directors, and other academic administrators rightfully understand their tasks to be to lead and serve, rather than to manage in a narrow sense. Universities are not, and must never become, simply businesses. Our essence and our human purpose run far deeper than that. Nonetheless, leadership for the 1990s requires an understanding of rapidly shifting conditions, opportunities, and resources. The human resources of America's research universities are truly extraordinary, but our fiscal resources are dwindling in real value. I believe that the times require of us uncommon attention to financial and organizational planning and, indeed, management. This attention must come not only from administrators, but also from faculty and staff throughout the academic community. We must all act concertedly, and with wisdom and dispatch, if we are to serve our societal purposes.

The Forces That Drive University Finances

The budgets of American universities have been affected for the last several years by opposing forces. On one side we are faced with declining rates of revenue increases and a general decline in the climate for support of higher education. Dominant factors include the concern of students and their families about college costs, a leveling trend in federal resources for education and university research, and a loss of national will to address the broad spectrum of the country's educational needs.

On the other hand, we are faced with increasing costs, expectations, and obligations. The cost of what we already do is rising, and there is an escalation in what we expect of ourselves and what society expects of us.

One of the fastest growing components of most campus operating budgets has been student financial aid. The combination of rising tuition, rapidly declining federal scholarships and grants, and more recently, the effects the national recession on family incomes have rapidly accelerated the need for financial aid. Federal grants to students have declined in real value by a factor of two since 1980. As recently as 1975, 70 percent of federal student aid was in the form of scholarships and 25 percent was in the form of loans. Following the trend of so many other things in our society, by 1991, only 31 percent of federal student aid was in the form of grants, while 66 percent was in the form of loans.

At MIT, 45 percent of MIT's student aid came from the federal government in 1975, compared with 31 percent in 1991. In 1975, the federal government provided 19 percent of scholarship grants at MIT, while the Institute provided 67 percent. By 1991, the federal portion had dropped to 11 percent, while MIT provided 81 percent. The reduction in the level of federal support, and the shift from grants to loans, have significant financial consequences that have been borne by the Institute.

Research universities are subjected to strong market forces associated with hiring new faculty members of the highest quality. Salary competition is pervasive, and the costs that universities are expected to bear in order to start the research career of a new faculty member in many branches of science and engineering are measured in hundreds of thousands of dollars. In many fields, the bidding for faculty members has included the promise of greatly reduced teaching loads -- a trend that we must resist.

Establishment of a healthy and vigorous research environment is often very expensive. Major costs include modern equipment and instrumentation and the associated technical support staff.

During the past decade, the revolution in information technology has brought with it an indispensable but very costly budget line that hardly existed theretofore. Microcomputers and workstations, campus network infrastructures, and the corresponding staff to manage and maintain information systems have become pervasive and essential features of university campuses. The demand for increasing capacity, speed, and sophistication has accelerated rapidly. This revolution has expanded greatly the breadth and complexity of educational and research topics with which we can deal. Yet these advances are costly. It is already common for 2 or 3 percent of a campus operating budget to be associated with information technology.

Libraries, even in their most traditional form, have been sources of particular cost escalation. The cost of acquisition, storage, and preservation of scholarly books and journals has grown rapidly during the last decade or two, and most libraries have also had to carry the capital investment in automation of many of their records and functions. As we have moved into new optical and electronic forms of information storage, libraries have tended to add to, rather than replace, traditional printed materials. Every campus library has been engaged in cutting back on the numbers of its journal subscriptions and book acquisitions. Yet during the last two decades journal subscription rates have often risen by many tens of percents in a year.

Not surprisingly, there is a rather large litany of regulatory and legal matters, as well as social mandates, that have caused costs to grow very rapidly on campuses. Issues of campus safety, access for the disabled, substance abuse monitoring, financial aid eligibility of students, conflict of interest matters, investigations of research misconduct, environmental regulation, the compliance reporting associated with affirmative action, matters of sexual harassment, and a variety of personnel issues in an increasingly litigious society are but a few of the many and substantial costs that are of relatively recent origin.

