Futures for higher education

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Futures for higher education

  1. 1. WWW.UNIVERSITIESUK.AC.UKHIGHEREDUCATION:meeting thechallengesof the 21stcenturyFUTURES FOR HIGHER EDUCATIONANALYSINGTRENDS
  2. 2. 1 www.universitiesuk.ac.uk Futures for higher education: analysingtrendsIntroduction 2Context 2Process 2Summary of themes and trends 3About this report 31Growth and investment 4Domestic participation trends 5Changes in the structure of fundingfor higher education 7Private funding 8A market-based system 9Public benefits 112Global demand for higher education 12Development of domestic highereducation systems 14Global opportunities for UK higher education 15Global research networks 173Innovation in higher education delivery 18New providers and new approaches 18The impact of technology 20Deregulation and organisational form 214Redefining the institution 22Re-articulating university values 23Institutional identity 24Maintaining quality 24Reach and relationships 25Investment-driven organisations 275Conclusions: from national industryto global system 28
  3. 3. Futures for higher education: analysingtrends www.universitiesuk.ac.uk 2IntroductionContextHigher education in the United Kingdom is undergoinga period of significant change. This is being driven bya number of factors: political, cultural, economic, andtechnological. The trends are global in their scope,and far reaching in their impact. They affect everyaspect of university provision, the environment in whichuniversities operate, what they will be required to deliverin future, and how they will be structured and funded.In periods of rapid change such as this, senior managersby necessity focus on short-term strategy and transitionplanning. However, the forces in play now are also likelyto have long-term consequences, potentially alteringthe shape and nature of the higher education systemin the UK.In order to take stock of these factors, UniversitiesUK (UUK)’s Longer Term Strategy Network initiated ascenario development exercise in October 2010, whichran through to July 2011. This provided an opportunityfor university leaders to identify the factors that weremost likely to be significant in shaping the future agendafor the sector, and to think through their impact andimplications, over a 15- to 20-year period.The exercise was not an attempt to predict the futureor to make forecasts which would almost certainlyprove to be inaccurate. Rather, it aimed to gain a betterunderstanding of the drivers and forces that have thegreatest potential to shape the present and the future,to consider how these might be anticipated or influencedto ensure that universities can continue to deliverhighly valued outcomes in a future environment, andto gain greater insight and understanding into thepresent context.The information presented in this report is intended toprovide a platform for further discussion and reflectionabout the future. There is no single interpretation ofa possible outcome for the sector, but rather a set offrameworks to support thinking about the changeswhich are currently taking place in higher education,and where these might lead.ProcessThere are many different ways in which scenariodevelopment exercises could be conducted, and manydifferent traditions to draw on. For the purposes of thisexercise, it was felt that an approach should be takenwhich would: allow collective discussion of the sort offuture towards which members of UUK would like tosee the sector move; aim to set the agenda, ratherthan merely respond to external events; and betterreflect the urgency with which the current issuesneed to be dealt with.This approach leads to an outcome which representsthe future as a series of possible paths, identifying themost important assumptions along the way. The resultof this process for the UUK project is set out in the finalchapter of this report, and is summarised in the nextsection of this introduction.The main phases through which the scenarios exerciseproceeded were:1. Mapping the current drivers of change2. Defining possible future scenarios3. Filling out the scenarios in more detail, and providingsome narrative commentary4. Specifying possible event timelines5. Modelling potential outcomes accordingto each scenarioThe themes and analysis set out in this reportwere generated through an interactive processof development, testing and reflection carried outover a period of months with university leaders andstakeholders from the sector, led by UUK’s LongerTerm Strategy Network.
  4. 4. 3 www.universitiesuk.ac.uk Futures for higher education: analysingtrendsThe principal steps in this process were:- initial scoping of the main issues facingUK higher education- a series of development workshops with staffand stakeholders looking at the trends shapingthe system- testing assumptions through a series of workshopsheld in a range of universities- a 24-hour round table discussion with the LongerTerm Strategy Network, reflecting on the widerthemes and implications from the exercise- individual conversations with academics, universityadministrators, and other stakeholders to developand refine the analysesSummary of themes and trendsThe principal themes examined in the course of theproject were:- Funding models- Future demand for higher education(domestic and global)- Innovation in service design and deliveryThis framework was used to generate a collectivevision of a positive future for higher education in the UK,acknowledging the significant risks that would have tobe negotiated to arrive there. The vision is presented asa series of choices faced by institutions, and by thosewith a collective responsibility for higher education,rather than as an attempt to predict the future.UK higher education currently faces a number ofpossible futures. The most positive of these wouldsee increasing integration of institutional interestwith the wider public good, successfully negotiatinga world of ever-increasing complexity and diversity,and placing universities at the heart of social andeconomic advancement.Arriving there will require treading a careful pathbetween the twin aims of:- ensuring that universities continue to remain fullyengaged in society at all levels- ensuring that the regulatory and operatingenvironment for universities is such that it allowsthem to continue to flourish and maintain theirworld-class statusThe main themes emerging from the analysisunderpinning this vision, and which was carried outin support of this project, are gathered under thefollowing headings:- Growth and investment- Global demand for higher education- Innovation in higher education delivery- Redefining the institution- Conclusions: from national industry to global systemThis analysis is summarised and presented in theremainder of this report.About this reportThis report is intended to be used by those who arecurrently engaged in thinking about the future of highereducation in the UK. It is one element within a set ofresources arising from the project, which collectivelycomprise a toolkit which can be used by anyone lookingto undertake a scenario planning exercise as part oftheir own strategy development.These resources comprise a summary ‘vision’ of apossible future for the sector; description and analysisof the most prominent critical uncertainties which thesector is currently facing (and which comprise themajority of this report); and a set of practical toolsfor institutions to use in applying the thinking to theirown situations.We hope this toolkit will assist planning in institutionsand other stakeholder organisations, and will helpinform the debates which are currently taking placeacross the higher education system.Other components of the toolkit include:- Background and guidance on using scenarioplanning in support of the strategy developmentand planning cycle- A step-by-step guide for running a scenariosworkshop, with supporting resources- A selection of other ready-made resources fromwhich institutions can pick and choose, to adapt totheir own scenarios exercises and internal needsThe resources are available at:www.universitiesuk.ac.uk/ScenariosProject
  5. 5. Futures for higher education: analysingtrends www.universitiesuk.ac.uk 4FIG 1aLevel and sources of income to the UK higher education sector,2000/01 and 2009/10£30,000,000£ thousands£25,000,000£20,000,000£15,000,000£10,000,000£5,000,0000Endowment and investment incomeOther incomeTuition fees and education contractsResearch grants and contractsFunding body grants2000/01 2009/10FIG 2Numbers of students at undergraduate and postgraduate level, andproportion of undergraduates studying full time, 2000/01 and 2009/102,500,0002,000,0001,500,0001,000,000500,0000Postgraduate Undergraduate Proportion of undergraduates studying full time2000/01 2009/1020%40%60%80%100%120%100%80%60%40%20%0-20%-40%-60%FIG 1bPercentage change in income sources between 2000/01 and 2009/10Funding bodygrantsTuition fees educationcontractsResearchgrants contractsOther income Endowment investmentincomeTotal1. Growth and investmentThe recent history of higher education has been oneof continued growth and investment. This is reflectedboth in terms of income into the sector (Fig 1a and1b), and in terms of numbers of students (Fig 2). Totalincome is 60 per cent higher in real terms than in2000/01, with only endowment and investment incomeshowing a real terms decrease. Total numbers havegrown by 28 per cent between 2000/01 and 2009/10,to around 2.5 million students, over three quarters ofwhom are undergraduates. The proportions of theseundergraduates studying full time were very similar in2009/10 to a decade earlier, indicating the continuedprevalence of this model of study, where 59.5 per centof students are under 21 years old.The higher education reforms introduced for 2012/13reflect both the culmination of 13 years of highereducation funding policy, while also potentially signallingthe beginning of a significant period of change for thesector. How the current proposals will impact on thesector in the short term depends on:- student decision-making behaviour in terms ofpreferred modes of delivery, subjects and institutions- the resilience of institutions and the effectivenessof their strategies to operate in an evolving market- demand from international students, and theimpact of immigration policy reforms and the globaleconomic crisis
