The peak of higher education - a new world for the university of the future
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The peak of higher education — a new world for the university of the future
“
WHAT IF HIGHER
FOREWORD EDUCATION IS REINVENTED
Our competitive differentiation is our
AS THE KNOWLEDGE
campus + our people + our diversity.
WHAT IF How does digital allow this to be better,
SERVICES SECTOR?
This paper presents a thought
rather than driving it down to the lowest experiment that explores how
viable product and price? How does converging technologies and new
WE’VE digital augment and give us superpowers? business models might change the
structure of the higher education
Professor Brian P. Schmidt AC FAA FRS sector. It posits four ‘What if…?’
Vice-Chancellor, Australian National University questions that every vice-chancellor
REACHED should consider to chart a course
from present to future with greater
confidence and clarity. Our primary
Renewable energy and electric vehicle A growing supply of digital-by-design
consideration has been the role of the
adoption have brought the world to providers are offering new learning
university as a provider of teaching/
the point of ‘peak oil’ and ‘peak car’. pathways and engaging content
THE
learning, rather than its role in
What if, after decades of growth, on platforms that harness AI to
research – but we have one or two
the size of the traditional higher personalise what and how
thoughts about research, too.
education sector has also reached people learn.
its upper limits? What if the advent We hope this thought leadership paper
And this is happening at a time when
PEAK
of COVID-19 means we’ve reached provokes some light-bulb moments in
employers and society care less about
peak international students, peak campuses across Oceania.
traditional degrees – and more about
undergraduate degrees, peak campus
proof of job-ready skills. The job
and peak rankings? What if the
market is crying out for innovators,
decline of traditional higher education
problem solvers and self-actualising
OF HIGHER
teaching and learning begins now?
learners with the ability to collaborate
There’s plenty of evidence to and co-create with others.
support this hypothesis. Converging Meanwhile, in the university sector, Catherine Friday
technologies are re-inventing cost and delivery models are in EY Managing Partner,
higher education, along with every
EDUCATION
crisis. Traditional degree courses Oceania Government and Health
other industry on the planet. are spiralling out of reach of more Sciences and Global Education Leader
Digital is driving the emergence of learners. Governments are failing
new ecosystems for learning and to recover a higher proportion of
knowledge creation, and setting the traditional degree loans.
IN OCEANIA?
stage for immense innovation.
Already, we can see growing demand
Alison Cairns
for learning that is continual, flexible,
EY Oceania Education Leader
customisable – and close to free.
IT’S TIME
TO THINK ABOUT
THE FUTURE
D I F F E R E N T L Y
In 2018, EY made bold forecasts about disrupted themselves or coalesced As higher education gets re-invented
the state of the university sector in into new networks of alliances. around us, we should consider how
Australia and New Zealand for 2030. the emerging knowledge services
As COVID-19’s systemic shock
Yet perhaps we were not bold enough. sector will challenge today’s norms.
continues to play out and
Because of COVID-19, much of the Hence, this paper.
technology changes the game of
2030 we predicted arrived in 2020.
higher education, we challenge you What follows are four plausible
And the sector was not ready.
to think the unthinkable: ‘What if…?’ scenarios for 2030 – all
“
The pandemic proved that, while based on clear trends, signals and
Imagine that demand for traditional
universities have been with us for technologies from today – to help
higher education never returns
centuries, they are not immune to the university leaders create a state of
business reinvention that is taking
to previous levels; 2019 was the
preparedness for the future.
If you want to see the
high watermark for universities in
down giants in media, automobiles
Oceania; we have reached peak
future, go and read
and energy. In a world of ‘work from
Coursera’s S1 filing.
“
higher education.
anywhere’, people also want to
‘learn from anywhere’ – and new The pandemic threw Oceania’s Martin Bean
over-reliance on international
education platforms are rising to meet
student revenue into sharp relief –
Many of our VC RMIT
this demand.
and demonstrated how universities universities face
Given the radically new expectations of
create major systemic risk when
higher education, Clayton Christenson’s substitution risk
they assume that today’s sector
prediction1 may be correct. By 2030,
structure, competitors and profit and won’t survive
a quarter of universities could go
bankrupt, merge, restructure or close
pools will persist through the next exponential
5 to 10 year planning horizon.
as the sector is reinvented. Survivors technological change.
will need to have forged ever closer
Edmund Wong
commercial relationships with industry,
Managing Analyst, EYQ China
1 Clayton M. Christensen and Michael B. Horn, “Innovation Imperative: Change Everything,” The New York Times, 1 November 2013.
