Research-intensive universities in Australia have borne the brunt of the economic impact of Covid-19 on higher education, in contrast to Europe, where they have been more protected, a conference heard.
The Remote summit, hosted by Arizona State University, heard that the most prestigious universities Down Under had been hit “particularly hard” because they hosted the “lion’s share” of lucrative international students and because government assistance has been focused on domestic teaching programmes – leaving little for research.
Michael Wesley, deputy vice-chancellor of the University of Melbourne, said that his institution faced losses of about A$1 billion (£550 million) over the next three years. As far as universities were concerned, the government response to the crisis was “best described as a work in progress”, since the sole support package to date, which guaranteed the continuation of funding for domestic students, “doesn’t touch the loss in international student revenue”.
Adding to the pain, proposed changes to domestic tuition fees and funding rates were expected to have “negative” implications for the university’s finances, while the government had also flagged tweaks to research funding. “We are awaiting those changes with some expectation and trepidation,” Professor Wesley said.
University of Edinburgh vice-chancellor Peter Mathieson said that Scotland’s highest-ranked university faced losses of between £70 million and £150 million on an annual turnover of approximately £1.1 billion – largely through disruptions to enrolments from outside the UK, which comprised 43 per cent of its intake last year.
But Edinburgh’s steps to mitigate the losses were being boosted by support from both the Scottish and UK governments. “A lot of the focus so far has been on research,” Professor Mathieson told the summit. “We’ll be key drivers of…economic development [and] the government is recognising that by seeking to prevent the risk of short-term damage on that infrastructure.
“For those universities that are not research-intensive, there’s not been as much to be pleased about. Neither the UK nor the Scottish governments have been absolutely clear about what they will do if institutions are in danger of failing. There are noises made about bailout packages…but we haven’t seen the details.”
The session at the summit was convened by Times Higher Education and chaired by its chief knowledge officer, Phil Baty, who said that, in a worst case scenario, a dozen UK universities could “go bust”. “There’s a sense that this [government] would be reasonably comfortable with some market shake-out,” he said.
Switzerland’s top-ranked ETH Zurich was “not immune” from the pandemic’s effects, either, the event heard. But rector Sarah Springman conceded that in an institution where international students paid the same fees as their domestic equivalents and about 70 per cent of funding came from the government, “we’re probably not struggling quite as much as some of the others”.
Professor Springman said that for ETH Zurich, one of two federally funded Swiss institutions, the pandemic’s main financial impact would be the diversion of government spending.
With a reduced tax take and billions already spent on health and social services, universities could expect less to come their way – particularly in the context of Switzerland’s so-called debt brake, which has curbed federal spending ever since 2003.
“Fifty per cent of what they give out every year is automatically programmed and has to be paid out,” she said. “We belong in the other 50 per cent. If there are any cuts, we probably end up getting double unless the case made for research and education is strong enough.”
Switzerland has escaped the worst of the pandemic’s economic ravages partly because – unlike the UK and Australia – it does not depend on international tuition fees to cross-subsidise university research. Rather, foreign students are valued mainly for the diversity that they bring to campuses and the skills they inject in the workforce.
“We are desperately seeking…master’s graduates in Switzerland for industries and commerce,” Professor Springer said. “There aren’t enough young Swiss coming up to fill those roles. About 75 per cent of our foreign graduates stay in Switzerland for about five years afterwards. This is a very important flow.”
She said that she expected Switzerland’s international education allure to increase in the aftermath of the pandemic, as geopolitical tensions shepherded Chinese students away from major destinations such as the US and Australia. The Chinese ambassador had told her last year that he expected ETH to be taking 3,000 Chinese students in the future.
With about 20,000 students in total, the main problem was whether this would “fit in” with the university’s character. “Given that we’re funded to a large degree by the Swiss taxpayers, we need to have a balance [where] diversity is promoted but doesn’t take over.”
Professor Wesley said that the burgeoning hostility between China and the US was problematic for Australia, because the two superpowers were “our largest research partnership countries”.
“We are starting to see a knowledge decoupling between the US and China,” he said. “International research [and] education partnerships are being put in a very difficult situation. I see the possibility, particularly in the hard sciences, that there will continue to be an erosion in the trust on which international research is based.”
Professor Mathieson said that the geopolitical tensions could play out differently at Edinburgh, where China and the US were the biggest sources of international students. The university was “very concerned” about future recruitment from both countries.
But he poured cold water on any notion that those flows – or anything else, for that matter – would recover to pre-pandemic levels. “We’re not calling it recovery; we’re calling it adaptation. We don’t think we will recover back to the old ways. We think we will adapt to new situations,” he said.
