Our global position and future potential The challenges facing Australian higher education

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Our global position and future potential The
challenges facing Australian higher education

• Simon Marginson
• Centre for the Study of Higher Education
• The University of Melbourne
• ATEM Branch Conference, South Australia
• Glenelg, 26 July 2006

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coverage today

• Australias current standing in the global
  setting, including research, and the market in
  cross-border degrees
• Factors affecting Australias current position
  and global potential history, geography,
  organisational cultures, public and private
  investment and composition effects, system
  stratification, government and Labor policies
• Five possible futures, given different
  assumptions about public/private sector balance,
  public and private funding at varying levels, and
  the extent of mission specialisation

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Positioned but also position-taking Factors
determining global potential

• Institutions, and national systems, are both
  positioned and position-taking in the global
  field of higher education (Bourdieu). They have
  some control but not total control over their
  potential and opportunities. Those with stronger
  resources and reputations have more room to move
  than do others
• Position affects the capacity to operate
  globally, which is unevenly distributed between
  nations and institutions on the basis of history,
  geography, size, resources, language of use, etc.
  
• Nations and universities have a greater range of
  position-taking options in the global setting
  than national/local setting. The global setting
  is more open, less path-bound, with more
  possibilities for securing position via policy
  moves, cultures of responsiveness, executive
  strategies, novel teaching and research
  initiatives, etc.

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Elements of global effectiveness

• The key is to be fully engaged globally while
  maintaining a grounded, evolving national/local
  identity. A spirit of global engagement, grounded
  in national/local identity, while at the same
  time fostering an active, informed curiosity
  about other cultures. Openness plus a strong
  sense of own project.
• Long term solid national government support is
  crucial
• Institutional autonomy and academic freedom to
  operate
• Research capacity and outputs are crucial to
  universities
• Vocational education that is cutting edged,
  properly resourced
• Communications power both in (1) IT and (2)
  languages
• Executive steering capacity based on professional
  managers
• Staff and student movement inwards and outwards
• Timing take the opportunities when they are
  there!

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Australias current global standing
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Australia in the global setting

• An upper middle ranking higher education system
• Key advantages (1) being English-speaking, (2)
  relatively safe and tolerant social setting, (3)
  location SE of the Asian continent, (4)
  responsive and enterprising university cultures
• Compared to other English-speaking nations,
  stronger in international education, in the sale
  of degrees especially in Asia, than in research.
  Academic capacity has been de-emphasized
• 1.6 of GDP spent on tertiary education (2002)
  USA 2.6
• Relatively high dependence on private income as
  is USA
• None of the top 20 research universities, two of
  top 100, 14 of top 500 (Shanghai Jiao Tong,
  2005) USA has 53 of top 100, 17 of top 20
• 2 of world scientific papers (2001) USA 31
• 97 ISI HighCI researchers 3568 in the USA, 409
  in UK, 161 in Canada, 16 in NZ
• 8000 foreign doctoral students USA 102,000
• 9 of the cross-border market in degrees (2003)
  USA 28

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Global markets, global competition

• There are two tier global markets in tertiary
  education
• The super-league of leading research
  universities in USA/UK that dominate research and
  doctoral training. A status competition not a
  commercial market relationships are conducted
  (and dominance exercised) as much via academic
  collaboration and exchange of public knowledge
  goods, as by competitive relations and private
  good production
• The market in commercial vocational training,
  produced by both non-profit and for-profit
  institutions, in both university and
  polytechnic/VET sectors. Australian institutions
  sit here
• 98 of students are educated at home. But in
  many nations global markets and the
  super-league now overshadow once unchallenged
  leading institutions and rising star
  institutions can leverage global activity to lift
  themselves at home

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Research papers in science and technology 2001
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Growth in science papers 1988-2001 (ISI data)
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Jiao Tong rankings weightings
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Top 100 research universities 2005 from Shanghai
Jiao Tong University Institute of Higher
Education
Others Israel, Finland, Denmark, Austria,
Norway, Russia, Italy each 1.
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Peaks of the global education market the top 20
research universities 2005 from Shanghai Jiao
Tong University data
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Australians in the top 500, 2005 from Shanghai
Jiao Tong University data
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Research rankings fully expose Australia to
global competition

• Universities are widely judged by research
  performance which is foundational to reputation,
  and operates as a proxy for degree power and even
  teaching quality. Now Shanghai Jiao Tong has
  provided a credible set of data on research
  performance, and this is feeding into the market
  in cross-border degrees
• Marketing (we are world-class, one of the
  finest, a research university etc.) is no
  longer enough - the data must confirm it!
• Governments/nations now want super-league
  universities. Implies greater concentration of
  research activity, greater stratification of
  universities, selective investment increases
• Every university (except Harvard) wants to lift
  its rankings, every university in the top 500
  wants to hire more high citation (HiCi)
  researchers. This competition is generating price
  effects

