Universities and the future - a view from Australia

June 1999

Thank you for giving me the opportunity to speak to your group. It is probably true that very few of you spend a great deal of time thinking about universities. Indeed it is true that few vice-chancellors spend much time thinking about universities these days. Many of us spend time talking about universities and all of us must spend time running universities, but it is wise to step back and take stock.

What is a university? Over the years this question has come up for me in many casual conversations – so let me attempt to describe my impression of what seems to be the common romantic view. In a nutshell this is one part Newman, two parts Humboldt, with a false back-projection that pretends it has been this way since the 14th century. Spelling that out a little more, we feel that universities are secluded and protected gardens in which rather unworldly people think and talk and spend too much time simply organising their own affairs. On the other hand, they produce Research. Some of that can be pretty impressive. It can provide mind-shifting insights into the world around us, with powerful explanations of both the physical universe and human behaviour. This research is objective and free in spirit, yet in the hands of others can have prodigious practical outcomes. A fact which has sinister implications as well as promising great benefits.

Also, students attend university. For them it provides a period between adolescence and serious work when young people discover, and in many cases exhaust, the passion within them. In some magical way their exposure to creative scholarship prepares them for immediate employment but also nurtures an adaptability of mind which ensures a capacity for life-long learning.

On the whole this sounds rather attractive, so there has been massive increased demand for university access. It is a world-wide phenomenon but, of course, it is Australian statistics that I have at my fingertips. From 1973 to 1998 enrolments in higher education more than trebled from 221,000 to 672,000. This may be to the overall betterment of society, but such massification changes the nature of the university and destroys the fragile dream that drives it.

Governments in Britain and Australia reacted in similar fashion to similar pressures. Expansion was achieved by renaming technical colleges and teacher training establishments, and funding per student had to drop in real terms. A government seeks a large increase in places, no significant budget increase and no diminution of quality. There is no solution in the real world but the political problem is not entirely insoluble – blame the managers who are the vice-chancellors and the workers who are the academics! Better still get them to blame themselves. That turns out to be remarkably easy, because one simply reserves gobbets of marginal funding for those who are prepared to proclaim efficiency gains. That helps to explain the paradox that it costs progressively more to police a system which is progressively less well funded. A few years ago the then education minister at Westminster remarked to me that he knew logically that ongoing cuts could not, for ever, improve a system, but that in universities the cross-over point had yet to be reached. It was his experience that cuts were still improving quality by generating ever greater efficiency.

It is time, I think, to say something about universities as businesses. When my colleagues in industry tell me that I would find things different out in the real world. I gently remind them that I run an enterprise with 5,500 employees and an annual budget exceeding A$600 million. Further, many studies have shown that universities confer an important economic benefit on their local region with a multiplier effect much greater than most business ventures of similar dimensions.

Even, if like me, you are in love with the romantic vision of the university which I sketched at the beginning, you can still observe that universities thrive in proportion to the economic benefits which they confer.

The early temple schools of Egypt taught mathematics and writing in the service of agriculture and astronomy. Theirs was an intensely practical science. With no provocation at all, I trot out a quote from judge, Joannes de Gualengis, of Ferrara. In 1442 after several attempts to establish the city university on a firm footing, as the citizens put it 'to give the shade of this school a true and living form', the judge was commissioned to provide a planning report. In the preamble he writes


"For to begin with its utility, strangers will flock hither from various remote regions, and many scholars will stay here, live upon our bread and wine, and purchase of us clothing and other necessities for human existence, will leave their money in the city, and not depart hence without great gain to all of us. Moreover our citizens who go elsewhere to acquire an education and take their money there, will have an academy at home where they can learn without expense and our money will not fly away."

A sluggish Oxford was certainly in need of reform in the early 19th century. We learn from Newman that "the storm broke upon the University from the North" as the utilitarians writing in the Edinburgh Review attacked the curriculum. One may speculate whether restructuring would have been generated internally in any event, but there is no doubt that "the cold cutting jibes of that Northern Review" helped things along.

Let me commend to you a book by Gordon Johnson which began as an extended preface for a new edition of Cornford's Microscosmographia Academica, but which is a fascinating account of the politics of change in Cambridge at the turn of the century. I think it is fair to say that Johnson's opinion is that improvement "was also a consequence of enthusiasm for change from within" but he gives many examples of how the rise of the new civic universities in Birmingham, Liverpool and Manchester exerted enormous pressure.

These universities provided technological infrastructure for developing industries but derived funding benefit for their wide activities. Here is a colourful example. Cambridge medicine was underfunded and students were starved of practice, according to Cornford who sang:


"When students to Cadavers are
As eighteen is to one
The dividend's inadequate,
The thing cannot be done
.....
At Owens' and at Birmingham
One man, one leg's the rule:
And students have a head a-piece
At happy Liverpool"

Nowadays the action has shifted to the United States. The president of Stanford is the one university leader whom I have heard set out the axioms of the pure research university as an entirely attainable working model. Thanks presumably to Silicon Valley he can live the dream.

