Can the universities of today lead learning for tomorrow? - The University of the Future - EY
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Can the universities of today lead learning for tomorrow? The University of the Future
Executive summary
Does higher education need a new paradigm to
serve Australia’s needs in the Transformative Age?
Imagine closing your eyes and waking up on 1 January
2030. The world has nine billion people. Humankind
has landed on Mars. Intelligent robots work alongside
people, cars are self-driving, energy is abundant
and clean. Plus, the world’s new largest technology
company is in the education business.
Contents Welcome to the To answer these questions, we launched
a formal scenario planning process as a
The university of today [ 02 ] Transformative Age follow up to our University of the Future
We have entered the Transformative Age white paper from 2012. The result is a
Disruptive forces and, much like the Industrial Revolution set of four divergent scenarios to assist
driving change [ 06 ] before it, we can expect fundamental university leaders and government
shifts in how we live, work and play. policy makers in planning now, to deliver
The university The Transformative Age will also change the educational needs of students and
of the future [ 12 ] how we learn – and, along with it, the employers, tomorrow. Our goal was not
nature and role of the university. to predict the future but to offer multiple
The transformed plausible “tomorrows” to stress-test new
Australia is a global success story when policies, strategies and plans.
university [ 28 ]
it comes to education. Austrade ranks
international education as our third To ground the process in reality, we
EY recommendations [ 30 ] conducted interviews and workshops
largest export, worth AU$26 billion and
adding 5.2% of real gross value to our with 50+ university leaders, government
EY contacts [ 32 ] policy makers and industry observers. We
economy per year. In the Transformative
also conducted surveys and focus groups
Acknowledgment Age, our universities must continue to
remain globally competitive1. with 3,000+ students and employers.
and methodology [ 33 ]
But what will make a university successful The value of these four scenarios lies
in this new world? What will our nation’s in their ability to stimulate questions,
students and employers demand of rather than the accuracy of their
our universities in the future? How will predictions. They will help universities
universities contribute to solving the to see emerging patterns, detect
challenges of the Transformative Age? opportunities and threats, and test how
And what should universities consider, resilient current strategies might be to
today, to be ready to deliver truly new worlds. Particularly, they will help
transformative outcomes? education sector leaders to understand
the trends unfolding outside of the
education sector, and outside of Australia
that will, inevitably, manifest in higher
education here.
1. Australian Government: Australian Trade and Investment Commission, “Why Australia: Benchmark Report 2018 ” .
Lucille Halloran
Managing Partner,
Oceania Government
and Public Sector,
Ernst & Young Australia
Catherine Friday
Partner, Oceania
Education Leader,
Ernst & Young Australia
Participating university leaders noted
The four future scenarios a tension between the dual strategy
needed to continue to reposition and
1 | Champion University optimise the core business of their
A hands-on government actively champions universities as universities, while also investing in future
strategic national assets. Most students enrol in traditional disruption for tomorrow. This echoes
undergraduate and graduate degree programs. Universities our own view that the commercial and
streamline operations by transforming service delivery and the disruptor university scenarios are
administration. the most likely to become reality. Both
will require leaders to simultaneously
reposition their institutions by
converging with industry, while also
2 | Commercial University
exploring disruptive new business models
A hands-off government requires universities to be financially that can fend off new market entrants.
independent to ease national budget pressures. Students favour
degree programs that offer work-integrated learning. Universities With this in mind, we suggest universities
reposition by drawing closer to industry to collaborate on teaching should consider the potential to:
and research. • Embark on double transformation
to optimise and grow
• Make the shift from being
3 | Disruptor University faculty-focused to learner-centric
A hands-off government deregulates the sector to drive • Integrate with industry to co-create
competition and efficiency. Continuous learners and their and collaborate
preferences for on-demand micro-certificates dominate as
• Re-imagine the physical campus for
technology disrupts the workplace. Universities expand into new
the digital world
markets and services and compete against a range of new local
and global educational services providers. • Unbundle degree programs and the
university value chain
And no matter the future, universities
4 | Virtual University will continue to be a national asset for
An activist government restructures the tertiary sector to our country, and government will have
integrate universities and vocational institutes, prioritising training a key role to play in making them
and employability outcomes as humans begin to be replaced globally competitive.
by machines. Continuous learners are the majority, preferring What is clear from this exercise is that
unbundled courses delivered flexibly and online. Universities profound change is imminent in the
restructure into networks that share digital platforms. education sector. Policy makers and
university leaders will need to work
together to challenge the status quo and
adjust the settings to ensure Australian
universities are encouraged to innovate,
invest and transform.
The university of today
Australia is a world leader at around 5% per year between Australia’s government generally requires
2000 and 2015 and now contributes public universities to be all things to
in higher education $30 billion to the country’s GDP, thanks all people — they all are broad-based
Education is a central pillar of Australia’s to rising enrolments and diversifying teaching and research institutions, with
economy. Not only does the education revenue streams. Thirty-five Australian vertically integrated business models
sector employ nearly 8% of Australian universities feature in the Times Higher and economic models underpinned by
workers, it is also our largest services Education’s World University Rankings student fees and government grants.
export.2 In 2015/2016 international of 2017, with six in the top 100.4 And the traditional “where, when, how,
education earned $20.3 billion in export Australia also attracts 350,000 fee- who” formula remains largely unchanged.
dollars, with universities and other paying international students who make Most students are under 25 and are
tertiary institutions generating two-thirds up about a quarter of the student body, taking undergraduate degrees to qualify
of that revenue.3 thanks to the quality of the educational for the professional working world,
system.5 Several universities are so large with learning taking place on physical
Statistics about higher education paint
and complex they would appear on the campuses, according to set schedules
a positive picture. The sector has grown
ASX Top 200 if they were corporates. of classes, via lectures and tutorials.
