Capitol Gains: Commercial competition from universities.
The issue of workforce development, training and education of the next generation of surveyors, photogrammetrists and other professionals and technicians in the geospatial field is becoming a topic of increasing concern.
It also raises a question as to what role universities should play in preparing individuals for their careers.
Surveyors, traditionally licensed by the states, are increasingly required to have a four-year degree from a university accredited by the Accreditation Board for Engineering Technology (ABET). More states are including photogrammetry and GIS activities in their licensing laws, and the National Council of Examiners for Engineering and Surveying (NCEES) model law now includes both disciplines.
Whatever the state requirement may be, the role of an educational institution is to raise up qualified professionals to enter a competitive marketplace. However, the universities themselves are increasingly becoming their graduates’ toughest competition.
Under the guise of “research and education,” schools of higher learning are engaged in commercial activities that are far from their institution’s charter. This government-sponsored competition is causing concern in the geospatial community as universities are entering the mapping, remote sensing and geospatial business by selling services in the commercial marketplace.
It should be noted that this competition from universities is not just invading mapping. Dozens of other private industries and professions are also being affected, including bookstores, hotels, audio-visual services, television programming, printing and publishing, health clubs, software development, information technology, biomedicine, laboratory testing and others.
Universities should be teaching students and conducting research in new methodologies, NOT performing commercially available services in competition with private firms.
Big Problem for Small Business
University competition in the commercial market is not unusual. In fact, it is becoming the norm. At MAPPS conferences over the years, attendees have increasingly indicated that they have encountered competition in the marketplace from universities. More than 85 percent responded to a recent poll that university competition was an issue that deserved public policy attention. Mapping has been subjected to unfair competition from government-sponsored entities in the past, but particularly since the 1980s. A 1980 report by the Small Business Administration also singled out universities as a major source of tax-dollar-supported unfair competition with private companies, particularly small firms.
Numerous factors have led schools of higher education to venture away from their core mission to teach and conduct basic research. Financial demands, such as reduced government funding and pressures to limit tuition increases, have led university presidents to transform academicians into entrepreneurs who will bring in revenue from commercial activities to supplement university budgets.
Universities enjoy significant advantages over for-profit companies. They are eligible for billions of dollars in grants from federal and state governments. They often have the ability to secure noncompetitive, sole-source contracts with government agencies. They pay no taxes. Their overhead--buildings, electricity, even equipment--is already paid for by the university so they do not need to charge fees to cover these costs of doing business the way private firms must. Their student labor force is either unpaid or compensated at well below prevailing market wages. They carry no professional liability insurance, do not have to pay unemployment compensation and in many cases are exempt from Social Security contributions. When universities enter into contracts to perform services, they usually insist on “best effort” clauses, which absolve them from completely finishing a project. They are also recipients of millions of dollars of free or discounted hardware and software, which firms provide with the expectation that students will learn on their systems, be proficient in their use upon graduation and instill a consumer loyalty that will translate into sales once these students move up in the ranks of their employers.
Nonprofit organizations are provided special tax status under section 501(c) of the Internal Revenue Code. That special “exempt” treatment is clearly intended for “governmental” activities rather than commercial. A report by the House Ways and Means Committee, a congressional tax-writing committee, noted:
The exemption from taxation of money or property devoted to charitable and other purposes is based upon the theory that government is compensated for the loss of revenue by its relief from financial burden which would otherwise have to be met by appropriations from public funds and by the benefits resulting from promotion of the general welfare.
As a long-time advocate of small businesses, I believe that the advantages universities bring to the marketplace make it virtually impossible for private firms to compete.
An example of university competition with the private mapping community is North Carolina State University’s (NCSU) production of electronic image-based maps, known as digital orthophotos, for the National Park Service (NPS). Procurement announcements for aerial photography issued by the NPS include specific instructions that the photos are to be delivered to its contractor, NCSU, for the professional value-added process of creating digital orthophotos. In my opinion, there is neither educational nor research value to the NCSU operation. The services performed are widely available at dozens of private firms and involve processes and techniques resident in numerous commercial enterprises.