  6. 6. 5 www.universitiesuk.ac.ukManagers andSenior Officials46%Professionaloccupations81%AssociateProfessionaland Technical54%Caring, leisureand other services20%FIG 4Percentage of graduates (2010) within occupations with the largest projectedshare of new jobs in the UK economy up to 2020Futures for higher education: analysingtrends700,000600,000500,000400,000300,000200,000100,000080%85%75%70%65%60%55%50%FIG 3UCAS applicants and acceptances in the 2005 to 2011 cycles– UK-domiciled studentsApplicants Accepted applicants as proportion of all applicants2005 2006 2007 2008 2009 2010 2011Domestic participation trendsThe experiences of the last decade show a continuinggrowth in demand for higher education from UK-domiciled students (Fig 3). In light of rising demandcoupled with constraints in public funding, there hasalso been increasing regulation of supply of places inorder to control overall costs, reflected in the smallerincrease in full-time undergraduate acceptancescompared to applications between the 2008 and2010 admissions cycles.A number of modelling and projection exerciseshave been undertaken which indicate that domesticdemand will remain strong in the longer term. Thisis largely driven by a rebalancing of economic needstoward higher level skills, together with changingsocial backgrounds:Higher level skills agendasA range of domestic and European education andskills agendas aimed at shifting toward a high skilledeconomy, alongside longer compulsory educationand training, indicate a trend toward higher educationbecoming the primary entry point into the labourmarket. This is illustrated by the fact that thoseoccupations where high level skills are most prominentare projected to account for the majority of jobs growthin the UK economy over the next decade (Fig 4).
  7. 7. www.universitiesuk.ac.uk 660%50%40%30%20%10%0%FIG 7Proportion of 19 year olds in England qualifiedto Level 3, 2004 to 20102004 2005 2006 2007 2008 2009 2010Futures for higher education: analysingtrends80090070060050040030020010002010201120122013201420152016201720182019202001020304050607080FIG 5Decline in the UK 18 year old population to 202018 year olds(thousands)All ages(millions)18 year olds All agesNot allowing forsocial class effectAllowing forsocial class effectAll males All females All0%-2%-4%-6%-8%-10%-12%-14%FIG 6Effect of allowing for changes in the social class composition of thepopulation on the change in demand for full-time undergraduateeducation, 2007/08 to 2020/21Population changesOfficial projections lead us to expect a decline in the18 year old population over the next decade (Fig 5). Itis possible, however, that changes in the social classcomposition of the population could alleviate the effectson full-time demand (Fig 6), through an increase in theproportion of students who have historically attendeduniversity in the UK. Other demographic factorsdriving continued increases in participation includethe growing second-and third-generation minorityand migrant communities, which also tend to haveproportionally higher rates of participation at university.Educational changesThis change in the composition of the population mayaccelerate increases in the proportion of young studentsachieving Level 3 and above qualifications, which nowstands at 54.2 per cent of 19 year olds (Fig 7).
  8. 8. 7 www.universitiesuk.ac.ukFIG 8The publicly planned unit of funding per full-time equivalent (FTE) student to 2009/10 (real terms – 2009/10 = 100)60%50%90%100%40%80%30%70%20%10%0%FIG 9Indicative breakdown of funding between loans for the graduatecontribution and HEFCE teaching grant between 2010/11 and 2014/152010/11 2011/12 2012/13 2013/14 2014/15£8,000£8,500£9,000£7,500£7,000£6,500£6,000£5,500£5,000£4,500£4,0001989/901990/911991/921992/931993/941994/951995/961996/971997/981998/991999/002000/012001/022002/032003/042004/052005/062006/072007/082008/092009/10Futures for higher education: analysingtrendsGrant Grant + public fee + private regualated fee Grant + public fee + private regualated fee + capitalGrant + public feeLoans outlay to HEIs Teaching grant (adjusted baseline)Changes in the structure of fundingfor higher educationWhile the overall level of student demand is likely toremain strong, the allocation of a significant proportionof funding to institutions will be based on the decisionsthat students make.Figure 8 illustrates the pattern of investment over thepast 20 years, with the majority of the new governmentinvestment into the sector over the past decadedirected via public and privately regulated student fees(alongside a capital investment fund). The recent setof reforms goes one step further by reducing the grantand replacing it with a graduate contribution (Fig 9).However, current intervention in the market isattempting to encourage a wider range of pricing byincentivising institutions to reduce tuition fees below£7,500 per year. There is also a deregulation of studentnumber controls for students above an attainmentthreshold of AAB, on the basis that this is a relativelysteady overall cohort that is unlikely to expand. Whilethis has raised questions about the impact both oninstitutions and on student behaviour, modelling ishighly difficult, with cost and academic reputation onlytwo of many factors determining student choices.These changes could have potentially far-reachingconsequences on the shape and structure of the UKhigher education system, particularly if (as is currentlyplanned) further deregulation according to both priceand qualifications is introduced on a rapid basis.
  9. 9. www.universitiesuk.ac.uk 81Office for Budget Responsibility (December 2011) Student loans and the financial transactions forecast – Economic and fiscal outlookNovember 2011; Office for Budget Responsibility (March 2010) Economic and fiscal outlook – March 2011, Table 4.17.2The current round of public spending cuts has left the science budget declining in real terms, while grant funding cuts for undergraduateteaching have been replaced through fees.FIG 10Proportion of income from public sources100%MedianMaximumMinimumUpper quartileLower quartile90%80%70%60%50%40%30%20%10%0%2005/06 2006/07 2007/08 2008/09 2009/10Futures for higher education: analysingtrendsThis change will have a significant short-term impacton the public finances, with the net impact of outlayon fee and maintenance loans expected to reach£13.5 billion by 2016/17 (a 141 per cent increase on2011/12) and the long-run resource cost of subsidisingloans likely to be in excess of £3.3 billion by the samepoint.1This change is also likely to have a long-termcumulative effect, bringing about a cultural shift in therelationship between students and institutions, andin how institutions perceive and govern themselves.Private fundingHigher education occupies a distinct position in relationto public investment calculations. It is a public gooddelivered by autonomous institutions which generatesadditional benefits for the UK in terms of overseasrevenue, research and development (RD) outputand attracting high value firms to the country.The scale of the current financial crisis will place asignificant constraint on large scale public investmentin the short, medium and even long term. There maybe differences in the fiscal and economic policies ofgovernments in the future, but universal public servicessuch as healthcare and compulsory education may wellbe higher electoral priorities for future reinvestmentthan higher education.Nevertheless, given the ongoing economic and socialimperatives to produce more high quality graduates, andthe growth of enrolments in competitor and emergingeconomies, options will need to be explored to expandthe system and to generate innovative funding solutions– particularly for teaching. This will in all likelihoodmean building on the foundations of the current system,with a higher individual contribution and an emphasison the role of government as a strategic purchaser.There is also a continuing role for government insupporting research as an essential component ofongoing national economic and social development.2However, research funding is increasingly directed viacontracts with institutions for more clearly instrumentaloutputs. The shift toward private models of researchis also in the context of a recent history of a steadilydecreasing reliance by institutions on public funds, asthey seek to diversify their funding revenues (Fig 10).However, while the overall trend is towards a decliningdependence on public funding, the distributional patternshown in Figure 10 still clearly indicates the diversityof funding sources across the sector.
