Average in-state tuition and fees at four-year public colleges rose an additional $631 this fall, or 8.3 percent, compared with a year ago. (Jacquelyn Martin/AP)

This piece is part of an On Leadership roundtable on higher education and the 21st-century leadership challenge for university presidents.

America once again finds itself at a crossroads. But what has happened to our nation is not the result of a global banking conspiracy or the collapse of the housing bubble. Instead, we have been so successful at selective innovation that many of our traditional pathways to economic success are now closed. A good job in public safety or at the plant down the road no longer provides the economic return necessary to fully participate in an economy designed around innovation and technological advancement.

No one deliberately designed an economy in which these core drivers of success—innovation and technological advancements, manifested through new business formation and investment—push people off their farms, offshore their jobs and drive wages down in many sectors. Unfortunately, these have been the unintended consequences.

The only path forward for the United States is to continue on this historical trajectory of perpetual innovation, a path forged by education. Following the Second World War, our nation emerged to lead the world in educational attainment, and from there led the way to scientific discovery, new business start-ups, new industrial sectors like biotech, pioneering military preparedness, and astonishing feats of human creativity and technological genius, like landing humans on the moon or creating an Internet economy.

We are now falling from the lead on many of these indicators of success. There has even been a rise of those within our own country who believe that the American economic zenith has passed and that now it is time to retrench and cut back on investment in higher education.

Yet higher education is the single most critical adaptive function in our society. Can we educate all Americans to be more creative and entrepreneurial? Can we redesign our outmoded K-12 education system to produce students who can succeed in our colleges and universities? Can we rearticulate our community colleges to better perform their critical role in advanced training and university preparation? And, can we find a way to reconceptualize our universities to prepare broadly educated master learners who can adapt over their lifetimes to the changing socioeconomic conditions of the global knowledge economy?

All of this is possible if academic leaders emerge who understand the imperative for innovation to be both a process applied to higher education and its critical outcome. What is missing at present are leaders creating such models—that is, pathways for more students to achieve higher levels of educational attainment while graduating at the lowest possible cost. At present, we are not trending toward success at the levels necessary for continued social and economic development in the decades ahead.

Public universities, which educate nearly 70 percent of our college graduates, have declining graduation rates, rising costs of access, and higher rates of dissatisfaction from families and public investors such as state legislatures. Universities, both public and private, have generally reacted to the economic slump and escalating costs of the past few years with retrenchment rather than even minimal expansion. Their lack of creativity in adjusting to the reduction of resources has shocked governors and business leaders alike who want to see universities innovate in order to educate more students better, faster and cheaper.

Unlike other sectors, higher education is dominated by a model in which status is attained through the maintenance of scarcity. Such scarcity is sanctioned by tradition and attained through exclusivity. Historically, status hasn’t been measured through impacts on local, state or national socioeconomic success, nor achieved through indicators of innovation or reductions to the cost of learning.

Higher education is languishing because we have not generally created the conditions for the emergence of effective leadership. Governing boards often focus on status to the exclusion of outcomes, overlooking the essential correlation between an institution’s strategic goals and social and economic progress. Moreover, boards often become sidetracked by issues of local political immediacy.

In short, we often lack adequate leadership in higher education because leaders are not sufficiently directed toward the production of outcomes that address regional, state and national goals. This is especially the case for community colleges and regional public universities focused on teaching rather than research. These institutions are seen as subordinate in the status hierarchy and their efforts at innovation little incentivized or recognized.

It is this lack of innovation by academic leaders that has left room for a proliferation of pushback in the form of incomplete ideas and poorly conceptualized policies. Among such ill-conceived schemes are proposals to effectively turn universities into businesses. Some are proposed by frustrated state leaders desperate to educate more students without bankrupting newly fragile state governments. Others suggest that we send our kids to college in the basement with the local online university when, to the contrary, the level of focus required for competitiveness in the knowledge economy is best produced through immersion—students actually working with and learning from one another, side by side.

At a time when higher education is critical to national success, we need colleges and universities to be more accessible and successful at the scale our nation requires. We need leadership that recognizes academic enterprise as intrinsic to the intellectual core of the institution. We need academic leaders focused on innovation.

In order for our nation to retain its economic competitiveness, we need to change higher education’s criteria for, and measurements of, success. We need leaders with the vision and capacity to advance our national higher education enterprise, and subsequently our entire educational system, to new levels of performance and attainment. If we fail, we imperil the American dream in the present and for future generations.

Michael M. Crow is president of Arizona State University.

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Read More:

Mark Taylor: Why university presidents refuse reform

Paul Portney: Higher ed’s leadership vacuum

Howard Gardner: The rise and fall of the university emperor

Anya Kamenetz: Sacrificing the higher-ed sacred cow