Keeping up with the Joneses: Why Australia is falling behind the neighbours on higher education

China’s government has made a massive investment in research, and student funding. Australia can learn a lot. AFP/Information Services Department

In recent weeks two commentary strands have intertwined and are extremely important to Australia’s future, and with special resonance for the higher education sector.

Beginning with the announcement of the Government’s “inquiry” into the nation’s future with Asia, there have been a string of reflections around that general theme including Melbourne University vice-chancellor Glyn Davis’ thoughts on China, Michael Wesley’s wider ones on Asia as a whole, and more specific proselytising from Sean Gallagher and Geoffrey Garrett.

The general message is that Australia must engage more. Many observers would confirm Greg Sheridan’s response to the Asia inquiry: “We know all that. Just do something!”

Higher and higher and higher education

The other strand is the now annually awaited but tired round of international university rankings that confirm Australian universities do pretty well, that we all love the polls when they elevate us, disparage them when they demote us, and cue our promotional tag lines to take best advantage.

At first sight these two strands are not obviously connected, but the clue lies in the underlying theme of the first: that this need to engage intellectually and institutionally with Asia is newly emerged and discovered when, in fact, it is anything but. The added prompt is the idea that Asia itself is now moving when, in fact, it has been doing so for some time.

One good example here concerns the current raging preoccupation with China as a rising intellectual powerhouse as reflected in the numbers of papers cited, patents registered and postgraduates produced. In a locally little reported moment, a few months ago the Royal Society in the UK awarded Chinese leader Wen Jiabao the prestigious King Charles II medal, in recognition of his country’s massive contribution to research investment. The Royal Society, unlike some current commentators, saw the long term nature in all this.

Indeed, the origins of China’s rise in this sphere lie at least fifteen years back. In the mid-1990s Chinese authorities decided that the university sector needed to improve so, in what became known as the 211 scheme, 100 identified universities were given significant extra funding to lift their performance and start putting China on a more international path (this, of course, was a strong extension of Deng Xiaoping’s general “opening” of China). That was followed quickly in 1999 with the 985 scheme (because it was formulated in May of 1998) where 35 of the original universities were given even further additional funding, specifically to build substantial research capability.

By the new millennium, visiting Vice-Chancellors were learning from counterparts in these chosen institutions that the additional funding alone matched or exceeded their annual budgets at home in Australia. That is, over a decade ago China was investing in its universities.

Left behind?

A much earlier, different, even more unobserved but just as powerful move was going on in India, that other “giant” now so much in the news and “sort of” on the Australian radar.

In the 1950s Jawaharlal Nehru became convinced that the universities there were too-slow moving in their present form, so among other things set up the Indian Institute of Science followed over the years by the Indian Institute of Management system and, spectacularly, the Indian Institutes of Technology that went on to dominate the hi-tech world before themselves now becoming the subject of speculation, considered to be too rigid and overly susceptible to entry by force-fed “cram school” candidates.

Then there was Singapore, whose National University (NUS) throughout the 1990s and beyond was transformed into a world-class institution of the kind desired by a sequence of Australian Ministers and Governments. Singapore then produced its Management University (SMU) that has quickly become a world leader.

Universities as the foundation of growth

All these governments effectively invested in higher education as a nation-building instrument. Significantly, that philosophy is now being spread around the world, especially by aid and development agencies like the World Bank, the Asian Development Bank and the European Union, with differing levels of success.

There are now projects in places like Cambodia, Lao PDR, and Mongolia, several sites in Eastern Europe and throughout the Middle East and North Africa (MENA), where the approach is to develop higher education as a direct tool of social and economic growth. That is why the World Bank, for example, has recently produced a controversial paper on higher education in East Asia that has attracted attention, and another on developments in MENA.

Countries like Germany, too, have revised their higher education research funding approach with a view to achieving more national and applied impact.

Australia - where to now?

It is at this point where Australia starts to look very different, and where a policy re-think is beginning to become imperative, as anyone who has been in our universities over the past twenty years or so will understand.

At the risk of a generalisation, a string of Australian federal governments did two things: cut public spending on higher education and pushed towards a user-pays system. That coincided neatly with the sector turning en masse toward the international education market.

From the early 1990s onwards, then, per head domestic student funding more or less halved while the numbers of those students more than doubled. Into that were imported large numbers of fee-paying students along with the corollary of Australian institutions teaching international students overseas. Australia became a world leader in this, but the hidden strains were substantial.

That leads directly to the current new policy implementation of “deregulation” whereby universities are encouraged to recruit as many domestic students as possible, this coming at a time when a high dollar, changing overseas conditions and tastes are running a test through Australia’s international market.

Put bluntly, for a long time the Australian system relied on international fee-payers to supplement sagging national funding. The current conditions are revealing the potential impacts of that, as has occurred sporadically in recent years. La Trobe University, for example, is attributing its projected 2012 “black hole” to this concatenation while the Government denies it.

Whatever the truth of that, Australia’s policy approach stands revealed as vastly different to that of the region with which it now contemplates “closer engagement”.

The true meaning of competition

The word “competition” is apposite here. Risking another generalisation, it might be observed that Australia’s approach to higher education competition is a standard commercial one – successful operations will attract the best students, not necessarily because they will provide the best or even the needed services.

In part that is why Australian universities in recent years have turned more toward “brand management”, some might say to the exclusion of program development and management.

In China and India, though, at the policy level the “competition” has been more about developing the best student talent to better serve national developments and global competitiveness. It is true that both those countries have flourishing private higher education industries, but in part that is because such large populations inevitably have hugely talented students who cannot be catered for by the mainstream system.

The present Australian government along with its predecessors will deny that it has underfunded the higher education system and, indeed, argue that the sector has never had it so good.

The Cooperative Research Centre scheme will be pointed to. But many universities with more than one CRC will bemoan the fact that hidden costs eat well into any benefit. The new funding reviews will be pointed to, but after 20 years or more they are well overdue and as yet still rather inchoate.

The vision thing

Whatever the detail, the Australian approach is demonstrably at odds with that adopted in many regions it now wishes to engage more with. Universities themselves have had their own problems with places like China and India, with lack of interest being the prime in the case of the latter and the Indians have long memories.

That notwithstanding, some clever long-term higher education strategy and policy development will be necessary if Australia is really to engage with these regions, and if the Australian sector is to be the real social and economic driver being aimed at now around the world.

Put simply, higher education needs immediately to be seen as an investment, not as a cost, and as a driver for change rather than a drain on the national budget.

Other countries, like China and Singapore, are seeing that and drawing away. If we are to keep up let alone participate and prosper, then a change in mindset is desperately overdue.

It is for that reason that the Lomax-Smith Base Funding Review, now said to be imminent, will be such a litmus test for the Government’s vision and resolve in this area.

A long-term benefit for Australia and a strengthening of its regional position in higher education needs a clear and significant commitment from Government.