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HiCi researchers selected universities, 2005
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HiCi researchers Australia 2005
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Exporters of cross-border education 2003 OECD
data
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Largest Australian providers
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Education export pluses minuses
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Enrolment shifts 2003-2004Australia 2004 DEST
data
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The top 20 in 2005 according to the Times Higher
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Australians in the top 200, 2005 according to
the Times Higher
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Times Higher rankings weightings
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2. Factors affecting Australias global position
and potential
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Constituents of global position and potential
summary
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Languages of 100 million voices
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Investment in tertiary education as a proportion
of GDP (2002)
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• Australian investment in tertiary education is
  high relative to the OECD norm but the
  composition of investment has changed
  dramatically. In the last two decades the public
  share of funding has fallen from 85 to 40.
  Incentives have been transformed. The pattern of
  activity has altered.
• It is notable that the rises in private
  educational expenditure have not generally been
  accompanied by cuts in public expenditure on
  tertiary education. On the contrary, public
  investment has increased in most of the OECD
  countries for which 1995-2002 data are available,
  regardless of changes in private spending. In
  fact, many OECD countries with the highest growth
  in private spending have also shown the highest
  increase in public funding The main exception is
  Australia, where the shift towards private
  expenditure at tertiary level has been
  accompanied by a fall in the level of public
  expenditure in real terms.
• - OECD, Education at a Glance, 2005, p. 193.
  The decline in public spending 1995- 2002 is 8
  per cent in total (p. 187) and about 30 per cent
  on a per student basis (p. 175) .

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• Total university revenues have not declined.
  Public funding per student is down, private
  funding per student is up, the effects seem to
  cancel out. But on the private income side, what
  matters is not total income but surplus. In many
  universities international student marketing
  provides additional cash flow but does not
  generate net surplus. The new revenues have been
  largely or wholly absorbed by the new functions
  needed to raise them marketing, off-shore
  activity, special services, etc. The old public
  income, the gift of government that cost little
  to raise, is not replaced.
• And in some cases where international marketing
  does generate significant surplus, quality is
  suffering.
• This is why in the midst of the export bonanza,
  universities are impoverished, and quality and
  value are in question.
• In sum, with the shift to market-based incomes,
  universities spend more on revenue raising
  functions and less on the core businesses of
  teaching and research. Yet it is these core
  businesses from which business draws value. The
  incentives are wrong. Universities are spending
  more on reproducing themselves, and less on
  producing valuable products.

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National research performance compared to
economic capacity
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Australia in the global market inmobile doctoral
studentsPercentage () of all international
students enrolled in research degreesOECD data
for 2003 except USA is 2003-2004
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Where will public institutions raise the new
money they need?

• Limited scope for HECS increases given faltering
  participation and fact most institutions are at
  maximum
• No sign of serious increase in targeted research
  money to support RQF, or ANU-style funds to other
  institutions
• Full fees a bonanza to emetging private sector
  institutions but choked by red-tape in public
  sector, e.g. uniform caps by program no bonanza
  for sandstones,others not competitive
• Serious increases in industry and philanthropic
  money dependant on tax changes
• Limited potential for further cranking up foreign
  students

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Intensified global salary competition 2000-2004
data, various sources, Purchasing Power Parity
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Private and public sectors

• The main impact of the Nelson reforms is the
  fostering of the private higher education sector,
  now about 10 of enrolments
• Here the federal government is creating a
  pro-coalition constituency akin to the newer
  private schools like them some are communities
  of faith
• The change to the national protocols permitting
  specialist universities (originally triggered by
  Carnegie Mellon in SA?) is a decisive
  innovation, with the potential to radically
  remake the map of provision in the longer term
• The private zector has become the main site of
  growth and innovation while the public sector has
  little growth potential
• However there are signs of a new trend to mission
  specialisation in the public sector, notably at
  Melbourne

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Stratification

• Slow evolution into steeper market, not dramatic
  change
• The sandstones have not taken flight - limits of
  undergraduate full fees, no RQF yet, and anyway
  the RQF is unlikely to deliver major shifts in
  research funding
• Elite private sector yet to emerge (but watch
  this space)
• Spate of new medical faculties strengthens some
  contenders
• Middle level institutions under new pressure to
  merge, and with or without this face difficulties
  in cost management
• Volume maximisers with weaker research face
  declining reputations and possibly, declining
  fee-based incomes
• Serious money for regionals yet to appear. A hard
  time

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3. Five possible futures
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Some worrying signs

• We have lived off a strong research reputation
  accumulated on the basis of public investment in
  the 1960-1985 period, but
• Jiao Tong rankings now make research reputation a
  function of measured performance, not history or
  marketing
• They also emphasise the need for top 40
  universities
• Downward pressures on quality of teaching
  (doubling of staff student ratios) and research
  (funding cuts hurt basic research)
• We are weak in comparisons with the UK and Canada
• Our international market share and revenues are
  vulnerable, e.g. import replacement and export
  competition in China, Singapore
• We lack a national approach to standards
• Fiscal policy is locked up, seems to be downward
  flexibility only
• Global capacity? National policy is leave it to
  the universities

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Australia and Canada compared
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Student flows in the global education environment
EUROPE
ASIA-PACIFIC (demand for foreign study In
China, India, Korea, etc.)
UNITED STATES UK Canada
JAPAN
AUSTRALIA NZ
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Export and import in Asia OECD data for 2001
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Five possible scenarios