Snapshot of Australia’s higher education sector (2016)
Industry snapshot Market snapshot Product snapshot
62%
Domestic students
58%
Undergraduate
degrees and programs
Revenue $30.1 billion 24% 25%
Post-graduate degrees
International
Surplus $1.6 billion students
and programs
1.4 million
15%
Students
Employees 100,000 Research
Universities 43
14%
Growth rate
2000-2015
5.4% Research markets
2%
Other courses
Source: EY Market Analysis
2. Australian Bureau of Statistics.
3. Australian Department of Education and Training, November 2016.
4. Times Higher Education, “World University Rankings” 2017.
5. Universities Australia, Data Snapshot 2017.
2 | Can the universities of today lead learning for tomorrow? The University of the Future
“I just think learning and “The level of competition
knowledge is so important is so high now. If you
just to know things about don’t have the standard
life or what you wanna do. education, you are not
School doesn’t really set even in the running.”
you up for real life.” Continuous learner
School leaver
“The degrees that our
parents have hold such
different value to the ones
we have now.”
Current student
“… Australia’s public universities are much the same, all committed
to research, comprehensive course offerings and large
enrolments. This is an expensive way to deliver higher education,
yet offers few meaningful choices for students about the type of
institution they attend … As technological ferment threatens the
established order, it also breaks the constraints that encourage
conformity. It may be the time to allow new choices, more
diversity. The Australian idea of a university has served us well.
It may also have run its course.”8
Professor Glyn Davis AC, Vice-Chancellor, University of Melbourne
7. “Australia reaches international student milestone”, 7 March 2018, www.universitiesaustralia.edu.au
8. “The Australian idea of a university”, Melbourne University Press, 2017.
Can the universities of today lead learning for tomorrow? The University of the Future | 3
Perceptions of value of university degrees
University graduates earn more over the course of their careers than non-graduates. However, being a university graduate
isn’t quite the elite status it once was.
Standing out is becoming more and more difficult. The number of people holding a degree today makes it increasingly
difficult to stand out, leaving more and more people looking for additional qualifications or expertise.
Value and investment Impact of a degree on employment
of a degree % Agree % Improve
74% 80%
Completing a degree is well
90%
of prospective/
worth the work and effort Career prospects
Completing a degree
current/past
will improve my long-term
students think it’s
71% 69%
financial prospects
important to have Professional networks
(10-20 years after)
an undergraduate
degree
Completing a degree
will improve my short-term Finding employment
53% 63%
versus financial standing within a short timeframe
(2-3 years after) (4 months of graduating)
58%
for a postgraduate
I would no longer
pursue a university
Base: prospective/current/past students
39%
degree degree if employers
no longer require it
There is little advantage in
getting a university degree
26%
instead of gaining one via
a non-university provider
Source: EY Sweeney market research 2017
Yet, as EY argued in our 2012 University nano-degrees powered by leaders in existing degrees will soon be obsolete,
of the Future white paper, the status quo industry; the other focused on scientific which may mean institutions will lose
is unsustainable. In 2012, we posited that progress and exponential technologies. their “cash cows” and be forced into
the higher education industry globally specialisation paths they may have not
Disruptive models have yet to fully
was on the cusp of disruption and that chosen. And some institutions have yet
emerge in Australia, but there is growing
Australia’s dominant university model to digitise their operating models.
potential for this to happen, and happen
– a broad-based teaching and research
quickly. Once the first new entrant cracks The university leaders we interviewed
institution with a large asset base and
the market, we believe a deluge could know they need to act with urgency to
cumbersome back office — would prove
follow, not least because of the lack of prepare their institutions to compete in
unviable in the future.
diversity in the sector. a very different world to today. They are
We still believe this to be true. Demand also operating within a funding and
The case for change is clear. A growing
for learning is shifting to a fundamentally policy context that makes such changes
cohort of graduates are leaving the
new paradigm. The rise of Udacity and difficult, meaning that any solutions
university environment with more debts
Singularity University in the US point to will require government and university
and few job prospects. Some university
two potential disruptors: one offering collaboration to address.
leaders estimate that around 40% of
4 | Can the universities of today lead learning for tomorrow? The University of the Future
Higher education business model canvas
Australia’s universities are monolithic institutions that control all aspects of their
teaching and research activities, anchored by physical spaces and time-bound
schedules. Digital transformation is challenging this dominant model. As universities
evolve from faculty-centred to learner-centric institutions, they may well find it
necessary to unbundle their many functions as well as their degree programs to
differentiate and maintain competitive advantage.
Potential areas of disruption
Who are our Domestic International Continuous
Government Industry
customers? students students learners
What are the Developing Accessing Transferring
Acquiring Coming Learning Discovering
jobs to be done hard and employment new
knowledge of age flexibly new ideas
for customers? soft skills opportunities knowledge
What products/
How do services are we Undergraduate Postgraduate
Courses Other services Research
degrees degrees
universities providing?
create value?
