Our global position and
future potential
The challenges facing Australian higher education
Simon Marginson
Centre for the Study of Higher Education
The University of Melbourne
ATEM Branch Conference, South Australia
Glenelg, 26 July 2006
coverage today
• Australia’s current standing in the global setting, including
research, and the market in cross-border degrees
• Factors affecting Australia’s current position and global
potential: history, geography, organisational cultures,
public and private investment and composition effects,
system stratification, government and Labor policies
• Five possible futures, given different assumptions about
public/private sector balance, public and private funding at
varying levels, and the extent of mission specialisation
Positioned but also position-taking:
Factors determining global potential
• Institutions, and national systems, are both ‘positioned’ and
‘position-taking’ in the global field of higher education (Bourdieu).
They have some control but not total control over their potential
and opportunities. Those with stronger resources and reputations
have more room to move than do others
• Position affects the capacity to operate globally, which is unevenly
distributed between nations and institutions on the basis of history,
geography, size, resources, language of use, etc.
• Nations and universities have a greater range of position-taking
options in the global setting than national/local setting. The global
setting is more open, less path-bound, with more possibilities for
securing position via policy moves, cultures of responsiveness,
executive strategies, novel teaching and research initiatives, etc.
Elements of global effectiveness
• The key is to be fully engaged globally while maintaining a
grounded, evolving national/local identity. A spirit of global
engagement, grounded in national/local identity, while at the
same time fostering an active, informed curiosity about other
cultures. Openness plus a strong sense of own project.
• Long term solid national government support is crucial
• Institutional autonomy and academic freedom to operate
• Research capacity and outputs are crucial to universities
• Vocational education that is cutting edged, properly resourced
• Communications power: both in (1) IT and (2) languages
• Executive steering capacity based on professional managers
• Staff and student movement inwards and outwards
• Timing: take the opportunities when they are there!
1. Australia’s current
global standing
Australia in the global setting:
• An upper middle ranking higher education system
• Key advantages: (1) being English-speaking, (2) relatively safe
and tolerant social setting, (3) location SE of the Asian
continent, (4) responsive and enterprising university cultures
• Compared to other English-speaking nations, stronger in
international education, in the sale of degrees especially in Asia,
than in research. Academic capacity has been de-emphasized
• 1.6% of GDP spent on tertiary education (2002) USA 2.6%
• Relatively high dependence on private income as is USA
• None of the top 20 research universities, two of top 100, 14 of
top 500 (Shanghai Jiao Tong, 2005) USA has 53 of top 100, 17 of top 20
• 2% of world scientific papers (2001) USA 31%
• 97 ISI ‘HighCI’ researchers 3568 in the USA, 409 in UK, 161 in Canada, 16 in NZ
• 8000 foreign doctoral students USA 102,000
• 9% of the cross-border market in degrees (2003) USA 28%
Global markets, global competition
There are two tier global markets in tertiary education:
1. The ‘super-league’ of leading research universities in
USA/UK that dominate research and doctoral training. A status
competition not a commercial market: relationships are
conducted (and dominance exercised) as much via academic
collaboration and exchange of public knowledge goods, as by
competitive relations and private good production;
2. The market in commercial vocational training, produced by
both non-profit and for-profit institutions, in both university
and polytechnic/VET sectors. Australian institutions sit here
98% of students are educated at home. But in many nations
global markets and the ‘super-league’ now overshadow once
unchallenged leading institutions; and ‘rising star’ institutions
can leverage global activity to lift themselves at home
Research papers in science and
technology 2001
others, 111100
Thailand, 655
USA, 200,870
Sweden, 10,314
Korea, 11,037
India, 11,076
Netherlands, 12,602
Australia, 14,788
Spain, 15,570
Russian Fed, 15,846
China, 20,978
Japan, 57,420
Italy, 22,313
Canada, 22,626
France, 31,317
UK, 47,660
Germany, 43,623
Growth in science papers 1988-2001
(ISI data)
change between 1988 and 2001
1988 = 100.0
Korea
1431.5
Turkey
808.3
Singapore
Taiwan
Portugal
634.9
571.6
499.3
China
Brazil
454.2
408.0
Mexico
363.0
Australia
149.4
Jiao Tong rankings: weightings
criterion
weighting
Alumni of institution: Nobel Prizes and field medals
10%
Staff of institution: Nobel Prizes and field medals
20%
High citation (HiCi) researchers
20%
Articles in Nature and Science
20%
Articles in citation indexes in science, social science, humanities
20%
Research performance (compiled as above) per head of staff
10%
total
100%
Top 100 research universities 2005
from Shanghai Jiao Tong University Institute of Higher Education
others 7
Australia 2
Netherlands 2
Switzerland 3
Sweden 4
France 4
Canada 4
USA 53
Japan 5
Germany 5
UK 11
Peaks of the global education market:
the top 20 research universities 2005
from Shanghai Jiao Tong University data
1 HARVARD USA
11 Yale USA
2 Cambridge UK
12 Cornell USA
3 Stanford USA
13 UC San Diego USA
4 UC Berkeley USA
14 UC Los Angeles USA
5 MIT USA
15 Pennsylvania USA
6 Caltech USA
16 Wisconsin-Madison USA
7 Columbia USA
17 Washington (Seattle) USA
8 Princeton USA
18 UC San Francisco USA
9 Chicago USA
19 Johns Hopkins USA
10 Oxford UK
20 Tokyo Japan
Australia has ANU at 56, Melbourne at 82
Australians in the top 500, 2005
from Shanghai Jiao Tong University data
top 100
ANU (56), Melbourne (82)
top 150
Queensland, Sydney
top 200
NSW, WA
top 300
Monash, Adelaide, Macquarie
top 400
Newcastle
top 500
Tasmania, Flinders, La Trobe, Murdoch
Research rankings fully expose
Australia to global competition
•
•
•
•
Universities are widely judged by research performance which
is foundational to reputation, and operates as a proxy for degree
power and even teaching quality. Now Shanghai Jiao Tong has
provided a credible set of data on research performance, and
this is feeding into the market in cross-border degrees
Marketing (‘we are world-class’, ‘one of the finest’, ‘a research
university’ etc.) is no longer enough - the data must confirm it!