New intellectual trends, especially the growing importance of organizing to conduct highly interdisciplinary research and education, tend to bring new organizational overhead with them. The formation of new laboratories, centers, and institutes is sometimes encouraged by research sponsors, and is often believed to be necessary, in order to conduct many interdisciplinary activities. These new organizations often require new space, as well as additional staff and services.

The past two decades have brought an expanded societal role for many of our colleges and universities. We all share a responsibility to be more reflective of the rapidly changing racial and ethnic makeup of our nation, and a need to make all career paths fully accessible to minorities and women. In addition, institutions have increasingly assumed, or had thrust upon them, various roles in the economic development of their states or regions. The daunting problems facing primary and secondary education have led many universities to undertake a variety of active roles in the improvement of K-12 systems and curricula.

Finally, there are many new services that we have either taken on, or very much wish we could better assist with, as socially responsible employers. These services reflect the changing nature and economic characteristics of the families and careers of our faculty and staff. Matters such as health care, child bearing, child care, housing and retirement, not to mention care of the elderly, all impose new or rapidly growing costs or potential costs upon our institutions.

New tasks, new roles, and new responsibilities -- but no corresponding new revenues -- have become a familiar situation in academe.

A National Perspective

Academia today exemplifies the adage that misery loves company. Last year, nearly 85 percent of the nation's colleges and universities reported that securing adequate financial support was one of their three most serious challenges. During 1990-91, 45 percent of our colleges and universities announced mid-year budget cuts. This was not a one-time anomaly; 57 percent implemented mid-year cuts during 1991-92. The budgets of public universities, because they are subject to the variations and changing priorities of state legislatures and administrations, tend to fluctuate more rapidly and over a wider range than those of private institutions. But the basic financial trends of both types of institutions are depressingly similar, and the private institutions have fewer options available to them for the long range amelioration of their financial problems.

To put higher education's revenues into some historical perspective, we must examine both how the levels and sources of revenue have changed and also how the use of those revenues has varied. The total operating budgets of all public and private doctoral-granting universities grew in constant dollars by 109 percent, from $31 billion to $65 billion during the last 20 years. More than doubling operating budgets in 15 years hardly seems like austerity, so why are we sensing such constraint? The answer seems to be twofold: we are taking on more tasks and we are teaching more students. Enrollments have grown (99 percent in public institutions and 50 percent in private institutions) during the last twenty years, continuing to grow monotonically even during the years in which the number of 18- 24 year olds in the US declined by more than 20 percent.

The operating revenue of private, doctoral-granting institutions has grown from roughly $12 billion to around $23 billion in constant dollars during the last twenty years. The most dramatic change in the source of these funds is that the federal government supplied nearly 30 percent twenty years ago, but only about 18 percent today. The fraction of operating revenue (26 percent) derived from tuition and fees has increased slightly during this period, while that arising from endowment has remained constant at about 9 percent. During this period, the fraction of operating revenues derived from auxiliary activities, including hospitals and federally funded research and development centers, has increased substantially, from 29 percent to 40 percent. The trends for public universities are similar, but, of course, they have a high dependence on state support (approximately 40 percent across all such schools, but with wide variations among them).

Tuition across the country, especially that of private universities, has rather consistently followed the ups and downs of variations in the consumer price index (CPI), but for fifteen years the annual increases have been greater than the CPI. This is because the cost of the majority of goods and services needed by universities -- such as scholarships and fellowships, books and journals, faculty and staff salaries -- tends to rise more quickly than the CPI. Hence, while general inflation has been a primary driver of tuition, the specific costs borne by tuition have grown even more rapidly. It should be noted that while the tuition of the major private universities grew by nearly 300 percent from 1976 to 1991, its real growth, i.e., growth adjusted for inflation, was 55 percent. Interestingly, the contribution of tuition to the operating budgets of these universities grew by only about 3 percent during the past fifteen years.

MIT's Budget

How is MIT's budget faring in the current climate? The simple answer is that we are in a stronger position than many of our sister institutions, but that the forces on our budget have reached a critical point, one that requires concerted, Institute-wide action if we are to remain excellent and rebuild some flexibility to do the things that we believe to be important.

Our situation differs somewhat from that of most research universities. Because of our focus on science and engineering, and the consequent dependence on federal funding, we are particularly sensitive to government policy and budgetary changes. On the positive side, our historically strong relations with the private sector are important and growing assets.