Teaching Campus and
How do customers Virtual Artificial Research
and residential Online Publications Partners Other
get our services? reality intelligence projects
learning facilities
Teaching
How do we Develop content Deliver content Assess learning Credentialise learning
activities
produce it?
Research Develop Conduct Publish Commercialise
Fund proposal
activities proposal research research research
How do we Academic schools
Physical campus Digital campus Printed materials
distribute it? and faculties
How do
universities How do we Student Student Research Back office
Marketing Technology Other
support it? administration services administration services
deliver value?
Who are our
key partners Government Other universities Industry Outsourcers
and suppliers?
What are our major
Campus Digital Back office Industry
investments? Research Talent
infrastructure infrastructure transformation engagement
How do
universities What is our Commercialised
Student fees Government grants Philanthropy
revenue model? research
capture value?
Can the universities of today lead learning for tomorrow? The University of the Future | 5
Disruptive forces driving change
There are many ways to identify the challenges of change
in higher education. We workshopped five external drivers
over which university stakeholders have limited control,
which together will shape the future of higher education
in Australia.
Global forces impacting the university sector
• • • • • • •
• •
• •
•
•
•
•
• •
Rise of continuous Changing world
• •
learning of work
• • • • • •
• • • • • •
University
of the
Increasing Blurring
international
Future industry
competition boundaries
•
•
••
•
Evolving digital
•
•
• behaviour •
• •
• • •
• • • • • •
6 | Can the universities of today lead learning for tomorrow? The University of the Future
“We have been here before. The dizzying pace of change in
every aspect of life presents us with both the risks and potential
rewards of a new renaissance taking place in our modern world.
Except, this time, it is the entire world and a population of seven
billion who are becoming connected and able both to access
and input information that is globally accessible. The pace of
advancement is therefore many times faster, and the degree of
instability that ensues many times greater.”
Professor Ian Goldin, Oxford University
1 | Changing world of work
Perceptions on degrees and changing world of work
Technology disruption is affecting
Some students would happily opt out of their degrees if they could see a feasible
the nature of employment and
pathway to employment without attending university. Others would welcome new
employability.
approaches to gaining qualifications and progressing their careers. This highlights
As workplaces change, so does what a risk to universities, particularly if they are untethered from industry.
it takes for a graduate to be ‘work
ready’. The future of work will be radically Past student perceptions of Importance of the integration
different, driven largely by the machine degree course relevance of digital technologies in degree
economy, where robotics and machine course by current/past students
learning take over repetitive and
of current/past
programmable human tasks and artificial
Study area directly graduates feel their
intelligence augments human roles.
relevant to current job 42% degree requires
transformation as
Nursing 87%
When machines Health services
digital technologies
take off in the workplace
become workers, and support
86%
what do humans do? Education 80% 40%
Domestic students
Law and
How will universities paralegal studies
79%
adapt to remain Business and management 67% 51%
relevant for the Psychology 67% International students
future of work? Study area less commonly
How will workers and
relevant to current job
57%
Humanities, culture and IT
citizens be motivated social sciences
36%
in the machine Science and mathematics 41%
56%
economy? Architecture built Business and
48%
environment management
How will we address Creative arts 48%
income inequality
when machines
Engineering 52%
54%
Communications 59% Law
replace humans?
Source: EY Sweeney market research 2017
Can the universities of today lead learning for tomorrow? The University of the Future | 7
“In the future, the university campus will become a precinct that
interfaces university and society, with start-ups, community
organisations and social enterprise intermingling with the
students: there will be full integration with society and industry.”
Dawn Freshwater, Vice Chancellor, University of Western Australia
2 | Blurring industry boundaries democratises information. For and work more closely with industry
universities, convergence heralds to develop curricula that mirror the
Non-traditional rivals offering new competitive threats from new entrants requirements of the professional world?
educational services are increasingly with disruptive business models. But it Will corporates look to outsource key
challenging the dominance of also offers the opportunity to collaborate pieces of research and professional
universities in teaching and learning. on research and innovation, curriculum development to universities newly open to
Technology is driving convergence in design and work placements. Will the collaboration and hunting for new revenue
almost every industry, as disruption ivory tower become the ivory network, streams? Will universities themselves
reconfigures value chains and as universities go beyond pure research expand into new markets and services?
Perceptions about university and industry collaboration
An overwhelming 83% of undergraduate students expressed interest in an integrated employment and education offering
had one been available. Yet, current student perceptions around their course industry linkages are better than past student
perceptions. This may signal that universities are making improvements, but there is greater potential in this respect.
Perceptions about integrated Perceptions about industry integration Perceptions about connecting
study/employment program with industry
Current scenario Ideal scenario % Agree
Foundational More graduate-
knowledge and ready skills The assignments and
some graduate- through greater learning have high
relevance for the workplace
58%
ready skills integration
between
83%
universities
There are plenty of
and industry
Very/fairly workplace opportunities
interested
linked directly to my
56%
degree1
There are strong links to
53% Very 30% Fairly 12% A little potential employers 51%
interested interested interested
3% Don’t 2% Not at
know all interested
Skills university provides
Base: current/past students
Skills employers want
Base: Prospective/current/past undergraduate students 1. Base: current/past students who are working
Source: EY Sweeney market research 2017
8 | Can the universities of today lead learning for tomorrow? The University of the Future“The higher education sector will focus on driving
research and fostering incubators and breakthroughs
that make a fundamental difference.”
