Futures for Higher Education Scenario workshop DELEGATE PACK.
Post on 29-Dec-2015
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5www. .com
It’s 15 years from now, what will have
changed most in terms of the university’s…
…mission
…income
…organisation / ways of working
6www. .com
Which aspect of your strategy is most critical to ensuring the future success of the university?
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 funding of higher education in the UK
The demand for higher education
Innovation and evolution in higher education
A PICTUREFORTHE FUTURE?
NOWCurrent 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.
Institutional level
Sector level
Key indicators 2010 2015 2040
1.
2.
3.
THIS SLIDE ILLUSTRATES COMPONENTS OF THE DAY
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’?
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
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
9,000
£ p
er
FT
E s
tud
en
t
Government publicly planned unit of funding (real terms 2009-10=100)
grant
grant + public fee
grant + public fee + private regulated fee
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
•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?
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?
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
0
500
1,000
1,500
2,000
2,500
0
50,000
100,000
150,000
200,000
250,000
300,000
97,997
111,480 109,940116,840 117,290122,150
136,295
152,620
173,985
199,225214,690
219,175239,210
229,645
247,995
Higher education institutional income from non-EU domiciled students 1994/95 - 2008/09(and non-EU domicile student numbers; excluding students from EEA countries)
Academic years
£ m
illi
on
, ca
sh t
erm
s
Stu
den
t n
um
ber
s (h
ead
co
un
ts)
Source: Higher Education Statistics Agency (HESA): Resources of higher education institutions, Students in higher education institutions, various years
£1
,88
0
m
£1
,49
9
m
* From 2007/08 writing up and sabbatical students are no longer included in standard counts of students
*
*
£1
,71
3
m
£2
,20
0
m
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)
2007 2008 2009 2010 2011 2012 2013
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
GDP growth
World growth will be sustained by the non-OECD countriesContribution to annualised quarterly world real GDP growth, percentage points
Source
Non-OECD
OECD
And the route out is long and complex
Economic outlook
Sovereign debt crisis
Banking debt crisis
Credit and lending crisis
Recession and unemploy-
ment
Will this lock in the shift to tuition based funding?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010/11 2011/12 2012/13 2013/14 2014/15
Indicative breakdown of funding between loans for the graduate contribution and HEFCE teaching grant, 2010/11 to 2014/15
Loans outlay to HEIs
HEFCE teaching grant
What other questions will need to be resolved?
Immediate questi
ons
•Impact of government student number de regulation and incentives (AAB and £75000)
•The new regulatory framework – extent of any de regulation or liberalisation
Short/ Mediu
m 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
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
2009/10HEI in the UK
2009/10HEI overseas
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
Other EU
Non-EU
Overseas students on UK HE provision and location of study, 2009/10
Location of study
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)
China
India
Nigeria
United States
Malaysia
Hong Kong
Pakistan
Saudi Arabia
Canada
Thailand
Taiwan
Korea (South)
Bangladesh
Sri Lanka
Singapore
Japan
Norway
Russia
Iran
Turkey
0 20,000 40,000 60,000
2009/10
1998/99
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
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
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
‘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)
Or will a drift toward contract based funding present challenges or opportunities?
HEBCI survey
2003-04 2004-05 2005-06 2006-07 2007-08 2008-090
100
200
300
400
500
600
700
800
900
1000
Collaborative research
Contract research
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
- 500,000
1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000
Science budget allocation
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?
Stream
Instituional group
US for profit (4 year) US not for profit (4 year) US public (4 year)
-50% 0% 50%
% of Total per FTE
-50% 0% 50%
% of Total per FTE
-50% 0% 50%
% of Total per FTE
Auxillary enterprises
Educational activities
Federal appropriations, grants and contracts
Gifts
Government grants
Hospitals
Investment income
Investment return
Local appropriations
Other
Other non operating revenues
Other operating revenue
Other revenues
Private gifts, grants and contracts
State and local governments
State governments
Tuition and fees
Revenue per FTE at US higher education insitutions by income stream 2008/09
You may be interested in US revenue models
Stream
Instituional group
US for profit (4 year) US not for profit (4 year) US public (4 year)
0% 20% 40% 60%
% of Total per FTE
0% 20% 40% 60%
% of Total per FTE
0% 20% 40% 60%
% of Total per FTE
Academic support
Auxillary enterprises
Depreciation
Hospitals
Independent operations
Instruction
Non operating
Operation and maintenance plant
Other
Other operating
Public service
Research
Research and public services
Scholarship/ fellowship
Student services academic and institutional support
Expenditure per FTE at US higher education insitutions by expenditure stream 2008/09
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
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 Phoenix455,600 enrolled students in 2010 (25,000 in 1995)
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?
1) Trends, drivers, events
www.idenk.com
5) The DefiningMoment(s)
2) The worst case?
3) The best case?
4) An interesting case?
6) Implications?
a) Relationships with government(s)
b) Relationships with other institutions
c) Other relationships
7) Questions to ponder?
Possible futures for the institution – in 30 years
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