What have I said so far? "Not a lot", as Eric Morecombe would have replied. Having outlined a fuzzy romantic axiom of the university which most of us share at least in part, I have merely argued that economic well-being based in economic impact is fundamental to realising the elements of that ideal.

Here is another straightforward thought. Universities rise and fall in importance. People are often confused on this issue because of a famous passage by Clark Kerr in which he celebrated the amazing persistence of universities as institutions by making flattering comparison with the Manx and Icelandic parliaments and the Roman Catholic Church. Persistence is by no means the same as continuing eminence and there are many danger signs at present.

Simple economics suggests problems everywhere but in the United States. Recall that my university's budget is A$600million. We have some 34,000 students. The budget for UCLA is US$2.2billion with some 27,000 students. First the Dearing report and now the Bett report have met with limp responses here in Britain. On very sketchy data, I estimate that UK universities are a bit better off than Australian ones. Our funding is possibly about 3/4 of yours, but it could be argued that the pound is unrealistically high. In any event we both face funding ratios of the order of 1:5 and worse, when we compare with the U.S. Continental Europe is no better off and may even be worse. There, traditionally open access has flooded the institutions and there is even less scope for managing resources than in the UK or Australia.

These frightening comparisons suggest that future higher education leadership will come from the United States. They represent disparities which are not mirrored by simple economic comparators or by other indicators, such as success in sport. I do not believe that the answer lies in a simple appeal to government for more money. Universities do require more money from government but we cannot hope to achieve world-class institutions if we persist in adding to the romantic dream a further notion that all universities should be equal, that equity of access somehow requires uniformity of opportunity.

I am fully aware that Oxford and Cambridge are not regarded as undistinguished but I sense also envy of past privilege and ongoing privilege, where perhaps pride in achievement might be more appropriate.

But that is an aside. I expect that much of the Australian experience has relevance for this country. What is shocking to me is that, after the expansion of our systems, it is taking so long for differentiation to occur. This is partly because we are so tightly regulated that we have little scope to compete. Where that is allowed, 8 of the 36 universities win over 75% of the funds. Nevertheless, the competitive element accounts for only 4% of operating grants.

The United States is much better placed to cope with overall expansion because universities there can compete in many more ways.

In Britain and Australia there is a traditional reluctance to accept private funds in universities. We are happy to allow the purchase of a high school education which can obviously influence the competition for access to a free place at university, but we have a fetish about university tuition being provided as a public good. We worry about the influence of business partners should we form joint ventures with the private sector and appear to retain a touching belief in both the generosity and the benign non-interference of government. The evolution of once great universities under totalitarian regimes should at least give pause for reflection.

The task in both Britain and Australia is to find the appropriate mix of public and private funding, of regulation and deregulation, so that the universities can look after themselves.

At a series of seminars in Yale in the mid-60's the British contingent of economics dons argued for purity in the sense of government dependence. The Americans were toying with the 30% rule - no more than that percentage of income should come from any single type of source. It is reported that the Britons argued that no government would ever deny the universities the money they needed, fail to ensure that the professors were well paid or ever tell these universities how many students they could teach.

Now let me get serious. The real reason we want to invest in universities is not enchantment or nostalgia, although that helps. It is because in each generation universities provide the impetus for new economic growth. This is particularly true in the information era when capital can cross frontiers looking for investment opportunity and the countries which will succeed will be those with a successful culture of innovation. This depends fundamentally on business-university partnerships. The Americans understand this, foster such relations and worry whether their strategic investment is high enough. The pace is much slower elsewhere.

What are we doing about it? In Australia the research intensive universities, the eight leading institutions, have withdrawn from the industrial association that represented all universities and have taken steps to set up a secretariat and lobbying function. While we remain in the omnibus Australian Vice-Chancellors Committee we have decided that we must present direct to government the case for Australia having world-competitive universities.

I believe that one necessary step is that we should be free to set our own tuition fees. The present Australian government which, properly, reveres Menzies, has yet to show his courage in taking such a step. Indeed the fee issue is clouded by the role of another icon, for it was Gough Whitlam who abolished tuition charges in Australia. The Australian Labor Party, which is searching for its own version of a 'new labour,' finds it difficult to tackle such sacred matters.

For me, an expatriate Scot, the irony of ironies is that one of the first acts of a new Scottish parliament may be to abolish tuition fees. This could have a knock-on effect in Britain as a whole and affect the ultimate resolution of the issue in Australia.

There is nothing socially regressive about universities setting fees and simultaneously offering merit scholarships. Such a system helps to differentiate universities and we need academically elite institutions.

Let me stop there, for I have provided you with a novel experience – an Australian arguing the case in favour of tall poppies.