To examine our current situation, note that we have only three primary sources of revenue -- tuition, federal and industrial research funds, and private support, including gifts and investment income.

Tuition rates are set annually at the Institute's discretion, but obviously must reflect the realities of the nation's economy, the corresponding need to supply financial aid, and our desire to remain accessible to bright students regardless of their family's financial situation. While tuition will continue to grow somewhat, MIT has begun to slow its rate of growth; this year's increase was 6.5 percent, the second lowest increase in 20 years.

Federal research support is earned by the efforts, innovation, and high intellectual quality of MIT's faculty, but it also depends on the congruence of our goals with those of the federal government and is subject to the shifting nature of the federal/university partnership. Research support at MIT has nearly leveled out during the last two years.

Private support is received in the form of gifts, grants, and bequests from alumni, alumnae, and friends of the Institute and from foundations and corporations. The development of private support requires considerable concerted effort and stewardship, and ultimately is a function of our institutional quality. Donations to MIT have increased very substantially during the five years of the Campaign for the future, and our endowment has grown from $1.2 billion to $1.6 billion in market value over that period, while total invested funds have increased in market value from $1.4 billion to $1.95 billion.

The state of the budget is crystallized when we set tuition levels and, of course, when we balance costs and revenues. Flattening research income, despite the increase in private support, has left us in a position in which there is nearly a direct relationship between annual tuition increases and the magnitude of faculty and staff salary increases. This is not a healthy circumstance. I believe that we must constrain the rate at which tuition grows, but also that we must retain our ability to pay the salaries and wages required to retain and appropriately reward faculty and staff of the highest quality. This dilemma must be resolved.

MIT's endowment grows through the receipt of gifts and the investment of its funds. During the period of the Campaign for the future , we have done well by both measures. For example, we have been able to create 58 new full professorial chairs and 33 career development professorships. Each year we spend a portion of the interest earned by the endowment equaling between 4.5 and 5.0 percent of its principal. Of course, on the average, the endowment earns more than this, but by policy we plow the difference back into the principal of the endowment so that it will grow at least at the rate of inflation. In this way, we maintain the purchasing power of the endowment over time so that, for example, professorial chairs and student fellowships retain their value in perpetuity.

There are two key measures to consider when we attempt to balance our operating budget -- the deficit and the operating gap. The operating gap is the difference between our expenditures and directed revenues such as tuition, research funds, fees for service and most endowment income. This gap must be filled by discretionary resources in the form of annual unrestricted gifts, grants, and bequests. If the addition of these discretionary resources still does not bring our available resources to the level of our expenditures, we are left with a deficit. For the past 15 years, the operating gap has averaged around $5.7 million, but for the last three years this gap has ranged between $9 million and $13 million. The deficits between 1976 and 1988 were very modest, averaging nearly zero, with small surpluses in a few years. In 1989 and 1990, deficits grew to around $4.5 million. In 1991 we were able to bring it down to $300,000, but only because there was an unexpectedly large amount of unrestricted gifts and bequests received that year to fill the operating gap. In 1992 our deficit grew to $6.3 million.

The result of recent budgetary pressures, therefore, has been that our annual deficit has been running at about $5 million and is projected to increase further. This is troubling. Despite the fact that this is less than one percent of the campus operating budget, it is clear to all who have observed the federal deficit that, if unchecked, its effect will grow over time and leave an unfair penalty for the Institute in the downstream years. In my view, however, it is the development of a decidedly substantial, structural operating gap of at least $10 million that is of the most serious concern. The use of much of our annual, unrestricted gift income to fill the operating gap represents a loss of flexibility to fund new initiatives, to seed innovative educational and research projects, and to ameliorate our growing financial aid burdens. It also does not bode well for the appropriate compensation of faculty and staff if this situation is left unchecked.

MIT's Growth

A recent examination of the growth of faculty, students, and staff at MIT over the last 15 years indicated that in many ways our trends are similar to those of other major research universities around the country, although in one important measure, faculty size, we are somewhat distinct. We have maintained an essentially constant faculty head count during this period while many other institutions expanded. Currently, we have 966 assistant, associate, and full professors, 73 percent of whom are tenured. The discipline of maintaining this constant faculty size, I believe, has lessened the depth of financial pressures at MIT relative to that at some universities, but it has not eliminated them.

