The broad-based structure of our public universities hobbles their ability to specialise in niche areas of teaching.Jim Rice
The broad-based structure of our public universities – which hobbles their ability to specialise in niche areas of teaching and requires them to undertake research in at least three disciplines to secure federal funding – is a lynchpin in the production of graduates burdened by student debt and facing dismal employment prospects.
As the parent of a 15-year-old daughter, the future of higher education is of immense personal interest.
The mismatch between the skills we need and the skills we produce is stark. We’re producing hundreds more university-trained lawyers each year than the profession can absorb. This problem will compound if forecasts that more than 100,000 legal sector jobs will vanish in the next 20 years prove to be accurate.
On the flipside, our economy needs 4000 agricultural science graduates every year. Our universities produce only 800.
It’s not that we can’t track these things. Lots of organisations are doing work in this field. EY has applied its own analytics capability to solving these problems, and it’s also collaborating with others to better understand the gap between employee skills and employer needs.
JobGetter, a relative newcomer in the recruitment space which has developed sophisticated analytics tools with the ability to pull data from every job ad placed each day nationwide, is one of these.
These new data analytics platforms are also capable of tracking the supply-demand gap in “soft skills” – collaboration and teamwork, rational thinking, problem-solving and communications skills – which command a premium in hiring decisions and promotion.
Graduates are acutely aware of the “EQ premium“. But many believe their studies have not equipped them with demonstrable skills in this area. They are forced to top up with extra courses to make themselves more employable. Others are cutting short their formal studies and opting instead for industry experience. Without it, many employers won’t consider them for even entry-level jobs.
Money, rather predictably, sits at the heart of the problem. But it is also part of the solution.
The funding model and structure of the higher education and TAFE sectors has served us well for the past 40 years but is no longer fit for purpose. It is time to recast the entire system, for the sector to disrupt itself before nimble, new entrants – most likely from abroad – steal the march.
Universities can take the initiative on this, creating relationships with TAFEs or providing dual-sector pathways. But the funding challenge severely curbs their ability to be proactive.
There is also a crucial role for government to play that is beyond funding, and in many respects more important.
That is, to formulate a view of what value they want out of the sector, for Australia’s economy, to allow healthy competition and innovation, and to enable the collective sector to compete on the global stage in a position of its own choosing.
The Dawkins reforms of the 1980s were intended to improve equity and access to higher education. They succeeded in delivering those objectives but created a homogenous system – large, multi-campus and comprehensive universities, all receiving exactly the same funding per student for teaching exactly the same courses (although content and delivery may differ markedly among the providers).
The mismatch between the cost of course delivery and the course funding model is a topic of frequent discussion. It effectively forces university administrators to trade off numbers of students in some courses (arts, law) against others (engineering, agriculture, sciences) to “balance the books”.
Crudely, it costs less on average to produce an arts graduate than a veterinarian so our universities are managing their commercial models in a way that less costly graduates subsidise those who cost more to produce.
This doesn’t entirely address the cost gap so international full-fee students become important fee-generating components of the commercial university funding system.
As a result education has become Australia’s biggest services export adding $26 billion, or 5.2 percent, of real gross value to our economy each year.
There is now broad recognition at political and institutional levels that these funding arrangements have run their course and shadow education minister Tanya Plibersek has promised a funding review for the TAFE and VET (vocational education and training) sectors if Labor wins the next election.
Much of the debate centres around a fundamental question: what is the purpose of higher education?
From the perspective of students, most go to university with an expectation it will improve their job prospects. Factor in also the broader social and economic benefit accruing from a highly educated population.
Others believe the role of universities is not to produce work-ready graduates. Rather, they should occupy a position of learning, research, discourse and discovery for their own sake, with no required economic benefit, and that the beauty of learning and discovery is its own end. I understand that point of view and am sympathetic to it but it does not represent the outcome most students are seeking.
Catherine Friday leads the Oceania Education Sector practice for EY.