  10. 10. 9 www.universitiesuk.ac.ukFeatures of the shift toward a more open andcompetitive system include:- the shift toward demand-led funding andderegulation of places- policy agendas aimed at opening up the systemto a wider range of providers with different modelsof governance and delivery- the opening up of Higher Education StatisticsAgency (HESA) data to third party organisationsto provide market information in support ofstudent choice- the progressive deregulation of student numbercontrols between institutions, underpinned byfunding reforms- the application of competition law and Officeof Fair Trading scrutinyRecent examples of rational goals or incentivesintroduced into the system include:- the reallocation of places to those institutions thathave set their average annual tuition fee chargesat or below £7,500- the linking of access agreements to the abilityto charge tuition fees over £6,000- the deregulation of student number volumecontrols based on A-level qualification thresholds- the introduction of impact and other evaluationmetrics as part of research assessment andfunding allocations- the growing influence of national and internationaluniversity league tablesInfluences on the public funding environmentThe balance of public and other types of spendingin higher education is influenced by a number ofsignificant variables, including the balance betweenteaching grant and tuition funding. Other sources ofpublic funding are quality related grant funding andproject based grant funding, while the majority ofresearch contracts are also with the public sector.Future macroeconomic factors affecting the availabilityof public spending include:- domestic and international economic growth- domestic fiscal policy and budget deficits- European and international banking stability- the European sovereign debt crisis- the rate and distribution of global economicgrowth and developmentFutures for higher education: analysingtrendsA market-based systemThere are a number of drivers and policy toolsthat impact on the way in which higher education isgoverned. These comprise a number of ‘push’ and ‘pull’factors, leading in turn (for example) to greater or lesserautonomy, and greater or lesser homogeneity. The fourprincipal drivers are set out in the middle of the diagramopposite (Fig 11), and the corresponding effects shownin the boxes around the edges. Practical examples areshown below this (Fig 12). These drivers are all currentlysubject to change.The shift toward demand-led funding, together withpolicies to relax the barriers to entry for new providers,is indicative of a more open and competitive highereducation system. This is also currently accompaniedby other features, such as reducing the asymmetryof information through improving the quality of thepublicly-available data on higher education provision.The increasing reliance on competition in highereducation is likely to encourage the use of new formsof regulation and governance. Principal among thesewill be new accountability requirements (for example,around quality and financial management) that allow forbroad-based comparisons to be made across the rangeof institutions accessing public money through studentsupport and grant funding.The use of incentives to shape particular outcomesdesired from the sector is also increasing. These allowinstitutions the flexibility to set their own directiondepending on their particular mission, vision, anddegree of strategic freedom.
  11. 11. www.universitiesuk.ac.uk 10Futures for higher education: analysingtrendsFIG 11Methods of sector governanceMore interventionThe strategic direction ofinstitutions is influencedstrongly by external prioritiesRational goalsPriorities to influence theoutcomes of universities withvariable capacity to set ownpriorities or capitalise onincentivesPublic accountabilityDirect governmentaccountability with enforceableand universal requirementsacross all institutionsMore diversificationInstitutions set their own strategic directionOpen systemFew or no common standardswith institutions comparativelyfree from outside interference,and emphasis on innovation orcompetitionSector self governanceAn emphasis on collective selfgovernance around sharedinterests and valuesMore freedomThe sector is largelyable to set its ownstrategic directionMore coherenceInstitutions mostly share the same interests,values and strategic directionFIG 12Examples of sector governance methodsMore interventionRational goals- Research quality assessment,impact priorities- Student number allocations(core and margin)- League tables- Key Information SetsPublic accountability- HEFCE financialaccountability requirements- Quality assurance andmarket data requirementsMore diversificationOpen system- New providers- Admissions criteria- Tuition-based funding- Contract research funding- OFT competition law- Third party data providersSector self governance- Quality Assurance Agency- Higher Education StatisticsAgencyMore freedomMore coherence
  12. 12. 11The financial sustainabilityof the systemEnsuring and enhancing‘quality’ of education andresearch outcomesEncouraging socio-economicmobility and integration3. Producing graduates with the necessary skills, values and knowledge for a changing globaleconomic and social landscape4. Supporting research excellence and encouraging innovation and knowledge exchange5. Protecting students’ choices and expectations as private consumers in a competitive market6. Widening the number of people participating in the system7. Ensuring equality of access to different institutions in the system8. Addressing inequality of outcomes1. Managing the total cost of the system to the government through the loan book and studentnumber controls2. Accounting for the practices of those organisations in receipt of public funding through studentsupport and research incomeFutures for higher education: analysingtrendsAssessing public valuePublic benefitsIn addition to economic value, the higher educationsystem also generates substantial public benefits. Thiswill remain a critically important feature of the outcomesgenerated by universities in the future, and will needto be maintained within a potentially more market-based system which has a significant emphasis on theindividual returns to investment in higher education.The increasing use of the language of the market andmarketisation could tend to crowd out consideration ofthe wider public goods which universities generate, butwhich will nevertheless remain vital to their future roleand purpose.Examples of these wider benefits include: increasedhealth and wellbeing; reducing negative socialoutcomes such as unemployment or anti-socialbehaviour; increased participation as active citizensin society; improving social mobility and overcominginequality; making a substantial contribution to thearts, culture, and quality of life; and connectingcommunities with the benefits of globalisation.Public benefits are generated through a combinationof three broad elements:- Ensuring that the overall quality of the systemis sustained- Maintaining efficiency and transparency in the useof resources to support that system- Ensuring that everyone in society can have a stakein accessing the benefits which arise as a result –whether directly or indirectlyAttention and commitment to all three of these elementsincreases public confidence in the system and in theinstitutions which comprise it, thereby strengtheningthe stake that wider society has in ensuring that theuniversity system remains robust and fit for purposein the future.There are numerous ways in which public benefit couldbe quantified, and new methodologies are appearing allthe time. The table below provides a snapshot of someof the principal outcomes that could underpin publicvalue calculations, taking three broad indicators as anillustration: financial sustainability and transparency;maintaining quality; and encouraging social mobility.