Michelle King, Senior Director, Alumni and External Engagement
Monash University
3 | Evolving digital behaviour
Digitisation is empowering learners Perceptions of digital learning
by converting them into consumers Some universities are beginning to provide digital forms of learning or open
of educational services. online courses, but student demand is outpacing supply. Prospective students
As nearly every consumer activity shifts see online learning as flexible and convenient, thereby increasing access. This
to the digital realms of web, mobile, is the preference of 42% of future students, versus the 22% of current students
social, mixed reality and virtual reality, actually receiving the majority of their degree online.
digital natives are developing new Students also want universities to improve the use of technologies as part of
radically different learning behaviours the student experience, including the ability to translate learnings, engage with
and expectations. By 2030, how different others and interact with their teachers. However, many universities have yet
will the learning and social behaviour to deliver basic digital elements, including: integrating technologies, digitising
be of digital natives from previous content and automating administrative processes.
generations? Will educational services
move steadily and massively online? Preference for majority of Attitudes towards online
Will the student experience be more degree to be delivered online versus face-to-face learning
important than the course content?
% Agree
When choosing a
course, the information
“Universities will be on a university’s website
78%
able to identify and plays an important part 87%
in my decision
track their social and
economic contributions 22% The online learning
content in my course
back to society, driving gives me flexibility to
76%
the innovation agenda fit my study into other NA
things in my life1
through research.” Current students
When choosing a
Peter Marshall, Chief Operating course, the availability 43%
Officer, Monash University of online study plays
an important part in 58%
my decision
Online learning is just as
37%
42% effective as traditional
learning methods 49%
Current/past students
Prospective students
Prospective students’
preference Base: prospective/current/past students
1. Base: current/past students
Source: EY Sweeney market research 2017
Can the universities of today lead learning for tomorrow? The University of the Future | 9“There will be increased demand
for ‘lifelong educational wellbeing’,
in the same vein as general
health wellbeing and financial
wellbeing. This will be triggered
by the nervousness around
the uncertainty of work and
automation. Universities will
position themselves as educational
wellbeing partners, delivering
customised and in many cases even
individualised education services.”
Professor Michael Rosemann, PhD, FACS,
FQA, MAICD, Executive Director, Corporate
Engagement, International & Development,
Queensland University of Technology
10 | Can the universities of today lead learning for tomorrow? The University of the Future4 | Increasing international 5 | Rise of continuous learning
competition The shift to education as a continuous Perceptions on
International competition for rankings, process is changing demand for higher lifetime or continuous
students and academics is changing education offerings.
learning
the higher education landscape. Portfolio careers and the need for
The concept of lifelong learning
Global rankings, international mobility workforce agility in the gig economy are
is becoming a career necessity
and global knowledge hubs will change increasing the demand for continuous
rather than a discretionary luxury.
the competitive landscape and open up development, requiring learning that
No longer is learning new skills
new opportunities for learning. Student is self-directed, affordable, accessible
something people do only when
mobility is increasing as technological, and time critical. How will universities
pursuing a significant career
political and demographic changes make be part of the supply chain? Will new
change, but simply being relevant,
internationalisation a strategic goal for segments of learners and new learning
competitive, and in-demand
many governments, including Australia, propositions challenge the dominance
requires an ongoing commitment
China and India. Already, the balance of of undergraduate degree programs? Will
to lifelong learning.
host countries is beginning to change. continuous learning skills become part
To remain competitive, how will credit of the mainstream university curriculum? Barriers to universities taking a
transfer protocols need to change? larger share of the professional
Could Australian university brands development market include:
flourish in non-traditional countries? “There is a need to retool • While credible, universities
What new international research yourself, and you should are perceived as cumbersome
collaborations are possible? and inflexible
not expect to stop …
• Higher fees make it difficult
People who do not spend to rationalise the investment
five to 10 hours a week versus returns
in online learning will
obsolete themselves
with the technology.”9
Harvard Business Review
84%
of prospective/current/past
students believe it is necessary
for people to continuously upskill
or retrain themselves to remain
competitive in the workplace
Rises to 87% among
past students
Source: EY Sweeney market research 2017
9. Harvard Business Review, “To stay relevant, your company and employees must keep learning” by Pat Wedors,7 March 2016.
Can the universities of today lead learning for tomorrow? The University of the Future | 11The university of the future
We explored four divergent Of the several external forces shaping the The interplay of these two uncertainties
future of higher education, the future of leads to four extraordinarily different
yet plausible views of Australia’s universities will be shaped by futures. The following scenario narratives
Australia’s higher education two critical uncertainties: were developed through a series of
• Shifting role of government: to what workshops and interviews. Each scenario
landscape in 2030 extent will government play a hands-on introduces different opportunities and
or hands-off role in higher education? threats that challenge our thinking,
question our assumptions and help us
• Evolving learner preferences: to what think more broadly about the future.
extent will learners and employers
demand traditional or non-traditional The application comes from you, the
solutions from higher education? readers: by placing your own institution
within the four scenarios, you have
the opportunity to assess different
opportunities and threats, and test which
elements might be relevant to your
strategies for growth and sustainability
Bundled degrees over the next decade.
