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Higher Education Review ProcessHigher Education at the Crossroads: An Overview Paper3. changing contextsa. opportunities and challenges43 New opportunities are expanding for higher education to develop in emerging global markets and improve the quality of service to students, businesses and the community. 44 Developments in communication and technology have transcended traditional boundaries, creating the possibility of world-wide communities. The demand for the services of universities is no longer restricted to the surrounding area but is coming from a much more extended constituency. The demands of these new constituencies will require universities to develop new service delivery systems and create virtual places in which they can operate and compete on a global scale. global competition45 The worldwide market for international students has grown rapidly over the last 20 years. Between 1980 and 1994, the number of international students enrolled in overseas tertiary institutions rose from approximately 710 000 to 1.54 million, representing an increase of 117 per cent (UNESCO 1998). The global education market is continuing to grow at a strong pace fuelled by increasing incomes in developing countries, an opening of some new markets (eg. China), the value placed on an international education and the inability of domestic provision in many countries to grow in pace with demand (Pejovic & Associates 2001:17). 46 While Australia has been a successful player in the overseas student market over the last fifteen years, this market is highly dynamic and any one country’s share cannot be taken for granted. Australia’s main international competitors—the US, UK, Canada and New Zealand—are moving to protect or expand their market share and Australia should position itself to do likewise. The recent past provides only a limited guide to how the industry is likely to develop in the coming decades, suggesting the need to remain alert to the forces that are shaping changes. New competitors are emerging, including Malaysia, Singapore, France, Germany, Ireland and the Netherlands. For Australia, the increased use of information and communication technologies, offshore delivery and some emerging limits to growth in onshore numbers will also impact on the future development of education exports. While the current round of General Agreement on Trade in Services (GATS) negotiations provides scope to open overseas markets, Australian education providers will face increased competition from overseas institutions. 47 The players in the global market in higher education are not only accredited universities, but include private institutions offering courses with worldwide certification recognition, such as Microsoft Certification courses. These qualifications are very portable, ensure that specific measurable skills have been achieved and are widely recognised and highly regarded within the information and communications technology (ICT) industry. 48 Increasingly, the Australian higher education system is seeking to build a higher threshold capability to compete internationally in teaching and research. To this end, a number of Australian universities have led the formation of international consortia such as The International Network of Universities, Universitas 21 and The Global University Alliance. Such strategic alliances are complex businesses involving new patterns of around-the-clock operations, and demanding new approaches to the management of partner and customer relationships, product and service development, marketing and logistics, and financial and reputational risks. 49 To achieve a competitive advantage, Australian universities need to be able to attract and retain top quality staff and students. They also need to continue to develop new forms of education delivery and structure courses that meet the broadening needs of students. This will require better targeted resources, focussed areas for intensive investment in infrastructure and expertise, more flexible conditions of employment and a robust and credible quality assurance regime. 50 Globalisation has resulted in increasing economic integration and mobility of capital. The research and development and administrative bases of major corporations can and will be located in those parts of the world with a skilled workforce, adequate financial incentives, stable governments and economies, and entrepreneurial cultures. Australian universities have a major role to play in building Australia as an attractive location for global capital investment. The recent focus on reducing barriers to the commercialisation of research outcomes from public sector research agencies, including universities, will need to continue if Australia is to capitalise on these research and development opportunities. technological developments51 The growth of the global knowledge or digital economy has been accompanied by the promise of improved education and training and the emergence of new forms of education delivery. Australian universities have been at the forefront of significant developments in the area of online learning. However developments in new forms of education delivery, such as through ‘virtual’ learning environments, may challenge any advantage that Australia has in this area. 52 Many institutions have built on their existing expertise in distance education to offer either fully online courses or courses based on more traditional distance education offerings supplemented with online delivery of education or student support. Future development in online education will require universities to re-evaluate the pedagogies of the campus learning environment. Students, particularly school-leavers, are still generally demanding face-to-face access to teachers and educational experiences. Virtual learning environments will be attractive as they will provide a more interactive experience and future education consumers will be more at ease with this type of technology. Campus-based learning is likely to remain attractive on social grounds but can also be transformed by e-learning strategies. 53 Online developments provide opportunities for higher education institutions to better serve Australian students by offering easily accessible teaching and learning materials. The technology also enables educational services to students who would otherwise have difficulty accessing on-campus education. This is relevant not only to students in regional and remote locations but also to the increasing numbers of students who are ‘earner-learners’ seeking part-time study, and full-time students, ‘learner-earners’, engaged in paid employment (McInnis, 2000). 54 These developments are also changing aspects of academic work. Previously integrated activities of course design, materials preparation, lecturing and tutoring, assignment marking and assessment are being ‘unbundled’. New specialisations of labour are being established. New opportunities are emerging for courseware sharing and the buying-in of student support services. 