  13. 13. www.universitiesuk.ac.uk 12Futures for higher education: analysingtrendsFIG 13Higher education export earnings for the UK economy, 2008/09 prices£012345678910111213141516£17 million2009 2010 2015 2020 2025Tutition fees from overseas studentsOff campus expenditure by overseas studentsOff campus expenditure by overseas studentsResearch grants and contractsDonationsTrans-national education – students studying UK provision overseasConsulting, facilities and equipmentOther income2. Global demand for higher educationWhile demand for higher education in the UK is likelyto remain strong over the long term (although it may beaffected by demographic and policy changes in the shortterm), the increase in overall global demand is likely tobe even more pronounced. This will be driven largely bymiddle-income countries moving toward knowledge-based economic growth, including the BRIC countriesBrazil, Russia, India and China. However, it will remainopen to question whether the UK will be able to staycompetitive and retain its current very high shareof the international student market.The UK currently enjoys a world-leading position interms of numbers of international students attractedto study at its higher education institutions. Thiscompetitive advantage is based on features including:- an international reputation for education and research- the profile of its elite global higher education brands- historical trade and political links- the popularity of English language study and culture- post-study employment prospectsThis increasing global demand has already had asignificant beneficial effect on the UK higher educationsystem, as well as on the wider economy. Internationalhigher education as a strategic export industrysupports UK economic growth and RD, and generatesrevenue to support the overall health of the system.The export earnings of higher education, includingtuition fees and spending by non-UK students, hasbeen estimated at £7.9 billion for 2009, which thesector could potentially grow to £16.9 billion by2025 (Fig 13).
  14. 14. 13FIG 14Number of students in UK higher education institutions from the top20 countries of domicile for non-EU students, 2009/10ChinaIndiaNigeriaUnited StatesMalaysiaHong KongPakistanSaudi ArabiaCanadaThailandTaiwanKorea (South)BangladeshSri LankaSingaporeJapanNorwayRussiaIranTurkey0 10,000 20,000 30,000 40,000 50,0001998/99 2009/10Non-EU students and staff in UK higher educationsupporting strategically important subjectsIn 2009/10 non-EU students formed 24 per cent of thetotal student numbers in engineering, 19 per cent of thetotal student numbers in computer science and over 11per cent of the total student numbers in mathematics.Non-EU students made up 29 per cent of postgraduateresearch students, a key component of any universityresearch capacity. This compares to 33 per cent and 35per cent in the United States and France respectively.In terms of staffing, 18 per cent of those with a knownnationality were originally from outside the UK, with22 per cent of non-European Economic Area(EEA) academic staff appointed in 2009/10 previouslystudents in this country, an increase from 13 per centof non-EEA academic staff appointed before 2008/09.Internationally mobile studentsThe enrolment of greater numbers into highereducation has been a notable trend amongOrganisation for Economic Co-operation andDevelopment (OECD) countries over the past 20years. Globally, the percentage of the age cohortenrolled in tertiary education grew from 19 per centin 2000 to 26 per cent in 2009 (OECD 2011).Futures for higher education: analysingtrendsHowever, this predicted growth is dependent on therebeing in place a favourable policy environment, includingpolicies to promote the attractiveness of the UK as adestination for top international students, and to ensurethe smooth flow of students into the system. Imposingrestrictions on student visas, for example, will severelyrestrict the growth of this market.International student mobility has been principally drivenby China and India, and to a lesser extent by Nigeria andthe Middle East (Fig 14). The fastest growing group ofnon-EU students in the UK are Indian students on taughtpostgraduate courses, which showed an increase of 189per cent in enrolments in the five years to 2009/10.
  15. 15. www.universitiesuk.ac.uk 14Development of domestic higher education systems3The development of domestic higher education systemsin emerging economies such as China and India willbe a significant factor shaping the global educationlandscape in the future. Organisations such as theWorld Bank now promulgate a model of productivity-led ‘knowledge economies’ as the principal path tosuccessful growth. Central to the development ofan effective knowledge economy is the developmentof a national innovation system. According to the WorldBank a ‘national innovation system’ is:[A] well-articulated network of firms, research centres,universities, and think tanks that work together to takeadvantage of global knowledge – assimilating and adaptingit to local needs, thus creating new technology. Tertiaryeducation systems figure prominently in such systems,serving not only as the backbone for high-level skills, butas centres of basic and applied research.4There is potential for knowledge-based economicgrowth across a wide range of countries, some ofwhich have further to go in terms of education of theirpopulation than others. The World Bank has developeda benchmarking tool that evaluates the preparedness ofcountries for knowledge-based economic development.This evaluation includes the economic regime (tariffbarriers, rule of law and regulatory quality), innovationoutputs (patents, royalties, and scientific and technicaljournal articles), ICT (penetration into business andpopulation), and education (literacy, secondary andtertiary enrolment) (Fig 15).As part of knowledge economy strategies, manycountries are investing in the development of world-class higher education institutions. World-classinstitutions act as important conduits for internationalresearch expertise, attract and retain human capitalwithin a particular country, and encourage internationalbusinesses to establish themselves – all factorsthat contribute substantially to national competitiveadvantage in the global knowledge economy.In addition, a number of countries are actively seekingto increase their market share of internationally mobilestudents. This includes European countries offeringEnglish language provision as well as countries in EastAsia and the Pacific such as Australia, China and HongKong. This is partly evidenced in the change in marketshare of internationally mobile students between 2000and 2009 (Fig 16).3International student migration will remain a significant feature of the global landscape into the foreseeable future for a range of low- andintermediate-income countries. National governments will continue to use bilateral arrangements in the short to medium term, particularly inprofessional disciplines such as health and other advanced postgraduate courses, such as STEM subjects, to support development needs.4For further information about the World Bank’s work on the knowledge economy, see their Education for the Knowledge Economy web pages.High-income economies ($12,276 or more)NorwayCanadaUnited KingdomUnited StatesAustraliaJapanEstoniaFranceHong KongSpainItalySaudi ArabiaUpper-middle-income economies ($3,976 to $12,275)Taiwan, ChinaLatviaMalaysiaBrazilRussian FederationTurkeyThailandSouth AfricaBelarusChinaCubaIranLower-middle-income economies ($1,006 to $3,975)MongoliaSri LankaVietnamUzbekistanIndiaSyrian Arab RepublicSwazilandSenegalPakistanYemen, Rep.ZambiaNigeriaFIG 15Knowledge economy index rankings and education score of selectedcountries, 2009Futures for higher education: analysingtrends0 1 2 3 4 5 6 7 8 9 10Knowledge economy index Education score