MIT's undergraduate enrollment has stayed essentially stable at 4,300, while our graduate enrollment has grown by almost 1,000 -- to 5,200 -- during this period.

As at virtually every other research institution, there has been an increase in staff during this fifteen year period, especially during the first few years. Administrative, support, and service staff have increased roughly 7 percent, from 3,699 in 1976 to 3,976 in 1991. Why? This growth was the result of such factors as an increase in services required by faculty for their research and educational activities, a 70 percent growth in the head count of other academic staff,* the increasing bureaucratic overhead required to conduct sponsored research programs and to comply with the upward spiral of federal regulation, the establishment of a pervasive computing environment, the establishment of a major organization for fund raising, and the development of a comprehensive medical department. Simply put, we have grown in complexity in response to enhanced internal needs and expectations and to externally imposed requirements. Unfortunately, many of these new tasks have not brought with them new revenues.

* Other Academic Staff includes instructors, technical instructors, lecturers and senior lecturers, adjunct faculty, visiting faculty, postdoctoral fellows and associates, senior research scientists, visiting scientists, coaches, and medical staff.

It is fair to say that by far the bulk of growth of administrative, support, and service staff has been driven by academic needs. Indeed, the size of the staff on the administrative side of the house (i.e., those reporting to the vice presidents) is at virtually the same level (2,200) as in 1976, having grown slightly and then been reduced in the early 1980s. The administrative, support, and service staff in the academic sectors (schools, departments, and laboratories), however, has grown by 16 percent -- from 1,481 to 1,721 -- during this period, reflecting the increasing need and demand for academic support services. Similarly, research staff increased in head count by 47 percent -- from 650 to 953. Each of these additions has been a conscious, local decision, ultimately agreed to through the deans or directors and the provost.

Revenue Enhancement

There are only two ways to bring a budget into balance -- increase revenues or cut costs. In my view, both are called for at the present time. In examining both options we must always remember the obvious -- our mission is not a financial one; it is one of teaching, research, and service. Our revenues are only the means to an end, and the structure of our budget should be a direct reflection of our substantive goals and aspirations.

I am confident that the excellence of our faculty and students and the quality and innovative nature of faculty activities will assure that our federal research support will remain strong. But there are two caveats. First, by small step upon small step, federal agencies are backing away from paying the full costs of the programs that they sponsor, including research and fellowships. Second, the directions of federal research policy are in flux as a natural consequence of the end of the Cold War era and because of the advent of new concerns associated with issues such as the environment, health care, and industrial competitiveness. America's research universities must respond to these changing conditions, but more importantly, have a responsibility to help shape policies and programs in the national interest.

There are many object lessons and reasons for optimism in recent MIT initiatives. Let me cite two -- the Leaders for Manufacturing Program and the MIT Japan Program. Leaders for Manufacturing is an innovative master's level program designed and implemented in close working partnership with several US manufacturing firms to educate a new breed of managers and engineers equipped with a broad, integrated understanding of manufacturing and management science, technology, and organization in a contemporary, international context. The MIT Japan Program provides a number of MIT undergraduates with in-depth Japanese language training, combined with education in Japanese culture, history, and business practice, and places them, upon graduation, as interns in Japanese industrial and research organizations. These students then return to the US with a detailed working knowledge and understanding of Japanese practices and techniques, as well as with the general benefits of international acquaintances and cultural experiences. Both of these programs respond to a clear national need; both are conducted in a world-class manner; and both have created very substantial new revenue streams for operations and student support, because the importance and effectiveness of the investment have been made clear to corporations and to the government. It also should be noted that both are primarily educational activities.

We should move forward with confidence that programs conceived with excellence, educational innovation, and long-term economic and social relevance will still find appropriate partners and sponsors. These partners and sponsors should come increasingly from the private sector, but it would be unrealistic to imagine that this will to a major extent replace federal funding. It remains a necessary function of the federal government to support the advanced education and research on which the future so directly depends.

