Futures for Higher Education
Scenario workshop
FACILITATOR PACK
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Introductions
Who do we have in the room?
FUTURES FOR HIGHER
EDUCATION
Trends presentation
2011
The workshop addresses
two main aims
Analysing trends
into the future and
what is taking us
there
Exploring what we
want for the future
and how we could
get there
This presentation focuses
on three main trends
The demand
for higher
education
The funding
of higher
education in
the UK
Innovation
and
evolution in
higher
education
A
PICTURE
FOR
THE
FUTURE?
THIS SLIDE ILLUSTRATES
COMPONENTS OF THE DAY
NOW
Current situation
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2/3-5 years
‘Lock ins’
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Outcome 1
What is hoped for in
the 30-year vision?
Outcome 2
Long-term drivers
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Outcome 3
Institutional level
Sector level
Key indicators
1.
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‘Segment stories’
Short-term choices
Long-term choices
A.
2010
2015
2040
B.
2.
3.
C.
And these are points for
the group to consider
Headline questions
Things to think about
• What are the key decisions
that face your institution?
• What sectors have changed
beyond recognition?
• How might these shape
higher education in the UK
and around the world?
• What sectors are starting
rapid change now?
• What about ‘Black Swans’?
• How do you see the future
of HE in the long term?
DEVELOPING A PICTURE OF
THE FUTURE
These are some caricatures of
the last decade
• Demand continuing to outstrip heavily
regulated supply
• Persistence of a dominant 3 year residential
degree model – prestige of traditional models
• Private providers and FE marginal or
subordinate to universities
And this has been the story of
funding for the past twenty years
9,000
8,500
Government publicly planned unit of funding
(real terms 2009-10=100)
grant
grant + public fee
8,000
grant + public fee + private regulated fee
£ per FTE student
7,500
7,000
6,500
6,000
5,500
5,000
4,500
4,000
grant + public fee + private regulated fee + capital
We are now set for a
liberalisation of the market
• Supply side liberalisation
• Tuition fee replacing grant – with more scope
for differentiation in cost (Or not...)
• Stronger demand led focus on ‘quality’
• Introduction of amendable mechanisms to
restrain taxpayer liability
Others sectors have been
through liberalisation
New entrants?
Innovation?
Continued market
domination for a time?
Failures, mergers and takeovers?
New regulation?
New sources of funding?
• Lots of small niche suppliers & some big value entrants
• In what is offered in terms of services, pricing, support, etc
• Biggest and most financially sound of the ‘incumbents’
• Amongst both original players and new entrants
• Ex ante to protect consumer interests and ex post competition
law
• An influx of foreign investment at some point
A big assumption that needs to be
assessed
Post
industrial
economic
development
Developing
middle
classes in
emerging
economies
Data rich
and
knowledge
driven
world –
learning
throughout
career
Ongoing and
growing
demand
for
higher
education
and research
Could this be a picture of a
deregulated high demand future?
Higher education institutional income from non-EU domiciled students 1994/95 - 2008/09
(and non-EU domicile student numbers; excluding students from EEA countries)
2,500
*
300,000
247,995
2,000
214,690
219,175
229,645
250,000
*
200,000
173,985
1,500
152,620
136,295
0
£2,200
£1,880
£1,713
£1,499
£ 1,275 m
£ 1,085 m
£ 875 m
£ 746 m
£ 672 m
£ 507 m
£ 455 m
500
£ 636 m
97,997
£ 1,396 m
111,480 109,940
150,000
116,840 117,290 122,150
£ 622 m
1,000
£ 563 m
£ million, cash terms
199,225
1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/25 2005/06 2006/07 2007/08 2008/09
Academic years
Source: Higher Education Statistics Agency (HESA): Resources of higher education institutions, Students in higher education institutions, various years
* From 2007/08 writing up and sabbatical students are no longer included in standard counts of students
100,000
50,000
0
Student numbers (head counts)
239,210
However - the worst financial and
economic crisis since 1929 started
in 2007
Our GDP growth forecast is slow
relative to previous recoveries. This
reflects the effects of the fiscal
consolidation, the relatively slow easing
of tight credit conditions and ongoing
private sector deleveraging.
