The Australian | 24 October 2012
A report by consultancy firm Ernst & Young – University of the future – predicts that only elite, research-intensive universities with global brands will exist in their current form in 15 years, while the rest will be forced to rethink their business models as decreasing government funding, increased competition and online technologies reshape the higher education landscape.
Second-tier public universities will be forced to close, recreate themselves as niche operators or forge public-private hybrids that carve up how content and teaching is created and delivered.
The search for new revenue streams, combined with increasing competition, sophisticated technologies, universal access to higher education and industry involvement will drive new streamlined business models unlike the large comprehensive universities of today.
Over the next 10 to 15 years, the current public university model in Australia will prove unviable in all but a few cases. Universities should critically assess the viability of their current business model, develop a vision of what a future model might look like and develop a broad transition plan.
Lead author Justin Bokor says tension is emerging as declining government revenues combined with policies driving increases in the number of people holding a degree.
Governments have a critical interest in the sector because we are not going to dig dirt out of the ground for the next 20 years at the same prices we’ve seen in the last two. If we seek to become a high-performing knowledge economy, then this sector counts.
The report targets inefficiencies in traditional universities, such as more administrative than teaching staff, two-semester years leaving teaching facilities idle for 26 weeks a year, massive infrastructure costs and the requirement for teachers to be research-active.