Higher education is living in interesting times, no matter where you stand.

Two accounts from Australia, one from an academic and the other from a consulting firm, provide a clearer view of the future of higher education than is possible when looking through an exclusively American lens.

Our “stateside” perspective is clouded by the scale of our demographics and the parochial nature of our political geography.  In addition, the wide disparities in institutional wealth and academic reputation make it difficult for us to think about much more than a narrow slice of higher education.

Wealthy US institutions have endowments larger than the Gross National Products of some countries.  The US has more than half of the world’s top 100 universities, even though that number is declining year by year.  Australia has only 5 of the top 100 and none of its institutions has a sizable endowment.

Despite these differences the conditions facing Australian and US higher education are virtually identical:  declining public funding, unrelenting competition from for-profit providers, dramatic growth in digital options and a growing concern about the ability to recruit international students to prop up sagging domestic revenues.  For the US it may be okay to assume that the rich will get richer and the poor will get poorer.  The Australians don’t consider that to be a viable national strategy.

Stefan Popenici, Senior Lecturer at Macquarie University in Sydney, adds to this picture concern about worldwide under-employment and increasing doubts about the value of the traditional college degree.  In his December 2012 address to the Rotary Club of Sydney, he called it a perfect storm.

His most powerful writing addresses what he sees, throughout the world, as the myopia of college administrators, most specifically their inability to see that the monopoly status of traditional institutions has been shattered by technology and unsustainable costs.

While Popenici focuses on the educational mission, Ernst and Young’s Australian consultancy looks at the business issues.  University of the Future quantifies the realities that underlie the Popenici argument.  Based on these conditions E&Y hypothesizes “that the dominant university model in Australia … will prove unviable in all but a few cases over the next 10 – 15 years.”

Given the demographic scale of Australia and a wide range of interviews, E&Y was able to distill a national view, rather than the more regional or tiered perspective we usually get in the States.  The E&Y report suggests institutional survival will lie in three trajectories of evolution:

• Streamlined Status Quo – traditional institutions that transform their methods of engagement and delivery to reduce costs and improve performance.
• Niche Dominators – established universities that choose to excel at only certain part of their current scope and “targeting particular customer segments.”
• Transformers – new entities that “carve out new positions …and create new markets.”

For most of higher education, regardless of location or status, these are radical choices.  Such blatant talk about customers, markets and targeting is unfamiliar to most traditional higher education administrators.  Most faculty members see it as heresy and not to be abided.  Popenici labels this response as myopia.  A psychologist might call it denial.

Looking at the same conditions in the US, Richard DeMillo, Director of the Center 21^st Century Universities, hypothesizes that “middle” institutions – just like those in Australia – are most at risk.  A range of institutions by virtue of scale, reputation, unique mission, wealth and/or entrepreneurship will survive and even thrive.  The ones at risk are the “vast middle” without the advantages of scale, wealth or any particular niche.

Those institutions destined to survive have already taken a first step – paying careful attention, as Popenici demands, to the changing conditions effecting all of higher education.  Only just now are they beginning to choose one of trajectories suggested by E&Y’s, or they are devoting increasing effort to devise something better.

Regardless of where an institution stands, standing pat is a poor strategy.

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