25 April 2024

Strategic choices for universities in the ATEC era



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Universities should consider these six strategic choices to help chart a way forward to new growth opportunities.
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It seems likely the Australian Tertiary Education Commission will become a reality within 18 months.

If so, we will enter a phase of higher education policy and funding unlike anything seen in 30 years.

ATEC will have an explicit mandate to develop a long-term plan for the sector, to evolve funding models, and make mission-based compacts with individual institutions. It will be charged with creating a more diverse and differentiated system, and with ushering in new provider types.

Some in the sector are already forecasting that ATEC will become an intrusive and coercive bureaucracy, forcing individual institutions to conform grimly to a sector wide grand plan.

I would like to suggest a different and more positive view – that ATEC's mandate will create genuine strategic choices for universities for the first time since the Dawkins reforms in the early 90's; and that fortune (and ATEC) will favour institutions with a clear idea of how they want to respond to those choices.

What are those choices? Six big ones can help a university chart a way forward in a post-Accord world.

First is the question of growth in higher education provision. The panel recommends ambitious growth targets in student numbers and participation rates. How much should universities want to participate in this growth (assuming domestic demand returns)? It is not inevitable it should occur only in the university sector. Indeed, there may be reasons why it shouldn't. For example, from a government point of view, universities are costly places to deliver higher education compared with more teaching focused institutions. From a university point of view, many universities are already very large and may not want to grow further. Additionally, significant growth would require commensurate investment in systems to support disadvantaged students, which not all universities will want to make.

Second, ATEC's remit to drive greater diversity and differentiation should increase the likelihood of support for individual institutions to specialise in particular disciplines, or become more teaching or research focused. Once again, individual universities will need to decide how to respond.

Third, if there is to be greater diversity of provider types, and especially more non-university providers of higher education (NUHEPS), how should universities position themselves relative to these new providers? Should they partner with them, ignore them, or perhaps create their own as subsidiaries?

Fourth, the tighter integration of the VET and higher education sectors over time will be another theme of ATEC's work. Underpinning this will be significant policy reform designed to grow the ‘connective tissue' between the sectors, such as a reformed AQF, a common skills taxonomy and integrated reporting. This means the choice facing universities will be how to respond to this ‘skills imperative' or, as Peter Dawkins put it, ‘the growth in the importance of skills relative to knowledge' in university curricula and organisational arrangements. How universities approach their relationships with the TAFE sector will be particularly important.

Fifth is the question of new types of qualification. The Panel refers explicitly to two – microcredentials and degree apprenticeships – but refers generically to ‘modular, stackable, and transferable qualifications' and asks universities to establish exit pathways at diploma and associate degree level. A post-ATEC world will require universities to decide whether they want to participate in this newly expanded qualifications universe, or not.

Finally, with research, universities will need to decide whether they can continue to support research in all areas in which they teach. The proposal to raise the rate at which the indirect costs of research are funded is likely to reduce the range and quantity of publicly funded research at most universities. If they haven't already, universities should be deciding where to excel at research and what to let go.

Universities will need much more information about the funding consequences of these choices before committing to a strategy for responding to them. They will get this information only once ATEC starts work and the government's willingness to fund the Accord recommendations becomes clear.

These choices have significant financial and operational consequences.  So, when universities make their choices, expert understanding and analysis of the revenue and financial consequences will be essential. In the meantime though, universities would be advised to ensure a stronger line of sight of their current cost structures. This will not only allow them to operate more effectively today but give them a critical foundation for the work ahead. Waiting without this insight until the choices need to be made will leave universities slow off the mark to embrace new growth opportunities.

So, it's time for universities to start thinking about each of these choices. Whatever happens, it's clear that future university business will not be as usual.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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