  16. 16. 15 www.universitiesuk.ac.ukGlobal opportunities for UK higher educationIn 2009/10, for the first time, there were more overseasstudents undertaking UK courses overseas than cameto the UK to study (Fig 17). This form of provision isknown as transnational education (TNE): the deliveryof UK degree programmes, modules, training and othertypes of education at overseas locations. TNE presentssignificant strategic opportunities for institutions wishingto extend their reach around the world, including:- reaching a huge potential new market of studentswho seek a UK degree, but who don’t have the meansto travel to the UK to study- developing new streams of revenue for capacitydevelopment in teaching and research- developing a presence and identity in a new market- expanding international operations andinternationalisation strategies- opening doors to other types of partnerships, such asresearch links and knowledge exchange with businessTNE therefore represents the most significant globalgrowth opportunity for UK higher education over the longterm. TNE collaborations increase global opportunitiesfor access to higher education, creating significant socialvalue and public benefit in the process.The developing global middle classIncreased enrolment in higher education is closelylinked to the development of an educated economicmiddle class. Although writing prior to the 2008banking crisis, the World Bank predicted thatfuture changes in the global economy are likely toparticularly benefit households in the third, fourth andfifth world income deciles. While the middle class’sshare in the world population remained largely thesame from 1993 to 2000, its income share rose from12 per cent to 14 per cent. By 2030, the size of thisgroup is projected to surpass one billion, making itthe fastest-growing segment of the world’s population(World Bank 2007: 73) – and over 90 per cent ofthe members of this middle class will reside indeveloping countries.FIG 16Percentage point change in market share of internationally mobile students, 2000-2009Futures for higher education: analysingtrendsChinaUnited KingdomGermanyUnited States–AustraliaNew ZealandSpainCanadaItalyJapanFrance+0 51 42 33 24 15 0
  17. 17. www.universitiesuk.ac.uk 16Models of TNE provisionThe defining feature of TNE is that theprogrammes are those of the home institution,taught abroad. TNE can range from one ortwo degree programmes delivered by apartner university or a private provider, usingtheir staff and some ‘flying faculty’ from thehome institution, to a complete overseascampus. It also allows flexibility in that someof the programme can be taught at the homeinstitution if affordable and desired. It allowsthe UK institution to offer UK and EU studentsan international experience in overseaslocations as an integral part of their course.Typical models include:- full-scale campuses- faculties in educational villages- franchising of UK degrees for local delivery- twinning arrangements with study in boththe local country and the UK- validation of local programmes byUK institutions- distance learning programmes- collaborative delivery with shared input incurriculum, eg joint, double or dual degrees- advanced standing or articulationagreementsTNE case study: Hong KongThe following UK institutions offer TNE provision registered with theHong Kong Education Bureau, in partnership with local providers:1. Birmingham City University2. Coventry University3. De Montfort University4. Durham University5. Edinburgh Napier University6. Glyndwˆr University7. Heriot-Watt University8. Kingston University9. Lancaster University10. Leeds Metropolitan University11. Manchester MetropolitanUniversity12. Middlesex University13. Northumbria University14. Nottingham Trent University15. Oxford Brookes University16. Plymouth University17. Queen Mary, University of London18. Sheffield Hallam University19. Staffordshire University20. Swansea Metropolitan University21. The Royal Veterinary College,University of London22. The University of Hull23. The University of Manchester24. The University of Northampton25. The University of Nottingham26. The University of Warwick27. University College Birmingham28. University of Bath29. University of Bedfordshire30. University of Birmingham31. University of Bolton32. University of Bradford33. University of Central Lancashire34. University of Derby35. University of Glamorgan36. University of Gloucestershire37. University of Greenwich38. University of Hertfordshire39. University of Huddersfield40. University of Leicester41. University of London42. University of Portsmouth43. University of Reading44. University of Salford45. University of Strathclyde46. University of Sunderland47. University of Surrey48. University of Ulster49. University of Wales50. University of Wales, Newport51. University of Wolverhampton52. University of West of England,Bristol53. York St John University200,000150,000400,000450,000100,000350,00050,000250,0000FIG 17Number of non-UK students registered on higher education level UKcourses, 2009/10Studying at a UK highereducation institutionLocation of studyStudying at a higher educationinstitution overseasOther EUNon-EUFutures for higher education: analysingtrends
  18. 18. 17 www.universitiesuk.ac.ukGlobal research networksThe continued strength of the traditional centres ofscientific excellence and the emergence of new playersand leaders point towards an increasingly multi-polarscientific world, in which the distribution of scientificactivity is concentrated in a number of widely dispersedhubs.(Royal Society 2011: 5)Research to support knowledge transfer and innovation,carried out in partnership between universities, industryand society, will continue to be a critical feature ofthe economic landscape. Economic development andgreater investment in research in emerging economieswill also increase the domestic imperative to maintaincompetitiveness in research and innovation.The influence of emerging economies will producean increasingly multi-polar research landscape.Regionalisation of research networks is traditionallyfacilitated by geographical and cultural proximityand shared development trajectories, and is furtherdeveloped by regional funding programmes (suchas European Union collaborative research funding).However, with the emergence of developing economies(and their significant levels of investment), newregional networks and opportunities for collaborationand knowledge exchange will begin to develop.Communications technology and staff mobilitywill also continue to facilitate the development oftransnational global networks of researchers. Theproliferation of ‘grand challenge’ research programmesis an acknowledgement of the global nature of manyconcerns, and of the need to draw on specialism fromaround the world in order to address the most pressingproblems. Online searchable journal databases,international high speed communication technologies,and low-cost international travel have all contributed tothe growth of new networks of researchers collaboratingmore effectively across traditional geographicalboundaries (although the era of low-cost internationaltravel may now be over). In an increasingly globallandscape, these opportunities and networks are likelyto extend into new and developing regions of the world.HEGlobal Integrated Advisory ServiceThe HEGlobal web portal aims to improve highereducation institutions’ access to services for TNEactivities and address barriers to engaging inTNE activities. It will give users:- better knowledge of foreign market opportunities- clearer and better coordinated provision ofgovernment and other partners’ services- better understanding of foreign quality assuranceand accrediting systems- access to finance and insurance to reduce risks- access to key information to help institutionsassess risks and carry out due diligence beforeundertaking TNE activitiesHEGlobal is hosted by UUK and the UK HigherEducation International Unit and reports to theInternational Education Advisory Forum, chairedby David Willetts, Minister of State for Universitiesand Science. The project will coordinate the existingexpertise and resources of:- Universities UK- UK Higher Education International Unit- UK Trade Investment- British Council- Quality Assurance Agency- Export Credit Guarantee Department- Foreign and Commonwealth Office- Science and Innovation Networks- Department for Business, Innovation and Skills- Research Councils UK- Training GatewayChinaIndiaBrazil- 20% annual growth in RD investment since 1999- 1.5m science and engineering graduates in 2006- Increase in RD investment to 2.5% of GDP by 2020Growing research investment overseas- 2.5m science and engineering graduatesper annum (average)- Threefold increase in RD spend over last decade,aiming for 2% of GDP in next five years- Increase RD investment to 2.5% of GDPFutures for higher education: analysingtrends
