A “doom and gloom” analysis on the future of Australia’s universities has been downplayed by some leaders in the sector, who say many changes are already underway.
An Australian parliamentarian has questioned a report by a renowned international consultancy firm that states that “There’s not a single Australian university that can survive to 2025 with its current business model”.
Senator Lee Rhiannon, the Australian Greens spokeswoman on higher education, has described the Ernst & Young report University of the Future as being “over the top” and “all doom and gloom”.
“Who exactly do Ernst & Young want to save the day for?” Rhiannon says. “And who actually commissioned the report?”
“I mean universities have survived for hundreds of years and I am certain they will survive into the future but there does need to be some change coupled with greater federal government funding.”
While Rhiannon acknowledged that there were valid points within the report, she was also highly concerned by the push for Ernst & Young to advance the private sector involvement into universities.
“The report is fashioned to smooth the entry of private sector providers at the expense of a robust and equitable public university sector, as well as to win Ernst and Young business,” she says.
“ ‘Market contestability’ and ‘competition’ are buzz words designed to paint increased funding cuts to public universities as inevitable and the private sector as the saviour of universities.
“Universities have already been cut to the bone but this report talks of ‘new, leaner business models’ ‘run like corporations’ to ‘exploit profitable market niches’ using ‘Darwinian’ forces.
“This report forecasts cutting ‘unprofitable’ disciplines, slashing administrative staff and outsourcing back-office functions. It belittles the dominant university model – a broad-based teaching and research institution.”
The Ernst & Young report believes that traditional university business models are outdated and won’t survive new technologies, increased competition and flat-lining government funding.
It is the culmination of a six-month study on the changes occurring in Australian and international universities. The study included interviews with more than 40 leaders from universities, private providers and policy makers including extended interviews with 15 vice-chancellors around Australia.
“We’ve seen fundamental structural changes to industries including media, retail and entertainment in recent years – higher education is next,” says report author Justin Bokor, executive director in Ernst & Young’s education practice.
“At a minimum, universities will need to get much leaner, both in terms of the way they run the back-office, and in use of assets.”
Ernst and Young sets out three models as to how universities can survive with the first focusing on providing more online learning opportunities with private sector partners and the second emphasises “niche dominators” which will see universities provide a small, world-class range of teaching and research programs.
The third model focuses on the evolution of the “transformer” future model, which will be led by private providers and new entrants, not incumbent public universities.
“Innovators” in the report would “extend the definition of a higher education customer to include content wholesalers, content consumers, financiers, employers and parents” as well as creating a value chain for new areas of specialization, as well as “combining traditional education services with services in related industries such as media and entertainment, financial services and venture capital”.
“This is a sector that, more than any other, will shape Australia’s future as a high-performing knowledge economy,” Bokor says, “But, to succeed, Australian universities will need to forge new business models that are dynamic, modern and are fit for the decades ahead.”
Edith Cowan University vice-chancellor Professor Kerry Cox was in total disagreement with the report’s prediction.
“No,” was the response he gave when asked if he agreed with the report’s prediction that no university in Australia could survive until 2025 with its current business model. Cox said that the university had put in various measure to attract extra funding to maintain quality of courses and staff.
“A service focus for the communities we were established to serve,” Cox says. “Increasing use of digital technology for learning and assessment; continuous adjustments, making use of technology, to improve cost effectiveness and explicit rewards systems for students and staff and those involved in governance.
“ECU will continue to phase in new courses and phase out those that are at lower priority long into the future, and will continue to make appropriate staff adjustments to have the expertise to deliver the agreed priorities for the university.”
Edith Cowan was awarded university status in 1991 (formerly the Western Australian College of Advanced Education) and has more than 27,000 students at both undergraduate and postgraduate levels. About 5500 of these are international students from more than 70 countries.
It offers more than 400 courses, through four faculties: Business and Law; Computing, Health and Science; Education and Arts, which includes the Western Australian Academy of Performing Arts (WAAPA) and regional professional studies.
Belinda Robinson, chief executive of Universities Australia, acknowledges some valid points in the report, but certainly doesn’t agree with everything.
“It correctly observes some key drivers of change,” Robinson says. “The democratisation of knowledge, increasingly tight public budgets, the digital economy, globalisation and the integration of education and industry as well as an increasingly competitive international environment are already pushing the sector to a crossroad.
“On the impact of the digital era, however, I don’t believe though that the university sector will be in the same situation, say as media, where it is was talked about and talked about and then ‘bam’ one day we woke up and everything was different.
“Universities have been talking about these issues for a long time and adapting and re-shaping their business models and practices accordingly.
“Universities have been around since the ninth century and have survived any number of catastrophic changes. The challenge though, will be to ensure that we have the policy, regulatory and funding frameworks in place that will enable each and every institution to find their place of best fit in this brand new world.”
Robinson says that many of the themes canvassed in the report will be addressed at next year’s Universities Australia’s higher education conference to be held in February.