Available at: https://www.nytimes.com/2013/11/03/education/edlife/online-education-as-an-agent-of-transformation.html
4 | The peak of higher education — a new world for the university of the future The peak of higher education — a new world for the university of the future | 5
01
‘The classroom
Changing attitudes and behaviours
towards digital present new Sector structure in 2030
is dead’
opportunities for universities to The knowledge services sector
WHAT IF ... reinvent learning delivery solves for accessibility.
Universities are just one category
Imagine that accessing learning in
of a plethora of knowledge
2030 is like listening to music via 61% 69% services providers accessed via
THE COST Spotify in 2021. It’s a do-it-yourself Gen Z Gen Y
digital platforms, which reduce
or self-directed experience – for a
the marginal costs of distributing
very low fee. At the touch of a screen,
believe the way they use technology content to almost zero while
you access catalogues of learning
has changed since the pandemic began enabling almost infinite scale
content to consume at your own pace,
OF LEARNING with algorithms taking you deeper
(Source: Future Consumer Index) and reach. Universities in 2030
are like public libraries in 2021:
into topics of interest and artificial
temples of knowledge that few
intelligence matching learning activities
to current knowledge levels. You create
33% 20% visit because information and
IS DRIVEN
Gen Z Gen Y services have been dematerialised
and share your favourite educational
to screens.
playlists. The platform offers you
feel that the way they study will change
increasingly personalised content based
over the longer term as a result of COVID
Implications for
on your learning preferences, passions universities
(Source: Future Consumer Index)
DOWN and career aspirations.
Traditional higher education
revenues decline by $5-6bn
“
Universities have a unique
opportunity to build meaningful and the non-research workforce
connections and relationships shrinks by more than 50% as
TO Universities need to with a global audience new learning services proliferate.
Winning universities pivot early,
stop trying to write think ahead of the market,
every single piece of
ZERO
embrace learning platforms and
70% 69% acquire new capabilities.
content when there Oceania Global
are already terabytes Signposts from today
would enroll in online learning anywhere Revenue declines for incumbents
of great content out in the world (Source: IPSOS Mori research
as industries digitise; rise of
“
there that students for Connected Citizen )
services like Clubhouse, Substack,
can access. YouTube and podcasts to replace
pre-recorded lectures; availability
The future for universities is Professor Colin Stirling of $500 Google career certificates
to both stream like Spotify and President and Vice-Chancellor and free corporate MBAs as
Flinders University substitutes for university degrees.
offer experiential learning like
a Crowded House concert.
Professor Ian Wright
Deputy Vice-Chancellor (Research)
University of Canterbury
6 | The peak of higher education — a new world for the university of the future The peak of higher education — a new world for the university of the future | 7
02
‘Work is Sector structure in 2030
WHAT IF ... the new uni’ The knowledge services sector
solves for accountability.
Universities have lost their
A CC R E D I TA T I O N
Imagine that investing in knowledge in monopoly on accreditation and
2030 is as easy as investing in ex- non-degree credentials are
change traded funds in 2021. You live mainstream. Some employers and
in ‘beta’ mode – constantly having to industry bodies compete directly
IS THE NEW learn something new for your career.
You want to make informed choices
with the traditional accreditation
system while others partner
between acquiring intellective or job
with universities to develop
skills, based on return on investment
BATTLEGROUND?
bespoke credentials. Universities
and outcome metrics. You log on to
your independent career platform compete, co-create and engage
that provides expert advice on which in ‘co-opetition’ by working with
programs link most strongly to your employers to develop training
employability and career goals – with and the associated performance
choices ranging from on-the-job learn- measures to assure graduates
ing to micro-credentials to university have required workforce skills.
degree programs with job guarantees.
The platform holds your growing port- Implications for
folio of skills and has a dashboard that universities
tracks the return on investment from
First movers in digital
your learning.
accreditation (e.g. stackable
micro-certifications) gain access
“
to a new $10bn marketplace.
(Source: EY analysis)
We are grappling with
“
Signposts from today
science labs and how Policy linking funding to student
It doesn’t matter whether to use digital tools outcomes; mismatches between
employers and universities on
you take three years or six like gamification and job-ready skills; corporates buying
years to finish your degree. virtual reality, as there enterprise learning licenses from
universities; digital credentialing
As long as you’re learning, are accreditation technologies.
that’s a good thing. challenges around this.