Governments/nations now want super-league universities.
Implies greater concentration of research activity, greater
stratification of universities, selective investment increases
Every university (except Harvard) wants to lift its rankings,
every university in the top 500 wants to hire more high citation
(HiCi) researchers. This competition is generating price effects
HiCi researchers
selected universities, 2005
Stanford USA
91
UC Berkeley USA
81
Harvard USA
72
MIT USA
72
all USA combined
3568
Cambridge UK
42
Oxford UK
29
All Australia combined
97
all China combined
20
HiCi researchers
Australia 2005
(Stanford)
(91)
Australia combined
97
ANU
25
Melbourne
9
WA
7
Sydney
6
UNSW
6
Macquarie
3
Newcastle
3
Murdoch
2
Southern Cross
2
others include Queensland, Adelaide, Monash, Tasmania,
La Trobe, Flinders, UTS, UWS each 1, CSIRO 9, personnel
in industry laboratories and medical research institutes, etc.
Exporters of cross-border education
2003 OECD data
others 20%
USA 28%
Spain 3%
Russian Fed. 3%
Japan 4%
Australia 9%
France 10%
UK 12%
Germany 11%
Largest Australian providers
Institution
* More than 50% of international
students off-shore
International
students 2004
International fee
revenues 2004 $sm
Proportion of all
revenues 2004
1 Monash U
17,077
160.3
19.5%
2 RMIT U *
15,132
122.8
25.2%
3 Curtin UT *
14,319
96.4
23.2%
4 Central Queensland U
10,460
97.1
39.5%
5 U South Australia *
10,257
51.3
16.2%
6 U Sydney
9806
124.3
12.7%
7 U NSW
9481
116.4
15.0%
8 U Melbourne
9215
154.8
14.7%
9 Macquarie U
8725
83.6
24.5%
10 Charles Sturt U *
8429
13.7
6.4%
11 U Southern Queensland *
8333
20.9
16.0%
12 U Wollongong
7940
55.2
20.6%
U Southern California (2004-05)
6846
Education export: pluses & minuses
PLUSES
•$5 billion export industry with 230,000 students built in 15 years –
thanks to university entrepreneurship and business models (and the
strength of revenue incentives)
•Market share in university sector third in world
•Sustains a major national engagement in Asia
•Provides 15% of university revenues: fiscal savings
•National quality assurance (though needs strengthening)
MINUSES
•Too dependent on high volume medium quality standard cost
training in business and IT – lack of diversity of product
•Not enough top quality students, including PhD students
•‘Franchising’ operations weaken quality and reputation
•Growth over-dependent on incentives created by public funding
cuts, creating downward pressures on standards
•Lack of attention to international student security
•Market position vulnerable to price effects, declining research
reputation, import replacement in Asia, non-English languages
Enrolment shifts 2003-2004
Australia 2004 DEST data
students from
2003
2004
2003 = 1.00
China
27,020
37,106
1.37
Malaysia
27,267
28,862
1.06
Singapore
29,878
28,290
0.95
Hong Kong
29,169
27,461
0.94
India
11,133
16,320
1.47
Indonesia
11,865
11,316
0.95
9418
9522
1.01
USA
The top 20 in 2005
according to the Times Higher
1 HARVARD USA
11 Duke USA
2 MIT USA
11 LSE UK
3 Cambridge UK
13 Imperial College UK
4 Oxford UK
14 Cornell USA
5 Stanford USA
15 Beijing China
6 UC Berkeley USA
16 Tokyo Japan
7 Yale USA
17 UC San Francisco USA
8 Caltech USA
17 Chicago USA
9 Princeton USA
19 Melbourne Australia
10 Ecole Polytechnique France
20 Columbia USA
Australians in the top 200, 2005
according to the Times Higher
19 Melbourne
82 RMIT
23 ANU
87 UTS
33 Monash
98 La Trobe
38 Sydney
101 Curtin
40 NSW
118 QUT
47 Queensland
127 Newcastle
67 Macquarie
154 South Australia
80 Western Australia
166 Tasmania
80 Adelaide
Times Higher rankings: weightings
criterion
weighting
‘Peer review’ (survey)
40%
Global employer review (survey)
10%
Internationalization of academic staff
5%
Internationalization of student body
5%
Student-academic staff ratio (proxy for ‘teaching quality’)
20%
Research citations per head of academic staff
20%
total
100%
2. Factors affecting Australia’s
global position and potential
Constituents of global position
and potential: summary
Geography
Isolated from the Atlantic zone which will never be home (sigh…);
forever located SE of Asia; SE Asia our natural backyard; we are closer to
China than is the USA or Europe (embrace this destiny!)
