Chapter II.-Need for Higher Business Education

Prior to devising administrative mechanisms for and determining the content of higher business education, it is vitally necessary that land-grant institutions discover existing needs. Unless genuine needs exist, adequate cause for action is lacking. No institution can justify a policy of ignorance. The discovery of the needs of higher business education is a task which land-grant institutions have almost completely ignored. They have failed to study the demands of the business world for specific types of training to meet specific types of requirements. They have put forth little or no effort in analyzing changing economic and business conditions and in making adequate excavations prior to the laying of foundations for their educational structures. Indeed, except in a few isolated instances, they have exhibited no interest in making use of the painful process of fact gathering as prerequisite to the formulation of their policies as to higher business education.

To substantiate these statements, it is necessary to show what the needs of higher business education are and to indicate the rôle which land-grant institutions have played in the discovery of these needs. Higher business education is used in this sense of training on post secondary school levels in the principles and techniques of money making-money making to be regarded both as a social and as an individual process.

Business involves the sum total of all exchange or financial transactions. It includes all the livelihood pursuits of man.

Business, in the generally accepted language of Prof. Leon C. Marshall, is a pecuniary scheme of gratifying human wants, and, properly understood, falls little short of being as broad, as inclusive, as life itself, in its motives, aspirations, and social obligations. It falls little short of being as broad as all science in its techniques.

Since business, broadly understood, is concerned with the financial organization of society, the purpose of higher business education is to provide instruction on levels above those of the high school which seeks to make this organization function effectively both in terms of the individual and of the society to which he belongs.

The needs of higher business education may be classified under two heads: (1) Individual or occupational needs and (2) genera! or collective needs-needs for general economic and business services by the land-grant institutions themselves as well as by public and private agencies. As will be shown later, it is not enough for landgrant institutions to discover the needs of business for recruits. trained for specific vocations, although this is their primary or most important task, they must also discover the needs for general economic and business services wherever those services will improve man's means of securing a livelihood.

It is necessary to recognize the varying levels of individual or occupational needs for business education. These levels, classified according to the functions performed by the persons appearing on each level, are as follows;

(1) Business proprietors and officials, (2) salaried major executives, (3) specialists or staff rather than line officers, (4) intermediate executives, (5) minor executives, and (6) clerical or routine workers.

If the preparation of teachers of commercial and business subjects be added as a special need, the result is the maximum individual or occupational needs on all levels.

Reduced to general terms, these occupational levels might be thought of as (1) upper levels, (2) intermediate levels, and (3) lower levels. The lower levels have been recognized and provisions made therefor by the secondary schools. The land-grant institutions have long recognized the upper levels, even though they have made preparations for training thereon in an indefinite fashion; but they have ignored completely, as will be shown later, the intermediate levels, leaving training on these levels to private business colleges and private business establishments.

In 1920, according to census figures, out of the 41,614,248 persons 10 years of age and over gainfully employed in all occupations, 7,369,520, or 17.9 per cent of the total, were concerned either directly or indirectly with the principles and practices of exchange, marketing, finance, and accounting as distinct from technological principles and practices. In 1910 there were 5,351.723 out of a total of 38,167.336, or 14.1 per cent. In 1920, 79.5 per cent of the total gainfully employed in all occupations were males and 20.5 per cent females as compared with 78.8 per cent males and 21.2 per cent females in 1910. In 1920, 71.6 per cent of the total in trade and clerical occupations were males and 28.4 per cent females, whereas, in 1910, 80.2 per cent were males and only 19.8 per cent females. The largest percentage of increase in females is in the clerical occupations. The percentage of increase in the total number gainfully employed from 1910 to 1920, as may be readily calculated, is 9 for all occupations and about 37 for trade and clerical occupations. If the average working life of men in business pursuits is 30 years and of women 6 years, then to maintain a supply of 5.275,612 males and 2.093.908 females in trade and clerical occupatrons as of 1920 an annual placement of about 172,000 males and of about 348,000 females will be required.

