The marketplace of ideas? What competition will mean for universities

The humanities could be dwarfed in a deregulated university marketplace. Shoes on Wires

In his recent speech to the National Press Club Glyn Davis, Vice-Chancellor of The University of Melbourne and Chair of Universities Australia, made it clear that from now on higher education in Australia will be subject to increasing levels of competition.

Legislation that came into force in January this year allows universities compete for students in unprecedented ways. The removal of a cap on student numbers means that federal funding will flow to institutions in proportion of their shares of the market. It is probably only a matter of time until caps on student fees will be removed, too. And it is hard to believe that future governments will reverse these rules.

In other words, there will be competition between universities on price and quality with respect to teaching. The market will reward institutions that work out how to develop courses that optimise on quality and price such that they attract maximal profits.

This suggests some surprising possibilities. A linguistics professor teaching a course to fifty students is breaking even. But if the university hired a linguistics super-star (such as Steven Pinker from Harvard) to teach the course, it might attract 500 students. It might cost half a million dollars to attract such a person for a few weeks and there would be many additional expenses. But the university would increase its profit substantially on these terms.

The presiding hope is that institutions that best meet the needs of students will grow. It’s a point that is essentially democratic: government should allocate resources to those institutions that best serve the public good, as the public identifies it.

As Professor Davis notes, deregulation with respect to teaching will have significant consequences for research. The connection is not immediately obvious, but the underlying causality is plain. The greater competition and risk an institution is exposed to overall, the more concerned it has to be with generating sufficient income to meet its obligations. For otherwise it will default. If there is increased financial exposure through markets, institutions will have to deal with this by getting more effective financially.

Teaching is – from a financial point of view – the primary university activity, with administration and research following. Competition will give universities an incentive to tame their bureaucracies. And it will also lead to pressure on research to demonstrate its contribution to the financial well-being of the institution.

It won’t be enough merely to break even. That’s because – in a competitive environment – we need to consider opportunity cost. That is, the advantage to the institution of diverting resources from one area (research) to another (teaching). The prospect of publishing a journal article in a few years’ time will compete more than ever with generating income right now through teaching.

Institutions that devote too great a proportion of their resources to administering themselves or to undertaking research that does not generate income will be vulnerable to competition from leaner, better organised competitors.

The impact of competition will be very challenging to long-held, almost sacrosanct, attitudes towards research.

Across large fields, research is generally supply-driven. That is, we get the research that researchers are interested in. Of course this cannot set out to become income-generating. It does not ask what kind of research people are willing and able to pay for. So it is hardly surprising if it rarely finds a commercial market.

Supply-led research has such a claim on loyalty because it seems to align with the ambition to pursue the truth, irrespective of where it may lead, and without the pressure of worrying whether anyone at present needs it.

But this attitude to research will – increasingly – come under pressure. Will universities be able to devote so much of their efforts to research on these terms? Or will it happen that, by and large, research in areas that do not generate income (particularly in the arts and social sciences) will gradually become less and less relevant to the overall functioning of universities?

There may be no cataclysmic end, just a gradual withering of stature and status. (And it may be that in the humanities at least we are on this track already.)

Academics often argue that undertaking research is a crucial factor in delivering good education. That proposition is going to be tested in the market place. It will be a matter for students to decide. If they happen to make their choices of where to study on other grounds, then the link between teaching and research will be weakened. At present it is not a question of whether this is a good or a bad thing. It is something that we simply have to face.

It means – for instance – that the actual benefit to teaching of undertaking particular kinds of research will be tested. How much weight do students give to this in their decision making?

What we should hope to see is a more accurate alignment here. From the proposition that doing research of any kind is good for teaching, to the claim that undertaking specific research may indeed make it more attractive to students to study a particular course in a particular institution.

There is one particularly interesting avenue of hope for research. And that is to develop a greater appetite for mission-driven work. This starts from an investigation of the needs and resources of the wider world. Where is research needed and where will it have the greatest consequence? Who might pay for it, and why?

The key point that institutions need to absorb and make their own is that the division between mission driven and enquiry driven research is not an absolute one. Rather, enquiry (or investigator) driven research needs to be integrated as much as possible with mission driven work. The very best accounts of mission reveal – in any case – why this is so. In order to truly comprehend why things work as they do, and understand best how to solve the problems that face us (or people who are willing to pay us) there is a benefit which flows for the accuracy and adequacy of the fundamental axioms and underlying conception of the nature of a discipline, and of the aspect of reality it seeks to know.

The problem is not whether institutions undertake investigator (enquiry driven) research. The problem is always – and necessarily – how good we are collectively at turning such knowledge to account in our mission driven research. Except in a very few areas the point of investigator-driven research is that it will eventually join up with missions. Are we looking at a restrictive practice that – for interesting social reasons – sets up a barrier between enquiry and mission, which (in the end) makes institutions less effective than they would otherwise be?

One might complain that the situation we are in is unfair or unwise. But the complaints will not help fund research. The full consequences of deregulation around teaching will be felt gradually.

We should grasp the period of grace to develop attitudes towards research that will equip it to flourish in the new world of competition.