University and the Competence Crisis of the Modern Economy

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Extended Abstract
The modern economy is confronting a severe human capital crisis, defined by the World Economic Forum and other bodies as a “competency gap.” This gap is most pronounced not in routine tasks, but in high-level cognitive skills, specifically “analytical thinking” and “creative thinking.” In the ensuing discourse, universities are frequently “scapegoated” for this deficit and face intense pressure to align more rapidly and efficiently with market demands. This article argues that the competency gap is not a simple supply-demand misalignment but is, in fact, a symptom of a deep structural paradox generated by the university’s historical-sociological transformation over the last half-century. The corporate complaint of a “competency gap” and the graduate complaint that their “diploma has no currency in the job market” are two sides of the same coin, revealing a foundational crisis within the modern university itself. This study synthesizes a causal chain of institutional transformation to explain this crisis. The university’s historical mission, preceding this crisis, was oriented toward the collective “public good,” organized around the liberal education and research ideals of figures like Newman and Humboldt. The post-WWII era, however, initiated a profound shift. This transformation began with what sociologists’ term “massification.” This expansion was not merely numerical; it was a fundamental transition in the “dominant aims, curricula, governance, and financing” of higher education, shifting its primary public function to the provision of “skills.” This functionalist “skills” narrative was soon challenged by a critical sociological perspective, labeling it a “technocracy myth.” This critique argues that most professional skills are actually learned “on the job.” In this view, the university’s primary, though often hidden, function is one of “status and socialization.” Education provides “cultural currency”—a set of valid cultural codes—which individuals use to “buy” positions in the labor market. This process creates a relentless “status competition,” resulting in “credential inflation” as entry requirements continuously rise. This synthesis reveals the core tension: the university promises functional skills but delivers status-based cultural currency. This structural tension was “resolved”—or rather, managed—by the institutional intervention of the 1980s: New Public Management (NPM). Driven by “New Right” ideology, NPM reforms attempted to manage the skill/status tension by imposing market mechanisms: marketization, privatization, managerialism, performance measurement, and accountability. As critical analyses of this period argue, these neoliberal reforms, while increasing “efficiency,” actively decreased “effectiveness” by limiting university independence. Universities were forced to become entrepreneurial, adopting corporate models and repositioning themselves as actors in an “economic skills market.” They were compelled to place “economic impact, efficiency, and commercial alignment” in their shop window. The cultural consequences of this marketization are profound. They manifest first in the meaningless discourse of “excellence”—an empty signifier applicable to anything from research to parking lots. This logic inevitably introduced the “student-customer” paradigm. As systematic reviews of the field show, this metaphor creates a “two-poled table”: Critics link it to lower academic performance and an instrumental view of education, while supporters see it as a democratization of the academy. This debate, however, is often “unproductive” and “unhelpful” for improving higher education, as it merely reinforces stereotypes. This instrumentalism is the core of the “McDonaldization” of the university—a “rational-looking irrationality” where “predictability” and efficiency replace cultural authenticity and intellectual depth. This leads to the paper’s central paradox. The market urgently demands “creative thinking” and “analytical thinking.” Yet, the market-driven mechanisms (NPM, McDonaldization) imposed on the university are rooted in an educational Taylorism designed to “suppress difference and originality” and “breed and train a standardized citizen.” The university is thus being blamed by the market for successfully fulfilling the instrumental, standardization-focused mission the market itself imposed. The market’s demand for more alignment and more “industry-relevant” curricula is, therefore, an acceleration of the crisis, not its solution. The discussion explores alternative, albeit still market-oriented, models such as “collective entrepreneurship” and “academic capitalism,” noting that even these pro-market views emphasize the need to protect “collective” and “public” space. These are contrasted with the deepening crisis of “hyper-individualist politics” which has declared “the dream is over” for the collective public university, and its symptoms in systemic crises like student debt and political anti-intellectualism. This paper concludes that the solution, aligning with calls for “collective needs,” is itself paradoxical. To produce the “thinking” practice that the market desperately needs but cannot foster, the university must not align further with it. Rather, it must regain the institutional independence required to restore its core mission: fostering intellectual engagement as a public good.