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All people dream—of love, of fame, of wealth, of a happy life—and none more so than the young, who have yet to learn that not all things are possible in this world. This book deals with a dream that is almost universal among them: that they will grow into successful, self-sufficient, prosperous adults, independent of their parents, able to stand on their own. Throughout history people have found various ways to achieve this dream, most of which involved entering the workforce early, taking over the family farm, or learning the techniques of hunting or the family trade. Other avenues involved immigrating to new lands, rising in the church or the military, or engaging in some other adventure. Today, however, in the world’s urbanized society, the dream is increasingly focused on education in universities and colleges.

There are over 150 million students attending colleges, technical schools, and universities worldwide. They are part of a social revolution and an impressively risky social experiment: the democratization of university education in a manner comparable to the spread of mass elementary and secondary education throughout much of the world during the twentieth century. Going to college has been transformed during the past two generations from a privilege available only to the Western or Westernized elite into something that is almost viewed as a right. This movement and investment, this commitment of the young talent of so many nations to the classroom, represents one of the most profound transformations of the modern era.

In 1950, there were many fewer colleges in the world. The institutions currently in operation range from the oldest (Bologna in Italy and Oxford in England) to the hastily built research and technical institutions founded in the USA after World War II or created from polytechs in the United Kingdom in the late twentieth century. By 2000, there were more than twelve thousand colleges, with hundreds more under development, particularly in China, India, and the Middle East, and with for-profit institutions competing in ever-larger numbers with increasingly overcrowded publicly funded colleges.

Everywhere around the world, young adults—eighteen and nineteen years or older—stand on the precipice of adulthood, faced with decisions that will affect the rest of their lives. In the industrialized world, they must choose between joining the workforce, travel, attending a college or university, or entering a trade college or an apprenticeship program. Those who dropped out of high school have already made a different choice, one that has severely limited their options. For the rest, the pressure to make the right decision is intense.

This preoccupation with academic study leading to a career is nothing new, much as advocates for post-secondary education like to think higher education is primarily for expanding the mind, improving public discourse, and celebrating the world of ideas. The growth of colleges in all countries has been tied to the economy since the end of World War II. Companies and the public sector, the argument goes, need highly qualified personnel—mostly college graduates. Governments want a strong, modern economy, which most authorities see as tied to the training of young people and the creation of intellectual prosperity in the laboratories and field stations of research-intensive institutions. Eighteen- and nineteen-year-olds desire careers freed from physical labour—jobs that are often called “meaningful” by student advocates and the politicians of the left. Globally, it can be argued that this generation is the softest generation of all, desperate to escape from agrarian or low-end industrial futures and eager for white-collar opportunities or, for the tiny creative elite, for entrepreneurial activities. Students in China, India, and Vietnam tackle their studies with a ferocity and competitiveness that most Western students find alarming; but then, for American and European students, the rice paddy or the sweatshop is not the alternative to a college education. From South Africa to Thailand, Finland to Bulgaria, the most-motivated and hardest-working young people are determined to find brain work and to avoid physical labour. The test of the college system, then, is the degree to which opportunities for graduates match with graduates’ abilities and expectations.

In rich countries, these young adults—often poorly prepared for the choices they now must make—face a bewildering set of options. If they possess extraordinary abilities or if their parents have money, they can select from several world-class universities, believed to be fast-tracks to prosperity and career success. If they come from poor families or are of average intelligence or ability, their options will be more limited: Oxford, Harvard, and the Sorbonne are not likely possibilities for them. But even here, a long list of universities, colleges, for-profit institutions, and the like compete for their attention and tuition dollars.

Their counterparts in the developing world have fewer choices. Here, the decision is a harsher one, often amounting to education or a life of factory work or subsistence agriculture. But here, too, the dream is very much alive. Children of the wealthy or well-connected, prodigies, or those educated in elite private schools have significant options, many outside their home countries. For the children of ambitious middle-class or working-class parents, the best opportunities lie overseas, where post-secondary education may lead to immigration to a more prosperous nation. For the rest, village agriculture or industrial labour beckons.

Earlier generations, too, had their dreams, but they did not often involve universities. Centuries ago, these institutions had a very narrow focus—they served mostly as training places for jobs that required a high degree of literacy: the clergy and, to a lesser degree, the law. Young adults (until late in the nineteenth century they were almost always male) would have scoffed at the idea that universities were the best road to a successful career of any kind. Of the great “robber barons” of the early American industrial age—Astor, Vanderbilt, Carnegie, Rockefeller, Morgan—only the last had a university education, and that was because his father was wealthy. Even law and medicine were not professionalized until the late 1800s. It was quite possible to become a lawyer by apprenticing yourself in your teens to a practising lawyer—John A. Macdonald, the first prime minister of Canada, did that, and Abraham Lincoln read law books after a day’s work—or to become a doctor by spending a short time at some more or less respectable medical academy.

