Can the universities of today lead learning for tomorrow? - The University of the Future - EY

 
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
Can the universities
of today lead learning
for tomorrow?
The University of the Future
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
Executive summary
                                                               Does higher education need a new paradigm to
                                                               serve Australia’s needs in the Transformative Age?

                                                               Imagine closing your eyes and waking up on 1 January
                                                               2030. The world has nine billion people. Humankind
                                                               has landed on Mars. Intelligent robots work alongside
                                                               people, cars are self-driving, energy is abundant
                                                               and clean. Plus, the world’s new largest technology
                                                               company is in the education business.

   Contents                                                    Welcome to the                                     To answer these questions, we launched
                                                                                                                  a formal scenario planning process as a
   The university of today [ 02 ]                              Transformative Age                                 follow up to our University of the Future
                                                               We have entered the Transformative Age             white paper from 2012. The result is a
   Disruptive forces 			                                       and, much like the Industrial Revolution           set of four divergent scenarios to assist
   driving change     [ 06 ]                                   before it, we can expect fundamental               university leaders and government
                                                               shifts in how we live, work and play.              policy makers in planning now, to deliver
   The university                                              The Transformative Age will also change            the educational needs of students and
   of the future                             [ 12 ]            how we learn – and, along with it, the             employers, tomorrow. Our goal was not
                                                               nature and role of the university.                 to predict the future but to offer multiple
   The transformed                                                                                                plausible “tomorrows” to stress-test new
                                                               Australia is a global success story when           policies, strategies and plans.
   university                                [ 28 ]
                                                               it comes to education. Austrade ranks
                                                               international education as our third               To ground the process in reality, we
   EY recommendations [ 30 ]                                                                                      conducted interviews and workshops
                                                               largest export, worth AU$26 billion and
                                                               adding 5.2% of real gross value to our             with 50+ university leaders, government
   EY contacts                               [ 32 ]                                                               policy makers and industry observers. We
                                                               economy per year. In the Transformative
                                                                                                                  also conducted surveys and focus groups
   Acknowledgment                                              Age, our universities must continue to
                                                               remain globally competitive1.                      with 3,000+ students and employers.
   and methodology                           [ 33 ]
                                                               But what will make a university successful         The value of these four scenarios lies
                                                               in this new world? What will our nation’s          in their ability to stimulate questions,
                                                               students and employers demand of                   rather than the accuracy of their
                                                               our universities in the future? How will           predictions. They will help universities
                                                               universities contribute to solving the             to see emerging patterns, detect
                                                               challenges of the Transformative Age?              opportunities and threats, and test how
                                                               And what should universities consider,             resilient current strategies might be to
                                                               today, to be ready to deliver truly                new worlds. Particularly, they will help
                                                               transformative outcomes?                           education sector leaders to understand
                                                                                                                  the trends unfolding outside of the
                                                                                                                  education sector, and outside of Australia
                                                                                                                  that will, inevitably, manifest in higher
                                                                                                                  education here.

1. Australian Government: Australian Trade and Investment Commission, “Why Australia: Benchmark Report 2018 ” .
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
Lucille Halloran
                                                                                                           Managing Partner,
                                                                                                           Oceania Government
                                                                                                           and Public Sector,
                                                                                                           Ernst & Young Australia

                                                                                                          Catherine Friday
                                                                                                          Partner, Oceania
                                                                                                          Education Leader,
                                                                                                          Ernst & Young Australia

