The Enterprise Model in Higher Education

In this video, ASU President Michael M. Crow outlines the strategic shift from traditional public university governance toward a bold enterprise model for higher education. Contrasting three core structures—private institutions, public agencies, and public enterprises—Crow explains how Arizona State University functions as a public enterprise: a mission-driven institution that serves the public interest while operating with the agility, innovation, and fiscal discipline of a private enterprise. This model allows for greater institutional freedom, diversified revenue streams, and reinvestment into student success and community impact. By moving beyond bureaucratic constraints and tax dependency, ASU demonstrates how universities can thrive through partnerships, financial sustainability, and market-driven innovation. This is a must-watch for higher education leaders, policymakers, and anyone interested in reimagining the structure and funding of public universities.

So so there's many types of ways that universities organize and operate. So there's private colleges and universities, which are owned by themselves. They have a governing board. They generate their own resources. They operate as a private enterprise. There's universities that operate as, basically, public agencies. In fact, that's most public universities, community colleges and so forth. They receive funding from the government and authority from the government. They build government buildings. They set tuition rates that the government sets with them, that they then receive money for students that are coming and they work in a political, bureaucratic model.

Then there's this model that we talk about called public enterprise, which is different from public agency. So it's more like a private university or a private enterprise, but it serves the public. And so there are public corporations in the United States that take on certain tasks and perform certain functions. And a public enterprise is therefore then like that, but focused on teaching, learning and discovery, in which the institution then operates outside of the normal public agency, public bureaucracy, operational modality, more partnerships, more alignments, more revenue sources, more dependency on marketing and success and the development of a positive margin for reinvestment, financial margin for reinvestment back into the institution or into the students or into the communities that we're serving. 

And so it's a different kind of model. I think it has many, many advantages, because you have higher degrees of freedom, you have the ability to be more creative, to be less stifled by, you know, constraints that come from only being able to grow with tax resources and so forth.