tag:theconversation.com,2011:/id/topics/group-of-eight-3843/articlesGroup of Eight – The Conversation2020-08-13T20:10:36Ztag:theconversation.com,2011:article/1443652020-08-13T20:10:36Z2020-08-13T20:10:36ZVital Signs: this university funding crisis was always coming – COVID-19 just accelerated it<figure><img src="https://images.theconversation.com/files/352650/original/file-20200813-14-artg79.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3586%2C2400&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>In the early 1930s a 21-year-old undergraduate at the London School of Economics asked a great question during his summer research project: “if my economics professors are right that markets are an efficient way to allocate resources, then why do firms exist?”</p>
<p>To put it another way, why would an entrepreneur go to the effort of building a company and buying things “in house” rather than just buying them in the market?</p>
<p>That student, <a href="https://www.nobelprize.org/prizes/economic-sciences/1991/coase/facts/">Ronald Coase</a>, would go on to win a Nobel prize for his contribution to answering this question. </p>
<p>He suggested markets have the great virtue of the price mechanism, which communicate information about economic fundamentals (like what consumers value) and balances supply and demand. But there are “transaction costs”, and sometimes haggling in the market can be less efficient than, say, a manager simply telling her employees what she wants done.</p>
<p>These insights point to the fundamental problems with Austalia’s university sector in 2020. </p>
<p>We have about 40 “firms” that, as far as domestic undergraduates are concerned, don’t set their own prices, don’t set their own quantities (i.e. the number of students they accept) and are regulated not by the invisible hand of the market but the federal government’s <a href="https://www.teqsa.gov.au/">Tertiary Education Quality and Standards Agency</a>.</p>
<p>At the same time universities compete in an international marketplace for both students and staff.</p>
<p>This leads to the worst of all worlds. The sector has many of the downsides but none of the benefits of market competition. They are not in control of their own destiny.</p>
<p>The recent round of federal government <a href="https://theconversation.com/fee-cuts-for-nursing-and-teaching-but-big-hikes-for-law-and-humanities-in-package-expanding-university-places-141064">reform attempts</a> – encouraging students to pursue “job-ready” qualifications by slashing the price of courses such as mathematics, agriculture and nursing while doubling those such as humanities and communications – is incrementalism likely doomed to failure. </p>
<p>There is pressing need for more significant reform. </p>
<h2>A crisis that was always coming</h2>
<p>Perhaps the place to begin is to acknowledge that both the university sector and the government have legitimate gripes with the current funding model.</p>
<p>Universities can point to a host of perverse incentives – creating unintended negative consequences contrary to what was intended – embedded in the system. In particular, it has encouraged universities to chase full fee-paying international students to cross-subsidise Australian students.</p>
<p>The funding universities receive for domestic undergraduates is insufficient to provide them a world-class education. Research is also underfunded. This has left universities with no choice but to enrol large numbers of foreign students, paying market prices for their education.</p>
<p>The government argues universities might not be preparing students as well as they could for the job market – with too few graduating with the skills the economy demands and too many pursuing degrees in fields they are unlikely to find employment. </p>
<p>To all these points there are responses. I could tell you, for instance, that in nine years at UNSW Sydney I have seen the quality of undergraduates I teach get even better, not worse. But this back and forth rather misses the point. </p>
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Read more:
<a href="https://theconversation.com/australian-universities-could-lose-19-billion-in-the-next-3-years-our-economy-will-suffer-with-them-136251">Australian universities could lose $19 billion in the next 3 years. Our economy will suffer with them</a>
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<h2>Warning bells</h2>
<p>COVID-19 has simply accelerated a crisis in university funding that was always coming. </p>
<p>There has always been the risk of the Chinese government simply turning off the tap. China has done so to other countries, such as <a href="https://www.studyinternational.com/news/china-doesnt-want-students-study-taiwan/">Taiwan in 2017</a>, when it halved the number of students permitted to study there to just 1,000.</p>
<p>In February 2018, Clive Hamilton and others warned about dependence on Chinese students after <a href="https://www.afr.com/policy/health-and-education/universities-are-too-reliant-on-income-from-china-experts-say-20180216-h0w6vn">China issued a “Study Abroad Alert”</a> about Australia being unsafe for Chinese students.</p>
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Read more:
<a href="https://theconversation.com/without-international-students-australias-universities-will-downsize-and-some-might-collapse-altogether-132869">Without international students, Australia's universities will downsize – and some might collapse altogether</a>
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<h2>Two major reforms needed</h2>
<p>We need two things.</p>
<p>First, removing the perverse incentives of cross-subsidies in the system. </p>
<p>This will require domestic students paying more for their education through the HECS-HELP loan system. Our “<a href="https://go8.edu.au/">Group of Eight</a>” universities can’t keep charging a quarter of what institutions like Boston University or the University of California San Diego charge and deliver a world-class undergraduate experience. It will also require funding research properly, in part by linking universities and industry more closely.</p>
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Read more:
<a href="https://theconversation.com/australia-can-do-a-better-job-of-commercialising-research-heres-how-95526">Australia can do a better job of commercialising research – here's how</a>
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<p>Second, we need to allow and encourage universities to specialise more. Not every institution needs to be doing research in particle physics, for example. Indeed, not every university needs to being doing research at all.</p>
<p>Universities focusing more on their comparative advantage, in research or teaching, would enable research dollars to be better targeted. </p>
<p>Nor should we continue to insist that all universities charge the same price to students for the same subject matter. Students should be allowed to be the arbiters of what good education looks like, rather than an Excel spreadsheet in Canberra making that determination.</p>
<p>When we come out of COVID-19, economic growth will be at more of a premium than ever before, and harder to come by. Economists have long emphasised the crucial role of <a href="https://www.nobelprize.org/prizes/economic-sciences/2018/romer/facts/">human capital and “ideas” developed through research</a> in driving economic growth. We need a high-quality, well-functioning university sector.</p>
<p>Rather than bicker about incremental changes to the system, we need a grand bargain between universities and government that fundamentally reforms the sector. The future of young Australians, and our economy, depends on it.</p><img src="https://counter.theconversation.com/content/144365/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Holden was previously an ARC Future Fellow. These views are those of the author and do not necessarily reflect official UNSW views.</span></em></p>Australia’s higher education sector needs significant reform to remove the perverse incentives that have made universities dependent on revenue from international students.Richard Holden, Professor of Economics, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1374942020-04-30T11:27:46Z2020-04-30T11:27:46ZNew roadmap gives Australia two paths out of COVID-19 lockdown: elimination or adaptation<p>Australia is in an enviable position when compared with major world cities like New York, London and Madrid, each of which continues to deal with COVID-19 deaths in the thousands.</p>
<p>Although Australia has suffered 91 deaths, its daily rates of new cases are now in the low double figures or even single figures - evidence of very little community transmission in the country.</p>
<p>This means that unlike places that are still facing lockdown for weeks or months to come, Australia has some crucial imminent policy choices: how to balance the economic and social benefits of easing restrictions with the risks of a future spike in cases. </p>
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Read more:
<a href="https://theconversation.com/what-might-trigger-a-return-to-normal-why-our-coronavirus-exit-strategy-is-tbc-136047">What might trigger a return to 'normal'? Why our coronavirus exit strategy is ... TBC</a>
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<h2>Roadmap to recovery</h2>
<p>The Group of Eight, an affiliation of leading Australian research universities, this week published a major independent report describing a <a href="https://go8.edu.au/wp-content/uploads/2020/04/Go8-Road-to-Recovery.pdf">Roadmap to Recovery</a> for the nation. It sets out some key policy choices, as well as a suite of recommendations to state and federal governments for the months ahead – specifically, beyond May 15, the extent of the federal government’s <a href="https://www.abc.net.au/news/2020-04-16/national-cabinet-scott-morrison-coronavirus-restrictions/12153632">current restrictions</a>. </p>
<p>The report invites the Australian government to choose between two contrasting but related strategies: “elimination” of COVID-19, and a “controlled adaptation strategy”. </p>