  19. 19. www.universitiesuk.ac.uk 185‘Unbundling’ is a concept that emerged from the deregulation of telecommunications and other public utilities. It refers to the separationof ownership of different parts of infrastructure and process in service delivery. It has also been used in some instances to refer to thecompartmentalisation of different components of the end consumer product, such as offering personalised ‘pick-and-choose’ packages of services.6For further details on private provision in the UK please see Universities UK (2010) The growth of private and for-profit higher education providersin the UK London: UUK.20,00015,00035,00040,00010,00030,0005,00025,0000FIG 18Provisional figures on student numbers at private and for-profitproviders of higher education in the UK, 2009/10100%90%80%70%60%50%40%30%20%10%0%2009/10Postgraduate UndergraduateProportion ofundergraduatesstudying bydistance learningProportion ofundergraduatesstudying full timeFutures for higher education: analysingtrends3. Innovation in higher education deliveryUniversities have played a very significant role inincubating the new technologies that are currentlyshaping society, such as internet technology andthe digitisation of content. However, innovation is acontinual process, and in the future institutions will facenew internal and external developments shaping thelandscape of higher education in the UK and aroundthe world. These include:- the growth in the range of providers in the domesticsphere, which will encourage new organisationalmodels for the delivery of higher education- the growing use of technology in teaching andlearning in domestic and TNE provision- the ‘unbundling’ of delivery through (for example)partnerships, spin out organisations, and thefragmentation of knowledge and informationprovision5New providers and new approaches[I]n most countries the private sector [expands] accessby creating niche offerings, by entering new geographiclocations... by offering alternative delivery models andby serving specific student populations... both wherepublicly-funded provision is not available and where itis. (Middlehurst and Fielden 2011: 30–31)For-profit private providers are a growing feature ofhigher education around the world, driven by the globalincrease in demand. In the UK, a recent survey by HESAshowed that, in 2010, nearly 38,000 students wereregistered on higher education courses at private andfor-profit higher education providers. Fifty-seven percent of these were undergraduates, of whom 12 percent were registered as studying via distance learning(Fig 18). Forty-eight per cent of all students werefrom outside the EU. There is also already one majorfor-profit provider with degree awarding powers: BPPUniversity College, owned by the Apollo Group (whichalso owns the University of Phoenix). The University ofPhoenix has seen significant growth in student numbers,from around 25,000 enrolled students in 1995 to 455,600in 2010. Validating partnerships between universitiesand private colleges have also been growing since 2000,in part driven by international demand for UK degrees.6
  20. 20. 19 www.universitiesuk.ac.ukIn many cases for-profit providers have establishedthemselves in new market areas not typically served byestablished institutions. In addition, for-profit providersin the United States, as well as not-for-profits, aremaking increasing use of online learning, and areunbundling the components of their delivery. Animportant feature of the success of the for-profitsector in the United States has been the recruitmentof non-traditional groups into higher education.These are all trends that can be expected to developfurther in the future, and which may in turn shape thepatterns of revenue and expenditure within the sector,as is the case in the United States (Fig 19a and 19b).FIG 19aRevenue per FTE student at US higher education institutions by income stream, 2008/09Auxiliary enterprisesEducational activitiesFederal appropriations, grants and contractsGiftsGovernment grantsHospitalsInvestment incomeInvestment returnLocal appropriationsOtherOther non operating revenuesOther operating revenuesOther revenuesPrivate gifts, grants and contractsState and local governmentsState governmentsTutition and feesUS for profit (4 year)Stream US not for profit (4 year) US public (4 year)% of total per FTE % of total per FTE % of total per FTE0%-50% 50% 0%-50% 50% 0%-50% 50%FIG 19bExpenditure per FTE student at US higher education institutions by income stream, 2008/09Academic supportAuxiliary enterprisesDepreciationHospitalsIndependent operationsInstructionNon operatingOperation and maintenance plantOtherOther operatingPublic serviceResearchResearch and public servicesScholarship/fellowshipStudent services academic/institutional supportUS for profit (4 year)Stream US not for profit (4 year) US public (4 year)% of total per FTE % of total per FTE % of total per FTE40%20% 60% 40%20% 60% 40%20% 60%Futures for higher education: analysingtrends
  21. 21. www.universitiesuk.ac.uk 20Online learning developments in UK universitiesA recent report to the Higher Education FundingCouncil for England on online learning highlightedthat there remained a great deal of work to bedone in developing a taxonomy of the market.It also found that:- Courses provided by institutional-private sectorpartnerships were heavily biased towards business-orientated provision.- The relatively large number of Level 4 courses(approximately one-third of the total offered) weretypically short stand-alone courses offering 10 or20 credits toward a higher education award.- A significant number of Level 4 and Level 5 courseswere identified that could potentially provide a routeinto higher education.However, the widespread digitisation of journals andresources for online access, and the use of onlinetechnologies in institutions for libraries, timetablemanagement and communication, highlight theexisting integration of online technology in highereducation. The report also noted the use of onlinelearning in TNE delivery, which accounts for asignificant proportion of all online provision (with morethan 74,000 students enrolled on distance learningcourses). Innovations such as the development ofonline classrooms are a key component in bringingstudents together into a collaborative learningenvironment over long distances.7HESA student record, 2009/10. Note this excludes the students at private providers shown in Figure 15.Futures for higher education: analysingtrendsThe impact of technologyIn the coming years, rapid technological developmentwill require higher education institutions to continuallyreview their approaches to teaching and researchmethods. This will be driven by:- improved domestic access to high speed broadband- changing social attitudes of students and staff inrelation to the use and adaptation of technology- rapid innovation in online technology, including mobiledevices and cloud computing- ‘bottom-up’ adoption of externally-developedtechnologies into the activities of an institution bystudents and lecturersThe principal direct impact of learning technology isits scope to change significantly the delivery of highereducation in terms of volume and distance. That is:- the ability to reach a much larger volume of students,with fewer resources- the ability to reach students over much longerdistances, while maintaining a direct interaction inreal time through shared online spacesThe role of technology in the delivery of teaching haslong been discussed, but has had only limited impact onmainstream usage to date. Distance learning is currentlya relatively small element of the higher educationlandscape, with only 5.3 per cent of undergraduatesregistered as studying in this mode.7Early predictionsthat online provision would claim a high proportion ofmarket share have not yet been borne out.Consideration of potential patterns of growth ofblended and online provision must also take accountof the technological and social context. In 2005 only25 per cent of homes in the UK had a broadbandconnection, increasing to 70 per cent in 2009 (OFCOM2011). The United States has also grown (from a slightlyhigher base) to a similar level of coverage. In addition,changes in technology are having a significant impacton attitudes to web usage – the cohorts of studentsarriving at university now and in the future are goingto be increasingly socialised towards web-basedcommunication. The increasing integration of onlinelearning methods and skills into secondary schoolcurricula may also influence the implementationand uptake of online learning at higher levels.