                                                                                        Participating university leaders noted
The four future scenarios                                                               a tension between the dual strategy
                                                                                        needed to continue to reposition and
              1 | Champion University                                                   optimise the core business of their
              A hands-on government actively champions universities as                  universities, while also investing in future
              strategic national assets. Most students enrol in traditional             disruption for tomorrow. This echoes
              undergraduate and graduate degree programs. Universities                  our own view that the commercial and
              streamline operations by transforming service delivery and                the disruptor university scenarios are
              administration.                                                           the most likely to become reality. Both
                                                                                        will require leaders to simultaneously
                                                                                        reposition their institutions by
                                                                                        converging with industry, while also
              2 | Commercial University
                                                                                        exploring disruptive new business models
              A hands-off government requires universities to be financially            that can fend off new market entrants.
              independent to ease national budget pressures. Students favour
              degree programs that offer work-integrated learning. Universities         With this in mind, we suggest universities
              reposition by drawing closer to industry to collaborate on teaching       should consider the potential to:
              and research.                                                             • Embark on double transformation
                                                                                          to optimise and grow
                                                                                        • Make the shift from being
              3 | Disruptor University                                                    faculty-focused to learner-centric
              A hands-off government deregulates the sector to drive                    • Integrate with industry to co-create
              competition and efficiency. Continuous learners and their                   and collaborate
              preferences for on-demand micro-certificates dominate as
                                                                                        • Re-imagine the physical campus for
              technology disrupts the workplace. Universities expand into new
                                                                                          the digital world
              markets and services and compete against a range of new local
              and global educational services providers.                                • Unbundle degree programs and the
                                                                                          university value chain
                                                                                        And no matter the future, universities
              4 | Virtual University                                                    will continue to be a national asset for
              An activist government restructures the tertiary sector to                our country, and government will have
              integrate universities and vocational institutes, prioritising training   a key role to play in making them
              and employability outcomes as humans begin to be replaced                 globally competitive.
              by machines. Continuous learners are the majority, preferring             What is clear from this exercise is that
              unbundled courses delivered flexibly and online. Universities             profound change is imminent in the
              restructure into networks that share digital platforms.                   education sector. Policy makers and
                                                                                        university leaders will need to work
                                                                                        together to challenge the status quo and
                                                                                        adjust the settings to ensure Australian
                                                                                        universities are encouraged to innovate,
                                                                                        invest and transform.
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
The university of today
  Australia is a world leader                                    at around 5% per year between                Australia’s government generally requires
                                                                 2000 and 2015 and now contributes            public universities to be all things to
  in higher education                                            $30 billion to the country’s GDP, thanks     all people — they all are broad-based
  Education is a central pillar of Australia’s                   to rising enrolments and diversifying        teaching and research institutions, with
  economy. Not only does the education                           revenue streams. Thirty-five Australian      vertically integrated business models
  sector employ nearly 8% of Australian                          universities feature in the Times Higher     and economic models underpinned by
  workers, it is also our largest services                       Education’s World University Rankings        student fees and government grants.
  export.2 In 2015/2016 international                            of 2017, with six in the top 100.4           And the traditional “where, when, how,
  education earned $20.3 billion in export                       Australia also attracts 350,000 fee-         who” formula remains largely unchanged.
  dollars, with universities and other                           paying international students who make       Most students are under 25 and are
  tertiary institutions generating two-thirds                    up about a quarter of the student body,      taking undergraduate degrees to qualify
  of that revenue.3                                              thanks to the quality of the educational     for the professional working world,
                                                                 system.5 Several universities are so large   with learning taking place on physical
  Statistics about higher education paint
                                                                 and complex they would appear on the         campuses, according to set schedules
  a positive picture. The sector has grown
                                                                 ASX Top 200 if they were corporates.         of classes, via lectures and tutorials.

    Snapshot of Australia’s higher education sector (2016)
    Industry snapshot                                            Market snapshot                              Product snapshot

                                                                                  62%
                                                                                  Domestic students
                                                                                                                           58%
                                                                                                                           Undergraduate
                                                                                                                           degrees and programs

    Revenue                $30.1 billion                                          24%                                      25%
                                                                                                                           Post-graduate degrees
                                                                                  International
    Surplus                $1.6 billion                                           students
                                                                                                                           and programs

                           1.4 million
                                                                                                                           15%
    Students

    Employees              100,000                                                                                         Research
    Universities           43
                                                                                  14%
    Growth rate
    2000-2015
                           5.4%                                                   Research markets
                                                                                                                           2%
                                                                                                                           Other courses
    Source: EY Market Analysis

  2. Australian Bureau of Statistics.
  3. Australian Department of Education and Training, November 2016.
  4. Times Higher Education, “World University Rankings” 2017.
  5. Universities Australia, Data Snapshot 2017.

2 | Can the universities of today lead learning for tomorrow? The University of the Future
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
“I just think learning and                                                                                                    “The level of competition
     knowledge is so important                                                                                                      is so high now. If you
     just to know things about                                                                                                      don’t have the standard
     life or what you wanna do.                                                                                                     education, you are not
     School doesn’t really set                                                                                                      even in the running.”
     you up for real life.”                                                                                                         Continuous learner
     School leaver

                                                                      “The degrees that our
                                                                        parents have hold such
                                                                        different value to the ones
                                                                        we have now.”
                                                                        Current student

                                                                 “… Australia’s public universities are much the same, all committed
                                                                   to research, comprehensive course offerings and large
                                                                   enrolments. This is an expensive way to deliver higher education,
                                                                   yet offers few meaningful choices for students about the type of
                                                                   institution they attend … As technological ferment threatens the
                                                                   established order, it also breaks the constraints that encourage
                                                                   conformity. It may be the time to allow new choices, more
                                                                   diversity. The Australian idea of a university has served us well.
                                                                   It may also have run its course.”8

                                                                   Professor Glyn Davis AC, Vice-Chancellor, University of Melbourne

7. “Australia reaches international student milestone”, 7 March 2018, www.universitiesaustralia.edu.au
8. “The Australian idea of a university”, Melbourne University Press, 2017.

                                                                                            Can the universities of today lead learning for tomorrow? The University of the Future | 3
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
Perceptions of value of university degrees
      University graduates earn more over the course of their careers than non-graduates. However, being a university graduate
      isn’t quite the elite status it once was.