Many young people tried to escape the dead-end drudgery of rural life by taking factory work in cities, but this often did not improve their lives, only substituting one kind of proletarian existence for another. Emigration provided better opportunities for those who dreamt of religious freedom, social liberation, private land, or economic opportunity in North America, Brazil, Australia, New Zealand, and elsewhere. America, launched in part as a “city on the hill” for religious dissenters, became a global magnet for people seeking prosperity and better prospects. For young men in countries with empires, the dream often involved military or administrative service in the colonies or working in an institution such as the East India Company.

Rapid post–World War II industrialization created a new set of dreams, offered to eager families in the form of secure factory jobs, suburban tract homes, and the domestic tranquility of the consumer age. These were times of simpler dreams, supported by widespread prosperity and growing economic opportunity. It was possible to fulfill one’s dream while working for a company such as General Motors, Ford, or Chrysler, which, mostly thanks to trade unionization, provided middle-class opportunities for working people. Universities were for those heading for the learned professions, for those with sufficient family money to spend four years in a pleasant finishing school, and for those—always a minority—who were genuinely fired with a thirst for academic knowledge. Today’s world is much more muddled, with far greater returns for those who chose the right track, and serious career dangers for those who choose unwisely. For young people and their parents around the world, the dream of personal opportunity and well-being is focused, obsessively, we argue, on university and college education.

It was during this postwar era that the universities began to grow into Dream Factories, first with the influx of war veterans, and then with the tsunami of baby boomers that descended on them after 1960. They began to position themselves as the logical, and increasingly the only, or at least the preferred, route to prosperity. More and more it became clear to young people that universities, not the shop floor and certainly not striking out on their own for new lands or distant opportunities, held the key to their dreams.

An example of this process is the professionalization of school teachers, particularly at the elementary level. Before World War II few teachers in the lower grades went to university. At most they went to a “Normal School,” as teachers’ colleges were sometimes called, for a year’s course. Often those who taught in the one-room country schools had only a high school education. This is why it was common to see classrooms in these schools presided over by teachers, often women, who were twenty years old or even younger. Then, partly as a means of raising salaries, elementary education became “professionalized,” to the point where five years or more of post-secondary education is now required to teach the basics to six-year-olds. Today, if your dream is to be a teacher, there is only one path to achieve it (although some American schools, particularly in poorer districts, are so desperate to find teachers that they are fudging this requirement).

At the same time, the earlier paths to success gradually began to fade. Immigrating to America remains something of a global fantasy, but not for all those who once dreamt of it. Elsewhere, the cities in the developing world hold out hope for the desperate and the ambitious. The “arrival cities” in the sprawling slums around the major cities in the developing world are one of the most important phenomena of our generation, but the prospects for immediate improvement are minimal and uncertain, as any visit to Lagos, Mumbai, or Cairo will attest. Industrial labour, strengthened by a long run of union empowerment, has crumbled, largely due to the unique blend of global competition and technological transformation. There are fewer entry points and fewer opportunities each year.

Where, then, do the dreamers look? Where do people seek opportunity and the promise of well-being and wealth? What do you say to teenagers about their future? That the world is full of endless opportunities? That they can be anything they want to be? That the twists and turns of the global economy have created more uncertainty than we have seen in decades? That they will have a brighter and richer future than their parents? That the lives of today’s adults are no roadmap for the future? It is hard to know how to arm young people for prosperity, opportunities, and a high quality of life in the midst of the constant economic and technological turmoil that engulfs the modern world. For many people, the answer is simple: universities.

To their proponents, universities are the Dream Factories of the twenty-first century, ideally suited to the desires of the current and future generations. This is the time of the “knowledge economy,” where innovation and human creativity seem to have replaced natural resources and industrial strength as the foundation for personal and national prosperity. This is the age where smart people rule, where companies like Google, Facebook, Rakuten, Skype, and Alibaba rise from obscurity into global prominence. This is the generation where national boundaries have declined in significance, where the mobility of labour is rushing to catch up with the mobility of news, celebrity, influence, and, most of all, capital. In the global swirl that wipes out old wealth and creates new with dazzling speed, young adults and their parents search for the golden ticket, the assured path forward, that will ensure their family’s place in the new economy.