55 The delivery of education via the Internet involves a range of new costs, many of which are not yet fully understood given the technology is still relatively new. E-learning was initially seen as a cheaper way of delivering education to students, but substantial costs are involved in designing and delivering a good quality course. Teachers need to commit considerable time to course and materials development and, especially, interaction with and feedback to students. 56 The hopes that online delivery would result in considerable reductions in expenditure on ‘bricks and mortar’ because of a reduced need for such infrastructure are yet to eventuate. There are also significant infrastructure costs, particularly in terms of gaining access to adequate bandwidth. Metropolitan institutions are currently well serviced. Bandwidth is a serious issue for many rural and regional institutions attempting to be competitive online. 57 Developments in ICT available to researchers mean that it is increasingly possible for research to be undertaken by small groups in a specialised field in collaboration with a global community of researchers with similar interests. Important infrastructure providers such as the Australian Partnership for Advanced Computing (APAC) and AARNet (Australian Academic and Research Network), the former specialising in high speed computing and the latter in supplying bandwidth to the Australian university community, have combined to establish a new optical network called GrangeNet (Grid and Next Generation Network). 58 There is an opportunity to extend the current policy emphasis on developing ‘critical mass’ of researchers in key areas. We can now also consider focussing strategic support on small research groups that can collaborate flexibly and globally. Smaller work groups can have advantages over larger work groups. There can be a greater sense of urgency to the work being carried out and short term wins experienced by staff can boost confidence and productivity. Assuming an adequate infrastructure of communications and computing capacity to support distributed expertise, such an approach could help Australia overcome its disadvantages of distance and scale. social and environmental issues59 There has been a growing acknowledgement of the connections between research and development and economic growth, and of the roles universities play in this interaction. Universities need to be involved in more than serving labour market requirements and undertaking applied research. The community expects and needs higher education institutions to contribute more fully to societal development which is increasingly knowledge-based. 60 There are complex social and environmental issues facing Australia and our region, including regional security, social cohesion, bio-ethics and water quality. Such issues impact in various ways on the operations of higher education institutions. The community expects higher education institutions to contribute to problem solving through intellectual leadership. Addressing the challenges will require high quality research and innovative applications of knowledge as well as improved understandings of problems and their causes. This also requires the development of new forms of relationship between higher education institutions and their communities. demography and labour markets61 The school-leaver feeder population for higher education is likely to grow modestly until 2010 after which there will be a slow long term decline. In order to maintain current participation levels we require on a national basis around 780 growth places per year until 2010. If we project the age-specific participation increases that occurred over the 1990s, we would require a further 3 750 places per year. 62 However, there will be pressure for greater increases in specific regions. For example, the population of 15–19 year olds is projected to grow by 12 per cent in Queensland but decline by 10 per cent in Tasmania between 2000 and 2010. 63 The major pressure for growth is likely to come from demands for increasing levels of participation, rather than from population growth. States with below average participation argue that places should be funded to place them on par with the average. 64 Developments in the labour market are likely to encourage higher participation and longer durations of study. Double degree combinations are increasing at the undergraduate level. Postgraduate qualifications are being required for entry to a number of professions. There are also likely to be calls to increase participation on a number of grounds. Some also point to the large disparity in participation between males and females and the lower participation in rural areas and among low socioeconomic status groups. 65 There is also the issue of unmet demand. In 2002 around 50 000 applicants through State Admission Centres were not offered a university place. However, it should be noted that this figure overstates unmet demand since it includes applicants who could not reasonably expect to get into university, who made multiple applications and may not have accepted an offer. Specific factors can affect annual shifts such as a pulling back on over-enrolments of previous years. 66 University education remains financially attractive. Graduate starting salaries, expressed relative to Average Weekly Earnings, have been increasing and graduate unemployment rates are low. Graduates command a significant wage premium in the labour market. Workforce projections (Workforce 2005) suggest strong growth in numerous professional areas including accounting, financing, human resource management, law, architecture, computing and information technology, science, health services, marketing, social welfare and early childhood teaching. There is also very strong demand for nurses and teachers. 67 There is no exact science in estimating the future demand for student places. Forecasting occupational requirements is notoriously unreliable. Cyclical changes to the economy can significantly affect student demand. Such short-term fluctuations can be large. Hence we need a higher education system with resilient absorptive capacity. 68 The pressures on higher education are qualitative as well as quantitative. Increasingly, the emerging workforce requires professionals with the capacity to work across traditional disciplines in problem-oriented teams. Employers are looking for people who can respond to change, keep up with rapidly changing technology and show initiative and creativity. We need a system that produces graduates who can think critically and have adaptable skill sets as well as technical expertise. In many ways, that will require significant transformation of approaches to curriculum and pedagogy to stimulate and stretch students and accommodate their varying needs. fiscal capacity69 Public funding is likely to remain a cornerstone of Australian universities, although their sources of revenue have diversified as their revenue has increased. Some commentators argue that the nation’s capacity for increasing expenditure on higher education will depend in large measure on widening the range of funding options and increasing the flexibility of institutions to pursue those sources. 