      Standing out is becoming more and more difficult. The number of people holding a degree today makes it increasingly
      difficult to stand out, leaving more and more people looking for additional qualifications or expertise.

      Value and investment                                                        Impact of a degree on employment
      of a degree                                                                             % Agree                                             % Improve

                                                                                             74%                                              80%
                                                           Completing a degree is well

                               90%
                               of prospective/
                                                           worth the work and effort                    Career prospects

                                                           Completing a degree
                               current/past
                                                           will improve my long-term
                               students think it’s

                                                                                             71%                                              69%
                                                           financial prospects
                               important to have                                                        Professional networks
                                                           (10-20 years after)
                               an undergraduate
                               degree
                                                           Completing a degree
                                                           will improve my short-term                   Finding employment

                                                                                             53%                                              63%
                         versus                            financial standing                           within a short timeframe
                                                           (2-3 years after)                            (4 months of graduating)

                               58%
                               for a postgraduate
                                                           I would no longer
                                                           pursue a university
                                                                                                        Base: prospective/current/past students

                                                                                             39%
                               degree                      degree if employers
                                                           no longer require it

                                                           There is little advantage in
                                                           getting a university degree

                                                                                             26%
                                                           instead of gaining one via
                                                           a non-university provider

    Source: EY Sweeney market research 2017

  Yet, as EY argued in our 2012 University                 nano-degrees powered by leaders in           existing degrees will soon be obsolete,
  of the Future white paper, the status quo                industry; the other focused on scientific    which may mean institutions will lose
  is unsustainable. In 2012, we posited that               progress and exponential technologies.       their “cash cows” and be forced into
  the higher education industry globally                                                                specialisation paths they may have not
                                                           Disruptive models have yet to fully
  was on the cusp of disruption and that                                                                chosen. And some institutions have yet
                                                           emerge in Australia, but there is growing
  Australia’s dominant university model                                                                 to digitise their operating models.
                                                           potential for this to happen, and happen
  – a broad-based teaching and research
                                                           quickly. Once the first new entrant cracks   The university leaders we interviewed
  institution with a large asset base and
                                                           the market, we believe a deluge could        know they need to act with urgency to
  cumbersome back office — would prove
                                                           follow, not least because of the lack of     prepare their institutions to compete in
  unviable in the future.
                                                           diversity in the sector.                     a very different world to today. They are
  We still believe this to be true. Demand                                                              also operating within a funding and
                                                           The case for change is clear. A growing
  for learning is shifting to a fundamentally                                                           policy context that makes such changes
                                                           cohort of graduates are leaving the
  new paradigm. The rise of Udacity and                                                                 difficult, meaning that any solutions
                                                           university environment with more debts
  Singularity University in the US point to                                                             will require government and university
                                                           and few job prospects. Some university
  two potential disruptors: one offering                                                                collaboration to address.
                                                           leaders estimate that around 40% of

4 | Can the universities of today lead learning for tomorrow? The University of the Future
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
Higher education business model canvas
Australia’s universities are monolithic institutions that control all aspects of their
teaching and research activities, anchored by physical spaces and time-bound
schedules. Digital transformation is challenging this dominant model. As universities
evolve from faculty-centred to learner-centric institutions, they may well find it
necessary to unbundle their many functions as well as their degree programs to
differentiate and maintain competitive advantage.

                                                                                                                                   Potential areas of disruption

                       Who are our                 Domestic             International             Continuous
                                                                                                                          Government               Industry
                       customers?                  students               students                 learners

                       What are the                             Developing          Accessing                                                       Transferring
                                               Acquiring                                              Coming         Learning       Discovering
                       jobs to be done                           hard and          employment                                                           new
                                               knowledge                                               of age         flexibly       new ideas
                       for customers?                            soft skills      opportunities                                                      knowledge

                       What products/
  How do               services are we          Undergraduate           Postgraduate
                                                                                                      Courses            Other services           Research
                                                   degrees                degrees
  universities         providing?
  create value?
                                               Teaching     Campus and
                       How do customers                                                 Virtual     Artificial                    Research
                                                 and         residential       Online                              Publications                 Partners   Other
                       get our services?                                                reality   intelligence                    projects
                                               learning       facilities

                                               Teaching
                       How do we                               Develop content           Deliver content          Assess learning         Credentialise learning
                                               activities
                       produce it?
                                               Research         Develop                                  Conduct               Publish         Commercialise
                                                                                  Fund proposal
                                               activities       proposal                                 research             research           research

                       How do we                 Academic schools
                                                                                 Physical campus                 Digital campus             Printed materials
                       distribute it?              and faculties

  How do
  universities         How do we                Student          Student           Research                         Back office
                                                                                                   Marketing                        Technology         Other
                       support it?            administration     services        administration                      services
  deliver value?
                       Who are our
                       key partners                 Government                   Other universities                Industry                   Outsourcers
                       and suppliers?

