Raising the Stakes

Professor Peter Coaldrake is Vice-Chancellor and President of Queensland University of Technology (QUT), a position he has held since 2003. A dual Fulbright Scholar, he served as Chair of Universities Australia, the peak body of Australia’s universities, for a two-year term to May 2011. He is Chair of the governing board of the OECD’s higher education program and earlier in his career spent four years as Chair of Queensland’s Public Sector Management Commission.

Dr Lawrence Stedman has been Principal Policy Adviser within QUT’s Chancellery since 1995. He holds a PhD in mathematics from the Australian National University and, prior to joining QUT, he worked within both the Commonwealth Department of Finance (monitoring higher education) and the Commonwealth Department of Health, where he was Secretary to the Medical Research Committee of the NHMRC.

Coaldrake and Stedman previously co-authored On the Brink: Australia’s universities confronting their future (UQP 1998) and Academic Work in the Twenty-First Century (DETYA 1999). Coaldrake is also the author of Working the System: Government in Queensland (UQP 1989).

This book is for

Lee, Emma, Jess and Calum

and for

Robyn, Dougal and Lucy

Contents

1 Tackling myths

2 The role of universities in the twenty-first century

3 Models of the Australian university

4 Driving mass diversity

5 Funding for performance: The case of teaching

6 Being world class

7 Weapons of mass instruction

8 Cost, quality and sustainability: The move to on-loan higher education

9 The scholarship of fools? Governance and management

10 Conclusions

Acknowledgements

Notes

References

Index

Chapter One

Tackling myths

In the early years of the twenty-first century Australia is still a lucky country, blessed with abundant resources, high standards of living for most and a society that has so far managed to avoid the polarising extremes in wealth, economic dislocation and cultural conflict seen in many other places. Yet we cannot assume things will stay this way indefinitely. We are connected more than ever to the rest of the world and are consequently affected by powerful global forces driven by demographic change, economic development in the Asian region, continued fallout from the global financial crisis, structural changes in developed economies, ongoing technological transformations and environmental challenges and disruptions. We have only just begun to feel the impact of all these trends.

In this connected, competitive and environmentally stressed world we depend on better understanding and knowledge, but uncertainty seems ever more present. The scope and range of scientific expertise and technology are greater than before, but so too is our awareness of the limitations of what we know. We have faced adversity in the past and a major part of our national response to that was to increase our collective ability to make use of our brainpower. Like many countries Australia emerged from the Second World War determined to improve national circumstances through public investment in education and research, and transforming a fledgling university system was part of that task; however, the situation today is different. While individually, and as a nation, our need for better knowledge to adapt to the challenges we face is much greater than previously, the costs and risks are being borne mostly by individuals and we are struggling to manage and sustain funding for a university system that has grown enormously in size and scope.

There are numerous expectations of universities and many people are sceptical about their capacity to deliver. While universities are considered fundamental for economic, social and individual development, and university places are highly sought after and more widely available than in times past, the institutions themselves are portrayed widely as unsustainable, unfit for purpose, lost in their way and on the brink of obsolescence.

From the viewpoint of government, universities are costly and difficult to align with official priorities, and they are often considered complacent, self-serving and insufficiently exposed to competition and market forces. As a result, students now shoulder a substantial share of the cost of their education and, in turn, students expect flexibility, responsiveness and service from their universities as well as excellent academic standards and facilities.

Some worry that the special character of elite universities, those that seek to produce world-class research, compete internationally for top researchers and cater for the most academically adept students, will be lost in a homogeneous system. In other universities there is a widespread view that their supposedly defining characteristics – for example, regional engagement, industry links, modes of teaching, or student demographics – are insufficiently recognised and ought to receive special support. More generally within universities there is chronic discontent with constraints on time and resources, and dissatisfaction with management. Strains are evident in traditional academic cultures with increasing work pressures, more intrusive regulation by government and closer involvement with the world of commerce, as well as diversification of roles and disparities in rewards.

Looming over much of the university policy debate here and overseas is a spectral threat of technology-driven obsolescence. New, nimble and cheap online providers are, we are assured, about to break the traditional university mould. The best lecturers in the world and learning resources from the best universities in the world can be accessed anywhere at any time with minimal cost, avoiding the unnecessary overheads of the place-based, research-involved and labour-intensive university.

While Australian academics are, according to international surveys, among the least content with their lot in the world, the dismal picture just painted is not confined to Australia. Nor is it particularly new. Academics, government representatives and pundits have been fretting over much the same issues for decades. The United States and, to a lesser extent, the United Kingdom dominate the university league tables, but official reports in those two countries, as in most other places, warn of ‘falling behind’ and ‘lagging behind our competitors’, and both countries also excel in the production of doom literature, with new works analysing the decline of the university appearing with depressing regularity.