Another way in which census data may be used to discover business training is to analyze the figures concerning proprietors, officials, managers, and superintendents. While such analysis may not be very profitable due to limitations of data and due to the added difficulties of segregating the figures for these classes, it may shed at least two or three rays of light on the problem, particularly since the land-grant institutions almost without exception, both in their catalogues and in their answers to the questionnaire on business education, specify that their offerings in commerce and business are for the purpose of training students to become business proprietors and responsible business executives.

With the foregoing ideas in mind, Table 2 has been prepared. In preparing the table each of the nine major occupational groups as used by the census was carefully checked to determine as far as possible those persons that could be allocated under the general class of business proprietors, officials, executives, and managers, in contradistinction to laborers, clerks, and persons engaged in public, professional, and domestic and personal service. Many occupations intermediate between laborers and clerks, on the one hand, and officials and managers, on the other, such as railway station agents, manufacturing foremen, and overseers and the like, requiring considerable executive or managerial ability, have not been included in the table.

From Table 2 it will be observed that in 1920 there were 8,614,521 persons who may be considered proprietors, officials, executives, and managers. This represents an increase of more than 600,000 since 1910. Of these, 6,201,261 in 1920 and 5,979,340 in 1910 were farmers. The number of women as compared with men was very small in number in both census years. Out of the total of 41,614,248 persons 10 years of age and over gainfully employed in 1920 business proprietors, officials, executives, and managers comprised about 20.7 per cent. If the average working life of men in business pursuits is 30 years and of women 6 years, then to maintain a supply of 8,614,521 proprietors, officials, executives, and managers as of 1920, an annual replacement of something like 340,000 beginners will be required.

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TABLE 2.-Business proprietors, officials, executives, and managers 10 years of age and over engaged in each specified occupation classified by scx for the United States for 1920 and 1910

If the objectives of land-grant institutions in providing offerings in commerce and business are limited solely to the training of business proprietors, officials, and so on, the foregoing figures measure in a general fashion the maximum undifferentiated needs for higher business education as of 1920. The word "undifferentiated" is used because such figures do not indicate needs in terms of specific types of training programs. Colleges of agriculture exist to train agricultural business men, of whom, as has been shown, there were 6,201,261 on farms in 1920. Colleges of engineering are interested in training students for manufacturing, transportation, and even trade. Other divisions of the institutions may contribute their quota of training to these fields. But underneath or perhaps on top of all these training programs, there is the necessity for instruction in business principles and practices. In addition to the technical aspects of agriculture and of engineering there are the business aspects. In all of these occupations there is certainly a core of scientific business knowledge which must be included in every program of instruction. In many of the occupations, if not in all of them, definite specialized

training programs in addition to this core, with major emphasis on the business aspects and minor emphasis on the technical aspects, are required.

Still another group of census data may be worthy of consideration in determining occupational needs. These data, taken from the census of manufacturers, are assembled in Tables 3 and 4. A study of Table 3 will show the situation with respect to proprietors and officials, on the one hand, and clerks and other subordinate salaried employees, on the other, as of 1919 and the changes which have occurred since 1909.

By a simple calculation it will be observed that out of a total of 682,857 proprietors and officials in 1919 women comprised 3.8 per cent, and that out of a total of 1,033,507 clerks and other subordinate salaried employees women comprised 36.2 per cent. Assuming again that the average working life of men in business pursuits is 30 years and of women 6 years, annual replacement needs on the basis of the 1919 figures would be as follows: Proprietors and officials, approximately 22,000 men and 4,000 women; clerks and other subordinate salaried employees, approximately 22,000 men and 62,000 women; all classes above wage earners, 110,000.

TABLE 3.-Persons engaged in manufacturing industries in the United States, 1919, 1914, and 1909

While figures in Table 4 are not comparable except in a rough way with the figures presented in Table 3 they show little change in the major occupational classes in the manufacturing industries from 1919 to 1927 other than a decrease of 136,000 in proprietors and firm members. In Table 4 proprietors and firm members refer to individual proprietorships and partnerships and must not be confused with proprietors and officials of which they are only a part in Table 3. Salaried officers and employees in Table 4 include salaried officers of corporations, superintendents, managers, clerks, and other subordinate salaried employees. Since there seems to have