Economists use the term “externalities” to talk about such things as untaxed pollution, long-term resource depletion, and the extinction of species due to habitat destruction. These are factors that lie outside their economic models and therefore, for the purposes of their discipline, do not exist. This is not to say that in reality they do not exist, but only that they exist outside the confines of formal consideration. Because no discipline can consider everything, every discipline has externalities. Only by focusing on some aspects of an issue, while ignoring all others, is it possible to gain clarity. But when disciplinary expertise becomes the basis for real-world decision making, without reference to externalities, the decisions are likely to be misguided or even tragic. Today most university and college planning is based on global economic projections that may prove to be completely mistaken because of externalities such as global climate change, the end of inexpensive oil, and what some have termed “an unending war on terrorism”—issues that economists rarely contemplate. The economic realities of the future may be very different from what many are now forecasting.

Modern universities fully recognize the importance of strategic planning, but such planning tends to be short term (five years out). As a result, there is a tendency to assume that the future will greatly resemble the immediate present. In normal times this is a rational assumption. The dominant pattern of any civilizational structure is stability and incremental change. Institutions endure over time because they tend not to change quickly or dramatically.  

Marcus Ford. 2007. The Externalities Influencing Higher Education. Planning for Higher Education. 35(4): 5–11.