Lexington, KY - Recently named interim dean of the University of Kentucky's Gatton College of Business and Economics, Merl Hackbart, Ph.D., talked with Business Lexington's Tom Martin about Gatton's need for new facilities and graduates that meet 21st century expectations.
TM (Tom Martin): What's new at Gatton?
MH (Merl Hackbart): This is a big year for us at the Gatton College. First of all, we are going through reaccreditation. Business schools that are accredited by AACSB (Association to Advance Collegiate Schools of Business) go through reaccreditation about every 10 years, and this happens to be the year that we are up for reaccreditation. So that's added a lot of additional work and effort, and it also helps us focus on the future as well.
TM: Does an accreditation team look at a school's facilities and, if so, might a recommendation of a new facility for Gatton work to your advantage, perhaps as a driver?
MH: They look at our facilities and certainly that's a major part of our ability to provide the highest quality business education. One of our priorities for the college is a new facility. At the present time, we have approximately 2,400 undergraduate students; in fact, this year, we're above that. We're probably closer to 2,500 students. We feel that our capacity, both in terms of facility and staff, as well as physical facilities, is basically in the 2,300 to 2,400 range. Consequently, over time we've had to monitor the admission standards for upper-division students so that we can stay within the capacity that we have in terms of our resources and our physical facilities to deliver the type of business education we feel that students enrolling in our college certainly deserve.
So certainly that would be another aspect of the review, but we have been focusing on that for several years. And we hope that sometime in the near future, we will be given the bonding authority by the state legislature to permit us to move ahead on that particular facility, which we've given a lot of thought to, to make sure that the new facility will have the type of capacity, the type of facilities, that our peer institutions have.
TM: Your predecessor, Dean Sudharshan, was championing a concept for a new facility on the Avenue of the Champions. Is that still the working plan?
MH: It's still the working plan. I chaired the committee that worked on that with Dean Sudharshan, and we're trying to look forward, along with the university's 2020 plan, in terms of the enrollment goals that (former) President Todd had projected and to make sure that, if the new facility is finally approved and financed, that we'll have a facility that will permit us to grow and be able to accommodate a number of students that we feel we should be able to accommodate to effectively serve the share of the new enrollment growth that business schools typically would have.
TM: What is needed to ensure that the students that you are sending out into the business world are fully equipped?
MH: There's a lot of emphasis on the use of technology in the classroom, as well as the possibility of going to online programs (so that) students can obtain copies of lectures and basically provide real-time information about the lectures and those kinds of things. We want to make sure our students have a technical background, as well as knowledge of business concepts and issues, and they can only gain that by actually doing it. And so certainly group experiences, experiences using technology, are certainly a major part of the future of business education.
TM: What is the projected cost?
MH: The initial estimates were approximately in the range of $100 million to $120 million, but the cost of construction changes over time. The original estimates were probably in the $100 million range to provide the type of facility that not only would serve business students but would also provide classroom space and facilities for other students on campus. The building that we are presently in is still basically a good building which can be used for other deparTMents and other colleges on campus and provide the capacity for the university to facilitate its growth for the number of students envisioned by the 2020 plan.
TM: How would it be financed?
MH: The financing plan for the new facility has two parts. One, the college made a commiTMent to raise funds from the private sector, and that has gone very well. Alumni and other supporters have raised about $21 million. I think the original commiTMent was to raise approximately $25 million to match the resources that would be provided by the issuance of bonds to help finance the facility and, of course, to pay for the facility over the next 20 or 25 years. So we have sort of a twofold plan to finance the building.
TM: The mayors of Lexington and Louisville have proposed the formation of a "super region," anchored by their cities and focused on advanced manufacturing. From your perspective at the Gatton College of Business and Economics, is the university adequately structured to develop the kind of workforce that would be demanded by an increase in high-tech manufacturers in Kentucky?
MH: We have an excellent college of engineering. We have a fine computer sciences deparTMent. We have the biological sciences. Certainly in the medical field, we have the opportunity in our university to provide the types of individuals with the types of background experience, the educational attainment, which is certainly setting the stage for that. And I would assume that, if we're thinking about advanced manufacturing, we would also have to build on the capabilities of our community colleges and tech schools, because they are creating a different type of employee.
So you need the research component, and UK is in a position to provide the type of graduate who has innovative vision for the future and can do the research, develop the new products. I think our business school can provide the managerial staff in terms of new strategies, new ways to take advantage of new opportunities, ways and means of financing those new initiatives. And of course, in a global world, certainly accounting is also a key factor, because different accounting systems are used in different parts of the world with our trading partners. So we feel our business school graduates can be a major part of that initiative along with the more technical areas in our university, combined with the particular capabilities of students graduating from our community and technical colleges.
TM: Students are planning their futures in the midst of a down economy. What's your message to them?
MH: One of the major problems we're facing is a lack of confidence. In the early '80s, we had a recession that was at least as deep as this recession, that we just technically have come out of. But that recession was very short term - two or three years maximum. And all the recessions that we've had since the 1940s have been relatively short in duration. Therefore there is always an expectation that we'll just have to go through the downturn, but certainly as inventories are reduced, the major manufacturers will respond to those inventory reductions and the economy comes back out of the recession. That's been the general pattern.
This recession has been unique because of its duration, and because of its duration, we have the continuing problem of individuals, as well as policymakers, business and industry leaders, just not sure exactly what the future holds. Consequently, consumers delay expenditures, and businesses and industries are not sure about the future, and therefore they tend to defer invesTMents. Those invesTMents and consumer expenditures are the key components of demand. And if demand basically drops, there's less need to build more products and for the manufacturing sector to be active.
So we're sort of in a situation that we probably haven't experienced before. And because of the duration, we have this confidence problem. That's a challenge, and certainly it affects our students. For the students who graduated in the 1990s, everything was going well; the economy was growing at a very high speed, job opportunities were out there and available. Students today are looking at their future in a different way.
One of the results of that is a renewed and strong interest in entrepreneurship. In effect: "If I'm not going to find a job with a manufacturing firm, a national firm, or if other opportunities aren't there, I'm going to try it myself." And I think that's exciting, because it does restart the entrepreneurial spirit that's been at the heart of this country's economic growth for decades. I think it's going to be more personalized.
Historically, entrepreneurs probably came out of major manufacturing companies and, at mid-career, just said, "I've got a good idea and I'm going to break out and start my own business." I think we're seeing a new phenomenon, and that is new graduates, MBAs, engineers, who are basically saying, "OK, I think there are opportunities that I can develop for myself." They realize the general conditions, but that's not distracting their ability to pursue their own ideas.