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Most business leaders believe innovation is critical for U.S. colleges to remain globally competitive

At a time of great debate over the value of a college degree, a new national survey reveals a concern among U.S. business leaders about the pipeline of talent produced by American colleges and universities. While most executives express support for the American system of higher education, they also believe the U.S. is falling behind global competitors and inadequately preparing graduates to succeed in the modern workforce.

The new survey, the third in a series by Northeastern University, presents the views of C-suite executives, with a particular focus on global competitiveness, the employee skills gap, employer workforce investments, and opportunities for policy reform.

According to the new survey, more than half of business executives (54 percent) believe the U.S. is lagging behind developed and emerging countries when it comes to preparing college graduates for career success.

The report also highlights a concern from the C-suite about the notion of an employee “skills gap.” Nationally, 73 percent of business leaders say there is a skills gap among today’s workforce, and an even greater number (87 percent) believe that today’s college graduates lack the necessary skills to succeed.

“These findings underscore a critical call to action for all of us in higher education to innovate,” said Joseph E. Aoun, president of Northeastern. “Business leaders—who are key partners for colleges and universities—want higher education to be more experiential and want us to instill entrepreneurial qualities in our graduates.”

Talent Pipeline Infographic 2014

Infographic of Survey Results

Regionally, business leaders have somewhat varying views. In Boston, where the concern is less widespread, only 64 percent of executives see a skills gap. In Charlotte, N.C., 71 percent are concerned about a skills gap, while in Seattle the figure is 76 percent. The Northeastern survey oversampled business leaders in Boston, Charlotte, and Seattle—the three American cities where the university maintains campuses.

Among the attributes most important for college graduates to possess, business executives rank communication, interpersonal skills, and adaptability at the top of the list. That echoes the sentiments of the majority of Americans from Northeastern’s August 2013 poll, who said so-called “softer skills” such as communications and problem solving were most important. According to the new survey, nearly one-third (28 percent) of business leaders believe that very few recent college graduates actually possess those skills.

Business leaders are divided on the question of whether college graduates will be more (27 percent), less (32 percent), or equally (39 percent) prepared for the workforce in the next 10-15 years. The findings were consistent across the samples in Boston, Charlotte, and Seattle.

In addition to the hurdles presented by the skills gap, recent graduates face a job market that is in many ways still recovering from the Great Recession. Nearly two-thirds of executives say the recession impacted their businesses, with the most commonly cited consequence being a reduction in the number of entry-level jobs.

Consistent with findings from Northeastern’s previous two surveys, C-suite executives believe that colleges and universities should develop innovative ways to educate and prepare students for the workforce.

An overwhelming majority of respondents (97 percent) say that experiential education—the integration of classroom study with professional experience—is critical to an individual’s success. A large majority of business leaders (89 percent) also believe the nation’s higher education system should expand opportunities for teaching entrepreneurship.

Other noteworthy regional findings include:

•    While most U.S. business leaders (72 percent) cite personal drive as the most important factor for career success, business leaders in Boston and Seattle cite the value of mentors and advisers at a higher rate than respondents nationally. While just 27 percent of business leaders across the country place great value on mentors and advisers, the figure is 45 percent of Boston business leaders and 43 percent of their Seattle counterparts.

•    Business leaders in Seattle tend to be more supportive of online college degrees. Nearly 6-in-10 Seattle executives say an online degree provides a similar quality of education as traditional degrees, compared to 47 percent in Charlotte and 45 percent in Boston.

The release of the survey results will take place at a summit on higher education held at the Intercontinental Hotel in Boston. The summit, Innovation Imperative: Enhancing the Talent Pipeline, features a high-profile panel of CEOs and thought leaders including President Aoun; Gary Gottlieb, president and CEO, Partners HealthCare; James T. Brett, president and CEO of The New England Council; and Jeff Selingo, contributing editor at The Chronicle of Higher Education. The event is sponsored by Northeastern, in partnership with WGBH Radio and the New England Council.

Kara Miller, host and executive editor of WGBH’s Innovation Hub, will moderate the panel. Watch a livestream of the event at 9 a.m. on Tuesday morning.

The survey interviews were conducted by telephone among a representative sample of more than 500 C-suite executives and business leaders in the U.S. from Feb. 3-19, 2014. It includes an oversample of 300 respondents in Boston, Charlotte, and Seattle. The margin of error is +/- 4.37 for the national sample and +/- 5.65 for the regional sample.

Additional information is available at northeastern.edu/innovationsurvey.