Last week Peter Thiel, PayPal co-founder and early Facebook investor, announced the appointment of the first 24 Thiel Fellows. These are young entrepreneurs and creative minds that, as inaugural members of the 20 Under 20 Thiel Fellowship, will pursue innovative scientific and technical projects, learn entrepreneurship, and begin to build the technology companies of tomorrow. During a two-year tenure, each of them will receive $100,000 from the Thiel Foundation as well as mentorship from Peter Thiel’s influential network of people. 
Thiel launched the Fellowship in September 2010 and since then has been busy discussing the reasoning behind it. In an interview with the National Review earlier this year, Thiel argues that Higher Education has become the new bubble. For Thiel, this Higher Education bubble has taken the place of the previous dotcoms and housing bubbles. ‘A true bubble is when something is overvalued and intensely believed,” he says. “The idea that attending Harvard is all about learning. No one pays a quarter of a million dollars just to read Chaucer. The implicit promise is that you work hard to get there, and then you are set for life.’ 
It is true that many are increasingly seeing the primary role of Higher Education as providing a path towards ‘greater earning potential’. Indeed, many students have even started to demand refunds for ‘poor teaching’, when universities fail to deliver and provide those measurable outcomes that students expect as a return on their investment.
However, as student debt has mounted and the impact of the recession has started to bite, a sea-change has occurred in how Higher Education is viewed. Scott Adams, the creator of ‘Dilbert’, has also questioned the value of Higher Education. Writing in the Wall Street Journal he questions why Grade B students are forced to study physics, chemistry, calculus and classic literature along with Grade A students. ‘The kids in this brainy group are the future professors, scientists, thinkers and engineers who will propel civilization forward. But why do we make Grade B students sit through these same classes? That’s like trying to train your cat to do your taxes—a waste of time and money.’ Wouldn’t it make more sense, he argues, to teach B students something useful, like entrepreneurship or business skills? Forget art history and calculus. Most students need to learn how to run a business. 
The problem with this discussion is that it seems to be pitting higher education against innovation and entrepreneurship in an ‘either or’ fashion. However the truth is that both are essential to our development as a society, and rather than being over-valued, both Higher Education and innovation are increasingly under-valued and under-resourced.
Today a university education is no longer treated as something that has an intrinsic value, regardless of the outcomes upon graduation. There is a tendency to devalue subject-based academic learning as elitist and/or irrelevant. Universities are now seen as engines of social mobility, only there to help students to make their way up the career and social ladder.
At the same time, investment in innovation is being cut rather than increased. While there has been large investment in R&D in China, overall investment in R&D was cut by 1.7% in publicly listed firms in 2008-2009. Most automotive firms spent less (General Motors, down 24.5 per cent; Toyota, down 19.8 per cent). So did firms in construction (Caterpillar, down 17.8 per cent) and in consumer products (Unilever, down 3.9 per cent). 
So let’s not pitch Higher Education against entrepreneurship and innovation – both are essential and both are in danger of being devalued. We need to encourage young people to develop a new spirit of innovation while at the same time defending the intrinsic worth of education for its own sake.
Moving forward, we need to encourage an entrepreneurial culture that invests in and supports innovation in key areas such as pharmaceuticals, energy, aerospace and biotech. We need to encourage the best and brightest young people to both study these subjects at university and then seek a career in them.
 Thiel Foundation Press release, 29 September 2010
 National Review, 20 January 2011
 Wall Street Journal, 9 April 2011
 McKinsey, Innovation and commercialization, 2010: McKinsey Global Survey results, August 2010