Learner preferences
Scenario 1 Scenario 2
Champion Commercial
University University
the base case the likely case
Hands-on Hands-off
Government role
Scenario 4 Scenario 3
Virtual Disruptor
University University
the extreme the alternate
case case
Unbundled courses
12 | Can the universities of today lead learning for tomorrow? The University of the Future“The challenge with investing in the next 30 years is
that it’s dependent on reading the future landscape
— universities need more certainty to be able to make
strategic decisions and rely less on assumptions.”
Vice Chancellor, University
“There is a fundamental need to know how to
distinguish or differentiate yourself in the market, and
it starts with evaluating the viability of new business
models and potential areas of specialisation that feeds
into student segmentation.”
Higher Education Researcher and Author
“To what extent, as a sector, do we have to change?
We need to recognise the need for change and where
the change will come from, and understand how
long it will take to materially impact the sector. More
importantly, we need to understand how to prepare
for this change. The pace of change and responses
required within this period may not afford the luxury
of time.”
Greg Pringle, Chief Operating Officer, The University of Queensland
Can the universities of today lead learning for tomorrow? The University of the Future | 13Future Scenario 1:
Champion University
In 2030, a hands-on government actively champions
universities as strategic national assets. The majority of
students enrol in traditional undergraduate and graduate
degree programs. Universities streamline operations
by transforming service delivery and administration.
The division between Vocational Education and Training
(VET) and higher education remains largely unchanged,
with the differentiation in the Australian Qualifications
Framework (AQF) still marked by different education
provider models.
Scenario drivers
Government role • Activist government prioritises university-friendly
regulation and promotes higher education as a
strategic national sector
• Funding from government exceeds funding from
other sources
Demand • Majority of learners are 18-25 years old and are
conditions pursuing undergraduate degrees and programs
• They value independent and well-rounded
learning experiences
Technology • Technology integrates into traditional university models
conditions • Artificial intelligence in industry is nice
Sector structure • Protected landscape with elite universities dominating
and rivalry • Universities compete via international and national rankings
14 | Can the universities of today lead learning for tomorrow? The University of the FutureThe landscape for • The pace of technological change is “skills and experience” institutions.
moderate. AI remains niche and They play a strong role in developing
higher education people work alongside machines. and disseminating new technology
remains traditional Digital business models complement to industry.
traditional approaches.
• The broad-based teaching and research • Universities have embraced technology,
institution remains the dominant • Training and career-focused infusing it into both their front-office
model. Learner preferences for education (continuous learning) and back-office operations. Universities
traditional degree programs remain largely happens outside the sector. act as learning facilitators, with students
strong, and school leavers between the Emerging threats include providers using AI-enabled digital channels for
age of 18 and 25 remain the dominant from outside the sector addressing the learning and classroom-based study for
student segment. training and career-focused education tutorials and discussions.
needs of continuous learners.
• Government is the primary funder of • The competitive landscape is dominated
teaching and research, and universities • Competition for international students by elite universities that are true global
maintain an arm’s-length relationship from rising Asian universities has players and compete globally, with
with industry. However, the national intensified. Brand-name international higher education acknowledged as a
mission of higher education is universities are beginning to key export service that contributes
increasingly highlighted in the policy attract domestic students with digital significantly to GDP. Other universities
discourse, with the government tasking learning offerings. are generally financially sustainable
universities with building the workforce but have a strong reliance on revenue
of the future and positioning Australia from international students and
globally through research in strategic
Universities are postgraduate students.
disciplines like AI and climate science. streamlined versions
This protects the independence of of today
universities, which remain the primary
homes of cutting-edge research. • Universities continue as trusted arbiters
More work skills are entrenched in of knowledge, catering to a relatively
degree programs to address the small share of the youth population
emerging future of work, as measured for the purposes of preparing them for
by the growth of the future economy employment in the emerging age of AI
and tax returns from new jobs created. and mass automation.
• Labour markets trust university • Universities pursue both teaching
degrees as independent signals of and research, as now, without
experience and expertise, with degrees excessive dependence or involvement
remaining a prerequisite for many from the private sector, thanks to
professional jobs. The link between strong government financial support.
learning and earning remains positive: There is minimal scope for significant
the unemployment rate drops and profit-generating initiatives within the
earnings rise as one goes up the public accountability framework.
educational ladder. More people are • Universities have made a major push
employed in professional jobs than are to increase the quality of teaching and
self-employed or freelance. Learners to entrench more work skills in degrees
have an increased need for updated to address the future of work. In this
and relevant skills as the nature of work model, universities shift from being
changes and automation and digital are passive teaching institutions to active
more prominent.
Can the universities of today lead learning for tomorrow? The University of the Future | 15Future Scenario 2:
Commercial University
In 2030, a hands-off government requires universities
to be financially independent to ease national budget
pressures. At the same time, legislated obligations
for research have eased and the university landscape
becomes more diverse, with fewer comprehensive
universities, and greater specialisation of providers who
“play to their strengths”, whether that be in particular
research, teaching, subject area focus or teaching/
learning models. Students favour degree programs that
offer work-integrated learning. Universities reposition
by drawing closer to industry to collaborate on teaching
and research.