History
English-speaking. Reputation based in strong comprehensive research
universities created 1950s-1970s, second layer only partly developed
Organizational
cultures
Responsive, enterprising, internationalised, capable of a range of positiontaking strategies. Weaknesses: Monocultural, and neglect of academic
capacity (except sandstones) amid emphasis on marketing/revenue-raising
Investment in
Above OECD average overall. Below average public investment but well
higher education above average private investment. This composition of investment has
implications for the patterns of activity and resource use
Public/ private
balance
Negligible private sector transforming into major player via FEE-HELP,
broadening diversity, centering innovation and growth in that sector
Overall s ystem
stratification
Average for an OECD nation but becoming steeper. Potential for very
strong research universities as yet unrealized, ‘tail’ of weaker institutions
Languages of 100 million + voices
English
1000 million
Putonghua (‘Mandarin’)
1000
Hindi/ Urdu
900
Spanish/ Portuguese
450/ 200
Russian
320
Arabic
250
Bengali
250
Malay-Indonesian
160
Japanese
130
French
125
German
125
[Thai]
[45]
[Lao/Isan]
[30]
Investment in tertiary education
as a proportion of GDP (2002)
3
2.5
2
1.5
1
0.5
0
USA
Australia
public
Netherlands
private
total
Finland
Korea
• Australian investment in tertiary education is high relative to
the OECD norm but the composition of investment has
changed dramatically. In the last two decades the public share
of funding has fallen from 85% to 40%. Incentives have been
transformed. The pattern of activity has altered.
• ‘It is notable that the rises in private educational expenditure
have not generally been accompanied by cuts in public
expenditure on tertiary education. On the contrary, public
investment has increased in most of the OECD countries for
which 1995-2002 data are available, regardless of changes in
private spending. In fact, many OECD countries with the
highest growth in private spending have also shown the
highest increase in public funding… The main exception is
Australia, where the shift towards private expenditure at
tertiary level has been accompanied by a fall in the level of
public expenditure in real terms’.
- OECD, Education at a Glance, 2005, p. 193. The decline in public spending 19952002 is 8 per cent in total (p. 187) and about 30 per cent on a per student basis (p. 175)
.
• Total university revenues have not declined. Public funding
per student is down, private funding per student is up, the
effects seem to cancel out. But on the private income side,
what matters is not total income but surplus. In many
universities international student marketing provides
additional cash flow but does not generate net surplus. The
new revenues have been largely or wholly absorbed by the
new functions needed to raise them: marketing, off-shore
activity, special services, etc. The old public income, the gift
of government that cost little to ‘raise’, is not replaced.
• And in some cases where international marketing does
generate significant surplus, quality is suffering.
• This is why in the midst of the export bonanza, universities are
impoverished, and quality and value are in question.
• In sum, with the shift to market-based incomes, universities
spend more on revenue raising functions and less on the ‘core
businesses’ of teaching and research. Yet it is these core
businesses from which business draws value. The incentives
are wrong. Universities are spending more on reproducing
themselves, and less on producing valuable products.
National research performance
compared to economic capacity
Nations with research capacity
greater than their economic
wealth suggests
Israel, Sweden, Switzerland, UK, Netherlands,
Canada, Finland, Denmark, Australia, USA
(in order of performance)
Nations with research capacity
about on par with economic
wealth
Germany, New Zealand, Hungary, Belgium,
Austria, Norway, Chile, France, Hong Kong,
South Africa
Nations with research capacity
less than their economic wealth
suggests
Ireland, Brazil, Japan, India, Portugal, Czech
Republic, Russia, Italy, Korea, Spain, Poland,
Greece, China, Argentina, Mexico
Italics: over 20% of students in independent private sector
Australia in the global market in
mobile doctoral students
Percentage (%) of all international students enrolled in research degrees
OECD data for 2003 except USA is 2003-2004
35
30
25
20
15
10
5
0
US doctoral
universities
Swizerland
Sweden
UK
Australia
Where will public institutions
raise the new money they need?