Professor Amit Chakma Professor Ian Wright
Vice-Chancellor Deputy Vice-Chancellor (Research)
The University of Western Australia University of Canterbury
8 | The peak of higher education — a new world for the university of the future The peak of higher education — a new world for the university of the future | 9
03
‘Learners Imagine that funding your learning
journey in 2030 is like seeing a medical Sector structure in 2030
empowered
professional or accessing disabilities
WHAT IF ...
The knowledge services sector
services in 2021. In a true shift to
solves for affordability.
learning-centric education, you choose
by choice’ from a wide range of government- Universities have lost their
GOVERNMENT
recognised knowledge services monopoly on government
providers and are fully or partially funding for student places.
reimbursed by government vouchers or The full spectrum of learning
private education insurance. The new providers (many offshore)
FUNDS
‘Educare’ system incentivises results compete with different value
by paying a higher percentage of costs
propositions: teaching excellence
when you achieve your goal credentials.
and reputation in specific
fields, innovative and effective
INDIVIDUAL
“
pedagogical approaches, close
partnerships with industry
and potential employers, or
Our government is not covering the costs
LEARNERS of the country’s undergraduate programs.
simply value-for-money. Public
universities exit markets with
no unique selling point or where
A typical ANU non-science degree costs demand is low, and instead focus
NOT $15,500 of which the government pays $1,000 their investments on areas where
they compete and win.
and the student pays $14,500. The equivalent Private universities enter markets
Harvard degree costs $80,000.
INSTITUTIONS?
where they can apply agile
commercial models to selective
Professor Brian P. Schmidt AC FAA FRS courses at scale.
Vice-Chancellor, Australian National University
Implications for
universities
“ “
$10b of government funding to
universities for student seats is
Why does doing digital well matter? Concentrate on the learner! If education is now fully contestable.
(Source: EY analysis)
Different students have different needs. truly about the learner, then why are there so
many separate sector bodies? This makes it too Signposts from today
We need personalisation at scale, and to enable
Democratised access to learning;
easy movement between physical and digital. hard to navigate the sector, therefore corporate
spiralling costs of traditional
or new competitors can seize an advantage. teaching and learning; cuts
Professor Iain Martin
in government funding for
Vice-Chancellor Professor Pascale G. Quester
education.
Deakin University Vice-Chancellor and President, Swinburne University of Technology
10 | The peak of higher education — a new world for the university of the future The peak of higher education — a new world for the university of the future | 11
‘Research Sector structure in 2030
pays the bills’ The knowledge services sector
solves for sustainability.
University research shifts to
Imagine that revenue from
commercialised research in 2030 prioritise commercial, demand-
fulfills the role of government driven research and development,
funding and international student creating closer collaboration
revenue in 2021. Governments between universities and industry
proactively support opening up the and capital markets. Universities
higher education sector to private repurpose their under-used
and overseas investment in R&D. campus assets for business
Corporates, governments, venture incubation. PhD students have
capitalists and foundations post clear career paths into industry,
business issues and research topics
eventually working for companies
to an ‘innovation marketplace’, where
whose commercial research
PhD students and universities bid
they undertake. Researchers
to secure funding and collaboration
and universities gain a share
opportunities. Commercialised
innovation boosts economic growth. of IP and its real commercial
Australia and New Zealand climb into revenues. Government continues
04
the top rankings of the world’s most to fund non-commercial academic
innovative countries. research that supports the
national interest.
WHAT IF ...
“
Implications for
universities
Universities must Universities self-fund through
research projects and
COMMERCIALISED prevail because they commercialisation of IP.
ask and answer $120b in commercial research
funding provides universities with
un-google-able
RESEARCH questions. And we
a sustainable income stream of
$10b per annum.
need to be better (Source: EY analysis)
FUNDS UNIVERSITY at passing on this
critical skill to our
OPERATIONS? students.
Professor Colin Stirling
President and Vice-Chancellor
Flinders University
12 | The peak of higher education — a new world for the university of the future The peak of higher education — a new world for the university of the future | 13
HOW “
Business model
disruption is here.
Tomorrow:
knowledge services
We are experiencing
TO it. I had been sceptical Humans
JUMP
@ center
it would land in my
lifetime, but it is
YouCore
needofto
happening now. Value
get Creation
here
Bruce Lines
Chief Operating Officer Technology Innovation
The University of Adelaide @ speed @ scale
THE
Today:
peak higher education
S-CURVE?
