Here we examine the changes in the industry that have spurred competition and the directions competition is taking. We take the broadest view of the whole industry, not simply the elite schools whose names are familiar to all but that educate only a few percent of all undergraduates. The goal of this chapter is to show that the higher education industry has a great deal in common with most other industries – having, for example, successful and unsuccessful organizations, with new entrants to the industry as well as exits from it, with schools borrowing money and developing credit ratings, with mergers occurring, and schools advertising and competing vigorously while collaborating when useful. The mixed ownership gives higher education a somewhat different character, but even that is by no means unique, with the hospital and nursing home industries, for example, having all three ownership forms, and other industries, such as the arts, museums, and antipoverty organizations, having at least two ownership forms in competition.

ENTRY AND EXIT OF PROVIDERS

The competitive process produces winners and losers. Some schools thrive and others falter – as in every other industry. Little recognized is that the higher education industry is very much in flux, with new schools emerging and existing schools closing, merging, and even switching ownership forms, as when a nonprofit college converts to a for-profit.

In recent decades there has been an influx of schools of all three ownership forms.