<p>Under the elimination scenario, Australia would continue its nationwide stay-home order (although restrictions currently vary between states) for two further weeks <em>after</em> daily cases reach zero. That means lockdown would last until the end of May or mid-June, given the current trends in cases. But beyond that many social distancing measures could be lifted relatively rapidly, due to minimal risk of community transmission. Travel restrictions would have to remain tight indefinitely, to prevent the possibility of reintroduction of the virus.</p>
<p>In the alternative, “controlled adaptation” strategy, the government would still use aggressive test-and-trace protocols to keep the number of new cases as low as possible. But lockdown restrictions would be lifted earlier – perhaps in the next couple of weeks – although the lifting would necessarily be gradual, with continued social distancing measures applied to shops, schools and workplaces.</p>
<h2>Pros and cons</h2>
<p>The advantages of elimination is that it prioritises Australians’ health while also affording a more rapid lifting of restrictions once it is deemed safe. For example, restaurants and cafes might perhaps return to serving sit-down customers once elimination has been achieved.</p>
<p>Controlled adaptation will involve more ongoing social distancing. Conceivably, even six months from now, shops and public transport might operate at restricted capacity so people aren’t crowded together. But the advantage of this approach may be in the long term: it prepares Australians for the fact that this virus will probably be circulating around the world for years, and we should adapt our behaviour accordingly. </p>
<p>Furthermore, with <a href="https://www.nytimes.com/2020/04/29/health/coronavirus-saliva-spit-tests.html">improved speed</a> and availability of testing, an adaptation strategy would perhaps allow less stringent international travel restrictions later this year and into 2021. That would be a boon for Australia’s higher education industry, its immigration-dependent construction sector, and its (<a href="https://www.abc.net.au/news/2020-04-28/coronavirus-economy-immigration/12181450">currently shrinking</a>) overall population.</p>
<h2>A ‘continuum’ of choice</h2>
<p>Why does the report advocate two strategies, rather than backing just one? The <a href="https://go8.edu.au/wp-content/uploads/2020/04/Go8_Road-to-Recovery_Summary.pdf">report argues</a> they are not distinct choices, but rather they lie “along a continuum” of strategic options. </p>
<p>So if the government opts to pursue elimination, it would still need to maintain testing and tracing capability in the longer term, as well as continuing to enforce some forms of social distancing even as other restrictions are lifted (for instance, it’s hard to imagine moshing at rock concerts being allowed anytime soon). </p>
<p>Conversely, pursuing a controlled adaptation strategy doesn’t mean Australia can’t also aim to bring cases to zero if possible, as many states are already recording zero cases for several days in a row. </p>
<p>The final exit from either strategy will involve a safe and effective vaccine. Neither allows for the growth of cases contemplated by other countries relying on immunity conferred by <a href="https://www.nytimes.com/2020/04/28/opinion/coronavirus-sweden.html">people infected with the virus</a>.</p>
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Read more:
<a href="https://theconversation.com/6-countries-6-curves-how-nations-that-moved-fast-against-covid-19-avoided-disaster-137333">6 countries, 6 curves: how nations that moved fast against COVID-19 avoided disaster</a>
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<p>Personally, I favour the end of the continuum that aims at controlled adaptation, rather than aiming for complete elimination of the virus in Australia. Elimination may prove elusive due to the long incubation period and high rate of asymptomatic cases of COVID-19.</p>
<p>But either way, it’s clearly important that cases are kept very low. While the disease disproportionately affects the old, people are still dying early and health economists have shown that an average of between 3 and 11 healthy life-years are <a href="https://avalonecon.com/estimating-qaly-losses-associated-with-deaths-in-hospital-covid-19/">still being lost per COVID-19 death</a>. </p>
<p>The rapidly advancing scale and quality of testing and tracing capability should allow for the near-elimination of COVID-19 to continue with mild social distancing measures. Travel restrictions could be eased in the longer term as the pandemic (hopefully) wanes across the world.</p>
<p>Arguably most important of all is for the government to be agile in its approach to the crisis - to keep an eye on the situation both here and abroad, and react accordingly.</p><img src="https://counter.theconversation.com/content/137494/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Sivey has received funding from the Australian Research Council.</span></em></p>A report by Australia’s leading universities envisages the next stage of Australia’s coronavirus response: either eliminate COVID-19 and then reopen for business relatively quickly, or proceed more gradually.Peter Sivey, Associate Professor, School of Economics, Finance and Marketing, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1015172018-08-14T04:18:36Z2018-08-14T04:18:36ZNational Press Club address: Ian Jacobs on universities, Australia’s ‘hidden’ asset<figure><img src="https://images.theconversation.com/files/231839/original/file-20180814-2912-1h9l5l9.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">In 2016, it cost A$12.4 billion to operate the Group of Eight universities, of which public funds from the government provided A$6.7 billion. The London Economics report reveals that the work of the Group of 8, delivered a return of over A$66 billion to the nation.</span> <span class="attribution"><span class="source">UNSW</span></span></figcaption></figure><p><em>President and Vice-Chancellor of UNSW and Chair of the Group of Eight Universities, Professor Ian Jacobs, addressed the National Press Club in Canberra today.</em></p>
<p><em>Here is an edited transcript of his speech.</em></p>
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<p>Good afternoon ladies and gentlemen.</p>
<p>I want to start by acknowledging that we stand on the land of the Ngunnawal people, and pay my respects to them as the traditional custodians of the land and to their elders past and present.</p>
<p>My thanks to the National Press Club for this invitation. It is a privilege to be here to deliver my address titled: “Australia’s hidden asset: Universities are the New Wealth of Nations.”</p>
<p>I do so in my capacity as Chair of the <a href="https://go8.edu.au/">Group of Eight</a> universities, but I want to emphasise that we see our eight universities as just one part of the spectrum of post-secondary education - including vocational, TAFE and other outstanding universities - all equally crucial to the future of Australia. We support an integrated approach across the full spectrum of educational offerings, noting that university is just one of many routes to a successful and worthwhile life and career.</p>
<p>But today, I am here to deliver a number of important messages about the impact of the Go8 universities.</p>
<p>My first message is about our economic impact, billions of dollars, as set out in a report commissioned from London Economics, which I launch today.</p>
<p>The second message is about the need for our universities to more effectively communicate the way that we contribute to and serve Australian society.</p>
<p>The third is a call to action to increase business-university collaboration, and drive the research pipeline from discovery to commercialisation to maximise Australia’s future prosperity. </p>
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Read more:
<a href="https://theconversation.com/australia-can-do-a-better-job-of-commercialising-research-heres-how-95526">Australia can do a better job of commercialising research – here's how</a>
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<p>But before I make those points, I want to talk about the role of higher education as a pillar of the economic wellbeing and social progress of nations. </p>
<p>Australia is a higher education exemplar. Just 0.3% of the world population but home to 25, that is 5%, of the top 500 ranked universities globally - 16 fold above our size. On a per capita basis, our Group of 8 universities are better represented in the <a href="https://www.topuniversities.com/university-rankings">QS Top 100</a> ranking of universities across the world than the higher-education giants of the US and the UK.</p>
<p>The history of Australia’s universities began in 1850 when William Charles Wentworth sought to establish the University of Sydney to give “the opportunity for the child of every class” to become “great and useful in the destinies of this country”. I share Wentworth’s vision and feel passionately about this objective being achieved in Australia, and on a global scale. </p>
<p>Like many of my generation in western democracies, I was the first in my family to go to university. My father left school at 15 to work in a factory, but my parents recognised the value of education and encouraged me throughout my studies at the University of Cambridge. This has provided me a fulfilling career as a doctor, surgeon medical researcher, charity worker, and now as a university leader.</p>
<p>Working and travelling in many countries, I have witnessed the joy and satisfaction that educational opportunities - both academic and vocational - can bring to people of all backgrounds.</p>
<p>We have come a long way since Wentworth’s time. Outstanding universities have been critical to the social and economic success of Australia. And globally, there is a direct link between periods of university expansion and periods of economic growth like the industrial and commercial revolutions. That trend continues today.</p>
<p>We are witnessing the massive expansion of universities in China and now India - alongside an extraordinary pace of economic development. It is indisputable that education is a key to breaking entrenched disadvantage, and a major contributor to reducing inequality worldwide.</p>
<p>Adam Smith’s book “The Wealth of Nations” - published in the 1700s - maintained that if individuals act in their own interests, the whole nation will benefit.
