Towards a market oriented approach: employer requirements and implications for undergraduate economics programs

The decline in enrolments in economics degrees and majors has been the focus of much concern in recent times. In 2001, two of the current researchers published a paper outlining a framework with which future investigation into the issue could be conducted (Keneley and Hellier 2001). Essentially this paper argued that a market orientated approach, which takes into account the value students and employers place on economics studies may point the way to a solution to the problem. As a first step in developing such an approach it is necessary to determine what employers require of the economics graduates they hire. With the support of the Economics Society of Australia such a survey was conducted in 2002. This paper presents the results of this survey and discusses some of the ramifications for the teaching of undergraduate economics.

Keywords: Market oriented approach, Employer survey, Undergraduate economics programs, Employer requirements.

The problem of declining enrolments in the economics discipline has been the subject of a debate that has gathered momentum since Lewis and Norris (1997). This problem has stemmed largely from a fall in demand for traditional economics courses. A number of reasons for the decline have been postulated. Some have argued that the rise of more generalist business degrees and the expansion of other related disciplines, such as management, marketing or e-commerce, are responsible (Millmow, 1995; Hodgkinson and Perrera, 1996). Others saw the cause lying in the progressive narrowing and specialisation of the discipline leading to courses that are out of date and not relevant to current issues (Alford, 1996, AVCC, 1992). Highlighting the problem has been the focus of much of the debate; few suggestions have been made as to its resolution.

Keneley and Hellier (2001) argued for a more constructive framework and suggested that a way forward may be to adopt a market oriented approach. Customer research literature suggests that students who experience a more market-oriented approach when taught economics may benefit from the added value provided, which will in turn lead to higher retention rates at undergraduate and postgraduate levels. (1) If this is the case, it could have far-reaching implications for the way in which economics is taught at university. Keneley and Hellier (2001) argue that a first step in the implementation of such an approach is to identify what the market requires of economics graduates. While Abelson and Valentine (1985) have conducted an Australian study, we have not found any similar overseas studies. The Abelson and Valentine research was designed to discover what skills and training employers required of economics graduates. Among other findings, it concluded that universities should place more emphasis on developing basic interpretative and communication skills in students.

Since 2001, the economics enrolment and retention discussion has continued. However there is now evidence of a shift in emphasis. Prior to this date, the decline in enrolments had been much lamented but very little data had been gathered (since Abelson and Valentine 1985) as to what the market actually required and why students no longer elected to study economics. The shift in recent times has seen the publication of the results of a number of surveys of tertiary students' perceptions and expectations. The recognition of the need to adopt a more inclusive approach to curriculum development is a major step forward in the debate. Although the student body constitutes only one group of stakeholders whose opinions are necessary in developing a market oriented approach to teaching economics, it is nevertheless an important milestone in the process of shifting focus from a producer to a customer focused approach.

The results of various surveys provide interesting insights into student expectations of their tertiary courses. Azzalini and Hopkins (2002) surveyed second-year Bachelor of Commerce students and found that students felt the study of economics was too hard and theoretical with little real-world application. They were after highly applied subjects, grounded in real-world examples. Furthermore, their survey results indicated that course content was not necessarily in line with students' career expectations. Interestingly, the majority of students did not see a career path in the public sector as a desired option. This led Azzalini and Hopkins (2002, p. 15), to conclude that a shift in emphasis in course content to reflect a more market-oriented pedagogy was required.

Other similar studies recently published include Marangos (2002a,b) and Guest and Duhs (2002). Marangos (2002a) considered the learning strategies adopted by first-year economics students and whether their learning plans were realised. The aim was to identify the way in which students study in order to derive teaching strategies that might better assist learning outcomes and indirectly encourage greater enrolments in economics units. Whilst this research does not suggest the solution to the problem of declining enrolments it does indicate that a change in the conventional approach to teaching methodologies may have something to offer the student.

Further research undertaken by Marangos (2002b) investigated the value students place on the study of economics. Marangos makes the salient point that although enrolments have declined, students still study economics, implying that it must be of some value to them. An important finding was that although many students study economics, they do not expect to work as economists. Instead survey results indicate that students, by and large, study economics because they believe it complements their other majors and enhances their employment prospects. This necessarily has important implications for the content of economics courses and the manner in which they are taught.

Guest and Duhs (2002) surveyed graduates from two universities as well as academics teaching economics courses. They concluded that the teaching of economics was rated very poorly. One reason for this was student dissatisfaction with the prevailing pedagogy. They found students wanted fewer topics, taught in a more in-depth and applied manner. On the other side of the coin, Guest and Duhs (2002, p. 158) also found that there was little incentive for academics to make such changes when the reward structure within universities favoured research above teaching.

The results of these university surveys point to the need for a rethinking of the way in which undergraduate economics units are taught. However, before new programs and approaches are adopted, it is necessary to determine the preferences of other market participants. As pointed out by Marangos (2002b, p. 89) over 50 per cent of students studying economics did so because they believed it would enhance their job prospects. Thus it can be argued that the demand for economics courses is a derived demand. Students make choices about their courses, which are to a large extent based on the available employment opportunities. If a market-oriented approach to educating economics students is adopted, then it must begin by identifying the critical theory and skill base required by employing organisations.

In 2001 the authors approached the Economics Society of Australia with a proposal to build on the study by Abelson and Valentine (1985). The objective of the study was to survey a group of employers from both the public and private sectors throughout Australia to determine what they see as desirable skills in graduates with economics majors. Specifically the research aimed to address four main considerations. These were:

* to determine the overall importance of economics skills and knowledge to employers

* to analyse the importance of various specific skills to employers

* to gauge the extent to which economics graduates met those requirements

* to determine if there was unmet demand for economics graduates, specifically, if employers were having difficulties in recruiting suitable economics graduates and their responses to any difficulties.

This paper outlines the results of this research and points to the skills employers see as desirable or constituting value in an economics graduate. The following sections of the paper deal with the research methods, data analysis and findings, application and discussion, and concluding comments.