Scenario drivers
Government role • Hands-off government prioritises market-friendly
competition that promotes deregulation
• Funding from industry exceeds that from government
• Prices are uncapped
Demand • Majority of learners are 18-25 years old and are pursuing
conditions undergraduate degrees and programs
• They value work-integrated learning and technical expertise
Technology • Technology integrates into traditional university models
conditions • Artificial intelligence in industry is niche
Sector structure • Diverse landscape with existing and new
and rivalry universities competing
• Universities are autonomous
• Universities compete via industry linkages
16 | Can the universities of today lead learning for tomorrow? The University of the FutureThe landscape for universities. External competition • The balance of teaching, research
increases as universities compete for and community service is thrown out.
higher education has international students against rapidly Some institutions specialise in research
been liberalised rising universities in China and India, and professional education, shedding
• Government policy is driven by free- plus Canada, UK and USA. International general education programs for young
market principles. Prices are uncapped, rankings allow students to compare high-school graduates. Others focus
but a significant part of the cost of different educational offerings against more clearly on the teaching mission.
higher education shifts to industry very specific and detailed criteria in
real time.
and learners. Cooperation increases In this scenario
between government and employers
over certification. The scene is set for Universities are universities must
• Take advantage of new revenue
new private and public universities
autonomous and streams — foreign markets, deregulation
to emerge.
commercially oriented of fees, patenting of research, growing
• Industry maintains trust in the higher
• Universities operate autonomously, financial links with industry
education system, with employers
accordingly to market principles, and • Build new commercial capabilities
continuing to require university degrees
rely on a mix of public and private and become more attuned to and
as a primary requirement for entry
funding for operations. Learner responsive to industry, including
into the professional world. Industry
preferences for traditional degree pursuing outsourced R&D and learning
pursues partnerships with universities
programs remain strong. functions from industry
on curriculum development, research
and work placements. • The line between universities and • Outsource non-core services,
industry is increasingly blurred as all particularly in the back-office, to
• Continuous learners are an emerging
parties collaborate closely to develop increase efficiency and reduce costs
segment, but traditional school leavers
curricula and conduct research.
far exceed their numbers. Learners
• Increase differentiation to compete
pay a significantly greater share of the • The broad-based teaching and research
and to attract funding, either through
cost of studies than in 2018, with more institution remains the dominant
multi-disciplinary research or by
funding coming via loans. model. Incumbent universities have
focusing on specialist domains
embraced technology to simplify
• AI remains niche and people work
operations, reduce costs and attract • Increase focus on quality of teaching
alongside machines. Digital business
industry partners. The sector has and employability as factors that
models coexist with traditional business
been destabilised by the entry of a are increasingly taken into account
models to enable mixed delivery.
limited number of new international by learners
• The threat of substitutes is moderate. competitors and a selection of • Run dual degree propositions:
Learners access training and universities offering a digital-only
development through corporates, degree at a lower price point. • On-campus degree (with blended
industry associations and other delivery methods) as a premium
• Universities take a market-oriented
providers. Training and career-focused proposition for full-time students
approach to operations without losing
education (continuous learning) • Digital degree as a lower-cost
basic academic values. They continue
largely happens outside the sector. mass proposition for full-time
to be selective institutions that focus on
Emerging threats include providers or part-time students
preparing school leavers for the working
from outside the sector addressing the
world and on world-class research. • Operate innovation precincts and hubs
training and career-focused education
University resources come from a to build strong links to local economies,
needs of continuous learners.
wide variety of sources, with mixed to commercialise research and to
• The market place is increasingly public-private funding models, thanks to start up new businesses
international. New entrants are strong integration with industry and the
generally global brands that combine local economy. Along with the returns • Entrench work skills in degrees to
physical and virtual presences and on intellectual property rights, research drive uptake
compete directly against the public is seen as a very important and very
lucrative activity.
Can the universities of today lead learning for tomorrow? The University of the Future | 1718 | Can the universities of today lead learning for tomorrow? The University of the Future
“Why do we teach people what they already know?
Our more experienced learners have already gained
key skills and capabilities in the workplace, or working
for themselves. Universities can assess what those
learners already know using micro credentials and
potentially make the credentials credit bearing in the
target degree course. This is more efficient, engaging
and personalised for the learner.”
Professor Beverley Oliver, Deputy Vice-Chancellor (Education),
Deakin University
“Universities will become known as hubs of social
interaction, engagement, collaboration and recreation
that interface with the surrounding communities.
This will enrich the theatre of learning, enabling
greater engagement and attendance that can drive
industry collaboration within the industry ecosystem.”
Greg Pringle, Chief Operating Officer, The University of Queensland
“How will universities be more integrated into
the decision making and operations of Australian
enterprises to provide valuable research
outcomes that in return, increase the demand
for their research?”
Professor Peter Høj, Vice Chancellor, The University of Queensland
Can the universities of today lead learning for tomorrow? The University of the Future | 19Future Scenario 3:
Disruptor University
In 2030 a hands-off government completely
deregulates the sector to drive competition and
efficiency. Continuous learners and their preferences for
on-demand micro-certificates dominate as technology
disrupts the workplace. Universities expand into new
markets and services and compete against a range of
new local and global educational services providers.