• Limited scope for HECS increases given faltering
participation and fact most institutions are at maximum
• No sign of serious increase in targeted research money to
support RQF, or ANU-style funds to other institutions
• Full fees a bonanza to emetging private sector institutions
but choked by red-tape in public sector, e.g. uniform caps by
program: no bonanza for sandstones,others not competitive
• Serious increases in industry and philanthropic money
dependant on tax changes
• Limited potential for further cranking up foreign students
Intensified global salary competition
2000-2004 data, various sources, Purchasing Power Parity
nation
data
year
Professorial salary
USD p.a.
USA (salary only, 9-10 months)
2003-04
$101,000 average
Singapore
2001
$92,000-130,000
Australia
2003
$75,000
Korea (private sector only)
2000
$71,000 average
Germany, Netherlands
2002-03
$60,000-70,000
France, Spain, Finland
2002-03
$40,000-70,000
Private and public sectors
• The main impact of the Nelson reforms is the fostering of the
private higher education sector, now about 10% of enrolments
• Here the federal government is creating a pro-coalition
constituency akin to the newer private schools; like them some
are communities of faith
• The change to the national protocols permitting specialist
universities (originally triggered by Carnegie Mellon in SA?) is
a decisive innovation, with the potential to radically remake
the map of provision in the longer term
• The private zector has become the main site of growth and
innovation while the public sector has little growth potential
• However there are signs of a new trend to mission
specialisation in the public sector, notably at Melbourne
Stratification
• Slow evolution into steeper market, not dramatic change
• The sandstones have not taken flight - limits of
undergraduate full fees, no RQF yet, and anyway the RQF is
unlikely to deliver major shifts in research funding
• Elite private sector yet to emerge (but watch this space)
• Spate of new medical faculties strengthens some contenders
• Middle level institutions under new pressure to merge, and
with or without this face difficulties in cost management
• Volume maximisers with weaker research face declining
reputations and possibly, declining fee-based incomes
• Serious money for regionals yet to appear. A hard time
3. Five possible futures
Some worrying signs
• We have lived off a strong research reputation accumulated on
the basis of public investment in the 1960-1985 period, but
• Jiao Tong rankings now make research reputation a function of
measured performance, not history or marketing
• They also emphasise the need for top 40 universities
• Downward pressures on quality of teaching (doubling of staff
student ratios) and research (funding cuts hurt basic research)
• We are weak in comparisons with the UK and Canada
• Our international market share and revenues are vulnerable, e.g.
import replacement and export competition in China, Singapore
• We lack a national approach to standards
• Fiscal policy is locked up, seems to be downward flexibility only
• Global capacity? National policy is ‘leave it to the universities’
Australia and Canada compared
population (2004)
GDP (2004)
GDP per head (2004)
universities in Jiao Tong top 100 (2005)
Canada
Australia
31.9 million
20.4 million
$905.6 billion
$541.2 billion
$28,390
$26,900
4
2
UT 24 UBC 37 McG 67 McM 90
ANU 56 Melbourne 82
23
14
universities in Times top 100 (2005)
3
12
world share of foreign students (2002)
1%
9%
GDP for tertiary education (C2001 A2002)
2.5%
1.5%
public share of funding (C2001 A2002)
67%
50%
provinces/national
national
universities in Jiao Tong top 500 (2005)
public funding source
Student flows in the
global education environment
EUROPE
ASIA-PACIFIC
(demand for foreign study
In China, India,
Korea, etc.)
JAPAN
AUSTRALIA
NZ
UNITED
STATES
UK Canada
Export and import in Asia
OECD data for 2001
200,000
150,000
100,000
50,000
C
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Exports
Imports
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Five possible scenarios
1
Present trends
continue
Private sector fostered while public sector remains
stagnant, private sector eventually becomes main site
of quality, research withers
2
Vouchers/ full
fees across
whole system
High tuition high aid: USA with less money: strong
private sector, privatised rich sandstones, steep
resource differentials, long-term costsof FEE-HELP
3
Private sector
plus elite
research layer
Japanese system. Research publicly fostered in a few
top universities (3-10?) while private sector is site of
mass growth and teaching innovation
4
Nuanced
missions
One-by-one negotiation with funded institutions over
mission/ profile, divergence in content depending on
whether Labor or coalition, needs buffer body
5
Reinvestment
across the
public system
One off or long term? Selective or general funding?
Fiscal cost . Leaves unresolved global competitiveness
of top research universities