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FUTURES FOR HIGHER EDUCATION Trends presentation 2011.

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Presentation on theme: "FUTURES FOR HIGHER EDUCATION Trends presentation 2011."— Presentation transcript:

1 FUTURES FOR HIGHER EDUCATION Trends presentation 2011

2 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

3 This presentation focuses on three main trends The funding of higher education in the UK The demand for higher education Innovation and evolution in higher education A PICTURE FOR THE FUTURE?

4 NOW Current situation  2/3-5 years ‘Lock ins’  Long-term drivers  Outcome 1 Outcome 2 Outcome 3 What is hoped for in the 30-year vision?  Short-term choices  Long-term choices ‘Segment stories’ A. B. C. ‘Segment stories’ A. B. C. Institutional level Sector level Key indicators201020152040 1. 2. 3. Key indicators201020152040 1. 2. 3. THIS SLIDE ILLUSTRATES COMPONENTS OF THE DAY

5 And these are points for the group to consider Headline questions What are the key decisions that face your institution? How might these shape higher education in the UK and around the world? How do you see the future of HE in the long term? Things to think about What sectors have changed beyond recognition? What sectors are starting rapid change now? What about ‘Black Swans’?


7 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

8 And this has been the story of funding for the past twenty years

9 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

10 Others sectors have been through liberalisation Lots of small niche suppliers & some big value entrants New entrants? In what is offered in terms of services, pricing, support, etc Innovation? Biggest and most financially sound of the ‘incumbents’ Continued market domination for a time? Amongst both original players and new entrants Failures, mergers and take- overs? Ex ante to protect consumer interests and ex post competition law New regulation? An influx of foreign investment at some point New sources of funding?

11 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

12 Could this be a picture of a deregulated high demand future?

13 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)

14 And the route out is long and complex Economic outlook Sovereign debt crisis Banking debt crisis Credit and lending crisis Recession and unemploy - ment

15 Will this lock in the shift to tuition based funding?

16 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 Short/ Medium term questions 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 Setting student numbers free – ending student number controls Use of competition regulation Ongoing variable themes Public value agendas of mobility, equality and access Research concentration v. diversification

17 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?

18 If the question comes up ask yourselves do you see perpetual tuition growth?

19 We are already seeing the globalisation of higher education

20 This is being driven by global economic development 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. (China on the Cusp: Becoming the biggest international student destination in Asia: The Observatory on Borderless Higher Education)

21 Producing new concentrations of demand 1.Birmingham City University 2.Coventry University 3.De Montfort University 4.Edinburgh Napier University 5.Glyndwr University 6.Herriot-Watt University 7.Kingston University 8.Lancaster University 9.Leeds Metropolitan University 10.Manchester Metropolitan University 11.Middlesex University 12.Nottingham Trent University 13.Oxford Brookes University 14.Queen Mary, University of London 15.Sheffield Hallam University 16.Staffordshire University 17.Swansea Metropolitan University 18.The Royal Veterinary College, University of London 19.The University of Bolton 20.The University of Hull 21.The University of Nottingham 22.The University of Salford 23.University College Birmingham 24.University of Bath 25.University of Bedford 26.University of Birmingham 27.University of Bradford 28.University of Central Lancashire 29.University of Derby 30.University of Durham 31.University of Glamorgan 32.University of Gloucestershire 33.University of Greenwich 34.University of Hertfordshire 35.University of Huddersfield 36.University of Leicester 37.University of London 38.University of Manchester 39.University of Northampton 40.University of Northumbria 41.University of Plymouth 42.University of Portsmouth 43.University of Reading 44.University of Strathclyde 45.University of Sunderland 46.University of Surrey 47.University of Ulster 48.University of Wales 49.University of Wales, Newport 50.University of Warwick 51.University of Wolverhampton 52.University of the West of England, Bristol 53.York St John University UK providers with courses in Hong Kong

22 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

23 But addressing these trends is not simple Brand Positioning Investment Overseas academic and industry partners for research New competitors – US and Chinese universities Complex ethical and political landscape Diverse student and staffing needs New organisational challenges – HR, finance Wider range of degree models (1+2 etc)

24 Research concentration may affect your institution’s positioning domestically and globally

25 Or will a drift toward contract based funding present challenges or opportunities? HEBCI survey

26 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?

27 You may be interested in US revenue models

28 You may be interested in US expenditure models

29 You may be particularly interested in the US not for profit financial model Private not- for-profit degree- granting post- secondary institutions Academic year 2007–08 * The investment return per student in 2007–08 for private not-for-profit institutions ($2,153) was smaller than the amount in some prior years ($19,852 in 2006–07 and $12,723 in 2003–04). In the following year 2008 / 2009, investment return was a loss of $21197.

30 You may be particularly interested in the US for profit financial model Per FTE student 2008/09. Source: IPEDS indicator 50

31 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 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 The University of Phoenix 455,600 enrolled students in 2010 (25,000 in 1995)

32 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

33 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?

34 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

35 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

36 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?

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