Scope
Scale Efficiency
You need to
get here
“
In the age of machine learning we all
need to become learning machines.
You are
here
To jump the S-curves and
maintain a dynamic competitive
advantage universities need to
adopt a new set of behaviors to
Riaz Shah get and stay ahead
EY Global Learning Leader
14 | The peak of higher education — a new world for the university of the future The peak of higher education — a new world for the university of the future | 15To survive and thrive in the
knowledge services sector,
universities must reinvent
“
COVID is forcing
strategic and business
“
How do we create
disruption within to
4
INVEST
ACROSS THREE
themselves by jumping the
model diversification create new markets? TIME HORIZONS
S-curve – moving from the that regulators and If we don’t, we face Ask: ‘How can we manage for
maturity stage of ‘peak universities have decreasing demand. today and change for tomorrow?’
higher education’ to the been unable to Balance your reinvention agenda
Emeritus Professor Martin Bean CBE
growth stage of knowledge to keep you thinking about
services. However,
achieve before. Chief Executive Officer
exponential change.
The Bean Centre
reinvention is challenging Tim Fowler Former Vice-Chancellor, RMIT
because organisations CEO, Tertiary Education HORIZON: NOW
become trapped by today’s
assumptions.
Commission New Zealand
3 Investment: 70%
BUILD NEW VALUE Focus: Strengthen the core business
models and operations of the university
Here is how you can repeat this WITH NEW of today. For example: protect sensitive
thought experiment to create a state information with cybersecurity or
CAPABILITIES
of preparedness for what is coming: digitally schedule classes using
2 Ask: ‘How can we create long-
term sustainable value for all our
intelligent automation.
stakeholders?’
THINK ‘FUTURE-BACK’ HORIZON: NEXT
Your historical value came from scale,
1 TO SET YOUR
scope and efficiency. Tomorrow, value
will come from a new set of dynamic
Investment: 20%
REINVENTION AGENDA behaviours: putting humans@centre, Focus: Build the new business models
BE CLEAR driving innovation@scale, and deploying and technologies for the university of
Ask: ‘How will my institution be
technology@speed. Leapfrog your tomorrow. For example: develop a next
ABOUT YOUR relevant in one or two decades?’
competitors with reinvention. Address generation digital learning ecosystem to
Use scenarios beyond the ‘What if...?’
LONG-TERM PURPOSE a customer need – a job guarantee deliver ‘on demand’ learning.
questions in this paper to define the
for graduates. Innovate your learning
Ask: ‘Why are we here?’ choices you need to make today.
model and industry partnerships
Purpose will help you maintain What if the sector consolidates via
to enable this. Deliver it with AI- HORIZON: BEYOND
relevance as you journey into an mergers? What if universities form
driven personalisation and digital
uncertain future. Is your purpose global partnerships like the airline Investment: 10%
credentialing. Scale it up.
to: advance lifelong education sector? What if universities become
wellbeing, collaborate to solve grand digital platforms? Engage with To build this muscle, go outside Focus: Make big bets to reinvent
global challenges, unlock knowledge your broader ecosystem, including your sector to find talent from other yourself and your industry. For example:
and commercialise research, or technology and consulting partners, industries living with reinvention, such build a digital platform to enable
something else? to think differently about the future. as media, financial services or energy. offering job guarantees to students.
16 | The peak of higher education — a new world for the university of the future The peak of higher education — a new world for the university of the future | 17And not all students will pursue As higher education peaks, universities
SECTOR alternatives to universities. Many will need to consider:
still want a coming-of-age experience • What might the post ‘peak higher
before starting their professional
REINVENTION lives. For this cohort, universities will
education’ world look like in Oceania?
• What opportunities are there to use
continue to provide transformative
technology to engage the world in
WILL COME experiences that go beyond acquiring
a catalogue of skills.
new ways?
• How might we produce job-ready
G R A D U A L LY . . . graduates as well as engaged,
AND THEN life-long learners?