  22. 22. Forms of unbundling21 www.universitiesuk.ac.ukDeregulation and organisational formCourses provided in partnership with commercialorganisations are more evenly spread across the HEacademic levels, but taken in conjunction with thoseoffered directly by institutions the emphasis remainson postgraduate provision. (White D et al 2010: 1)Unbundling is likely to be an important, and potentiallydisruptive, feature of the higher education landscape inthe future.8There are two main forms of this: supply-side models and demand-side models (see table below).Both of these models present challenges to moretraditionally-structured universities. For example,the shift towards open access to information presentschallenges in terms of the role of the institution invalidating knowledge and information. Wider access toinformation through the internet has drawn parallelswith the music industry, which has had to respond bothto illegal access to content, and to the dominance ofmonopoly providers. There are also challenges in termsof an institution’s flexibility to respond swiftly to newand more efficient models of provision.Supply side:Compartmentalisingand disaggregatingdelivery processCase studiesMany of the activities associated with unbundling are actually already present in the UK system, or are being driven throughdevelopment by for-profit education providers in the United States and Australia.Example 1: Validation, partnership and franchisingOver 115,000 students are on UK provision overseas through collaborative arrangements and almost 208,000 at a partnerorganisation overseas supporting the delivery of advanced curricula in local institutions. Higher education in further educationmodels have been in place since the late 1980s and early 1990s. Examples such as Plymouth University have a regional networkof further education colleges delivering higher education, and estimates put numbers enrolled in higher education in furthereducation colleges at between eight and ten per cent of the total UK student population.Example 2: Public private partnershipPathway provision opportunities offered by organisations such as INTO are classic public private partnership models. INTO arenotable as their traditional model involved being based on campus, with students enrolled on pathway provision and taught by INTOstaff in a building built with INTO investment but as fully enrolled as students of the university. This model and others like it havealso extended to include provision of one-year teaching that articulates into the second year of undergraduate courses. However,like many organisations in the current environment, INTO are also updating this model to introduce new forms of pathway delivery.Demand side:Compartmentalisingand disaggregating outputsor consumptionFaculty and teaching:Disaggregation of integrated faculty models through internal restructuring or the use of externallycontracted staff to teach, draft curricula or develop resources.Educational resources:Including open educational resources, such as formal and informal access to resources froma variety of online sources that can support independent learning. Examples include HarvardOnline, Stanford’s free introduction to artificial intelligence, and London School of Business andFinance’s Facebook MBA course with free materials and an option to sit a validated exam at theend for an award.Personally tailored learning:Quicker or multiple routes to qualification, pay-as-you-go credit accumulation, optionalpurchasing of resources, learning support and facilities.9Typically associated with for-profitproviders from the United States such as the University of Phoenix.Teaching and awards:Portability of the higher education ‘product’ in the form of the degree award through validationand the external delivery of curricula through franchising and partnership provision. A long historydomestically but rapidly developing through TNE activities.Infrastructure:Use of third parties for delivery of essential infrastructure and ‘back office’ functions such as ITnetwork management.Futures for higher education: analysingtrends
  23. 23. www.universitiesuk.ac.uk 228The role of technology in creating greater flexibility and tailoring of delivery to students and institutional models was explored in a scenario planningproject run by JISC and set out in JISC Netskills (2009). While not referring to unbundling explicitly, this report identified the ways in which technologycan be used to reshape the process of delivery of education. This captured the roles that technology can play in compartmentalising and extendingthe reach of the delivery of higher education, sometimes referred to as unbundling. In the United States, growing attention is being given to theidea of unbundling being a ‘disruptive innovation’ in higher education – see, for example, Christensen CM, Eyring H (2011) The Innovative University:Changing the DNA of Higher Education from the Inside Out NJ: Jossey-Bass.9’Private providers typically offer multiple entry points in a year, quicker routes to qualification and choices of study mode; they may also offersmaller class sizes and focused attention on student needs and employability.’ Middlehurst R, Fielden J (2011): p. 32.Futures for higher education: analysingtrends4. Redefining the institutionIt is not just a matter of generating sufficient income toremain in business but that it is equally essential that theinstitution proves its relevance to society and the variousentities in society that it regards as important.(Jongbloed et al 2008: 303–324)The previous sections of this report have described long-term trends that are likely to affect the higher educationsystem, including changes in funding and governance,global developments, and new innovations in delivery.In addition to these factors, critical dimensions ofuncertainty facing institutions include:- volatile domestic economic landscapes- political interventions which are ad hoc in nature- complexity and volatility in overseas economic,political and cultural landscapes- new technological and organisational innovationsthat may come from outside the system- the impact of cultural and policy changeson student demandIn order to prepare themselves for this new and evolvinglandscape, some institutions may need to re-evaluatetheir longer-term strategies. Current governmentpolicy is likely to see the sector become more divergentin terms of tuition fees and the prior qualificationsof students. Other factors will create greater fluidity:further education colleges will seek to grow theirprovision of higher education; schools and academyconsortia will seek to take market share of initial teachertraining; the landscape for the provision of healthcareeducation and training is shifting; and new types ofproviders will enter the market with different types ofproducts. The combined effect of these changes is thatsome institutions may need to reposition themselvesand adjust their brand.This final section looks at how some institutionsmight be evaluating some or all of the followingstrategic areas:- Their overall values and ethos- The role and importance of maintaining a clearinstitutional identity- How to deliver a high quality product in a shiftingenvironment- How to be an effective organisation
  24. 24. 23 www.universitiesuk.ac.ukEvolving challenges for institutionsTNE and overseas activitiesThe development of TNE presents significantopportunities for institutions, but also a new set ofchallenges that need to be addressed. These include:- significant financial risks associated withinvestment in overseas projects- political and reputational risks generated byoperating in certain environments- managing cultural differences around students,staff and other employees- potential confusion over the identity ofqualifications for students qualifying overseas- establishing and maintaining a quality learningcommunity in new locations or over long distancesOnline deliveryOnline technologies are already playing an importantrole in university life and offer great possibilities,as well as a set of challenges for their successfulincorporation:- developing and maintaining effective collaborativelearning styles over long distances and acrosstime zones- different competencies and attitudes towardtechnology between staff and students- patterns of user access to necessary technology –both in the UK and overseas- the impact of school curricula and prior usage oftechnology in learning- changing online research methods and searchalgorithmsFutures for higher education: analysingtrendsA set of common themes could underpin theinstitutional response to the challenges of the future:- The importance of institutional diversity- The need to work with the government of the dayto secure public value outcomes- The need to be responsive to the changing needsof society- Generating the resources to remain innovativeand creativeRe-articulating university valuesThe overall mission of universities remains broadlyconstant regardless of particular social or economiccircumstances: to deliver high quality teaching andresearch, and to serve the needs of society. However,as the wider environment evolves – as it will do,dramatically – in the near future, the ways inwhich this mission is articulated and deliveredmay change.Increasingly, the delivery of higher level qualificationsand vocational skills is being carried out by a new setof providers operating domestically, internationally, andonline. In this more challenging and market-orientedlandscape, institutions will wish to keep under reviewwhat it is that gives them a distinctive edge.
  25. 25. www.universitiesuk.ac.uk 2410See for example Nixon J (2011) Higher Education and the Public Good: Imagining the University London and New York: Continuum, and Barnett R (2011)Being a University Oxon: Routledge.Futures for higher education: analysingtrendsParticular features of a university that are nottypically shared by other institutions and educationorganisations include:- the development of new knowledge for societythrough research and academic enquiry- a commitment to academic freedom for staff toexplore and critique the world around them- an ethos of openness and serving the publicgood in its values and governanceThese features link to statutory regulation as well assubjective ideas of what a university should be andwhat it should stand for.10Universities are typically civicinstitutions embedded in local areas with regional,national and global social agendas. All look to be knownfor excellence in teaching and research that servestheir constituencies. Many look to respond to evolvingpatterns of employment to help professionalise andraise standards in new areas of employment. Somehave missions focused on widening access; othersfocus on particular forms of research excellence.Many institutions actively engage with and supportbusinesses to help develop innovation and improvementin their work. And most run social responsibility andengagement programmes in their local area.Institutional identityMany institutions will wish to enhance and continuethe work they do to emphasise their distinctivenessand maintain a clear institutional identity in a morecrowded and competitive environment. A clear andeasily-communicable identity is an important elementin attracting staff, students, funding and opportunitiesfor collaboration, as well as potential partners forother types of services or activities that an institutionmay undertake.As institutional leaders know, sharpening anddeveloping a distinctive identity requires evaluation of:- how an institution is perceived by staff, students,the sector, external communities and stakeholders- the features of an institution that may becommunicated to and understood by anoutside audience- the receptiveness of various audiences andstakeholders to that identityMaintaining qualityInstitutions will also want to continue to assess how theyunderpin their success through the development andmaintenance of a reputation for excellence in all of theiroutputs. Quality assurance plays an important part inregulating standards and maintaining confidence amongstudents, institutions, politicians and policy-makers,and the international community.Three main elements were typically identified withongoing success by institutions throughout the UUKscenario development exercise:- maintaining the right intellectual mix and capacityto develop new knowledge through research andscholarship- effectively transferring knowledge into practicaloutputs, in the form of course curricula or knowledgeexchange with external parties- communicating knowledge in partnership in orderto maximise its transformative impact
