This paper takes a look at the role and function of faculty in higher education from a public policy/public higher education perspective, focusing on the view of faculty not just as an institutional asset but also one for the public good. The paper examines major external challenges currently facing public higher education, faculty activities and productivity, public perceptions of the role of faculty, and faculty's perception of their role. Faculty are viewed as a long-term institutional investment to be developed, maintained, and effectively utilized. In viewing faculty as a state asset, the focus is on such outcomes of faculty activity as: college graduates who can get jobs and advance in given careers, an education comparable to the tuition charged, and solutions to state social and economic concerns. A model is proposed in which institutions are held accountable for achieving identified state objectives and, upon agreement of higher education's responsibilities for meeting state goals, state government leaders retreat and allow campus administrators and faculty to determine new assignments. Community colleges, which have developed close, sometimes symbiotic, relationships with their communities, may serve as a model for this new paradigm. An appendix outlines some caveats to defining and measuring faculty productivity. (Contains 15 references.) (JDD)