                       What are our major
                                                  Campus              Digital             Back office        Industry
                       investments?                                                                                               Research            Talent
                                               infrastructure     infrastructure        transformation     engagement

  How do
  universities         What is our                                                                              Commercialised
                                                    Student fees                Government grants                                             Philanthropy
                       revenue model?                                                                              research
  capture value?

                                                                    Can the universities of today lead learning for tomorrow? The University of the Future | 5
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
Disruptive forces driving change
  There are many ways to identify the challenges of change
  in higher education. We workshopped five external drivers
  over which university stakeholders have limited control,
  which together will shape the future of higher education
  in Australia.

                                                      Global forces impacting the university sector

                                                                                        • • • • • • •
                                                                                      •               •
                                                                                    •                   •
                                                                                  •

                                                                                                                         •
                                                                              •

                                                                                                                             •
                                                                          • •

                                                                              Rise of continuous           Changing world

                                                                                                                              • •
                                                                                   learning                   of work
                                                              • • • • • •

                                                                                                                                  • • • • • •
                                                                                             University
                                                                                               of the
                                                                        Increasing                                Blurring
                                                                      international
                                                                                              Future              industry
                                                                       competition                               boundaries
                                                            •

                                                                                                                                              •
                                                         ••

                                                                                                                                                •

                                                                                             Evolving digital
                                                       •

                                                                                                                             •

                                                                                  •            behaviour                 •
                                                                                                        •            •
                                                                                      • •             •
                                                                                          • • • • • •

6 | Can the universities of today lead learning for tomorrow? The University of the Future
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
“We have been here before. The dizzying pace of change in
                                                every aspect of life presents us with both the risks and potential
                                                rewards of a new renaissance taking place in our modern world.
                                                Except, this time, it is the entire world and a population of seven
                                                billion who are becoming connected and able both to access
                                                and input information that is globally accessible. The pace of
                                                advancement is therefore many times faster, and the degree of
                                                instability that ensues many times greater.”

                                                Professor Ian Goldin, Oxford University

1 | Changing world of work
                                                 Perceptions on degrees and changing world of work
Technology disruption is affecting
                                                 Some students would happily opt out of their degrees if they could see a feasible
the nature of employment and
                                                 pathway to employment without attending university. Others would welcome new
employability.
                                                 approaches to gaining qualifications and progressing their careers. This highlights
As workplaces change, so does what               a risk to universities, particularly if they are untethered from industry.
it takes for a graduate to be ‘work
ready’. The future of work will be radically     Past student perceptions of                           Importance of the integration
different, driven largely by the machine         degree course relevance                               of digital technologies in degree
economy, where robotics and machine                                                                    course by current/past students
learning take over repetitive and
                                                                                                                          of current/past
programmable human tasks and artificial
                                                   Study area directly                                                    graduates feel their
intelligence augments human roles.
                                                   relevant to current job                                42%             degree requires
                                                                                                                          transformation as
                                                   Nursing                                 87%
When machines                                      Health services
                                                                                                                          digital technologies
                                                                                                                          take off in the workplace
become workers,                                    and support
                                                                                           86%

what do humans do?                                 Education                               80%                            40%
                                                                                                                          Domestic students
                                                   Law and
How will universities                              paralegal studies
                                                                                           79%

adapt to remain                                    Business and management                 67%                            51%
relevant for the                                   Psychology                              67%                            International students

future of work?                                    Study area less commonly

How will workers and
                                                   relevant to current job
                                                                                                                          57%
                                                   Humanities, culture and                                                IT
citizens be motivated                              social sciences
                                                                                           36%

in the machine                                     Science and mathematics                 41%
                                                                                                                          56%
economy?                                           Architecture built                                                     Business and
                                                                                           48%
                                                   environment                                                            management
How will we address                                Creative arts                           48%
income inequality
when machines
                                                   Engineering                             52%
                                                                                                                          54%
                                                   Communications                          59%                            Law
replace humans?
                                                 Source: EY Sweeney market research 2017

                                                                    Can the universities of today lead learning for tomorrow? The University of the Future | 7
Can the universities of today lead learning for tomorrow? - The University of the Future - EY
“In the future, the university campus will become a precinct that
    interfaces university and society, with start-ups, community
    organisations and social enterprise intermingling with the
    students: there will be full integration with society and industry.”

   Dawn Freshwater, Vice Chancellor, University of Western Australia

  2 | Blurring industry boundaries                             democratises information. For                 and work more closely with industry
                                                               universities, convergence heralds             to develop curricula that mirror the
  Non-traditional rivals offering new                          competitive threats from new entrants         requirements of the professional world?
  educational services are increasingly                        with disruptive business models. But it       Will corporates look to outsource key
  challenging the dominance of                                 also offers the opportunity to collaborate    pieces of research and professional
  universities in teaching and learning.                       on research and innovation, curriculum        development to universities newly open to
  Technology is driving convergence in                         design and work placements. Will the          collaboration and hunting for new revenue
  almost every industry, as disruption                         ivory tower become the ivory network,         streams? Will universities themselves
  reconfigures value chains and                                as universities go beyond pure research       expand into new markets and services?

