A policy perspective: the role of higher
education in meeting the needs of business
and the community
Mary-Anne Sakkara
ACPET Symposium: Raising productivity, increasing prosperity – the
challenge for higher education
3 February 2012
Introduction: what this session will cover
Productivity – what does it mean?
Tertiary education – what we are trying
to achieve and how
Opportunities and challenges for higher
education
Opportunities presented by new portfolio
Productivity
Productivity is what we produce for each hour worked
But boosting productivity does not mean making Australians work
harder and longer. It means people having the skills and
resources to work more effectively.
 Productivity is about sensibly producing more with less.
 Improving productivity frees up resources to move to higher
value uses and allows people more freedom to make choices
about work, family and leisure.
 Ongoing productivity growth is essential to:
 build capacity to take advantage of current global demands
 provide an opportunity for all parts of the economy and regions to
grow substantially; and
 improve living standards and assist those in need while meeting the
fiscal challenges of an ageing society in the long run.
Productivity agenda
The Australian Government’s productivity
agenda is focused on the following three
areas:
 Stability – maintaining macroeconomic
stability, i.e. steady growth with low inflation
 Flexibility – ensuring that the economy is
flexible and that incentives exist to
encourage our labour and capital resources
to move to their highest value uses; and
 Capability – well targeted investments in
skills, infrastructure and innovation.
Tertiary education
has the capacity to
influence flexibility
and capability
How is Australia’s economy faring?
 The Australian economy remains among the most robust of advanced economies –
Treasury is predicting 3.25 per cent growth in 2011-12
 However, our growth is lower than in developing countries where the World Bank
predicts 5.4 per cent growth
 The resources boom is driving a high Australian dollar and our economy is transforming
as new industries emerge and older industries change
 But our economy is running at different
speeds depending on where you live
Productivity performance
 Australia’s performance in
productivity has deteriorated in
recent years with both labour
productivity and multi-factor
productivity below the OECD
average
 Productivity growth has
fallen from a high of 4.8 %
in 2002 to just 0.4 % in the
last financial year
 Job growth in 2011 was its
weakest since 1992
What we are trying to achieve through tertiary
education
 The Government is committed to investing in the higher skills needs
for the jobs of the future.
 Challenging targets have been set to increase the qualification levels
of the Australian workforce.
 By 2020:
• Halving the proportion of the working age population without at least a
Certificate III compared to 2009
• Doubling completions of diplomas and advanced diplomas compared
to 2009
• 20 per cent of higher education enrolments will be for people from a
low SES background
 By 2025:
• Increasing the proportion of 25 to 34 year olds with a degree to 40 per
cent
Tertiary reform contribution
KPMG research shows that if we increase these tertiary education targets
there will be improvements in both Australia’s long-term labour productivity
and labour force participation rate.
 By 2040, the tertiary reforms are estimated to build to additional
contributions of:
 2.1% gain in labour productivity through increased higher education
 1.5% gain in labour productivity through increased VET
 0.16 percentage point gain in the participation rate through increased
higher education
 1.0 percentage point gain in the participation rate through increased VET
 Achieving higher education and VET targets could generate up to around an
extra $50 billion output in the Australian economy every year on average for
the next 30 years, or $1,850 per person. Up to around 180,000 jobs could be
generated each year on average over the period.
Effect of all reform targets
9%
2040
2070
Workplace
Relations
Paid
Parental
leave
8%
0.7%
Percent Deviations from Baseline
7%
6%
Early Childhood
2.9%
Higher Education
2.5%
0.7%
5%
1.2%
4%
3%
2.1%
2%
1.5%
VET: Cert III-Adv. Diploma
1.65%
Schools
0.75%
2069
2067
2065
2063
2061
2059
2057
2053
2051
2049
2047
2045
2043
2041
2039
2035
2033
2031
2029
2027
2025
2023
2021
2019
2017
2015
2013
2011
2009
2037
0.6%
0%
2055
1%
Contribution to labour productivity increases (per cent deviation from baseline)
Source: KPMG Econtech 2010
 GDP is expected to be 20.1% higher than the baseline by 2070 if all
the reforms are achieved.
How are we trying to achieve these results?
 More people with higher skills which will drive
prosperity for the community
 More equity of skills acquisition which will better
meet needs of whole community
 A greater role for industry which will ensure that we
have the necessary skills for an evolving economy
 The National Workforce and Productivity Agency will
provide the Government advice on current and future skills
needs and how well the VET and higher education sectors are
meeting these needs
 Australian Government Skills Connect will help link
Australian enterprises with a range of skills and workforce
development programs and funding, including the National
Workforce Development Fund ($558 million over four years).
How are we trying to achieve these results?
 A demand-driven higher education system which will give
universities greater flexibility to respond to demand from students
and employers
 Recognition of the role of non-university and VET providers
in the delivery of sub-bachelor places which will ensure the
university sector does not expand at the expense of VET and
private higher education providers
 Improved quality through the national regulators which will
underpin the reforms in VET and higher education
 Improved transparency which will inform students and employer
choice
 My University, My Skills, Study Assist websites
 Unique student identifier for the tertiary education sector – we
have the CHESSN for higher education and are developing a USI for
VET to be part of a cross-sectoral framework linking schools, VET
and higher education
How does tertiary education meet the needs
of business and the community?
 Higher education – institution-to-institution basis
 Engagement – Business and industry engage with universities and higher
education providers at the faculty level to help shape the delivery of learning
and teaching and the relevance of what is being taught
 Accreditation – Professional associations work with higher education
institutions to accredit courses to ensure they meet national and international
benchmarks
 Work integrated learning – Work integrated learning appears to be
increasing significantly in universities
 VET – a more systematic approach to business engagement
 Training package development – ISCs actively support the development,
implementation and improvement of training and workforce development
products and services including training packages
 Advice – ISCs provide industry intelligence and advice to Skills Australia,
government, enterprises on workforce development and skills needs
 Engagement – Industry is represented on the Skills Australia Board and in
industry forums advising Tertiary Education Ministers
Opportunities and challenges
Ongoing global
economic
uncertainty
High growth in Asia
Clean energy
Technological
change
Ageing population
 In response we need to:
 prepare graduates with
the skills and flexibility to
deal with an
unpredictable future
 develop programs
related to skills needs
associated with
Australia’s transition to a
low carbon economy
 prepare the necessary
health and medical
research workforce
Opportunities presented by new portfolio
arrangements
 The new Department of Industry, Innovation, Science, Research and
Tertiary Education (DIISRTE) brings key economic levers together to
drive growth, productivity and participation and help keep society and the
economy strong.
 The new department provides an opportunity to:
 Build better connections between research and tertiary education
and strengthen partnerships with industry
 Strengthen our tertiary education agenda to meet industry needs
through a better co-ordinated portfolio of industry programs
 Focus increasingly on existing workers and re-training/up-skilling
“an integrated industry, higher
education and vocational training
policy that underpins Australia’s
economic modernisation” Minister
Evans 31 January 2012
DEPARTMENT OF INDUSTRY, INNOVATION,
SCIENCE, RESEARCH AND TERTIARY EDUCATION
Industry House
10 Binara Street
Canberra City, ACT 2601, Australia
Telephone +61 2 6213 6000