In his recent book “The New Wealth of Nations” Indian economist, Surjit Bhalla, argues that the true key to prosperity today is providing individuals with an education. </p>
<p>Education is the new wealth of nations.</p>
<p>As Bhalla notes: “The industrial revolution transformed lives - primarily in the western world. But the education revolution has transformed lives all over the world.” </p>
<p>When the University of Sydney was established, just 10% of the world was literate and wages had been stagnant for centuries. </p>
<p>Today, 86% of the global population is literate, millions of people have been lifted out of poverty and human capital, achieved through education, is even more valuable, globally, than any financial asset. </p>
<p>Like financial assets, it yields an income and myriad other benefits.
Unlike financial assets, it cannot be hoarded or lost and is a powerful force for equality.</p>
<p>As our prime minister acknowledges “the most valuable resource we have in our nation is not under the ground… it is walking around on top of it”. </p>
<p>Knowledge - the original renewable resource - is our most precious commodity in this high-tech world. And Australia, courtesy of our post-secondary education sector, generates it in abundance. </p>
<p>So, against that backdrop, I come to my first message, about the economic impact of the Group of Eight universities.</p>
<p>I am grateful for the contribution of our Chief Executive Vicki Thomson and my colleague Group of 8 Vice Chancellors - Glyn Davis, Deputy Chair Dawn Freshwater, Margaret Gardner, Peter Hoj, Peter Rathjen, Brian Schmidt, and Michael Spence - in commissioning and guiding the work I now present. For clarity, colleagues, that was in alphabetical order not order of importance.</p>
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Read more:
<a href="https://theconversation.com/national-press-club-address-glyn-davis-on-a-smarter-australia-12503">National Press Club address: Glyn Davis on a smarter Australia</a>
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<p>Life-changing, society-advancing endeavours are the fundamental contributions of our universities. But, as a sector, we are also rightly asked to justify ourselves in financial terms. Our economic impact tells a compelling story. A story which may surprise some and, I hope, excite many.</p>
<p>Earlier this year, we commissioned an independent <a href="https://www.go8.edu.au/sites/default/files/docs/article/go8_london-economics-report.pdf">report</a> by London Economics - a world-leading specialist policy and economics consultancy - on the impact of the Group of Eight. The take-home message is simple - there are few more worthwhile investments in Australia today than higher education. </p>
<p>In 2016, it cost A$12.4 billion to operate the Group of Eight universities, of which public funds from the government provided A$6.7 billion. The London Economics report reveals that the work of the Group of 8, delivered a return of over A$66 billion to the nation.</p>
<p>That is a 10 fold return on the government’s investment.</p>
<p>That A$66 billion return came from four areas: research, teaching and learning, educational exports, and direct university expenditure. I will share some highlights and the full report is available today.</p>
<p>Astonishingly, every one dollar of public funding spent on Go8 university research generated A$9.76 across the rest of the Australian economy.</p>
<p>Every one dollar of public money invested in our research generates a roughly 10 fold return for the Australian economy. And I should note that London Economics adopted a conservative methodology. </p>
<p>Clearly, funding research is an astute investment in the future of the nation.</p>
<p>But that is not where the impact ends. Every 1,000 jobs created within a Group of Eight university supports more than 2,400 jobs throughout Australia. </p>
<p>And while the Go8’s more than 100,000 overseas students bring a depth and breadth to campus life that is impossible to quantify, it is their economic contribution we focus on in this report. </p>
<p>For every three overseas students studying at Group of Eight universities, A$1 million of economic activity is generated in other parts of the Australian economy.
That is because as well as working hard our international students experience our lifestyle. </p>
<p>Beyond tuition fees, our students go out to cafes, restaurants and to see movies. They pay rent and bills, buy food and use public transport.
And their friends and family come to visit as tourists. </p>
<p>According to the London Economics report, the average non-fee expenditure per student during the course of their studies is A$51,000 - totalling A$8.5 billion for our 2016 student cohort, supporting more than 29,000 Australian jobs. These are not jobs for academics or university administrators. They are jobs out in the community - chefs, waiters, taxi drivers, shop assistants, workers in construction, private enterprises and tourism.</p>
<p>And the economic return is not just confined to the period that international students study in Australia. </p>
<p>The prime minister, speaking about international education last week, said that Australia’s ability to capitalise on the opportunities of the Indo-Pacific depends on strong links to the region. </p>
<p>In his words, “The education sector has the capacity to influence this like few other industries.”
The connections forged - the money spent, the jobs created - are impacts of a dynamic university sector.</p>
<p>But they often go unrecognised or are hidden from view.
And the fault for that lies with us.</p>
<p>And so, the second message I want to convey today begins with a mea culpa. There are some exceptions, but on the whole, universities have not excelled at communicating their worth - and I believe it contributes to the current climate of criticism.</p>
<p>There is a perception, not just in Australia, that universities have failed to adapt to meet contemporary needs. And there appears to be a lack of understanding, of what universities offer our nation socially and economically.</p>
<p>We have not taken the community - the taxpayers who fund so much of what we do - along on our journey. </p>
<p>We need to improve communication with the community we serve and make the A$66 billion annual return from Go8 activity real to the Australian public.</p>
<p>One powerful way to explain this is to show what that amount of money would allow the government to provide for the Australian people on a yearly basis.</p>
<p>It is sufficient to entirely cover welfare payments for the aged.
It is twice the cost of Medicare.
It is more than enough to pay for the government’s entire education budget or its entire defence budget.
Such is the economic power of the education and research at just eight Australian universities.</p>
<p>But beyond the dollars we must communicate the real-world social impact of Australian universities. </p>
<p>Our photovoltaics researchers, for example, have constructed solar cells for more than 40 years, even when nobody understood the potential of their research.
Now this work has a key role in addressing climate change, providing progressively cheaper renewable energy generation across the world.</p>
<p>Another example, close to my heart having spent most of my career caring for women with cancer and researching in this area, is the Gardasil vaccine. </p>
<p>This is an extraordinary tale of scientific brilliance, healthcare advances and partnership between academia, industry and government - none of which, I should emphasise, had anything to do with me. </p>
<p>It is a great Australian story based on the brilliant research of Ian Frazer and the late Jian Zhou whose work at the University of Queensland made it possible to develop a vaccine to prevent this devastating disease. It has been a resounding financial success with returns to Australia exceeding A$1 billion to date. But, its benefits are much greater than that.</p>
<p>Preventing cervical cancer means less stress on health care, less productivity loss through illness and less reliance on welfare payments.
But transcending all of this is the human element of the Gardasil discovery.
I have witnessed, firsthand, how devastating cervical cancer can be.
I saw too many women in the UK die of this cancer, despite the latest therapy.
And over more than a decade of partnership in Uganda - where treatment and screening remain largely unavailable - I have seen women experience dreadful, unnecessary suffering and death from an entirely preventable disease. </p>
<p>Tragically, there are still over 500,000 cases of cervical cancer per year worldwide and over half of those women will die. Gardasil has the potential to save the lives of women in Australia, Uganda and every other country. </p>
<p>It offers prevention for women in countries with and without proper healthcare.