Scenario drivers
Government role • Hands-off government prioritises market-friendly
competition that promotes deregulation
• Majority of funding comes from market mechanisms
rather than government
• Enrolment is open
• Prices are uncapped
Demand • Majority are continuous learners and are pursuing
conditions micro-certifications
• They value control and personalisation of their education
Technology • Technology disrupts traditional university models:
conditions education-as-a-service scales up
• New digital business models realise their full value
• AI is mainstream and machines are displacing jobs
Sector structure • Fragmented landscape with universities in hyper-
and rivalry competition against service providers from outside
the sector
• Universities compete via new business models and moving
into adjacencies
• Research and learning are disconnected: universities tend
to specialise in one or the other
20 | Can the universities of today lead learning for tomorrow? The University of the FutureThe landscape for • The landscape is highly fragmented, • University degrees are almost
with competing providers including: obsolete in some industries.
higher education has employers, corporates, professional Businesses recognise a diversity of
been disrupted associations, vocational education learning experiences, ranging from
providers and universities, which have higher education micro-certifications
• Technology disrupts employment.
a shrinking share of the market. to corporate training to industry
AI and automation displace professional
qualifications to work experience.
jobs; portfolios of skills are more
Private players credential all types
important than university degrees as Universities transform of qualifications with digital learning
prerequisite for jobs; the labour
market structure has shifted to more
by entering new markets passports underpinned by blockchain.
freelancers than full-time employees. and services • Switching costs for learners to change
• The core proposition of education-as- providers are low. Various organisations
• Technology disrupts education.
a-service has transformed the way offer accreditation services that
The sector has seen a steady and
universities acquire and retain learners recognise work experience along with
massive movement to learning online.
and provoked substantial changes in course work to create personalised
New ed-tech models include: on-
how revenue is generated. Continuous learning passports in place of degree
demand streaming learning, digital
learning has come of age and is now the programs. Government, training
courses digitally distributed through
dominant segment. Modular courses providers and employers cooperate
apps, AI platforms that support
tailored to industry needs and delivered over certification.
individualised learning, and digital
learning passports that accredit digitally account for a large proportion
• The widening of the learner base
higher education courses and work of sector revenues.
creates greater competition for
experiences. • This new landscape has taken a students. Tuition revenue comes to
heavy toll on incumbent universities. represent a more important share
• Learner preferences change the game.
A number were unable to adapt quickly of overall income. Research (and the
People know they need to acquire
enough and were outcompeted by best researchers) moves out to public
and upgrade skills through their
new entrants, who used innovative research institutes and corporate
lifetimes. Learners want learning
business models to rapidly acquire R&D divisions.
that is flexible and on-demand, via
micro-certifications that provide significant market share. The remaining • The university hierarchy remains
immediate employment payoffs. universities are significantly slimmer strong: elite universities maintain their
and more agile, with well-developed research profile, via research that is
• Government plays a hands-off role. business-to-consumer and business-to- more demand-driven, specialised and
It provides basic funding for learners business models. securing significant financial returns
and universities but expects universities
• Market forces give rise to institutions through licensing intellectual property
to be largely self-funding. Private
specialised by function (teaching vs. rights. Innovative challengers extend
providers are allowed to enter the
research), field (business, science, teaching to the mass market, using
accreditation market for higher
humanities) and audience (school digital models that drive greater
education. Government switches
leavers, continuous learners, virtual standardisation and patented curricula
to playing quality control of the
learning, campus learning). Technology and teaching methods.
international market players while
retaining the value of Australian is widely used in teaching, with digital
providers. business models dominating.
Can the universities of today lead learning for tomorrow? The University of the Future | 2122 | Can the universities of today lead learning for tomorrow? The University of the Future
“Universities will remain vital places for the In this scenarios
development of global citizens; a university thinks universities must
internationally, is based in the local economy, but • Compete to deliver the best content
in the best way, by expanding into
works for the purpose of national and regional providing education services, research
development.” services and commercial services,
pursuing new revenue streams via
international expansion, subscription
Dawn Freshwater, Vice-Chancellor, University of Western Australia models and franchising.
• Run two distinct, digitally enabled
business models:
1. Business-to-consumer — offering
an array of micro-certifications
strongly aligned to employability
outcomes.
2. Business-to-business — extending
into corporate training, as well as
into new propositions for content
development, aggregation and
distribution.
• With digital platforms requiring less
physical university infrastructure,
universities repurpose grounds and
buildings for other uses, creating:
education precincts that incorporate
primary and secondary schools;
innovation precincts that bring in
businesses; and community precincts
with community-oriented services.
• Staffing structures change. Academics
become freelance resources operating
across multiple institutions — and
moving from universities into industry
to commercialise research.
• The structure of a degree morphs
to include experience plus multiple
education and training courses. Private
providers certify these experiences into
a learning passport for learners.
Can the universities of today lead learning for tomorrow? The University of the Future | 23Future Scenario 4:
Virtual University
In 2030, an activist government restructures the
tertiary sector to integrate universities and the
Vocational Education and Training VET sector,
prioritising training and employability outcomes
as humans begin to be replaced by technology.
Continuous learners are the majority. They prefer
unbundled courses delivered flexibly online. Universities
restructure into networks that share digital platforms.