      Perceptions about university and industry collaboration
      An overwhelming 83% of undergraduate students expressed interest in an integrated employment and education offering
      had one been available. Yet, current student perceptions around their course industry linkages are better than past student
      perceptions. This may signal that universities are making improvements, but there is greater potential in this respect.

      Perceptions about integrated                             Perceptions about industry integration       Perceptions about connecting
      study/employment program                                                                              with industry
                                                                Current scenario          Ideal scenario                                                     % Agree
                                                                Foundational              More graduate-
                                                                knowledge and             ready skills      The assignments and
                                                                some graduate-            through greater   learning have high
                                                                                                            relevance for the workplace
                                                                                                                                                             58%
                                                                ready skills              integration
                                                                                          between

                         83%
                                                                                          universities
                                                                                                            There are plenty of
                                                                                          and industry
                          Very/fairly                                                                       workplace opportunities
                          interested
                                                                                                            linked directly to my
                                                                                                                                                         56%
                                                                                                            degree1

                                                                                                            There are strong links to
         53% Very           30% Fairly          12% A little                                                potential employers                         51%
         interested         interested          interested

         3% Don’t           2% Not at
         know               all interested
                                                                  Skills university provides
                                                                                                            Base: current/past students
                                                                  Skills employers want
      Base: Prospective/current/past undergraduate students                                                 1. Base: current/past students who are working

      Source: EY Sweeney market research 2017

8 | Can the universities of today lead learning for tomorrow? The University of the Future
“The higher education sector will focus on driving
                                               research and fostering incubators and breakthroughs
                                               that make a fundamental difference.”

                                             Michelle King, Senior Director, Alumni and External Engagement
                                             Monash University

3 | Evolving digital behaviour
Digitisation is empowering learners             Perceptions of digital learning
by converting them into consumers               Some universities are beginning to provide digital forms of learning or open
of educational services.                        online courses, but student demand is outpacing supply. Prospective students
As nearly every consumer activity shifts        see online learning as flexible and convenient, thereby increasing access. This
to the digital realms of web, mobile,           is the preference of 42% of future students, versus the 22% of current students
social, mixed reality and virtual reality,      actually receiving the majority of their degree online.
digital natives are developing new              Students also want universities to improve the use of technologies as part of
radically different learning behaviours         the student experience, including the ability to translate learnings, engage with
and expectations. By 2030, how different        others and interact with their teachers. However, many universities have yet
will the learning and social behaviour          to deliver basic digital elements, including: integrating technologies, digitising
be of digital natives from previous             content and automating administrative processes.
generations? Will educational services
move steadily and massively online?             Preference for majority of                         Attitudes towards online
Will the student experience be more             degree to be delivered online                      versus face-to-face learning
important than the course content?
                                                                                                                                                   % Agree
                                                                                                  When choosing a
                                                                                                  course, the information
“Universities will be                                                                            on a university’s website
                                                                                                                                                   78%

  able to identify and                                                                            plays an important part                              87%
                                                                                                  in my decision
  track their social and
  economic contributions                                       22%                                The online learning
                                                                                                  content in my course
  back to society, driving                                                                        gives me flexibility to
                                                                                                                                                  76%

  the innovation agenda                                                                           fit my study into other                   NA
                                                                                                  things in my life1
  through research.”                                      Current students

                                                                                                  When choosing a
 Peter Marshall, Chief Operating                                                                  course, the availability                  43%
 Officer, Monash University                                                                       of online study plays
                                                                                                  an important part in                           58%
                                                                                                  my decision

                                                                                                  Online learning is just as
                                                                                                                                            37%
                                                               42%                                effective as traditional
                                                                                                  learning methods                           49%

                                                                                                      Current/past students
                                                                                                      Prospective students
                                                       Prospective students’
                                                            preference                            Base: prospective/current/past students
                                                                                                  1. Base: current/past students

                                                Source: EY Sweeney market research 2017

                                                                 Can the universities of today lead learning for tomorrow? The University of the Future | 9
“There will be increased demand
                                                                                                for ‘lifelong educational wellbeing’,
                                                                                                in the same vein as general
                                                                                                health wellbeing and financial
                                                                                                wellbeing. This will be triggered
                                                                                                by the nervousness around
                                                                                                the uncertainty of work and
                                                                                                automation. Universities will
                                                                                                position themselves as educational
                                                                                                wellbeing partners, delivering
                                                                                                customised and in many cases even
                                                                                                individualised education services.”