The university degree is widely believed to be that golden ticket. Within two generations or so, universities have been transformed from largely Western, elite, and male-dominated institutions into truly global, multicultural, gender-neutral, and increasingly open-access platforms for personal growth and exploration. It seems that China is building universities as fast as the United States once opened McDonald’s franchises. India’s aggressively mediocre university system expands apace, relying more on unchecked private-sector growth than quality-focused public-sector expansion. Nigeria, with one of the most undependable university systems in the world, has seen its undergraduate population grow from seventeen thousand in 1970 to 1.7 million in 2012—a one-hundred-fold increase—before starting to slide in the face of demoralizing career results for graduates.[1] Even the United States, which is watching century-old private, rural, religious, and liberal-arts colleges close for lack of students, is supporting a rapid expansion of its highly variable and questionable for-profit university system.

Every generation needs and wants a focus for its dreams. And universities are perfect for this. Given enough money, there is, in theory, a university seat for every student who wants one, without, of course, any reference to intellectual ability or scholarly interest. There are grand schools, with impeccable pedigrees, that cater to the truly talented. Others are places for the offspring of the nouveau riche or the socially ambitious. Still others, with failure rates that defy belief, accept all comers and watch them be thrown onto the intellectual and career junk heap, degreeless and branded as failures. Even worse are those places all over the world, public and private, that move all tuition-paying students through their studies, granting degrees to individuals of minimal achievement who have severe deficiencies in their basic skills. Worse still is the distressingly extensive culture of lying, academic fraud, cheating, and fabrication of transcripts that increasingly mars the credibility of the global university system.

Like all of the grand dreams that have driven global affairs, modern universities display a mix of achievement and failure. There’s plenty of the former, but plenty of the latter too. Much as a goldfield produces a handful of rich deposits and thousands of empty shafts and the high-tech incubator generates two successful companies for every hundred that enter, universities produce a small percentage of winners. Some universities produce graduates of world-changing potential. Many others—including some of the famous as well as the obscure campuses—generate degree holders who work as taxi drivers, waiters, and retail clerks, hardly the stuff of parental dreams and childhood ambition. The odds are better than in a lottery, but nowhere near the slam-dunk of common belief.

For young adults, their families, and countries around the world, the Dream Factories have become a central solution to the uncertainties of the twenty-first century. While there are many examples of university graduates going on to great careers and productive lives, there is also ample evidence that the global system has grown too fast. There are only so many people with the talent to succeed at university. There are only so many jobs and opportunities that benefit from a university degree. And yet these institutions continue to be built by governments, private-sector speculators, and well-meaning philanthropists, all of whom embrace the belief in the unlimited absorptive capacity of the modern economy for university graduates. And they are embraced by young people and parents, eager to escape from physical or outside work, people who believe that universities hold the key to success.

Universities continue to be touted as the flagship opportunity-producing machines of the twenty-first century, but in reality they fall far short of delivering what they promise. There is nothing inherently wrong with them. For smart, motivated, and attentive students, a university degree can bring a wonderful education, a life-changing social experience, and the foundation for a highly successful career. The problem lies with two things: the uneven quality of the university experience and the global disconnect between the mass production of university graduates and the needs of the modern economy.

So here is the reality that is rarely discussed. Across the United States and Western Europe, there are huge numbers of unemployed and underemployed university graduates. In Asia, thousands of graduate degree holders, even those in the so-called career-ready fields of engineering, computer science, and mathematics, find a tight if not closed job market. Nigerian university graduates actually earn average salaries below those of high school graduates, so flawed is that country’s university system. And the Arab Spring was, researchers have discovered, an uprising driven significantly by the unrealized dreams of thousands of university graduates who could not find work in the stalled Middle Eastern economies.

The global university system needs a reset, as do the expectations of young people, their families, and governments. Governments need to stop expanding the system. Universities need to change their focus from the production of more graduates to a greater concentration on the quality of the system. Employers need to speak clearly to universities, young people, parents, and governments about their medium- and long-term employment needs. Young people and their parents must look far more carefully at the abilities of young adults and the realities of the twenty-first century economy. The system can be fixed, although the self-interest and autonomy of most institutions militate against responsiveness. The harsh truth is that universities will reform only when governments change their policies, and, even more rapidly, when young people pursue other means of preparing themselves for the future.

But here is the greater challenge. The young need a new dream, because the old one that has served for the past fifty or sixty years no longer works. The global population of young people is higher than ever. The technological and competitive transitions in the world economy have rarely been greater. Millennials, looking forward, are bewildered by the new realities. Their parents, scared about the prospects for their children and even for themselves, turn back to what worked in the past, namely university degrees. If every generation needs a dream, the tragedy of the twenty-first century is that young adults have had to borrow the vision of opportunity that sustained their parents. The Dream Factories are proving to be more ephemeral and less real than anyone thought. Dealing with this reality may well be the transformative challenge of our time.