There can be no doubt that these are challenging times, and even institutions as venerable and apparently ancient in form as universities are exposed to forces that will ensure that they have to change. This change will be hardest for public universities, the backbone of the higher education system in many countries, and particularly in Australia and the United Kingdom. The model of the public university with which we are broadly familiar today is no more than half a century old, and it emerged largely from the extension of an older form to fit new circumstances. That extension is now under unprecedented strain and challenge.

The rationale for the expansion of universities was that future prosperity would depend on unlocking the creative and productive potential of a nation’s citizens and drawing on the impressive development of human scientific knowledge and technological possibility that had been amply demonstrated since the nineteenth century. In the twenty-first century it has been recast as building knowledge-based economies and societies, and this acquired added urgency as the golden age of post-war economic growth faltered in the 1970s and gave way to significant economic and social disruptions caused by globalisation and technology. The nature of knowledge, though, and its role in economic and social development is not fixed, nor is it self-evident.

Knowledge, or at least information, is constantly growing and reshaping itself and is available in massive quantities anywhere at any time, and authority over knowledge has been muddied and vigorously contested. Universities cannot hope to maintain monopolies over the production and certification of knowledge but, despite the best efforts of governments around the world to design or encourage cheaper and more efficient alternatives, universities remain the preferred choice of students and the locus for undertaking long-term and basic research that add to our understanding of the world and can be used by others.

Australia is now entering an effectively universal phase of higher education: government restrictions on how many may enter public universities have been removed and public subsidies have been extended to a wide range of non-university providers. The percentage of young adults with a degree in this country is already high by world standards, and increasing. And, at least up to this point, the advantages of having a degree continue to make it a worthwhile investment for the great majority. The challenge for the future is to sustain the strengths of the university as an institution available to all in the face of inevitable resource pressures, demands for more accountability and policy reforms that can work against dynamism in the sector.

There are many policy conundrums facing Australian universities and in this book we do not attempt to grapple with all of them. We do not, for example, examine in depth issues about internationalisation, interfaces with business or with the vocational education and training sector, skills shortages, curriculum, changes in the academic workforce, or access and equity. These are all undeniably important, and of course are all mentioned. Our primary focus is on universities as institutions, and on the broad developments that are shaping their future.

The Australian university is based squarely on models drawn from the United States and the United Kingdom, and has evolved over time to take a more or less single institutional form in that it combines in various ways both teaching and research, is a physical home for scholars and is large in size and scope. By the latter we mean that it is broadly comprehensive in areas of study and in awarding credentials from bachelor degree through to postgraduate qualifications (in Australia this includes the doctorate). Within this form there is substantial academic freedom and institutional autonomy, including the power to self-accredit awards and to be self-governing. No doubt many people within Australian universities would dispute that academic freedom is sufficiently uncompromised and, in practice, issues can arise that cause complications – for example when one person’s claim to academic freedom may compromise another’s or when terminally disruptive and dysfunctional behaviour occurs. Yet academics in Australian universities have substantial control over what is taught and researched and enjoy significant leeway to make public comment without fear of dismissal or censure from management. Issues of governance are also more complicated than the term ‘self-governing’ might imply, and there are constraints and controls that apply to any institution that relies on public funding, but in essence the principle applies.

While variations on this theme may be found around the world, there has been a general convergence towards the Anglo–US university model, with a number of European countries giving greater autonomy to formerly state-managed institutions, and the vigorous pursuit of ‘world-class universities’ by many nations. Even at the less than elite level, universities in several formally differentiated systems have grown closer to the norm, in some cases differing only in their capacity to award doctoral degrees.

Despite sustained unease in government circles and in elite parts of the university world, the combined forces of student preference, economic change, public policy and financing, academic norms and institutional strategy have driven universities in a more or less similar direction.

The problem that arises is that if universities are to deliver what they purport to deliver, then this does not come cheaply. Moreover, their basic ‘business model’ remains dependent on both highly specialised human work and leading-edge technology, both of which contribute to escalating costs. The response by governments, particularly here in Australia and in the United Kingdom where higher education policy ideas are regularly exchanged, has been to control the major part of university income, allow limited deregulation in some areas, encourage (or force) the rationalisation of activities and the amalgamation of smaller players, keep the price of a student place at artificially low levels, separate funding for teaching and research, ramp up measurement and inspection of university quality, and make universities bid for new money for capital works or other developments. The effect has been to put greater pressures on universities, and further increase administrative and compliance costs, but not to change the fundamental nature of the sector.

