Times Higher Education 18 February 2021
The Australian unified national system for higher education was established in 1988 for various reasons, but its essence was to solve a funding problem. It was a one-size-fits-all solution, meaning that the government would fund all institutions in the same way. However, it was an approach that failed to stimulate difference and innovation in education services delivery.
Over 30 years, student numbers, staff, revenues and assets have grown to the point that higher education is now an industry making a direct contribution of around 2 per cent to Australia’s GDP. This growth has contributed to the emergence of an international education industry estimated to add around A$40 billion (£22 billion) to exports.
The Covid-19 crisis has had a devastating impact on the industry through a massive drop in revenues, particularly in the “big five” research-intensive universities of Melbourne, Monash, Queensland, Sydney and UNSW Sydney. The effect has also been to refocus community attention on the performance of the domestic component of the system. The crisis provides an opportunity for change and readjustment within institutions and the transformation of the system itself.
While the unified national system introduced uniformity in funding arrangements and regulation, the price of that uniformity has been a lack of diversity in institutional forms and education delivery, limiting the options for meeting the distinct educational needs of students, industry and the community in a growing and highly differentiated service-oriented knowledge economy. A more diversified national system would allow for more efficient allocation and use of resources between and within system segments; greater variety of educational opportunities and specialisations; and a better mix of teaching and research priorities and concentrations.
It is now clear that not all universities play on the same field. The five largest and wealthiest institutions have choices not open to the others, but the sector is treated as a single undifferentiated industry for regulatory purposes. And, to be fair, the unified national system's current operational reality suggests that the monolithic framework is already weakening, with attention being given, for example, to the “special place” of regional universities. Separate funding streams are emerging for regional education and research, while research-intensives find it easier to access funding streams in health and medical research.
Now is not the time for root-and-branch structural change. But greater diversity is unlikely to occur through policy osmosis. A deliberative approach is needed. The path towards greater specialisation and distinctiveness may involve aligning with elements of the proposed provider category standards currently before parliament. But it should go further.
The higher education system should be encouraged to grow and transform around several connected provider groupings. Each should have strong, distinctive capabilities addressing specific market segments, with a clearly defined range of educational offerings. As indicated, many of these segments have already started to self-select.
The path towards segmentation may start with:
The evolution of a diversified national system appropriate to 21st-century demand will be accelerated by Covid-19 disruption, the recent Job-ready Graduates funding reforms, changing demand for education and the probably continuing decline of public funding. System governance, rules and controls should be designed to facilitate this evolution rather than stand in its way.
John H. Howard is a visiting professor at the University of Technology, Sydney and director of Howard Partners consultants. He is author of Rethinking Australian Higher Education: Towards a Diversified System for the 21st Century.
A comprehensive review of Australia's higher education system was published as Rethinking Australian Higher Education by Howard Partners and UTS on 18 February 2021.
In May 2020 an extended analysis of Australia's research capacity was published as Challenges for Australian Research and Innovation by UTS as an Occasional Paper.
In 2019 Howard Partners completed the first ever comprehensive Performance Review of the Rural Innovation System for the National Primary Industries Research and Innovation Committee.
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