For the mother I diagnosed - whose own mother had died of cervical cancer and who feared desperately for the health of her daughter - the Gardasil vaccine means peace of mind.
How do you put a dollar figure on that?</p>
<p>You simply cannot put a price tag on the prevention of pain and suffering - for the person diagnosed or their loved ones.
And, yet, surely that is of the greatest value.
That is the real impact of our research. </p>
<p>That is how it benefits the Australian people and how it can become a gift to people around the world.</p>
<p>Is there anyone who would claim the time, energy and funding that went into Gardasil or solar energy research for that matter was wasted?</p>
<p>A recent Science and Technology Australia survey showed that 94% of respondents believe science and technology is important to their wellbeing and 78% think we should be investing more in research.</p>
<p>So why is there a disconnect between that public support and real-world investment?
It is up to the university sector to communicate clearly to Australians:</p>
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<li><p>the research that is being done</p></li>
<li><p>why it is important</p></li>
<li><p>and why they should champion the cause of research in Australia. </p></li>
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<p>For our part, Go8 universities, can better communicate our work and our pride in our research achievements. </p>
<p>There are many:</p>
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<li><p>University of Melbourne’s life changing cochlear implant</p></li>
<li><p>The University of Sydney’s non-invasive positive pressure treatment for sufferers of sleep apnoea</p></li>
<li><p>Monash University’s work to improve access to mental health services</p></li>
<li><p>ANU researchers’ quest to preserve Indigenous Australian languages at risk of extinction</p></li>
<li><p>University of Adelaide’s world leading winemaking and viticulture research.
UNSW work in zero-waste recycling and producing green steel</p></li>
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<p>Right now, Group of 8 researchers are also working in diverse areas from:</p>
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<li><p>reversing early tooth decay </p></li>
<li><p>and eco-friendly alternatives to chemical insecticides</p></li>
<li><p>to mitigating extreme heat in Australian cities</p></li>
<li><p>through extraordinary work to produce 3D replacement skin</p></li>
<li><p>and automation crucial to Australia’s mining industry </p></li>
<li><p>to cost effective, sustainable ways to repair sewage pipes, and</p></li>
<li><p>very much in our minds right now helping farmers with water usage.</p></li>
</ul>
<p>We are equally proud of the high-calibre alumni that Go8 universities produce.
Of 15 Australian Nobel Prize winners - one of whom is Vice Chancellor of the ANU, Brian Schmidt - 10 were Go8 educated.</p>
<p>Eight of the last 10 Australian Prime Ministers were Go8 alumni and our former students continue to achieve across the board, amongst them:</p>
<ul>
<li><p>the start-up, Tritium, building super-fast charging stations for electric vehicles</p></li>
<li><p>the first female CEO of the Macquarie Group</p></li>
<li><p>Akshay Venkatesh born in Delhi, educated in Australia and a graduate of the University of Western Australia who recently won the equivalent of the Nobel Prize for mathematics, the Fields Medal…congratulations Dawn and UWA colleagues.</p></li>
</ul>
<p>This is a mere fraction of what Go8 universities have produced - and given we graduate more than 96,000 students each year, our footprint will continue to grow.
It is a good news story and one we want to share.</p>
<p>As Chair of the Go8, and with the support of Chief Executive Vicki Thomson, Deputy Chair Dawn Freshwater and my colleague VCs we have developed an engagement initiative to better communicate the role of universities in the public sphere and place the Go8 at the centre of the big picture “national conversations” the sector and the nation needs to have. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/margaret-gardner-freezing-university-funding-is-out-of-step-with-the-views-of-most-australians-92570">Margaret Gardner: freezing university funding is out of step with the views of most Australians</a>
</strong>
</em>
</p>
<hr>
<p>That will involve a concerted and ongoing effort to enhance our communication with the Australian people and increased links with industry and business, the media, politicians and our alumni. It will also, of course, involve our students who have so much to contribute to this discussion.</p>
<p>Last month, along with senior staff from other Group of 8 universities and as part of our engagement initiative, I spent two days at a brainstorming event with Go8 student leaders. I was excited by the energy, ideas, emotional intelligence and the enthusiasm of this group and by their commitment to the importance of communicating the public service role of universities. I am delighted that some of those students - future leaders of Australia - are here today. They have a key role to play in explaining the public good of our universities.</p>
<p>So, to my third and final point. That is to call for a significant escalation in business-university collaboration - in cooperation with government, to drive the discovery-to-commercialisation pipeline, so as to maximise our country’s future wellbeing and prosperity.</p>
<p>Australia has successfully built a university research base which is the envy of much of the world. But, there is enormous potential in Australia’s research sector that remains untapped. Australian universities have great strength at the discovery end of the research pipeline. </p>
<p>In industry research, the focus is at the commercialisation end. There is a gap in between. We need to support the entire research pipeline - from discovery, to translation, to application, to commercialisation. </p>
<p>This pipeline is crucial to advances which change lives, create jobs, and support a modern 21st century economy and it is key to our ability to compete with emerging Asian nations and existing strength in Europe and North America. </p>
<p>While Go8 universities have enjoyed important successes with our research being commercialised here in Australia and creating jobs here in Australia, there are many stories of lost commercial opportunity because we have not had the money or the willing partner to complete the discovery-commercialisation pipeline. The solar research I mentioned is a case in point. </p>
<p>Developed in Australia but eventually finding commercialisation success overseas.
Do we want the economic return on the ‘next big thing’ discovered by Australian researchers to land here and create jobs here or in another country? If the answer is “here” - and of course it is - then we, as a nation, need to take action.</p>
<p>We thank successive governments for their vision in investing in research capacity in Australia and ask them to continue to invest in this area where Australia has a globally competitive edge.</p>
<p>Today, we face the reality that not only has Australia’s investment in R&D declined for the first time in two decades, but we lag internationally. We spend just 1.9 % of GDP on R&D while the OECD average is 2.3%, with Israel’s spend way up at 4.25%. Fear of failure may be one obstacle to investment in research.</p>
<p>When I shared this speech with UNSW Chancellor, David Gonski, he expressed the view “if in business you act ethically, legally, properly and without misrepresentation, then regardless of the business outcome there is value. We need to avoid an undue fear of failure in Australia”. Wise words.</p>
<p>I was heartened to hear of a growing consensus at the recent AFR Innovation Summit that it is time for action on our diminishing investment in R&D. I was equally pleased to see that business-university collaboration was identified as having a key role to play.</p>
<p>Innovation Science Australia Chair, Bill Ferris, has advocated a co-investment fund model, along the lines of the Biomedical Translation Fund, involving 50/50 sharing of equity by government and the private sector. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/politics-podcast-bill-ferris-on-australias-innovation-mission-91070">Politics podcast: Bill Ferris on Australia's innovation mission</a>
</strong>
</em>
</p>
<hr>
<p>Universities Australia Chair, Margaret Gardner, supported by Bill Ferris and our Chief Scientist Alan Finkel, suggests a “behavioural nudge” may encourage business to direct more of its R&D spending to the university sector. The vehicle for this would be a 20% R&D tax incentive collaboration premium. A component of the A$2 billion stripped from the R&D Tax Incentive scheme in the last Budget, could be channelled into this collaboration premium to incentivise industry and universities to work together.</p>
<p>Both of these suggestions are important and Innovation Minister Michaelia Cash has indicated that the Government will consider them in a future budget.</p>
<p>Another option I have proposed, is for the government to fill the translational gap for non-medical research - as the Medical Research Future Fund fills for medical research. An Australian Translational Research Fund of this type would encourage business-university collaboration to translate and apply the discovery research funded by the Australian Research Council.</p>