                                                                                               Professor Michael Rosemann, PhD, FACS,
                                                                                               FQA, MAICD, Executive Director, Corporate
                                                                                               Engagement, International & Development,
                                                                                               Queensland University of Technology

10 | Can the universities of today lead learning for tomorrow? The University of the Future
4 | Increasing international                                    5 | Rise of continuous learning
competition                                                     The shift to education as a continuous                        Perceptions on
International competition for rankings,                         process is changing demand for higher                         lifetime or continuous
students and academics is changing                              education offerings.
                                                                                                                              learning
the higher education landscape.                                 Portfolio careers and the need for
                                                                                                                              The concept of lifelong learning
Global rankings, international mobility                         workforce agility in the gig economy are
                                                                                                                              is becoming a career necessity
and global knowledge hubs will change                           increasing the demand for continuous
                                                                                                                              rather than a discretionary luxury.
the competitive landscape and open up                           development, requiring learning that
                                                                                                                              No longer is learning new skills
new opportunities for learning. Student                         is self-directed, affordable, accessible
                                                                                                                              something people do only when
mobility is increasing as technological,                        and time critical. How will universities
                                                                                                                              pursuing a significant career
political and demographic changes make                          be part of the supply chain? Will new
                                                                                                                              change, but simply being relevant,
internationalisation a strategic goal for                       segments of learners and new learning
                                                                                                                              competitive, and in-demand
many governments, including Australia,                          propositions challenge the dominance
                                                                                                                              requires an ongoing commitment
China and India. Already, the balance of                        of undergraduate degree programs? Will
                                                                                                                              to lifelong learning.
host countries is beginning to change.                          continuous learning skills become part
To remain competitive, how will credit                          of the mainstream university curriculum?                      Barriers to universities taking a
transfer protocols need to change?                                                                                            larger share of the professional
Could Australian university brands                                                                                            development market include:
flourish in non-traditional countries?                          “There is a need to retool                                   • While credible, universities
What new international research                                   yourself, and you should                                      are perceived as cumbersome
collaborations are possible?                                                                                                    and inflexible
                                                                  not expect to stop …
                                                                                                                              • Higher fees make it difficult
                                                                  People who do not spend                                       to rationalise the investment
                                                                  five to 10 hours a week                                       versus returns

                                                                  in online learning will
                                                                  obsolete themselves
                                                                  with the technology.”9

                                                                  Harvard Business Review
                                                                                                                                           84%
                                                                                                                               of prospective/current/past
                                                                                                                               students believe it is necessary
                                                                                                                               for people to continuously upskill
                                                                                                                               or retrain themselves to remain
                                                                                                                               competitive in the workplace
                                                                                                                               Rises to 87% among
                                                                                                                               past students

                                                                                                                               Source: EY Sweeney market research 2017
9. Harvard Business Review, “To stay relevant, your company and employees must keep learning” by Pat Wedors,7 March 2016.

                                                                                      Can the universities of today lead learning for tomorrow? The University of the Future | 11
The university of the future
  We explored four divergent                              Of the several external forces shaping the       The interplay of these two uncertainties
                                                          future of higher education, the future of        leads to four extraordinarily different
  yet plausible views of                                  Australia’s universities will be shaped by       futures. The following scenario narratives
  Australia’s higher education                            two critical uncertainties:                      were developed through a series of
                                                          • Shifting role of government: to what           workshops and interviews. Each scenario
  landscape in 2030                                         extent will government play a hands-on         introduces different opportunities and
                                                            or hands-off role in higher education?         threats that challenge our thinking,
                                                                                                           question our assumptions and help us
                                                          • Evolving learner preferences: to what          think more broadly about the future.
                                                            extent will learners and employers
                                                            demand traditional or non-traditional          The application comes from you, the
                                                            solutions from higher education?               readers: by placing your own institution
                                                                                                           within the four scenarios, you have
                                                                                                           the opportunity to assess different
                                                                                                           opportunities and threats, and test which
                                                                                                           elements might be relevant to your
                                                                                                           strategies for growth and sustainability
                                                                 Bundled degrees                           over the next decade.
                                                                          Learner preferences

                                             Scenario 1                                         Scenario 2
                                             Champion                                           Commercial
                                             University                                          University
                                             the base case                                      the likely case

          Hands-on                                                                                                        Hands-off
                                    Government role

                                             Scenario 4                                         Scenario 3
                                              Virtual                                           Disruptor
                                             University                                         University
                                              the extreme                                       the alternate
                                                  case                                              case

                                                               Unbundled courses

12 | Can the universities of today lead learning for tomorrow? The University of the Future
“The challenge with investing in the next 30 years is
  that it’s dependent on reading the future landscape
  — universities need more certainty to be able to make
  strategic decisions and rely less on assumptions.”

    Vice Chancellor, University

“There is a fundamental need to know how to
  distinguish or differentiate yourself in the market, and
  it starts with evaluating the viability of new business
  models and potential areas of specialisation that feeds
  into student segmentation.”

    Higher Education Researcher and Author

“To what extent, as a sector, do we have to change?
  We need to recognise the need for change and where
  the change will come from, and understand how
  long it will take to materially impact the sector. More
  importantly, we need to understand how to prepare
  for this change. The pace of change and responses
  required within this period may not afford the luxury
  of time.”

