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Institutional differentiation in Australian higher education

15 May 2017

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There is general consensus in the higher education literature that institutional differentiation is desirable (Meek et al, 1996; van Vught 2007). More diverse systems tend to perform better because they meet diverse student needs, are better equipped to stimulate social mobility through different access points and progression pathways, are better linked to labour markets that increasingly require different types of graduates, and allow for more cost-effective delivery of both education and research through specialisation. Concerns about the capacity of the Australian Unified National System to lead to diversity have been raised since it was first established in 1989, with the weight of the argument suggesting that higher education institutions are all variations on a single theme: the comprehensive research university.

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Underpinning this argument is the fact that the policy environment in Australia contains little incentive for institutions to actively pursue different missions. Funding drivers primarily reward the pursuit of competitive research grants and the very definition of a university in Australia since the establishment of National Protocols (MCEETYA, 2000) requires that the institution be engaged in research. This comparatively recent definition was based on an argument that there was a nexus between research and teaching, despite the absence of any clear evidence to support it. Combined with the value attached to research as a generator of status, and hence an attractor for the ever-important international student, this results in many institutions pursuing similar objectives. The pre-occupation with rankings is a case in point.

Whilst the policy environment and drivers may point primarily in one direction, this should not obscure the fact that higher education is neither a level nor a uniform playing field. There are significant differences in how universities are positioned. An analysis of the block grants provided to institutions based on research performance shows very significant differences between institutions (Figure 1). The government’s proposed changes to block grant funding intended for phased implementation beginning in 2017 is unlikely to disturb the status quo.

These data clearly show the stratification of research intensity across the system, which is also correlated with institutional age and size. This picture has been relatively stable across most of the post-Dawkins period, although positional changes have taken place in the relative RBG order in the non-Group of Eight (Go8) institutions.

From a comparative system perspective, having around 50% of universities among the top-500 worldwide (ARWU, 2016) is a significant achievement and a tribute to the vibrancy of these institutions. Yet, this good performance across the board, also evidenced by the Excellence in Research for Australia (ERA) outcomes, does not stretch to the top of the international research ladder, where Australian research does not compare well with other developed countries. Reasons for this appear to include:

  • the nature of our research system – which is strongly competitive yet based on short-term grants, the success of which is relatively unpredictable;
  • a research workforce that to a large extent is employed on short-term contracts, which hampers long-term program planning;
  • a long-standing emphasis on volume over excellence in terms of publications, although the introduction of the ERA is claimed to be changing this emphasis; and
  • a long-standing absence of an overarching national research strategy, although, again, the recently introduced National Innovation and Science Agenda (NISA) appears to be a step in that direction.

It should also be noted that whilst about half the university system features in the leading international research rankings, the other half does not. Given the significant differences in RBG (Figure 1) this is not surprising, but one cannot ignore the fact that this half of the system also receives significant public funding for staff research time that does not translate directly into outputs. This is generally captured under “General University Funds” (GUF) in the Australian Bureau of Statistics (ABS), based on institutional reporting. Behind this reporting are assumed to be general workload models that would reflect the 40% teaching, 40% research and 20% service allocations of regular academic staff. This is reflected in Figure 2.

This is further compounded by the fact that university-industry engagement is well below levels achieved in other developed countries (OECD, 2015). This is often explained by the argument that Australia is not home to Research &Development (R&D) activities for multinationals, does not have a sufficiently large industry base and, to a large extent, is made up of small and medium size enterprises (SMEs) and services industries. Whilst there is some truth to this, Australia is also characterised by a very large proportion of its research workforce being employed in the public research sector (especially universities), with little exposure to and interaction with industry. Incentive structures in universities in particular stimulate traditional academic outputs and place less value on industry engagement. Furthermore career structures for research-active staff do not reward moving between a university and an industry environment. Indeed, the opposite is true. An exception to this is the long established Cooperative Research Center (CRC) program, but the success and scale of this program is not sufficient to raise industry engagement to levels in comparable developed countries. While the recent government initiative to establish Industry Growth Centres has been designed in part to facilitate greater ‘engagement’ between industry and research, it is too early to determine its effectiveness. The persistent, predominantly internal, academic focus of the university research enterprise is problematic for a country that in a post-resources era will be highly dependent on a well-established innovation system (see chapter 10).

No co-ordinated approaches have been developed over the last decade formulating what Australia needs from its higher education sector and how individual institutions or groups of institutions can contribute to such a national agenda. Of particular concern are the inherent inefficiencies that result from poorly designed markets and inadequate transparency. If co-ordination of tertiary education provision is left only to the market, there are significant risks that certain areas of national importance may be ignored due to high costs, low demand or a combination of both.

Because of this lack of coordination, the expansion of tertiary education in Australia has been remarkable. Initially driven by the very successful development of the international student market, this growth has been complemented with significant expansion as a result of the introduction of the demand-driven system in 2012. Since the inception of the Unified National System in 1989, student enrolments have tripled from some 400,000 to over 1,373,200 (DET, 2016).

In summary, the strengths of the Australian university system include a significant and increasingly diverse student body, including very significant international student cohorts, quality higher education, and strong performance in research across half of the sector. Its weaknesses include the absence of system-wide coordination of education and research, the relative absence of top research performance seen in comparable developed economies, underdeveloped university-industry engagement in combination with a strong traditional academic focus, and the relative high costs of running the whole system based on an undifferentiated approach to teaching and research.

The above is an extract from Chapter 1o of CSHE’s recent publication Visions for Australian Tertiary Education.

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