<p>And that means translating research in key ARC areas including food, soil and water, transport, energy, the environment, defence, cyber security, manufacturing, history, culture, languages and social structures. These are areas which are crucial to the wellbeing of our economy and our society, and they should command attention.</p>
<p>The opportunity is clear provided Australia can mobilise the investment required to generate the available return. </p>
<p>We have to stop seeing the funding of research as tantamount to a charitable donation. It is not. It is a sound business investment and, more importantly, an investment in the future of the nation. The A$24.5 billion per annum return on research investment in Australia’s Go8 universities could be many times higher. </p>
<p>In fact, the London Economic Report estimates that an extra A$500 million invested in research in our universities - of the order of the scale of the MRFF - would generate a return of approximately A$5.3 billion. If we increased R&D spend by 0.5% of GDP, just up to the OECD average, the return would be much greater.</p>
<p>There is enormous potential to maximise the impact of research through:</p>
<ul>
<li><p>investing more in the discovery to commercialisation pipeline</p></li>
<li><p>clearly communicating the role university research plays as a key economic driver</p></li>
<li><p>and incentivising academia and industry to work together.</p></li>
</ul>
<p>The Go8 will lead by example to move forward the conversation on business-university engagement. </p>
<p>In October this year - in partnership with the Business Higher Education Roundtable - we will host a summit of industry and university leaders, together with Australian Government officials. We will explore ways to maximise the return for our nation on Australia’s discovery to commercialisation pipeline.</p>
<p>In conclusion, the Group of Eight universities believe it is time to forge a new relationship with government, business and the Australian people. In making this commitment we offer the London Economics Report as evidence of our confidence in the economic value of education and research.</p>
<p>Our commitment is made as hubs of knowledge and independent thought, as champions of freedom, openness, human rights and justice, and as a force for increasing prosperity and equality. We believe that universities can serve Australian society in navigating the challenges and opportunities of our age.</p>
<p>The Group of 8 universities is committed to ensuring that Australia maintains its place as one of the most prosperous, advanced and socially responsible countries in the world and that Australians understand, value - and take pride in - the leading role of the higher education sector, in fulfilling that aspiration. </p>
<p>Thank you.</p><img src="https://counter.theconversation.com/content/101517/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ian Jacobs is the Vice-Chancellor of UNSW, the Chair of the Group of Eight universities, and sits on the board of The Conversation. </span></em></p>A new report found that every one dollar of public funding spent on Go8 university research generated A$9.76 across the Australian economy, a roughly 10 fold return on the government’s investment.Ian Jacobs, Vice Chancellor, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/611452016-06-17T02:22:55Z2016-06-17T02:22:55ZUncapping of university places has not failed disadvantaged students<figure><img src="https://images.theconversation.com/files/126894/original/image-20160616-19925-uvtw7a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Under a demand driven system, poor students are finding more opportunities to attend university.</span> <span class="attribution"><span class="source">from www.shutterstock.com</span></span></figcaption></figure><p>The Group of Eight (Go8), which represents Australia’s elite universities, has called for university <a href="https://www.go8.edu.au/sites/default/files/docs/article/go8_7319_priority_directions_0.pdf">places to be recapped</a>, saying that the demand-driven system has failed to sufficiently boost numbers of disadvantaged students entering higher education – one of its primary goals – and therefore the additional cost to the taxpayer is unjustified. </p>
<p>In its paper, the Go8 said:</p>
<blockquote>
<p>Against the target of 20% of university enrolments to be students from a low SES background by 2020 the demand-driven system has delivered just a 1.5% increase, while the majority of the growth has come from medium and high SES students.</p>
</blockquote>
<p>The word “just” implies the policy has been a failure, but such rhetoric is misleading.</p>
<p>In real terms this represents more than 35,000 extra students from low-socioeconomic status (SES) backgrounds between 2009 and 2014, the period analysed by the Go8 in its paper.</p>
<p>This figure does not include other groups of disadvantaged students that have also benefited from the uncapping of places. These include Indigenous students, those living in regional and remote areas, and students with disabilities.</p>
<p>There are too many variables to know whether or not the 20% target by 2020 will be achieved. But even if, in the incredibly unlikely event that no more gains were made from now on, the policy would still have resulted in access for tens of thousands of disadvantaged students.</p>
<h2>A small but significant gain</h2>
<p>While on the face of it the 1.5% change might seem minimal, in real terms this is genuinely significant.</p>
<p>Using the same time period, enrolment population and low-SES measurement as the Go8 did for its paper, we find that between 2009 and 2014, an additional 36,720 low-SES undergraduate students were enrolled. </p>
<p>32,875 enrolled in non-Go8 universities, which is a proportional improvement of 7% over the period. That is, the relative change from an 18.4% share of enrolments to a 19.7% share was 7%. </p>
<p>In the eight elite universities an extra 3,845 low-SES students enrolled, which is an even better improvement of 11.7% over the period. </p>
<p>The Go8 is therefore calling for the scrapping of a system that has, it could be said, had more success in its own institutions than others. </p>
<hr>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/127020/original/image-20160617-15079-i4svpa.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/127020/original/image-20160617-15079-i4svpa.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=549&fit=crop&dpr=1 600w, https://images.theconversation.com/files/127020/original/image-20160617-15079-i4svpa.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=549&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/127020/original/image-20160617-15079-i4svpa.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=549&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/127020/original/image-20160617-15079-i4svpa.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=691&fit=crop&dpr=1 754w, https://images.theconversation.com/files/127020/original/image-20160617-15079-i4svpa.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=691&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/127020/original/image-20160617-15079-i4svpa.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=691&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.education.gov.au/higher-education-statistics">Department of Education and Training/Author provided</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<hr>
<p>A major reason for the better-than-average improvement for the elite universities is that they have always been harder for low-SES students to get into compared to other institutions. Therefore, even small gains in this regard represent significant organisational cultural changes by the elite universities. These are changes that almost certainly would not have occurred without the policy being introduced. </p>
<p>For disadvantaged students, getting access to a university is important; getting access to an elite university perhaps more so. </p>
<p>Consider also that overall enrolments rose by 157,717, meaning the low-SES students share of these was 23.28%. That is almost parity with their representation in the wider community, which is by definition 25%. This is unprecedented: historically the low-SES share of enrolments has been in the low teens.</p>
<p>If different figures or measurements or time scales are used, then the specific figures will change. </p>
<p>However, the overall message does not change: now that places are uncapped, disadvantaged students are finding more opportunities to attend university, including those elite universities. </p>
<p>If supply was again restricted, as the Go8 is arguing for, these gains will almost certainly be lost. </p>
<p>So is a gain of around 35,000 disadvantaged students, out of around 150,000 overall, a success or failure? </p>
<p>If these numbers are judged in isolation, as the Go8 has done, then they may seem unremarkable. But when they are compared with those that came before them, the benefits of uncapping places for disadvantaged students becomes much clearer.</p>
<p>Look at it this way: the extra number of low-SES students who have accessed higher education thanks to uncapping places, is only slightly smaller than the total number of low-SES students in our universities a decade ago (39,781 in 2006).</p>
<h2>Challenge of boosting numbers of disadvantaged students</h2>
<p>The policy of uncapping places has not yet achieved its full objectives. Social disadvantage is highly entrenched in our systems and institutions and can take years, if not decades, to overcome this. </p>
