We consider the Australian university system an interesting microcosm worth studying. Like the U.S., they have a heavy contingent of international students, however, the range of institutions in Australia is much more homogeneous than the diverse education system found in the U.S.
We recently reviewed a report by The Australian division of Ernst & Young, a global consulting and accounting firm. The report predicts that the dominant university model in Australia will prove unviable in all but a few cases over the next 10-15 years. They note that the Australian education system is composed of, "broad-based teaching and research institution[s] supported by a large asset base and large, predominantly in-house back office."
The E&Y report goes on to describe the "university of the future" driven by major developments in technology and the vast amount of knowledge present online. These factors are forcing universities to adopt a far more dynamic model. The market and economy will prompt change in the policies, business model and academic delivery methodology. The E&Y report has clearly defined 5 drivers of change that will affect the education industry:
- Democratization of knowledge and access: broad access to content.
- Contestability of markets and funding: competition for students and government funds as never before.
- Digital technologies: digital technologies will not wipe out universities but they are going to change the face of the method of delivering education.
- Global mobility: increasing global mobility with increasing competition from international branch campuses and highly branded freely available content.
- Integration with industry: the relationship between Industry and educational Institutions will deepen in the future. New partnerships will develop for academics content, distribution and industry programs.
We highlight in graph 1 (below) the source and destination of international branch campuses (IBC). Universities have been very slow to adopt international expansion with integrated program and degree offers. The E&Y report highlights the increasing number of IBCs, yet overall, this is a small number in the global context of institutions.
There are many factors contributing to this slow rate of growth including internal institutional factors, external regulatory factors and financial factors -- far more complicated issues than we could cover in this blog without putting you to sleep. Nevertheless, the factors are worthy of analysis by some sharp minds (we're debating internally whether our minds are up to the task ;-). And that is probably part of the internal struggle our stodgy higher ed institutions are having as well: How do you gather and align the minds from inside and outside the institution capable of moving in the right direction...together?
Graph 2 shows Australia's share of the global student market, growth rate and sources of students studying outside their own home market. China and India are dominating the student migration patterns into Australia, both due to the size of their student populations and their population growth rates. South Korea follows in 3rd place for number of students making Australia their academic destination.
In our view, the E&Y study points to and defines the sources of the increasing performance pressure on admissions and marketing departments in the coming years driven by increasing competition between institutions of all types -- online and offline. Distinct brand and service definition will be critical to establishing a defensible market position. And as institutions in the U.S., and around the world, better define their brand value to students looking to study away from home, Australian higher education institutions will continue to face a very challenging global marketplace.
E&Y develops three business models for the future called "the streamlined status quo, niche dominators and transformers." We covered that part of the report in our blog: "The university of the future - a predictive case study."
Graph 1
Graph 2