     Greg Pringle, Chief Operating Officer, The University of Queensland

                                        Can the universities of today lead learning for tomorrow? The University of the Future | 13
Future Scenario 1:
                                                          Champion University
                                                          In 2030, a hands-on government actively champions
                                                          universities as strategic national assets. The majority of
                                                          students enrol in traditional undergraduate and graduate
                                                          degree programs. Universities streamline operations
                                                          by transforming service delivery and administration.
                                                          The division between Vocational Education and Training
                                                          (VET) and higher education remains largely unchanged,
                                                          with the differentiation in the Australian Qualifications
                                                          Framework (AQF) still marked by different education
                                                          provider models.

                                                            Scenario drivers

                                                            Government role               • Activist government prioritises university-friendly
                                                                                            regulation and promotes higher education as a
                                                                                            strategic national sector
                                                                                          • Funding from government exceeds funding from
                                                                                            other sources

                                                            Demand                        • Majority of learners are 18-25 years old and are
                                                            conditions                      pursuing undergraduate degrees and programs
                                                                                          • They value independent and well-rounded
                                                                                            learning experiences

                                                            Technology                    • Technology integrates into traditional university models
                                                            conditions                    • Artificial intelligence in industry is nice

                                                            Sector structure              • Protected landscape with elite universities dominating
                                                            and rivalry                   • Universities compete via international and national rankings

14 | Can the universities of today lead learning for tomorrow? The University of the Future
The landscape for                             • The pace of technological change is                  “skills and experience” institutions.
                                                moderate. AI remains niche and                       They play a strong role in developing
higher education                                people work alongside machines.                      and disseminating new technology
remains traditional                             Digital business models complement                   to industry.
                                                traditional approaches.
• The broad-based teaching and research                                                            • Universities have embraced technology,
  institution remains the dominant            • Training and career-focused                          infusing it into both their front-office
  model. Learner preferences for                education (continuous learning)                      and back-office operations. Universities
  traditional degree programs remain            largely happens outside the sector.                  act as learning facilitators, with students
  strong, and school leavers between the        Emerging threats include providers                   using AI-enabled digital channels for
  age of 18 and 25 remain the dominant          from outside the sector addressing the               learning and classroom-based study for
  student segment.                              training and career-focused education                tutorials and discussions.
                                                needs of continuous learners.
• Government is the primary funder of                                                              • The competitive landscape is dominated
  teaching and research, and universities     • Competition for international students               by elite universities that are true global
  maintain an arm’s-length relationship         from rising Asian universities has                   players and compete globally, with
  with industry. However, the national          intensified. Brand-name international                higher education acknowledged as a
  mission of higher education is                universities are beginning to                        key export service that contributes
  increasingly highlighted in the policy        attract domestic students with digital               significantly to GDP. Other universities
  discourse, with the government tasking        learning offerings.                                  are generally financially sustainable
  universities with building the workforce                                                           but have a strong reliance on revenue
  of the future and positioning Australia                                                            from international students and
  globally through research in strategic
                                              Universities are                                       postgraduate students.
  disciplines like AI and climate science.    streamlined versions
  This protects the independence of           of today
  universities, which remain the primary
  homes of cutting-edge research.             • Universities continue as trusted arbiters
  More work skills are entrenched in            of knowledge, catering to a relatively
  degree programs to address the                small share of the youth population
  emerging future of work, as measured          for the purposes of preparing them for
  by the growth of the future economy           employment in the emerging age of AI
  and tax returns from new jobs created.        and mass automation.

• Labour markets trust university             • Universities pursue both teaching
  degrees as independent signals of             and research, as now, without
  experience and expertise, with degrees        excessive dependence or involvement
  remaining a prerequisite for many             from the private sector, thanks to
  professional jobs. The link between           strong government financial support.
  learning and earning remains positive:        There is minimal scope for significant
  the unemployment rate drops and               profit-generating initiatives within the
  earnings rise as one goes up the              public accountability framework.
  educational ladder. More people are         • Universities have made a major push
  employed in professional jobs than are        to increase the quality of teaching and
  self-employed or freelance. Learners          to entrench more work skills in degrees
  have an increased need for updated            to address the future of work. In this
  and relevant skills as the nature of work     model, universities shift from being
  changes and automation and digital are        passive teaching institutions to active
  more prominent.

                                                               Can the universities of today lead learning for tomorrow? The University of the Future | 15
Future Scenario 2:
                                                          Commercial University
                                                          In 2030, a hands-off government requires universities
                                                          to be financially independent to ease national budget
                                                          pressures. At the same time, legislated obligations
                                                          for research have eased and the university landscape
                                                          becomes more diverse, with fewer comprehensive
                                                          universities, and greater specialisation of providers who
                                                          “play to their strengths”, whether that be in particular
                                                          research, teaching, subject area focus or teaching/
                                                          learning models. Students favour degree programs that
                                                          offer work-integrated learning. Universities reposition
                                                          by drawing closer to industry to collaborate on teaching
                                                          and research.