<p>Expectations and aspirations of the students and their parents have to be supported over the long term, as does the academic preparation children receive from the earliest years of education. </p>
<p>Universities have to first encourage and then adapt to changing student demographics, including modifying their admissions and support systems. </p>
<p>All this takes time. But it is clear that uncapping places is helping.</p><img src="https://counter.theconversation.com/content/61145/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tim Pitman is affiliated with the National Centre for Student Equity in Higher Education.</span></em></p>While on the face of it a 1.5% increase in the number of disadvantaged students going to university might seem minimal, in real terms this is genuinely significant.Tim Pitman, Researcher in Higher Education Policy, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/396312015-04-07T20:16:47Z2015-04-07T20:16:47ZGroup of Eight’s change of tack smacks of self-interest<figure><img src="https://images.theconversation.com/files/76877/original/image-20150402-32451-1n4pf8l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Do the Group of Eight universities actually have a cash-flow problem, or are they more concerned about increasing their prestige to attract international students?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/sobriquet/89669252/in/photolist-8VzxA-971C9i-8Vzww-b77CtT-8Vzx2-8Vzxf-8VzwH-21AHU-21AGP-21AHw-21AH7-7i1uph-21AGd-21AHF-dB9R4G-3EXL9-b77C2F-b77BJp-dB42ka-dB9TkC-6854q-68564-6855d-6oGZHo-dB47pH-dB9FoY-dBa31W-dB9M1E-dB9CAU-dB9Hjh-dB458V-dB9V8u-dB9Pmj-dB4wD4-b77CcX-b77BSP-5pVMFe-684Wz-r12ThL-82dL6f-73mXoe-478MP2-47cSdd-47cSeN-47cSfo-47cShj-684Xm-82amak-5KHn8y-7i3vg5">Flickr/sobriquet.net</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>Last week the Group of Eight (Go8), Australia’s most prestigious universities, stopped supporting deregulation. Sort of. That is to say, they still support it (kind of) but they don’t think enough politicians agree with them, so they are suggesting a review. </p>
<p>Well, not a review exactly – god knows we’ve had enough of those. More like a conversation. With whom? What about? I’m confused and I’ve been studying universities for years.</p>
<h2>What just happened?</h2>
<p>It was morally disappointing that most university vice-chancellors supported the deregulation of university fees, but it was obvious what the Group of Eight stood to gain by it. As well as having a massive competitive advantage over the rest of the sector, these universities also seemed to believe deregulation was the best deal they were likely to get from any government.</p>
<p>The cost of Go8 support for deregulation, however, seems almost unbearably high. The fissures in the higher education sector – between the Go8 and the others, between vice-chancellors and their staff – were not obvious before. Now they are.</p>
<p>This will make it hard to get the sector to agree on anything together behind closed doors and harder for anyone outside the cloister to believe that anything a university says now represents anything other than self-interest. It is quite a serious thing, undermining trust. </p>
<p>And look what they did it for. The <a href="https://go8.edu.au/article/higher-education-funding-statement-go8">latest Go8 media release</a> pretty much says, “We only said we liked deregulation for your sake.” They now tell the public, academic staff and students alike, who all hated the idea, “It isn’t that we were wrong, but now we have a new idea, listen up…”</p>
<p>But the Go8 media release leaves more questions than answers. What is the problem anyway? What are we trying to fix? Are universities really broke? What is the Go8 suggesting, exactly?</p>
<h2>What is the Go8 worried about?</h2>
<p><a href="https://theconversation.com/drawing-positives-from-negatives-looking-back-at-the-higher-education-reforms-38890">University of Canberra Vice-Chancellor Stephen Parker recently argued</a> that universities have so long been in the habit of asking for more money that they can’t really help themselves. I think this is partly true; but only partly. I don’t really believe the Go8 would put so much effort into this – and undermine so much public trust – unless they were genuinely worried about something.</p>
<p>It is unclear to most of us just what this is. University annual reports look like their finances are okay, for the most part. The <a href="http://www.canberra.edu.au/research/faculty-research-centres/edinstitute/documents/HigherEd_FundingReviewReport1.pdf">base funding review</a> recommended only minor adjustments, generally. </p>
<p>And yet over and over vice-chancellors talk like a Liberal government declaring a budget emergency. Is it greed? Is it the pressure of their university councils seeking financial “performance” from their vice-chancellors?</p>
<p>It could, I suppose, be the question of “quality” that Education Minister Christopher Pyne clumsily gestured to in world rankings. <a href="https://theconversation.com/politics-101-why-pyne-has-failed-to-sell-his-education-reforms-30242">Most people pointed out</a> that per capita Australia does <a href="https://theconversation.com/top-ranked-universities-have-more-money-than-australian-unis-could-dream-of-39189">pretty well in the world rankings</a>, but perhaps this is not enough for some university leaders. </p>
<p>Anyone with a calculator can see it would cost the GDP of a small country <a href="https://theconversation.com/top-ranked-universities-have-more-money-than-australian-unis-could-dream-of-39189">to fund an antipodean Harvard</a>, but it is plausible that something along those lines is what the Go8 seeks. But to have all eight universities cohere over such a stupid dream – and to do so as desperately as they seem to be doing – seems unlikely to me. I think they must be worried about something structural that affects their mid-to-long-term sustainability.</p>
<p>I reckon it might be international students. In the 1980s, when <a href="https://www.newsouthbooks.com.au/books/history-of-the-modern-australian-university/">John Dawkins and others</a> suggested that “rich Asians” seeking a tertiary education might provide the custom for a higher education export market, the world’s higher education system did not look as it does now.</p>
<p>Universities in South-East Asia now have an excellent and growing reputation. India has <a href="http://www.ignou.ac.in/">developed a mega-university</a> that alone enrols 3.5 times Australia’s entire sector – without even thinking about the other 400-or-so Indian higher education institutions. </p>
<p>China is reputed to <a href="http://www.stats.gov.cn">graduate more engineers in a day</a> than Australia will in a year. For the world, the growth of good-quality universities throughout Asia (and everywhere else) is almost certainly a good thing. But if you are relying on the absence of quality universities in certain parts of the world for a good chunk of your student fee income, this development might pose a bit of a threat. Probably not this year – but soon.</p>
<p>I don’t know for sure, but my bet is that the Group of Eight universities are looking for a new structure, beyond international student fees, that will assure their financial sustainability.</p>
<h2>What does it look like they want?</h2>
<p>The Go8 media release gives scanty clues, but let’s think about what they seem to want. Under deregulation, growing fees, we can assume, would have allowed the Go8 to continue to compete globally, even if another funding source shrinks – largely because they would hold Australia’s young people to ransom over their participation in the labour market.</p>
<p>Now that deregulation seems unlikely, <a href="https://go8.edu.au/article/higher-education-funding-statement-go8">the Go8 says</a> it wants us to get rid of the </p>
<blockquote>
<p>current level of cross-subsidisation [of research] by teaching fees.</p>
</blockquote>
<p>I was a bit shocked by this; it seems a risky thing to ask. Especially when the week before you were asking for a massive subsidisation by fees from students. But it is an emotive issue in the current environment.</p>
<p>I expect non-Go8 universities will be outraged eventually, for it implies that society should “pay all those teaching universities only what it costs to teach that mass of students – but pay us, the research bloc, to do research”. Excellence, they imagine, will now come from research money, not deregulated student fees.</p>
<p>(In the 1990s, American scholar Bill Readings said that institutions worldwide were becoming “universities of excellence” that do nothing but be, uselessly, excellent.)</p>
<p>Why research? Well, they may argue that it wouldn’t cost that much, if you limit it to eight universities. The “broken funding model” they keep pointing to in non-specific ways apparently applies only to them (they are not exactly the eight poorest universities, though, I should note).</p>
<p>The other reason is most likely political. When <a href="https://theconversation.com/science-infrastructure-funding-is-being-held-hostage-by-government-38423">Pyne threatened research funding</a> in the recent Game of Deregulated Thrones, those controlling Australian wealth successfully persuaded the otherwise-intransigent minister that research funding was essential. </p>
<p>The “depoliticised” process the Go8 now wants instead of a review seeks a conversation with those people – representatives of business and industry, especially mining. </p>