We and our colleagues must continue to press for federal support of the full costs of programs, and to press for merit as the prime determinant of grants, contracts, and facility funding. Academic earmarking has reached the extraordinary level of nearly a billion dollars in the new federal budget -- more than was contained in the total of budgets during the previous decade. Although we must recognize legitimate concerns such as geographic distribution, it is not in the interest of the country to cut off the tops of its mountains in order to fill in the valleys. Surely the wisest policy for the country cannot be random selection for awards, based on the location of schools in particular congressional districts, and funded with moneys removed from the already stressed resources of programs and agencies. The great public and private institutions must be maintained. They are magnets for the best thinkers and researchers, and their facilities and graduate schools are the peaks of excellence to which students from schools and colleges all over the country aspire and matriculate. The set of these institutions is dynamic, with new universities moving into its ranks the old fashioned way -- by hard work and good ideas.

Having said this, the clear prognosis remains that the rate of growth of federal funds is being attenuated and the number of universities capable of productively conducting high-quality research and education is expanding. Substantial growth in overall research funding is therefore unlikely in the near term.

The outlook for private support is something of a mixed message. Through the very successful Campaign for the future, we have significantly increased MIT's level of private support. Our alumni, alumnae, as well as our staff and faculty, have worked very hard and effectively to make this happen. We must meet the challenge of continuing the momentum generated by the campaign. Resource development will need to become more deeply ingrained in the MIT culture. Continuing to increase the level of private support will be a strong challenge, but one that I have confidence we can meet.

The other side of private support, of course, is that the real value of our endowment depends on the performance of the market and the quality of our investment strategies. Our track record is good, but it also appears to most observers that returns will not be as great in the coming years as those that were possible during the last decade. Thus, major expansion of private support is somewhat problematic.

Learning Institutions

We cannot assume that the resources of universities in general, and of MIT in particular, will grow significantly in the years immediately ahead. Thus, the only way to assure that we maintain excellence and have the flexibility to strike out in exciting new intellectual directions, to be a high quality employer of faculty and staff, and, above all to meet our responsibilities to our students and the nation, is to do less, do different things, or gain efficiency. In my opinion, we must do all three. Indeed, there is no choice. We must be as open to new ways of thinking about how we operate and how we teach as we are to new lines of research and scholarly inquiry.

Universities must thoughtfully and continuously review and prune their programs and organizations in addition to creating new ones as times and intellectual frontiers change. Similarly, we must continuously review and renew the services that we provide to our faculty and students. Only in this way can we assure the excellence of what we are and what we do.

I am fond of quoting Frederick Terman, an MIT alumnus who became engineering dean and provost at Stanford. When once asked whether he wanted his university to be a teaching institution or a research institution, he replied that it should be a learning institution. Today, universities must also be learning organizations in the sense developed by Peter Senge of the Sloan School of Management: organizations that come to understand and react wisely to the opportunities and constraints they face. We must study the work of our own management scholars and we must learn from the substantial transformations of industries and other organizations around the world during the last decade or two.

The MIT Ad Hoc Faculty-Administration Committee on Indirect Costs and Graduate Student Tuition, for example, has proposed an MIT Quality Initiative to adopt the principles and lessons of Total Quality Management (TQM) within the Institute. I would use the term 'adapt' rather than 'adopt,' because we are a university, not a manufacturing or commercial service organization. However, the results of quality initiatives in a variety of settings have been so substantial that we cannot afford not to commit ourselves to serious exploration, experimentation, and implementation of these concepts and techniques.

In fact, there are three major areas in which such activities are already underway. First, the entire Information Systems group has for several months been studying and planning full-scale implementation of a TQM program to improve their service to the Institute community and to gain efficiencies in their operations. Second, campus departments that provide human services, ranging from Admissions to the MIT Press, and from Personnel and Public Relations to the Medical Department, have been meeting and working with external and internal experts to develop an approach to quality management that is appropriate for the MIT culture and that merges with their Building on Differences program -- a program designed to enhance productivity and the quality of professional life in an organization of highly diverse individuals. Third, a faculty initiative resulted in a major grant from the IBM Corporation that made possible a week-long seminar in their facilities that was attended by 50 faculty members and 25 staff and administrators from MIT in early September. The opportunity for this cross section of the Institute community to study and plan together how to enhance the excellence of all that we do as an institution was extraordinary. We shall build upon the momentum developed by this group.