There is no shortage of pundits on the future of higher education who opine sagely that all this is unsustainable, and more reform is needed. What we need, we are frequently told, is more ‘diversity’. This is a term that has been sufficiently flexible to enable disparate and sometimes conflicting concerns to be addressed under one heading, although it should not be surprising that the resulting policies and implementation have often failed to live up to expectations or have generated unintended consequences.

In the future, we are told, universities will be obsolete, or only the elite research-intensive institutions will survive, leaving the rest of the population to make do with cheaper alternatives better suited to their more limited abilities. Others claim that the market will sort it out, with private sector competition creating a better match of needs and means as students operate as savvy consumers, possibly guided by helpful information on government websites. Or perhaps the messiness of the current situation can be addressed only by better planning, or by more reform aimed at teasing apart the different parts of the university ‘value chain’ and opening up the university black box to external scrutiny and more effective external control.

Emerging from these kinds of policy debates about universities are propositions that are often repeated, and may be sincerely held to be self-evident by policy entrepreneurs, but are at best half-truths. Part of our purpose is, if not to debunk them, then at least to expose them to some critical scrutiny and to flesh them out a little more realistically. These propositions include that:

• Australia needs to pursue explicit policies to move up the world university rankings and concentrate its research resources on building world-class excellence;

• new providers, such as massive online programs offered from prestigious universities, are about to transform the higher education scene, hollowing out the university model;

• research and teaching are inextricably linked, or conversely research is an expensive optional add-on that should be separated from teaching for most universities;

• teaching needs performance-based incentives to raise it to be on a par with research;

• the higher education sector’s problems can be resolved only by deregulation. Universities can then play to their strengths, better informed markets will enable greater competition on price, and better choices will be made by students and better services provided to students;

• the sector needs more focussed coordination and design by government, through mission and performance-based agreements or by adopting the Californian system, or by encouraging smaller universities focussed on excellence in a specialised field;

• the university sector needs a buffer body to protect it and manage its relationships with the government of the day;

• university vice-chancellors are spineless and complicit in the destruction of public universities and need to be more effective lobbyists for more funding; and

• universities can regain their golden age by resisting the forces of neo-liberalism and managerialism.

Higher education, on the scale operating in Australia where more than a third of young adults hold a bachelor degree or higher qualification, is a remarkable achievement, one which has consistently exceeded past assessments about the intellectual capacity of populations, the relevance of study, or the economic demand for graduates. There is no sign that our national need for highly skilled graduates or new knowledge will decline in the future; in fact the opposite is likely to be the case. It is also abundantly clear that if we are to tackle the myriad social, environmental and other challenges facing us as a nation, and indeed as a species, then we need to know a lot more about the nature of the world we live in, and our relationships with it and with one another. Strong demand for education and research would seem to suggest a rosy future for universities.

Yet there are many signs that universities in Australia, as in most other countries, are under pressure. The stakes are being raised, and not just for students and for governments, which must balance competing demands for public funding. Universities face mounting risks as large, complex and often unwieldy organisations facing global and local competition and higher expectations for accountability and performance. We are moving inexorably away from a public system of university education towards a hybrid that is increasingly privately funded but subject to significant levels of public control and surveillance.

If we are to navigate this transition successfully and derive the best value from our universities we need to move on from myth-based policy-making and acknowledge the complexity of the sector, recognising that it has long moved past the point of yielding to simple systemic solutions. The real work of reform must move to the institutional level.

Chapter Two

The role of universities in the twenty-first century

Genius is one percent inspiration, ninety-nine percent perspiration.

Thomas Edison

If Edison had a needle to find in a haystack, he would proceed at once with the diligence of the bee to examine straw after straw until he found the object of his search. I was a sorry witness of such doings, knowing that a little theory and calculation would have saved him ninety percent of his labor.

Nikola Tesla

In the tumultuous rise of human civilization, universities remain one of our oldest institutions. This pedigree is emphasised with ceremonial caps and gowns of medieval origin, and echoes remain in academic titles such as dean and chancellor.

The roots of today’s academic institutions are indeed ancient. The term ‘academic’ comes from a hero of the Trojan War, Academus, after whom an olive grove was named. At that grove Plato founded his Academy in 387 bc. As the economic historian Donald Stabile has pointed out, higher education in ancient Greece generated conflicts between the sophists, who sought practical knowledge and charged tuition fees, and those committed to ‘virtue’ in the form of the pursuit of ‘pure’ knowledge, such as Plato. Plato’s star pupil, Aristotle, remained at the Academy for two decades as a leading intellectual figure, but left when he was overlooked in the appointment of an Academy leader after Plato’s death, the job going to a much older man. Thus human resource conflicts, like debates about fees and usefulness, go back to academe’s origins.

