This digest discusses the development and implementation of performance indicators in higher education, focusing on the factors driving increased demand for accountability in higher education and the use of performance indicators. It discusses the public and political concern for increased emphasis on undergraduate education, productivity, accountability, and quality assessment at colleges and universities in the United States and other countries, in light of educational retrenchment and budgetary constraints. The report concludes by discussing possible future trends in the use of performance indicators by governments and institutions to promote productivity, accountability, and quality in higher education. (Contains 6 references.) (MDM)