It is my belief that we must increasingly consider and operate MIT as an integrated organization. Our faculty, students, and staff must act more as a seamless community. Despite the fact that we must always be an environment in which individual achievement and disciplinary excellence are fostered, we must pay increasing attention to integrated activity and teamwork. In research and education, new approaches to teamwork and interdisciplinary problem solving are flowing naturally from the complexity of many of the most interesting areas of modern research and scholarship. Similarly, institutional complexity and constraint require that we approach our administrative support activities with greater communality of purpose and explicit cross linkage.

We must in these and many other ways seek to improve the quality and efficiency of our support services. But these efforts must also touch the heart of what we do -- teaching and research. Are we teaching the right courses in the right way? Do we maintain archaic approaches to classrooms and laboratories? Are we making the appropriate use of the very information technologies that we develop here? Is the information flow among faculty, students, and administrators designed to enlighten or to generate entropy? Can we gain greater efficiency in the more mundane of our duties in order to free time and resources for the really important aspects of academia? Do we have too many committees? Do we have the proper balance of formal and informal contact with our students? Are research proposals prepared in such a way that faculty can concentrate on their essence and quality rather than the bureaucratic details? Do we communicate effectively with the public, the government, the business world, and our alumni and alumnae? Are there redundancies in our operations? Do we consciously determine where we should cut back in order to make new programs possible? Do we maintain the proper balance of teamwork and individual activity? Do we allow responsibility to be exercised and decisions made at the levels where knowledge and understanding are greatest? Do we strike the congruence between the goals and needs of the Institute as a whole with those of individuals within it? Do we plan for, and invest our intellectual and financial resources in the future, or squander them on issues of the moment? Do we learn and improve as an organization as well as individually?

Ensuring the Future

Our times are times of change and uncertainty...and promise. In four decades, we have moved from an era in which the United States produced over half of the world's gross product to one in which we produce just over 20 percent. It is a world in which challenges of energy, environment, and human survivability are becoming paramount. It is a world in which idealism and concern for our fellow men and women have become rare commodities.

And yet, it is a world in which our understanding of the basic nature of life and of the physical universe is expanding exponentially. It is a world in which the integration of knowledge across seemingly disparate disciplines is producing startling new insights and intellectual directions. It is a world in which the range of temporal and physical scales with which engineers and scientists can operate has become vast beyond belief. It is a world in which the blending and cross-currents of among men and women of different races and cultures can give rise to new synergies for the advancement of civilization.

It is a world in which we at MIT can and must dream of new futures. And as we do, we must cherish those values that have made us great. We must demand excellence. We must celebrate both the solitary, iconoclastic scholar and the multi- disciplinary group. We must value both abstract thought and practical application. We must treasure both the diversity of our community and the communality of our deeply rooted values. We must, in sum, hold to a vision of MIT that draws on the best we have and the best we are, and that gives to the world the full measure of our talent and imagination.

These are the things that are at stake as the economic and societal underpinnings of the American research university, and of MIT in particular, shift and change. These changes must be met with a clear-headed view of financial realities. We must be both prudent and far sighted, and we must act carefully but decisively to shape our finances, our activities, and our organization in order to retain and enhance the excellence that is so critical to a vibrant future for ourselves and for our fellow men and women.

Charles M. Vest
October 1992


Resources used in preparing this report included the Caspar Database of the National Science Foundation; Science and Engineering Indicators, 1991 Edition, National Science Board; Science and Technology in the Academic Enterprise: Status, Trends and Issues. October 1989; Higher Education in a Changing Economy, edited by K. H. Hanson and J. W. Meyerson, American Council on Education, 1990; Inflation Measures for Schools and Colleges, 1991 Update, Research Associates of Washington; Higher Education Revenues and Expenditures, Institutional Data FY1990, Research Associates of Washington; Trends in Student Aid 1982-1992, College Board; Campus Trends 1992, edited by Elaine El-Khawas, Higher Education Panel Report Number 82, July 1992, American Council on Education.

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