Although greatly interesting in its own right, we will not be tracing the development of the university from its medieval roots as a fixed home for scholars through to the development of the research university in the nineteenth century; that task has been done very well elsewhere.¹ Suffice it to say here that the dominant driver of university expansion since the 1960s has been about that institution’s role in knowledge, based on the idea that developing educated people and generating new ideas drives national economic growth and prosperity. These propositions have been used to inflate to unprecedented proportions a model that had evolved over barely a century, one which had grown out of traditions of elite education, a fostering of national culture, and the specialised pursuit of professorial research interests. In the process the university model has been moulded to fit a new set of priorities, providing education for the masses and generating useful research, and has been subject to increasing pressures on funding and external scrutiny. But the university concept has also demonstrated its own adaptability and influence, retaining substantial independence, resisting many attempts to engineer it into policy-makers’ preferred forms, at times leading politicians and others to back it in international races for prestige and basic research, and absorbing influences that many have thought would lead to its downfall.

Of course it is easy to find signs of pressure, and many are willing to claim crisis. Forests have been levelled to produce books and articles about the corruption of the ideals of liberal education and the pursuit of knowledge for its own sake, the incursion of managerialist methods and terminology, the fracturing of academic work and the use of non-permanent staff. Some of these are serious scholarly criticisms, others are more curmudgeonly polemics produced by disgruntled academics.² From other quarters policy entrepreneurs regularly herald the coming dissolution of the academic monasteries, for nimble online private alternatives will surely rise to swamp them. More recently, as befits these times of global economic uncertainty, there has been talk of a ‘higher education bubble’ as levels of degree attainment and student debt reach unprecedented heights.

Without doubt we are beyond the stage where grand narratives of the university will do the job that they have done in the past, whether they invoke the purity of knowledge or its usefulness. Knowledge is vastly more diverse, complex and contested than ever before, and public funding for universities is under even greater pressure. This does not mean that universities will become obsolete, after all they have shown considerable adaptability before, but it does mean that it will be increasingly easy for what has been built up over the past half a century to be steadily eroded by inter-sectoral zero-sum competition for resources, changing philosophies of public financing, and competition for credibility and relevance.

After the Second World War, the attention of policy-makers turned to national reconstruction. In Australia and the rest of the Western world they did so in an environment with radically changed perceptions about the power of science and technology, alongside ongoing political concern about the influence and growth of communism and growing egalitarian and democratic social norms. An expanding middle class was emerging as Australia moved from a heavy reliance on primary industries and corporate and government bureaucracies grew.

An observer had only to look to the United States to see practical demonstration of the industrial, military and wider economic power of science and technology, riding on the back of the world’s strongest universities, which had benefitted enormously from the Nazis’ gutting of Germany’s intellectual capital in the 1930s. The arms and space races between the United States and the Soviet Union yielded astonishing advances in technology and engineering, and prospects for further advances in prosperity through knowledge seemed limitless.

By the late 1950s new theories of ‘human capital’ were being developed by economists to link the spread of education and research with economic growth. International bodies such as the United Nations Education, Scientific and Cultural Organization (UNESCO) and the Organisation for Economic Co-operation and Development (OECD) spread the new gospel with conviction and the arguments provided were an additional spur to help justify rapid expansion in public funding during the 1960s.

The post-war boom that fuelled the growth of universities in Australia and around the world was driven by demographics, changes in social attitudes and expectations, and economic growth. For the next 25 years until the early 1970s the Australian economy experienced a ‘golden age’ of prosperity.³ However, since that time there have been several economic swings in fortune, with a sustained shift away from employment and production in a number of traditional primary and manufacturing industries, rising participation by women in the workforce, expansion of service industries and, in particular, strong growth in professional employment and a shift in financial rewards that favour people with higher levels of skill and knowledge.

The most obvious factor driving these changes was globalisation and the exposure of national economies to increased competition. In particular, much attention has been directed towards the rise of East Asian economies, beginning with Japan in the 1960s, which were able to draw on abundant low-cost labour to supply global markets with manufactured products that could out-compete those supplied by developed nations. The capacity of firms to outsource elements of their supply chains to countries with cheaper labour has not been restricted to manufacturing, and ‘offshoring’ has seen significant numbers of lower-skilled jobs in areas such as telecommunications and banking support shifted to call centres in Asian countries. More recently, signs