70 Demands for competing public expenditure are likely to increase. Social expenditures are projected to increase as a proportion of GDP. The major source of that growth will be health expenditures, driven by increases in health costs and the ageing of the Australian population. Higher education will have to compete for public funds. 71 The community has several choices for spending taxpayers' money. One set of choices concerns the relative priority to be given to higher education as distinct from, school education, health, welfare and national security. A second related set of choices concerns the balance between public and private provision, and the extent to which taxpayers in general or specific beneficiaries pay for the investment in higher education. A third set of choices relates to the respective responsibilities of the Commonwealth and the States and Territories. 72 In all likelihood, public funding of higher education will continue to face tight fiscal constraints. Additional funding will have to draw on private as well as public contributions. Governments are seeking more tangible social and economic returns from higher education and will require assurance that the resources they provide are being managed efficiently and effectively. b. pressures and tensions73 The need for change in the higher education system arises not only from external challenges but also from internal pressures. Since the 1988 White Paper, the tendency of policy has been progressively deregulatory. However, some consider that market-oriented incentives sit uncomfortably within what is still essentially a central planning framework, with a number of significant anomalies. Given the tensions created it is not surprising that demands have increased for the Commonwealth Government to provide a more coherent policy framework for the further development of higher education. 74 The Commonwealth’s funding contribution to public universities through operating grants is based on student numbers and common values per student. However, cost structures vary according to an institution’s location, scale of provision and student characteristics. Several universities have significant historical advantage in terms of their assets yet this is not taken into account when funding is allocated. Universities are generally expected, and particularly those in regional areas, to perform a community service role but they are not funded explicitly for this purpose. 75 Universities have been encouraged to focus on their strengths for both efficiency and quality improvement purposes. However the current ‘one-size-fits-all’ funding arrangements tend to normalise institutions and provide few incentives to encourage innovation and differentiation. Large numbers of universities teach similar courses both at the undergraduate and graduate level. 76 Collaboration between public universities can bring about educational benefits and cost savings. Collaborative activity tends to be confined to areas of research and teaching of some languages. There are few incentives to encourage collaboration in course development, teaching, student services and administration. 77 There has been an increasing recognition that publicly funded higher education institutions need to diversify their funding sources. However, there are a number of restraints on institutions that limit their ability to do this. The greatest source of income for universities is their undergraduate students, yet for the most part, the institutions have little control over the number of these students nor the price they pay. This contrasts with private business where revenue and costs are counter-balanced through variations in volume and price. Restrictions are applied in relation to the number of domestic fee-paying undergraduate students that institutions are able to accept even though there are no such restrictions in relation to international undergraduate students. Universities cannot offer different courses to domestic undergraduate fee-paying students nor can they offer particular courses on a fee-paying basis only. 78 Institutions receive funding only at marginal rates where they attempt to respond to changing levels of demand. While the provision of marginal funding for such places provides up-front cash incentives for institutions, they may incur higher downstream costs and risk compromising quality. 79 Public universities are essentially competing in a service industry. Staff remuneration represents around 60 per cent of their annual costs. In this regard, it is argued that the current salary indexation arrangements fall short of rises in going rates for professional occupations. Universities are having difficulty attracting and retaining quality staff. 80 The Postgraduate Education Loans Scheme (PELS) has been introduced for domestic students paying full fees at the postgraduate coursework level. However the arrangement does not extend to fee-paying students undertaking undergraduate degrees, or sub-degree fee-paying courses. In addition, loan arrangements are currently restricted to public institutions (and the Open Universities Australia consortium) even though many private providers offer equivalent, fully accredited courses. A case has been made that this is inequitable for students and has unintended consequences for particular private providers. 81 Pathways to a higher education qualification are wide and varied. Articulation arrangements between the training sector and universities can result in students paying very different amounts to obtain the same qualification. A student might undertake an Accounting Diploma at TAFE where there is an articulation arrangement with a university offering a Bachelor degree in Commerce. This student will have paid up-front fees while at TAFE and will have contributed under HECS—with the option of a loan—while at university. The contribution from this student would be significantly lower than that of a student who undertook their Commerce degree solely through university, but against this the student would not have been able to borrow from Government for the TAFE-delivered part of the degree. In addition, the studies undertaken at TAFE will have been heavily subsidised by the State Government yet there is no State subsidy for the student who completed their degree entirely at university. 82 State governments have legislative control over the governance of public universities and receive significant community benefits that are provided by these institutions yet contribute a very small proportion of funding. Many of these governance arrangements are unwieldy and few provide universities with a Council that has the balance of capability, experience and business acumen that Vice-Chancellors can draw upon in managing a large organisation. The governance and management structures of universities also tend to restrict their ability to make the hard decisions required to achieve necessary change. 83 In short, the challenges facing universities are not simply of a financial nature. The policy framework which shapes Australia’s higher education system stands in need of review. |
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Any comments or
queries should be sent to:
highered@dest.gov.au
Department of Education, Science and Training
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