  26. 26. 25 www.universitiesuk.ac.ukInstitutions will also increasingly need to evaluate theirsuccess externally in terms of the constituencies thatthey serve, as opposed to undertaking relative evaluationagainst each other.Modes of institutional delivery may vary, ranging fromtraditional models of integrated faculty and high levelsof face-to-face contact between students and staff, tototal unbundling of content and delivery, and blendeduse of new technology and innovation. In all approaches,success is underpinned by the quality of relationshipsbetween all interested parties and stakeholders, andinstitutions will need to continually evaluate theirconstituencies and their methods of communicatingand working with them effectively.Reach and relationshipsAll institutions are embedded in a system of highereducation that cuts across individual organisationalboundaries through communities of practice in termsof research, professional associations and students.In the light of growing complexity, increased internationalopportunities, and funding and competition challenges,institutions will need to consider developing institutionalcollaborations to support the achievement of theirobjectives.Potential areas of development include shared servicesand other forms of collaboration focused on efficiency.Beyond this, areas that may be explored by institutionsinclude bilateral institutional partnerships, or thedevelopment of networks or federations of institutionswith local, regional and international reach in order to:- increase their capacity on a global stage, to attractresearch funding, staff and students- capitalise on complementary features, competenciesor reach, to develop and deliver coursesBoth these models increase the intellectual anddelivery capacity of an institution by developing theirpartnerships on the basis of their core competencies ofteaching and research. Such developments may includenetworks of further education and higher educationproviders, partnerships with overseas institutions,or collaboration with online delivery specialists.They also present challenges to institutions in termsof (for example) maintaining institutional identity andreputation, aligning attitudes toward intellectual capital,and the managerial challenges associated with multi-agency delivery.Futures for higher education: analysingtrends
  27. 27. www.universitiesuk.ac.uk 26Examples of collaboration and partnershipExamples of strategic collaboration betweeninstitutions include:- doctoral training centres involving consortia ofinstitutions in order to achieve the capacity andcompetency for successful award and delivery- university courses in further education colleges tosupport provision of degrees in new locations andcloser to target populations- overseas collaborations for TNE delivery, withnew educational challenges and opportunities forresearch and knowledge exchange activitiesExamples of innovation partnerships with businessPartnership is also important as part of knowledgeexchange activities, and public private partnershipsare a longstanding feature of the sector. Highprofile examples include the Rolls Royce UniversityTechnology Centres and the Network of AdvancedManufacturing Research Centres. These latterinvolve 13 different UK institutions, some involvingcollaboration between institutions that support theRD of a world-leading engineering company andadvanced academic research and training. Otherexamples include accountancy courses developedand funded in partnership with professional servicesfirms. These models and networks are establishedfeatures for institutions looking to respond to andshape the changing needs of society and industry.Futures for higher education: analysingtrends
  28. 28. 27 www.universitiesuk.ac.ukInvestment-driven organisationsIn this changing landscape, all institutions will need toevaluate their capacity to deliver independent, long-termstrategies. Three important areas for considerationthat were identified by institutions during the scenariodevelopment exercise were:1. Assessment of revenue and investment strategyCentral questions in relation to investment included:- the volume of research that an institution can supportto generate new knowledge and attract staff- where to target global investment, such as mature oremerging markets, and insuring against increasedeconomic and political risks- investment in new models of delivery such as onlinelearning, or maintaining an emphasis on traditionalface-to-face approaches2. Assessment of institutional efficiencyThis included looking at shared services, efficienciesof scale, and increased collaboration.3. Assessment of organisational capacityThis covered questions such as: the trade-off betweeninvestment in capacity to manage strategic directionagainst ‘front line’ investment in services, researchand teaching; and the organisation’s capacity toaddress significant strategic challenges in areas suchas institutional positioning, international strategydevelopment and implementation, developing newtechnologies, and managing external partnershipsand networks.Futures for higher education: analysingtrends
  29. 29. www.universitiesuk.ac.uk 28New technology – new waysof learning and teachingNew industries – demand fornew types of skillsNew research agendasGlobal challengeseg climate change,migration, demographicchangeGlobal economic developmentand the growing influence of AsiaNew opportunities indeveloping countriesMultiplicity of provisionand ‘unbundling’ of content‘Consumer interest’ regulationDemand-led fundingCompetitive globalmarketsEconomic,technological, politicaland social changeUniversity interestAutonomy and freedomReputation and sustainabilityPublic interestEconomic growthSocial equity and stabilityResilience/successFutures for higher education: analysingtrendsFIG 20The continuing challenges of the 21st century5. Conclusions: from national industryto global systemThe UUK scenario development exercise did notattempt to predict a single future or set of futures forthe UK higher education system. However, its ultimateconclusion is that the future success of the systemneeds to be evaluated against the role that institutionsand the sector play at the heart of society and theeconomy, serving their needs, and leading the raceto find solutions to their challenges.We expect that higher education institutions willcontinue to play an important role in the future economicand social success of the UK, helping to generategrowth and stimulate social mobility in an increasinglycompetitive global landscape. Higher educationprovides the skills, knowledge and innovation that willhelp support a productive and successful economy.Universities also equip members of society with theskills, values and knowledge needed to operate onthe global stage.In order to achieve the goal of remaining at the heartof society, institutions, the sector as a whole, andgovernment will need to work together to:- maintain a global reputation for quality by preservingthe highest standards across a more diverse system- invest and develop good practice standards in deliveryto keep the sector at the forefront of innovation- deliver on agendas of wide public importance – suchas social mobility, and research and innovation –which require cooperation between institutions toensure effective outcomes- maintain the autonomy and freedom of institutionsto set their own agendas and strategies
  30. 30. 29 www.universitiesuk.ac.ukArriving there will require treading a careful pathbetween the twin aims of:- ensuring that universities continue to remain fullyengaged in society at all levels, understanding itsneeds and developments- making sure that the regulatory and operatingenvironment for universities is such that it allowsthem to continue to flourish and maintain theirworld-class standingUK higher education currently faces a number ofpossible futures. The most positive of these (capturedbelow) would see the increasing integration ofinstitutional interest with the wider public good,successfully negotiating a world of ever-increasingcomplexity and diversity, placing universities at theheart of social and economic advancement.Futures for higher education: analysingtrendsFIG 21Meeting the challenges of the 21st centuryUniversities at theheart of social andeconomic advanceQuality internationalreputation of UK highereducation declinesDoes quality assurance keep up with newcomplexity/multiplicity?Do we know/offer what a fast-changingsociety needs from universities?YESYESNONOSelf-interested, protectionist,marginalised
  31. 31. www.universitiesuk.ac.uk 30The detailed data and a full list of sources usedin this publication can be found at:www.universitiesuk.ac.uk/ScenariosProjectFutures for higher education: analysingtrends
  32. 32. This publication has been produced by Universities UK, the representative organisationfor the UK’s universities. Founded in 1918, its mission is to be the definitive voice for alluniversities in the UK, providing high quality leadership and support to its members topromote a successful and diverse higher education sector. With 133 members and officesin London, Cardiff and Edinburgh, it promotes the strength and success of UK universitiesnationally and internationally.Woburn House 20 Tavistock Square London WC1H 9HQTel: +44 (0)20 7419 4111Fax: +44 (0)20 7388 8649Email: info@universitiesuk.ac.ukWebsite: www.universitiesuk.ac.ukISBN: 978-1-84036-268-8© Universities UKJanuary 2012To download this publication, or for the full list of Universities UK publications,visit www.universitiesuk.ac.ukDesignedbyReal451

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