(Office for budget responsibility: March 2011)
Given rising pressure on governments’
balance sheets and limitations on public
funding growth, Moody’s anticipates
that the university sector will, over the
long term, seek more independent
sources of funding to finance growth
and expansion. We anticipate that
endowment fund building through
philanthropy, enrolments of international
students and borrowing will rise in some
countries.
(Moody’s International Public Finance: Higher
Education, June 2009)
And the route out is long and
complex
Sovereign
debt crisis
Recession
and
unemploy
- ment
Economic
outlook
Credit and
lending
crisis
Banking
debt crisis
Will this lock in the shift to
tuition based funding?
100%
Indicative breakdown of funding between loans for the graduate contribution and HEFCE teaching grant,
2010/11 to 2014/15
90%
80%
70%
Loans outlay to HEIs
60%
HEFCE teaching grant
50%
40%
30%
20%
10%
0%
2010/11
2011/12
2012/13
2013/14
2014/15
What other questions will need to
be resolved?
Immediate
questions
• Impact of government student number de regulation and incentives (AAB and £75000)
• The new regulatory framework – extent of any de regulation or liberalisation
• Ending ‘moral hazard’ produced by government-backed loan – some risk transfer onto institutions
• Reducing government exposure to cost of loan book through RAB charge adjustments
Short/ Medium • Setting student numbers free – ending student number controls
term questions • Use of competition regulation
Ongoing
variable themes
• Public value agendas of mobility, equality and access
• Research concentration v. diversification
How will these changes affect
pressures around...
• ‘Customer’ satisfaction – quality of teaching
and facilities?
• Staff and professional satisfaction – the
volume and quality of research?
• Prestige and the push for ‘world class’
status – continued cost inflation?
We are already seeing the
globalisation of higher education
Overseas students on UK HE provision and location of study,
2009/10
450000
400000
350000
300000
250000
Non-EU
200000
150000
100000
50000
Other EU
0
2009/10
HEI in the UK
2009/10
HEI overseas
Location of study
This is being driven by global
economic development
0
China seeks to be the Asian country with the greatest
number of international students and a major destination
in the world for international students, according to goals
outlined in its National Plan for Medium and Long-Term
Education Reform and Development (2010–2020). With
an annual international student growth rate of 7%,
international student numbers will reach at least 500,000
by 2020, making it the biggest hosting country in Asia.
20,000
40,000
60,000
China
India
Nigeria
United States
Malaysia
Hong Kong
Pakistan
(China on the Cusp: Becoming the biggest international student destination in
Asia: The Observatory on Borderless Higher Education)
Saudi Arabia
Canada
Thailand
Taiwan
1998/99
2009/10
Korea (South)
Bangladesh
Sri Lanka
Singapore
Japan
Norway
Russia
Iran
Turkey
Number of students
in UK higher
education institutions
from the top 20
countries of domicile
for non-EU students,
2009/10
Producing new
concentrations of demand
UK providers with courses in Hong Kong
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Birmingham City
19.
University
Coventry University 20.
De Montfort
University
21.
Edinburgh Napier
University
22.
Glyndwr University
23.
Herriot-Watt
University
Kingston University 24.
Lancaster University 25.
Leeds Metropolitan
26.
University
Manchester
27.
Metropolitan
University
Middlesex University28.
Nottingham Trent
29.
University
30.
Oxford Brookes
University
31.
Queen Mary,
University of London
32.
Sheffield Hallam
University
33.
Staffordshire
University
34.
Swansea
Metropolitan
University
35.
The Royal
Veterinary College, 36.
University of London
The University of
37.
Bolton
38.
The University of
Hull
39.
The University of
Nottingham
40.
The University of
Salford
41.
University College
Birmingham
42.
University of Bath
University of
43.
Bedford
University of
44.
Birmingham
University of
45.
Bradford
University of Central 46.
Lancashire
47.
University of Derby 48.
University of
49.
Durham
University of
50.
Glamorgan
University of
51.
Gloucestershire
University of
52.
Greenwich
University of
Hertfordshire
53.
University of
Huddersfield
University of
Leicester
University of London
University of
Manchester
University of
Northampton
University of
Northumbria
University of
Plymouth
University of
Portsmouth
University of
Reading
University of
Strathclyde
University of
Sunderland
University of Surrey
University of Ulster
University of Wales
University of Wales,
Newport
University of
Warwick
University of
Wolverhampton
University of the
West of England,
Bristol
York St John
University
And increasingly global research
networks
The continued strength of the traditional centres of scientific excellence
and the emergence of new players and leaders point towards an
increasingly multipolar scientific world, in which the distribution of
scientific activity is concentrated in a number of widely dispersed hubs.
