More STEM students alone ‘won’t lift Australian productivity’

Universities will not lift productivity by pumping out more science and engineering graduates, a Canberra forum has heard.

Australian National University (ANU) economist Robert Breunig said homegrown inventions were not the ticket to economic prosperity. “Ninety-five per cent of our innovation in Australia is adopting innovation from overseas,” he told the Universities Australia conference. “It’s coming up with new ways to solve problems.

“Who does that well? People that have a university education. People that can think nimbly. People who can think creatively. It’s not about getting a STEM degree. It might be about getting a nursing degree.”

He noted that Treasury secretary Steven Kenny and University of Wollongong vice-chancellor Patricia Davidson had started their careers with nursing qualifications. “I’m not preparing people for careers,” said Professor Breunig, director of the ANU’s Tax and Transfer Policy Institute.

“I’m preparing people to go out and deal with something that I can’t even predict. I can’t predict the jobs of the future. What I can do is create students who are literate, who are numerate, who know how to solve problems, who know how to think on their feet, who are open-minded, who are going to adopt other ideas. That’s got to be the key way that universities are going to lead to productivity.”

While Australians’ participation in higher education has surged over the past 15 years, domestic productivity has flagged. Western Sydney University vice-chancellor Barney Glover said average annual labour productivity growth had slowed to 1.1 per cent in the last decade, compared with a 60-year average of 1.8 per cent.

The conference heard that this was partly because workforces in advanced economies like Australia had become more concentrated in sectors such as health and social services, which were not “high productivity” industries. This had diluted the statistical impact of mining, where productivity was about 10 times higher than the Australian industry average.

But the importance of research in driving productivity had also been “massively overstated”, the conference heard. “We don’t need to be the ones inventing everything,” said Cherelle Murphy, chief economist at EY Oceania. “We do need to be the ones using it.”

Catherine de Fontenay, a commissioner with the Productivity Commission (PC), said delivering better graduates was the main way universities could improve productivity. “Graduates who are going to be able to adopt innovation from overseas, are going to be able to innovate themselves – those graduates are the main vector.”

Dr de Fontenay said that while boosting enrolments had been a big focus of the Universities Accord’s final report, the effectiveness of teaching was just as important. “The quality of our managerial skills [has] been a real handbrake on innovation and growth in a lot of firms,” she told the conference.

“Universities have relatively weak incentives to provide quality in teaching. Academics [have] always had weak incentives to invest in teaching rather than research, [and] universities’…ranking and the demand of students is primarily driven by research. The quality of the teaching has very little impact on their demand, their profits, their future growth.”

Dr de Fontenay said a recent PC review had reached “somewhat different” conclusions from the accord panel on how to boost teaching quality at universities. She said the results of student experience surveys should be made “more prominent” for students choosing where to study, and universities’ online lectures should be made freely available to both potential students and regulators.

She said badly designed online education was a “huge challenge” to teaching quality. “[For] some academics, the main thing that drove them to teach well [was] the people awkwardly shifting in their seats in front of them. In a world where the cost of delivering a bad lecture…goes way down, because you don’t interact with the students, then there are potentially some big risks.”

john.ross@timeshighereducation.com