Scenario drivers
Government role • Activist government prioritises learner-friendly regulation
that integrates higher and vocational education
institutions into integrated tertiary sector
• Funding from government exceeds other sources
• Enrolment is open
• Prices are capped
Demand • Majority are continuous learners and are pursuing
conditions individual courses
• They value control and flexibility of their education
Technology • Technology disrupts traditional university models:
conditions learning has moved steadily and massively online
• New digital platforms link teams of higher and vocational
education institutions into networks or consortia
• AI is mainstream and machines are displacing jobs
Sector structure • Consolidated landscape with universities linked into
and rivalry networks with other institutions
• Universities compete through acquiring continuous
learners
• Research and learning are disconnected: universities tend
to prioritise learning
24 | Can the universities of today lead learning for tomorrow? The University of the FutureThe landscape for with allocations to universities based • Adapt to new learner segments,
on the success of their learners and including individuals looking for
higher education has citizens receiving help to learn while recurrent professional development and
been restructured they earn. Tertiary Education Quality skill upgrading, as well as elderly people
and Standards Agency (TEQSA) is enrolling for non-professional reasons.
• When AI began to disrupt employment,
repositioned to assure quality of
the government merged universities • Invest heavily in building shared
individual courses across institutions.
and TAFEs into an integrated tertiary digital “experience platforms”, with
sector, with universities shifting to • Universities and TAFEs merge into an harmonised systems, to deliver courses
digital business models and unbundling integrated tertiary sector, with regional and serve learners in a seamless and
traditional degree programs into networks, tasked with advancing integrated way across the network.
individual courses, which now account employment and employability as
• Consolidate physical footprints and
for the majority of sector revenues. people acquire and upgrade skills
repurpose facilities as hubs for
throughout their careers. Distributed
• Universities have linked into networks business collaboration, innovation and
virtual environments are now common,
with regional peers and TAFEs, community education.
and the learning experience has been
collaborating to develop common digital
commoditised, provided to anyone, • Put more focus on customer acquisition
learning and experience platforms.
anywhere, anytime — for a price. and retention, and learn to bundle and
Teaching is prioritised over research,
price products and services like telcos
and many universities have refocused on • A university degree is no longer a
and banks.
a narrower set of academic disciplines in pre-requisite for the professional
which they excel. Some elite universities world — portfolios of courses and skills • Change metrics to include: learner
have retained their broad-based are more important. People prefer acquisition, retention, satisfaction,
teaching and research model, but they individual courses that immediately lifetime value.
are the exception rather than the rule. increase employability options by
More research is done outside the making them more productive at the
university sector than within. earliest possible time. Universities and
What are the most
• Technology disrupts employment
TAFEs are viewed on an equal footing, significant innovations?
with course quality and fit mattering The learner profile — a digital profile
AI and automation have replaced
more than the institution. that catalogues an individual’s learning
more than 20% of Australia’s working
hours. Freelancers outnumber • New sources of competition arise from experience from early childhood and
full-time employees. overseas brand-name universities like follows them through their life. This
Oxford and Stanford. These iconic has become the learning currency for
• Technology disrupts education all stakeholders enabled by blockchain.
institutions have “set up shop” in
The sector has seen a steady and Students benefit from understanding
Australia, and more learners are also
massive movement to learning online. their capabilities, skillsets and interests;
accessing virtual learning through them
• Learners have been consumerised as they scale up their digital models. industry can clearly determine their
They want more control of the learning specific requirements and align them
path, preferring unbundled courses to In this scenario with the right students; and universities
prepare their curricula to cater to
traditional degree programs with poor
return on investment. universities must these needs.
• Standardise and modularise courses
• Government reboots educational
for conversion into digital products
policy The sector is restructured to
delivered by recognised content experts.
offer training and career-focused
education throughout citizens’ working • Improve speed to market. Universities
lives. Government remains the learn to develop, approve and deliver an
majority funder of tertiary education, industry-required course in six months
rather than a year.
Can the universities of today lead learning for tomorrow? The University of the Future | 25Scenario business model comparisons
Scenario 1 Scenario 2 Scenario 3 Scenario 4
Champion University Commercial University Disruptor University Virtual University
the base case the likely case the alternate case the extreme case
What are the Just-for-knowledge Just-for-work Just-for-you Just-in-time
jobs to be done learning learning learning learning
for customers?
What products/ Liberal arts degrees, Work-integrated Micro-certifications Individual courses
services are we specialised degrees degrees
providing?
How do Blended Blended face-to- Digital screen Digital screen
How do customers get face-to-face and face, digital screen
universities our services? digital screen and workplace
create value?
What support Lecturer, tutor, Lecturer, tutor, Personalisation Digital classroom
does the digital assistant work sponsor, via artificial and support group,
customer receive? digital assistant intelligence, personal coach
customer service
University
How do we University owns the University partners University unbundles the
produce it? entire value chain with business unbundles the value chain but
value chain orchestrate the
network
How do
universities How do we Campus, Campus, Digital platforms Digital platforms
deliver value? distribute it? digital platforms digital platforms
How do we Annual fees Annual fees Memberships, Memberships,
make money? subscriptions course fees
What are key People People People People
variable costs? Cloud services Cloud services
What are the Facilities Facilities Technology Technology
fixed costs? infrastructure infrastructure
How do
universities What are key Research, facilities, Facilities, industry Digital distribution Digital distribution
capture value? investments? student engagement engagement, platforms, platforms,
student engagement, digital content digital content
research creators, marketing, creators, marketing,
customer acquisition customer acquisition
and retention and retention
26 | Can the universities of today lead learning for tomorrow? The University of the FutureYou can also read