Royal society 2011
But addressing these
trends is not simple
Complex ethical
and political
landscape
Diverse student
and staffing
needs
New
organisational
challenges – HR,
finance
New competitors
– US and Chinese
universities
Overseas
academic and
industry partners
for research
Brand
Positioning
Investment
Wider range of
degree models
(1+2 etc)
Research concentration may affect your
institution’s positioning domestically and
globally
Or will a drift toward contract based funding
present challenges or opportunities?
5,000,000
4,000,000
3,000,000
2,000,000
Science budget allocation
1,000,000
-
1000
900
800
700
Collaborative
research
600
500
400
HEBCI survey
300
Contract
research
200
100
0
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
How will financial models
evolve?
• Efficiencies: streamlining and new accounting
practices?
• Costs: hollowing out of functions as part of efficiency
and modernisation strategies – narrower focus?
• Funding: new models of private revenue?
• New ways of monetising the asset base – investment
driven organisations?
You may be interested in US
revenue models
You may be interested in US
expenditure models
How might the presence of new
entrants affect you?
Online provision, with local learning
bases: locations within 10 miles of 87
million Americans
No tenured professors – recruited by
the class
The University of Phoenix
455,600 enrolled students
in 2010 (25,000 in 1995)
Large marketing budget –20% of Apollo
Group’s $1.3 billion net revenue on
selling and promotional expenses
Aggressive recruitment of those with
access to federal aid and veterans –
nearly 90% of revenue
And what about online – are we
leaving a decade of disappointment?
• Development in CPD & TNE:
• Facilitated
• Blended
• Online
• Increasingly bottom up adoption and
adaptation of technologies – e.g.
Cloud computing
• Do technologies require review of
methods?
• Navigating knowledge
• Intercultural and online learning
• Research methods & networks
And what about ‘unbundled’
models of delivery?
• The role of technology in enabling the
disaggregation of delivery and
compartmentalised ‘products’
– The delivery process:
• Content – syllabus, research & scholarship
• Classroom – teaching, lectures,
supervision
• Infrastructure – IT networks, libraries,
estates etc
– The ‘product’:
•
•
•
•
•
•
Pay as you go tuition, credit accumulation
Examination, accreditation and validation
Assessment
Library services
Accommodation
Student finance?
And through all of this generations
will change – what will this mean?
Today
• Cohort of fee paying students entering into academic workforce
• Web 2.0 generation entering into higher education
2020
• Fee paying cohort entering and maturing into academic posts
• Web 2.0 generation entering into the academic workforce
2030
• Fee paying cohort moving into leadership positions
• Web 2.0 generation entering into mature academic posts
2040
• HEIs staffed and led by those who have paid for most or all of the cost
of their tuition and been brought up on internet social networking
And social priorities will evolve –
what will be the next one?
• The shift to a digital society: innovated and incubated by universities
in the first place
• Will it all be about technological and social solutions for climate
change, or something else?
Future of UK university research
base, UUK 2010
Some initial questions for
the group
• What is right, wrong or missing from this picture: or
have you heard it too often to care?
• What is most significant for you and what are you
less bothered about?
• What are the most significant uncertainties and how
might these shape outcomes?
• What other ways are there or should there be of
looking at all this?
In groups, work through the template to create
scenarios for the future of our institution
Headline feedback on scenarios
• add
What’s your vision for the HE sector in 30 years?
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Comments from discussion
•
add
42
www.
.com
What will the most
successful
institutions be doing in 30 years that the
others aren’t?
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add
Comments from discussion:
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43
add
www.
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It’s 15 years from now, what will have
changed most in terms of the university’s…
…mission
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add
Comments from discussion
•
44
add
www.
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It’s 15 years from now, what will have
changed most in terms of the university’s…
…income
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add
Comments from discussion
•
45
add
www.
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It’s 15 years from now, what will have
changed most in terms of the university’s…
…organisation
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/ ways of working
add
Comments from discussion
•
46
add
www.
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Which aspect of your strategy is most critical to
ensuring the future success of the university?
Comments from discussion
•
add
 add
47
www.
.com
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