<p>The absence of agriculture in their list is fascinating, for agriculture still constitutes a large percentage of exports and relies heavily on research and innovation for global competitiveness. But perhaps the Go8 thinks agriculture doesn’t carry enough influence in Liberal-National political and economic priorities to include them.</p>
<h2>What should the rest of us be thinking?</h2>
<p>The problem of the Group of Eight’s long-term sustainability does indeed matter, even to those who work outside them. But a solution for eight universities (if indeed that is what it is – I am a little dubious) does not address the questions that a mass system of higher education ought to do collectively.</p>
<p>Presumably the Group of Eight universities would like to divest themselves of some students, educate only the elite (elite by merit, of course – though this overlaps considerably with the other kind, which is no coincidence) and focus on research.</p>
<p>What do we, as a society, think? Do we want research that was conducted mainly by eight universities, while the tens of thousands of other academics in Australia focus on their teaching? Is that best for students and best for research? Do we think that more people than Go8 leaders and the Minerals Council of Australia should have a say in that question?</p>
<p>More, it still leaves the question of student fees unresolved. I think the real issue is that we do not really know how to run a mass system of higher education – a good one, that is. </p>
<p>We are not alone; most other countries are struggling to figure this out, too. Working on that problem will help us figure out how best to fund universities. It will take a different set of questions than those we have seen in the funding debate thus far.</p><img src="https://counter.theconversation.com/content/39631/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hannah Forsyth studied and worked in a Group of Eight University for around 20 years and now works for one of The Others. Many of her best friends are in Group of Eight universities.</span></em></p>The Group of Eight have now withdrawn their support for fee deregulation, despite it already having caused fissures in the higher education system. But what are they worried about? And what sort of conversation do they want to have now?Hannah Forsyth, Lecturer in History, Australian Catholic UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/302182014-08-19T20:20:02Z2014-08-19T20:20:02ZTrickle up: only the elite will benefit from fee deregulation<p>Professor Ian Young, the Chair of the Group of Eight Universities, <a href="http://www.theguardian.com/education/2014/jul/30/australias-top-eight-universities-push-for-higher-fees-fewer-students">has argued</a> that fee deregulation will have a positive effect on all universities. The Group of Eight universities will take the opportunity to “downsize”, to teach fewer students whilst increasing the amount spent upon each student.</p>
<p>As they enrol fewer students, those who might otherwise have enrolled or aspired to a Group of Eight university will be available to “lower tier” institutions and we will have a system in which everybody wins. </p>
<h2>The “trickle-down” effect</h2>
<p>Young, who is also the Vice Chancellor of ANU, <a href="http://www.theguardian.com/education/2014/jul/30/australias-top-eight-universities-push-for-higher-fees-fewer-students">has referred to this</a> as the “trickle-down or flow across effect”. However, trickle-down economics doesn’t have a particularly good reputation – either among economists or the wider community. </p>
<p>Rather than distributing wealth and opportunity across the community, it is recognised as concentrating wealth and opportunity in the already privileged segments of society and hence is regressive rather than progressive. </p>
<p>In the same way, trickle-down or flow across in Australian Higher Education will strengthen the Group of Eight at the expense of Australia’s Higher Education sector as a whole.</p>
<p>The proposals for deregulation which Professor Young is boosting, are presented as freeing Australian Higher Education institutions to respond creatively and innovatively both in research and teaching, and to the changing external environment. We are assured that deregulation will enable the Australian Higher Education system to become nimble, diverse, innovative and creative. There will be multiple numbers of Australian Universities ranked among the top 100 in the world – evidence that, finally, we have a successful Australian Higher Education system.</p>
<p>In reality of course, the diversity and differentiation that both Education Minister Christopher Pyne and Professor Young advocate is a hierarchy of institutions. This new hierarchy of institutions will benefit some more than others – that is the very nature of competition. There is no such thing as a competition in which every player wins. There will be winners and losers. Some institutions will be winners – the Group of Eight will cement their assumed-to-be rightful position at the top of the tree, middle tier and regional universities will have access to capable students (that is, those culled from the Group of Eight aspirants), and all will be well in this best of all possible worlds. </p>
<p>I am reminded of a verse from the old hymn All Things Bright and Beautiful:</p>
<blockquote>
<p>The rich man in his castle,
The poor man at his gate,
God made them high and lowly,
And ordered their estate.</p>
</blockquote>
<h2>And what about the students?</h2>
<p>Most students will be losers – not perhaps those happy few who will be able to enrol at Group of Eight universities – but most. And I doubt anyone needs a higher degree in sociology to predict that those who will be able to access our elite institutions will most likely be from higher socioeconomic groups. But most students will be losers – not only financially but also in terms of opportunity. </p>
<p>But don’t worry - there will be Commonwealth Scholarships for students from disadvantaged backgrounds and regional areas – <a href="http://www.pyneonline.com.au/media/speeches-media/national-press-club-address-spreading-opportunity-and-staying-competitive">we are assured by the Minister</a> that these will ensure that our smartest students can receive a world-class education no matter what their background might be or where they are from. </p>
<p>Again the reality is more complex. It will be the student body as a whole who will be funding these scholarships - 20% of an institution’s additional fee revenue will go towards Commonwealth scholarships. And again it is likely to be the Group of Eight who will benefit most – with a greater capacity to charge higher fees they will be able to offer either more scholarships should they choose to do so, or more generous scholarships. Regional and rural universities - and regional and rural areas - are likely to lose their best and brightest. </p>
<p><a href="http://www.pyneonline.com.au/media/speeches-media/national-press-club-address-spreading-opportunity-and-staying-competitive">Minister Pyne argues</a> that when competition increases, the winners are students. However it is beyond dispute that the cost of a degree will increase, substantially, and commensurately to the cost to students. </p>
<p>Similarly student debt will rise – <a href="https://www.universitiesaustralia.edu.au/ArticleDocuments/1714">Universities Australia data suggests</a> increased debt levels of between 50% and 200%. Ironically in the US where student debt exceeds US$1 trillion, <a href="http://www.timeshighereducation.co.uk/news/us-calls-for-no-fee-degrees-gather-momentum/2014491.article">there are nascent calls</a> for fee free higher education. </p>
<h2>Letting the market rip in higher education</h2>
<p><a href="http://www.pyneonline.com.au/media/speeches-media/national-press-club-address-spreading-opportunity-and-staying-competitive">The Minister believes</a> that universities will be responsible in setting their fees under the new Higher Education arrangements. Well, he would say that wouldn’t he? If Higher Education institutions are to be freed to compete, then elite institutions will charge what the market will bear – that’s the principle of supply and demand. If demand exceeds supply then prices rise. </p>
<p>The Group of Eight institutions have cachet – no doubt they offer and will continue to offer quality courses and degrees, but that is not what they will be charging for – they’ll be charging for the name on the testamur. Of course this may well be the form of responsibility the Minister expects and respects. However for the community – and even perhaps for the common good or the national interest - responsibility would most probably be equated with reasonable affordability. </p>
<h2>‘Doing it for the students’, or for the rankings?</h2>
<p>The focus on “downsizing” the size of the student cohort at Group of Eight institutions is less about teaching or providing a world class education for students than it is about securing and furthering the research capacity of the Group of Eight. Professor Young in his National Press Club address adversely contrasted the size of Australian research universities to those of Stanford, Cambridge and Caltech (which has only 2200 students). In his view this is bad for the quality of research. </p>
<p>So for the Group of Eight it’s fewer students and more research – and higher rankings in the prestigious international university rankings - whilst teaching is concentrated elsewhere, in the non Group of Eight universities, some of which over time will be pressured by circumstances to become teaching only institutions.</p>