Another example is the University of Florida. It has purchased fully equipped aircraft and LiDAR sensors in order to provide commercial production services on LiDAR projects in direct competition with the private sector. LiDAR was a NASA program that was commercialized more than a decade ago. Today, it’s a proven technology--and a commercial activity. Government agencies at the federal, state and local levels, as well as private clients, regularly retain private firms to provide commercial LiDAR services. Private firms are engaged, on a daily basis, in research and development of LiDAR applications for current projects and are continuously developing new applications to market to their clients. Yet the University of Florida and the University of California-Berkeley secured National Science Foundation (NSF) funding for the establishment of a National Center for Airborne Laser Mapping.
I am surprised that many universities are not bashful about the operational and commercial nature of their activities. Although some professors view the practice as unethical and refuse to participate, others are resigned to the fact that the financial survival of their classroom programs is dependent on performing outside work. Still others find nothing wrong with the practice. They view commercial services as a normal and necessary part of classroom instruction and research.
One possible solution to university competition might be a congressional review of the Higher Education Act, which would focus on universities and their core missions in education and basic research. This review could result in legislation to apply a “commerciality” test to all noncore university activities. Any university that receives direct federal funding or indirect funding through tax-exempt or nonprofit status could be prohibited from performing commercial, tax-generating activities otherwise available in the private sector. In addition, the IRS could more vigorously enforce current rules governing the tax status of universities to assure that academic activities are indeed related to research and education, not commercial production.
In my opinion, individual universities practicing professional ethics and academic integrity should adopt policies stating that they will not compete with the private sector and that they will engage in a peer-review process with private geospatial firms to examine proposed projects before they are initiated to determine whether the project violates a “commerciality” test.
It is time for the geospatial profession to come together to agree on a strategy, accreditation and licensing programs, and respective roles and responsibilities for universities and private firms. The need to attract and train the next generation of geospatial professionals is not only critical to the profession, it’s critical to the U.S. economy, as well.
1- www.ucgis.org/docs/UCGIS_position_MAPPS_lawsuitFinal.htm .
2- “Unfair Competition by Nonprofit Organizations with Small Business: An Issue for the 1980s,” U.S. Small Business Administration, Office of the Chief Counsel for Advocacy, 1983, p. 52.
3- Unfair Competition: The Profits of Nonprofits, James T. Bennett, Thomas H. DiLorenzo, Hamilton Press, 1989, p. 26.
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Sidebar:The Next GenerationIt is well known that the Department of Labor has identified the geospatial community as one of the top high-growth job markets in the United States economy. In 2004, U.S. Secretary of Labor Elaine L. Chao announced grants of more than $6.4 million to address the workforce needs of the geospatial community.
The Labor Department’s Employment and Training Administration is supporting business, education and workforce development partnerships to address the workforce needs of private surveying, mapping and geospatial firms while also helping workers find jobs and a rewarding career in the geospatial profession.
The surveying profession already has career development programs in place. Trigstar, an annual high school mathematics competition sponsored by the National Society of Professional Surveyors (NSPS), is based on a practical application of trigonometry that introduces young people to the technical profession of surveying and mapping. NSPS and NCEES jointly developed “Measuring the World Beyond Us,” a program to bring surveyors into the classroom through “career days” in order to introduce students to the surveying and mapping profession.
The Labor Department program is designed not only to attract young students into geospatial careers but also to re-train workers from declining industries for employment in geospatial technology. Grants have been used to develop new training strategies, such as internships, distance learning and accelerated training; to develop tools and curriculum for enhancing the skills of geospatial technology professionals for nationwide distribution; and to enhance the capacity of educational institutions to train individuals to accepted competency levels for professionals and technicians. There is no question that such programs are needed. The debate lies in whether such funding should be funneled into educational programs that are in direct competition with the private sector.