Universities ‘just another knowledge provider’ by 2030: report

Australasian universities of 2030 will be just one category of knowledge services provider in a world where learning costs almost nothing. Like today’s public libraries, they will be “temples of knowledge” that attract few visitors.

Universities will have lost their monopoly on accreditation, as employers work with or against them to develop “bespoke” credentials. Universities will also have lost their monopoly on government funding for student places, with private providers vying for A$10 billion (£5.3 billion) in teaching grants. Research will become a net earner for universities, as contracts, patents and royalties generate a A$10 billion profit stream from a A$120 billion commercial research and development funding pool.

This is the scenario outlined in a “thought experiment” from consulting firm EY, based on its market research and interviews with 32 university executives – mostly vice-chancellors and chief operating officers – in Australia and New Zealand.

The report says Covid has accelerated change in higher education and predictions considered “bold” just a few years ago are already materialising. The “signposts” of sectoral overhaul are evident in Google professional certificates that cost less than A$500, the rise of artificial-intelligence-fuelled “digital-by-design providers” and the supplanting of pre-recorded lectures by Clubhouse, Substack and YouTube.

Report co-author Catherine Friday likened universities to the car and oil industries confronting the competitive threat of electric vehicles. Similarly, higher education may have already reached its “peak” and universities without new business models risked succumbing to technological change.

Many commentators doubt the viability of research as a university funding mechanism, pointing to low rates of commercialisation success and overheads that turn profits from the lab into net losses. But Ms Friday said Australian research had been geared to boosting universities’ rankings in order to attract international students.

“If we take international students off the table as a revenue source, we’ve got this amazing asset in terms of our research capability,” she said. “What other purpose can we put that to?

“There’s somewhere in the order of US$6 trillion [£4.3 trillion] washing around just in private equity, looking for somewhere to call home. If our universities were better connected into some of those markets, there’s absolute return to be realised. We’re saying the capabilities we’ve already got should be directly cash positive – rather than indirectly via the attraction of international students.”

Ms Friday said commercial success was not at odds with universities’ public interest mission or their role in answering “ungoogle-able questions” and solving existential problems. “The future of humanity requires nothing less than massive investments in research and learning that will allow us to grapple with the challenges of the future,” she said.

“At the same time, that is not what many people want from the university experience. Many just want to be able to get a job. Universities can provide high-quality content at speed, in a way that better connects learners to the job market of the future. It’s not an either-or thing.”

The report addresses four end-of-decade scenarios: learning costs are driven down to zero, accreditation becomes the new battleground, governments fund individual learners instead of institutions, and commercialised research funds university operations.

Ms Friday said universities’ strategic planning was not introspective enough. “There are questions they should be asking themselves. A lot just [assume] that students will come because it’s the nearest university to where they grew up.”

john.ross@timeshighereducation.com