<p>The proposed Pyne reforms are the most substantial since the creation of the Unified National System under the then Minister John Dawkins in the mid 1980s. Such significant changes need to be argued, debated and contested – thoroughly, diligently and rigorously. And unfortunately what Minister Pyne and Professor Young have offered will benefit only the elite few. </p><img src="https://counter.theconversation.com/content/30218/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Janice Dudley is affiliated with the ALP.</span></em></p>Professor Ian Young, the Chair of the Group of Eight Universities, has argued that fee deregulation will have a positive effect on all universities. The Group of Eight universities will take the opportunity…Janice Dudley, Associate Dean Learning and Teaching School of Management and Governance; Senior Lecturer in Politics & International Studies, Murdoch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/273182014-06-05T20:35:02Z2014-06-05T20:35:02ZPrestige costs rather than pays in higher education<figure><img src="https://images.theconversation.com/files/50039/original/kdqdwhck-1401754866.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Will students pay exorbitant fees for Australia's most prestigious universities if there's no future financial benefit?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/kimjustin/3722959779">Flickr/Justin Kim</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The belief of Australia’s Group of Eight elite universities that fee deregulation will allow them to fund their chase for global prestige is based on a fundamental misreading of the economics of elite US universities.</p>
<h2>What’s wrong with the US model?</h2>
<p>As is well documented, the elite US universities <a href="http://theunbrokenwindow.com/Higher%20Ed/Introduction/Gordon%20JPE.pdf">heavily subsidise their students</a> to attract the “highest quality”. This concern for “quality” doesn’t mean everyone has an equal shot. At the more selective US private universities, The <a href="http://www.nytimes.com/2004/04/22/education/22COLL.html">New York Times</a> reports that: </p>
<blockquote>
<p>More fathers of freshmen are doctors than are hourly workers, teachers, clergy members, farmers or members of the military – combined.</p>
</blockquote>
<p>There’s no vast conspiracy behind the intensely skewed socioeconomic distribution in elite US universities. The system is meritocratic. The problem, pinpointed by <a href="http://books.google.com.au/books?id=nL9z_huBmLEC&pg=PA22&lpg=PA22&dq=%2B%22Upper-middle-class+Americans+have+responded+to+the+triumph+of+educational+meritocracy%22&source=bl&ots=25993K3irH&sig=rgdRQT8wHI44cM6D2G8Ak2p53RQ&hl=en&sa=X&ei=Jd2GU7qPHISAkwWtwYDACA&ved=0CCoQ6AEwAA#v=onepage&q=%2B%22Upper-middle-class%20Americans%20have%20responded%20to%20the%20triumph%20of%20educational%20meritocracy%22&f=false">sociologist Mitchell L. Stevens</a>, is that: </p>
<blockquote>
<p>Only the relatively wealthy are able to afford the infrastructure to produce that accomplishment in their children. Upper-middle-class Americans have responded to the triumph of educational meritocracy by creating a whole new way of life organised around the production of measurably talented children and the delivery of news about kids to the right places at the right time.</p>
</blockquote>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/50047/original/ydyxjrv4-1401755165.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/50047/original/ydyxjrv4-1401755165.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/50047/original/ydyxjrv4-1401755165.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/50047/original/ydyxjrv4-1401755165.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/50047/original/ydyxjrv4-1401755165.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/50047/original/ydyxjrv4-1401755165.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/50047/original/ydyxjrv4-1401755165.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/50047/original/ydyxjrv4-1401755165.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Harvard University: this kind of prestige costs.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/nkcphoto/5494690532/in/photolist-9nxJ4E-kJsxgz-b1UmA-4oyYA8-d21SBW-iiv9Ni-7fnbx8-6Ni9oq-fSBbWm-dQSYKV-g5UaXU-9JiV94-8bRn4y-byXHQv-7fcsWZ-g1ZcVp-mxNv7d-hWG5xt-6jt4a1-eh1GMb-6Ermxq-8qnfkg-gBTUJm-a34C7f-dWRUYf-ovhFR-Nqeq9-8pAyMv-7fyjH3-6f9oTf-dRrz6V-73JB9w-crkGx1-8oyL6f-6f9pbS-5QnSet-fTH3KG-8ovzVn-4Jn5b1-9J8eAt-7eBgms-7TY2Uv-69RXfG-6NdqM3-bzK4pg-dCezux-KrPXh-8qbCcx-7C9W7J-9tsQwu">Flickr/NKCPhoto</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Will students pay more for no greater income benefit?</h2>
<p>Given similar, though less extreme, skewness in socioeconomic distribution of Group of Eight students, fee deregulation may appear sensible, even preferred on equitable grounds. But will students’ preferences remain unchanged after introducing higher fees? The strength of student preferences for the Group of Eight has never been tested because as Andrew Norton of the Grattan Institute <a href="http://www.theaustralian.com.au/higher-education/student-power-looms-as-uni-mkt-balances/story-e6frgcjx-1226645512712#">has observed</a>:</p>
<blockquote>
<p>You can get added prestige without extra cost so why wouldn’t students want to apply (to the Group of Eight universities)?</p>
</blockquote>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/50044/original/bhn2v3xc-1401755036.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/50044/original/bhn2v3xc-1401755036.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/50044/original/bhn2v3xc-1401755036.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/50044/original/bhn2v3xc-1401755036.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/50044/original/bhn2v3xc-1401755036.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/50044/original/bhn2v3xc-1401755036.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/50044/original/bhn2v3xc-1401755036.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/50044/original/bhn2v3xc-1401755036.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">How much more would students pay to attend the University of Melbourne?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/wynnie/105225247">Flickr/Steel Wool</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>What might give the Group of Eight pause is that Australian university rankings are <a href="http://espace.library.curtin.edu.au/R?func=dbin-jump-full&local_base=gen01-era02&object_id=191524">poor indicators</a> of graduate outcomes. There is <a href="http://www.westerlycentre.uwa.edu.au/__data/assets/pdf_file/0005/37085/08_04_Birch_Li_Miller__forweb1.pdf">no earnings advantage</a> to attending a Group of Eight university after controlling for industry and occupation.</p>
<p>Remarkably, the Group of Eight has proposed that uncapped fees apply in law, accounting, administration, economics and commerce <a href="https://submissions.deewr.gov.au/Forms/demand-driven-funding-system/_layouts/SP.Submissions/ViewDoc.ashx?id=%7Bb35458b2-8a2d-4614-aa16-5f1da9b84ed7%7D">“where there are high private returns”</a>. </p>
<p>These courses are precisely those in which private providers, including non-profits, are best able to compete, particularly once their students (“clients”?) can access HECS-HELP and they don’t need to divert surpluses to subsidise other operations.</p>
<p>To retain their status as the preferred path to entry to the professions the Group of Eight will find they will need to be more selective – an important measure of quality in elite US universities. Headline fees may very well rise to make up for lower government funding but the Go8 will also need to return more of the revenues generated by law and business students back to their schools to keep up with private providers and ensure selectivity.</p>
<p>The elite university model entails subsidy; fees from students are not a source of surpluses. The US experience also indicates the elite model doesn’t do much to promote equitable access.</p>
<p>The economic theory explaining why universities are usually non-profit, why top universities subsidise their students substantially even when many can afford to pay, why research drives prestige rather than teaching and other distinctive characteristics of the elite end of the sector is well developed and relatively uncontroversial, no small feat in a discipline where joint winners of the field’s Nobel Prize can have <a href="http://www.theguardian.com/business/2013/dec/10/nobel-prize-economists-robert-shiller-eugene-fama">startlingly opposing views</a>.</p>
<p>This solid work of economic theory makes it all the more puzzling that in the debate over demand-driven funding and fee deregulation the Group of Eight have advocated as though they hold pricing power in a for-profit industry. Perhaps a case of the corporate university being hoisted with its own petard?</p><img src="https://counter.theconversation.com/content/27318/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Raymond Da Silva Rosa does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The belief of Australia’s Group of Eight elite universities that fee deregulation will allow them to fund their chase for global prestige is based on a fundamental misreading of the economics of elite…Raymond Da Silva Rosa, Professor of Finance, President, UWA Academic Staff Association, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.