by JOHN H HOWARD

The higher education system doesn’t have a lot of friends in the business and broader community. It has tended to operate in an echo chamber with little connection and interaction with the mainstream media on Australian higher education challenges.

Its portrayal in commodity terms as Australia’s 3^rd largest export industry, contributing $40bn to the economy, doesn’t help comprehend its central role in Australia’s economic and socio-cultural fabric.

While the international higher education industry’s economic contribution is important to the economy, its pursuit should not be depicted in commodity terms, like mining and agriculture. It should not overshadow the fundamental importance of higher education for Australians to acquire knowledge and skills for future careers, creating new businesses, social mobility, and participation in a civil society.

People in business and the community can be generally unaware of how higher education institutions are governed, managed, organised, or operated. In particular, many of Australia’s universities have evolved into complex public corporations of highly diverse businesses, managing huge budgets, working to financial targets, and generally more complex than most industrial corporations. They undertake many activities – some for profit, some publicly regulated, and some operating in highly contested markets.

Nonetheless, higher education operates under a social license to deliver national, state, and regional benefits in teaching, research and engagement. In this regard, the higher education system encompasses universities, non-university providers, and elements of the vocational education and training system. But the system struggles to receive sufficient public funding to deliver these outcomes.

Higher education’s economic and socio-cultural potential cannot be achieved unless the system works in concert with other industry segments, government and the community, such as in the much-discussed triple helix framework. In this way, higher education is inextricably intertwined with national and regional economic and socio-cultural systems.

Higher education is a critical participant in the knowledge creation, application, and dissemination processes. This is played out strongly in innovation ecosystems (hubs/precincts/districts) and regional smart specialisation strategies. These processes are not linear but amount to a complex interplay of interactions and relationships covering research, skills and talent, business acumen, risk capital, and regulatory settings.

For higher education to flourish as a system and as an industry, it must make every effort to be part of the broader economic, socio-cultural and industrial structure. To this end, the Commonwealth government has a role in developing a policy and strategies for Australia’s higher education system by setting goals and targets, providing resources and guidance on the way it operates, and investing in creating and extending teaching and research capacity.

Policy must treasure the national, state, and regional benefit contribution the system makes for all Australians, particularly in the continuing evolution of the digital economy and the advancement and application of knowledge in its economic, social, and cultural contexts.

Higher education has a fundamental role in lifting opportunities for people of low socioeconomic status, people living in regional Australia, and people from families where members have never participated in higher education. However, the corporatisation of higher education has created a significant risk in that the delivery of these public benefits might be compromised.

Currently, the higher education system is excessively complex, rules-driven, and policy is control-oriented. Policy, such as it is, is an aggregation of regular announcements of priorities rather than a reflective of a fully developed vision and long term strategy. Creating and implementing this vision and strategy would be led by the government rather than ‘bottom up’ advocacy from strong lobby organisations and interest groups.

The time will come when people go looking for the national vision for higher education and its contribution to the economy and a civil society that values fairness, diversity, and tolerance to a broad range of views and opinions.

Higher education institutions, and particularly universities, have traditionally been places for debates over ideas, ideals, and reconciliation. It can be expected that people will continue to look for the role of higher education in Australia’s socio-cultural fabric, with the contributions to non-material aspects of quality of life and well-being.

Discussion of the future of higher education should not be restricted to universities; it must embrace the “non-university” provider categories, including TAFE institutes and specialised providers in the arts, cultural and creative industries. This inclusive approach will create more opportunities for higher education to contribute to national, state and regional economic and socio-cultural benefits.

The future is not path-dependent – extrapolating what has gone before and responding to periodic shocks and discontinuities, and expecting a return to normal. The “new normal” might be quite different from the past. The future is in innovation and transformation of higher education providers into modern, financially viable, and goal-oriented not-for-profit businesses delivering high quality and sustainable learning experiences.

A vision and long term strategy for Australian higher education must address:

* Diversity in education delivery and opportunities for different market segments defined by student, industry and community preferences and demand

* Opportunities for growth in new market segments through rationalisation, diversification, and responding to disruptive forces

* Investment in research in areas that are important for Australia’s industrial and innovation future (acknowledging, of course, broader purposes of research)

* Maintaining the excellent global standing in medical education and research, particularly in universities and associated medical research institutes moving to global status

*An urgent requirement for leading engineering, technology, and design providers essential to help build the digitally-oriented industries of the future. The development and growth of innovation ecosystems (hubs/precinct/districts) across urban and regional Australia

* Access and equity issues concerning participation in higher education, including people living in regional Australia and addressing high attrition rates and low completion rates of on-line education

* The role and contribution of higher education to the arts and creative industries

* Strengthening links between higher education institutions and national/state cultural institutions.

Many of these aspects of higher education policy are currently addressed of sorts. They are reflected in a grab bag of initiatives across multiple ministerial portfolios and government agencies – Commonwealth, state, and local. They come through as priorities and actions rather than components of a consistent and coherent national vision and strategy.

Delivery is hamstrung by the absence of an organisation to guide the system’s growth and development away from the unified system, set up in 1988, to a diversified system that meets the education needs of students, industry, government, and the community.

Creating a diversified higher education system for the 21^st century will require resources.  A national transition fund should be established to facilitate progress to a higher education system fit for purpose in the 21^st century.

Developing and implementing a vision and long term strategy for Australian higher education is confronted with a binary choice:

* do we encourage all of our higher education institutions to compete in the international student education industry with the principal objective of generating export income, jobs, and regional employment? The implication is that higher education carries the characteristics of a commodity industry.

or

* do we develop a higher education policy and strategy that guides higher education institutions in addressing 21^st century educational needs and requirements of a stable potential student cohort and manage and resource this appropriately to deliver a diverse portfolio of educational experiences and outcomes for students, industry and the community?

This choice reflects the dilemma of intertwining higher education industry objectives and higher education system objectives. Until now, the answer would have been “both” in our “unified” national system. All institutions would have to fit the national model. But that answer is no longer tenable: while the industry objectives of higher education are clear enough to state/territory governments, the much-needed pathway towards diversification and meeting domestic education requirements should take on greater precedence.

It follows that a vision and strategy for Australia’s international higher education industry should be developed separately but alongside the vision and strategy for Australian higher education.

Australia’s higher education system must be designed to put Australian students at the front and centre of what the system is intending to do and achieve. They are the ones who are paying. The system must fully engage with students, industry, and the community to deliver valuable learning experiences and outcomes. This fundamental aspect of the higher education mission should come a long way ahead of the corporate task of making money.

This is John H Howard’s final CMM essay based on his new book   Rethinking Australian higher education, published by Howard Partners and UTS in February.  Howard is a visiting professor at UTS and Managing Director of Howard Partners, a public policy and innovation advisory firm.