• How might we build a university
Of course, universities will not
that uses disruption as a
disappear overnight. They will remain
powerful vehicles for knowledge
S U D D E N LY competitive advantage?
creation, economic growth and • Does every university deserve
Today, the landscape around to survive?
prosperity. And they will continue to
universities is changing faster than
be trusted curators of learning and
the organisations themselves, making
knowledge whose teachers are
disruption more likely and decision- HIGHER EDUCATION
known for their accessibility, credibility
making more difficult. The COVID-19
and engagement. IS DEAD. LONG LIVE
pandemic is a systemic shock that
Not all universities are slow to change brings our higher education sector to THE KNOWLEDGE
and reluctant to innovate. Some are the fork in the road.
starting to innovate for a future that SERVICES SECTOR!
accommodates both degrees and
micro-credentials, intellective and THE FUTURE IS CLOSER
job-ready skills, synchronous and THAN YOU THINK.
asynchronous learning.
CHANGE MUST START
NOW – OR NEVER.
“
If the quality of life we now enjoy is the product
of the learning of prior generations, then what
does this moment in history demand of our
peak education and research institutions?
Catherine Friday
EY Global Education Leader
18 | The peak of higher education — a new world for the university of the future The peak of higher education — a new world for the university of the future | 19EY can help Contacts SELF-DIAGNOSTIC:
The future is uncertain, but the path HOW WELL ARE YOU DEPLOYING
there doesn’t need to be. Take two TECHNOLOGY @ SPEED?
simple steps:
• Self-diagnose your digital readiness
Some universities are accelerating New technologies are emerging that present opportunities for knowledge services
digital innovation. Others are still in players to reinvent business models and drive significant efficiency in operating
the planning stages. Take our self- models. Organisations can seize significant advantage over competitors by being
Catherine Friday
diagnostic (adjancent page) to assess more prepared and adept at leveraging these technologies.
Managing Partner, EY Oceania
the readiness of your university Government and Health Sciences Use this list to diagnose the readiness of your university to deploy technology at
to deploy technology at speed as and Global Education Leader speed as you reinvent for the knowledge services future.
you reinvent yours university for a catherine.friday@au.ey.com Rank your institution on how well you are: (use a 5-point scale: 5-excellent, 4-good,
knowledge services future.
3-average, 2-poor, 1-no action)
• Conduct your own thought
experiment
1. Converting your traditional 6. Exploiting artificial intelligence
Contact EY to facilitate a virtual
learning management system and machine learning to assist
‘future back’ strategic workshop with
into a next generation digital teaching, supporting activities
your leadership team, using exercises
learning ecosystem that provides ranging from grading to tutoring to
grounded in scenario planning to
adaptive or personalised learning performance monitoring?
envision an unconstrained future. Alison Cairns opportunities for individual
EY Oceania Education Leader 7. Leveraging digital credentialing
students?
alison.cairns@au.ey.com technology to authenticate skills
2. Implementing a career platform and knowledge to help students
that connects students to industry publish their achievements for their
Acknowledgements Author and provides career advice, professional lives?
planning and placements?
8. Using cyber security to protect all
Thank you to the academic 3. Enabling informed executive sensitive and personal information
industry and thought leaders who decision-making via a unified in the university ecosystem as your
generously shared with us their data platform that provides a institution becomes more digital?
thoughts, experiences and insights 360-degree view of students, staff,
during the interviews and workshops faculty and operations?
for this study. For any questions on If the answers to any of these
4. Using learning analytics to predict
the paper, please reach out to our Richard Cawood questions cause concern, it
student performance challenges
teams — we’d welcome your feedback Director, Strategy and could be time to accelerate
and provide targeted improvements
and comments. Transformation, EY Australia technology and digital
to courses?
richard.cawood@au.ey.com innovation to meet the rapidly
5. Creating smart processes and changing expectations of
workflows using intelligent your learners, partners and
automation to digitally schedule ecosystems.
classes and interact with students,
Talk to us about your options.
staff and faculty in a timely and
personalised way?
20 | The peak of higher education — a new world for the university of the future The peak of higher education — a new world for the university of the future | 21EY | Building a better working world EY exists to build a better working world, helping to create long-term value for clients, people and society and build trust in the capital markets. Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate. Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com. © 2021 Ernst & Young, Australia. All Rights Reserved. SCORE no. AUNZ00001694 PH20217-000825 ED None This communication provides general information which is current at the time of production. The information contained in this communication does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Ernst & Young disclaims all responsibility and liability (including, without limitation, for any direct or indirect or consequential costs, loss or damage or loss of profits) arising from anything done or omitted to be done by any party in reliance, whether wholly or partially, on any of the information. Any party that relies on the information does so at its own risk. The views expressed in this article are the views of the author, not Ernst & Young. Liability limited by a scheme approved under Professional Standards Legislation. ey.com
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