                                                            Scenario drivers

                                                            Government role               • Hands-off government prioritises market-friendly
                                                                                            competition that promotes deregulation 
                                                                                          • Funding from industry exceeds that from government 
                                                                                          • Prices are uncapped

                                                            Demand                        • Majority of learners are 18-25 years old and are pursuing
                                                            conditions                      undergraduate degrees and programs
                                                                                          • They value work-integrated learning and technical expertise

                                                            Technology                    • Technology integrates into traditional university models 
                                                            conditions                    • Artificial intelligence in industry is niche

                                                            Sector structure              • Diverse landscape with existing and new
                                                            and rivalry                     universities competing
                                                                                          • Universities are autonomous
                                                                                          • Universities compete via industry linkages

16 | Can the universities of today lead learning for tomorrow? The University of the Future
The landscape for                             universities. External competition                  • The balance of teaching, research
                                              increases as universities compete for                 and community service is thrown out.
higher education has                          international students against rapidly                Some institutions specialise in research
been liberalised                              rising universities in China and India,               and professional education, shedding
• Government policy is driven by free-        plus Canada, UK and USA. International                general education programs for young
  market principles. Prices are uncapped,     rankings allow students to compare                    high-school graduates. Others focus
  but a significant part of the cost of       different educational offerings against               more clearly on the teaching mission.
  higher education shifts to industry         very specific and detailed criteria in
                                              real time.
  and learners. Cooperation increases                                                             In this scenario
  between government and employers
  over certification. The scene is set for   Universities are                                     universities must
                                                                                                  • Take advantage of new revenue
  new private and public universities
                                             autonomous and                                         streams — foreign markets, deregulation
  to emerge.
                                             commercially oriented                                  of fees, patenting of research, growing
• Industry maintains trust in the higher
                                             • Universities operate autonomously,                   financial links with industry
  education system, with employers
                                               accordingly to market principles, and              • Build new commercial capabilities
  continuing to require university degrees
                                               rely on a mix of public and private                  and become more attuned to and
  as a primary requirement for entry
                                               funding for operations. Learner                      responsive to industry, including
  into the professional world. Industry
                                               preferences for traditional degree                   pursuing outsourced R&D and learning
  pursues partnerships with universities
                                               programs remain strong.                              functions from industry
  on curriculum development, research
  and work placements.                       • The line between universities and                  • Outsource non-core services,
                                               industry is increasingly blurred as all              particularly in the back-office, to
• Continuous learners are an emerging
                                               parties collaborate closely to develop               increase efficiency and reduce costs
  segment, but traditional school leavers
                                               curricula and conduct research.
  far exceed their numbers. Learners
                                                                                                  • Increase differentiation to compete
  pay a significantly greater share of the   • The broad-based teaching and research
                                                                                                    and to attract funding, either through
  cost of studies than in 2018, with more      institution remains the dominant
                                                                                                    multi-disciplinary research or by
  funding coming via loans.                    model. Incumbent universities have
                                                                                                    focusing on specialist domains
                                               embraced technology to simplify
• AI remains niche and people work
                                               operations, reduce costs and attract               • Increase focus on quality of teaching
  alongside machines. Digital business
                                               industry partners. The sector has                    and employability as factors that
  models coexist with traditional business
                                               been destabilised by the entry of a                  are increasingly taken into account
  models to enable mixed delivery.
                                               limited number of new international                  by learners
• The threat of substitutes is moderate.       competitors and a selection of                     • Run dual degree propositions:
  Learners access training and                 universities offering a digital-only
  development through corporates,              degree at a lower price point.                       • On-campus degree (with blended
  industry associations and other                                                                     delivery methods) as a premium
                                             • Universities take a market-oriented
  providers. Training and career-focused                                                              proposition for full-time students
                                               approach to operations without losing
  education (continuous learning)                                                                   • Digital degree as a lower-cost
                                               basic academic values. They continue
  largely happens outside the sector.                                                                 mass proposition for full-time
                                               to be selective institutions that focus on
  Emerging threats include providers                                                                  or part-time students
                                               preparing school leavers for the working
  from outside the sector addressing the
                                               world and on world-class research.                 • Operate innovation precincts and hubs
  training and career-focused education
                                               University resources come from a                     to build strong links to local economies,
  needs of continuous learners.
                                               wide variety of sources, with mixed                  to commercialise research and to
• The market place is increasingly             public-private funding models, thanks to             start up new businesses
  international. New entrants are              strong integration with industry and the
  generally global brands that combine         local economy. Along with the returns              • Entrench work skills in degrees to
  physical and virtual presences and           on intellectual property rights, research            drive uptake
  compete directly against the public          is seen as a very important and very
                                               lucrative activity.

                                                              Can the universities of today lead learning for tomorrow? The University of the Future | 17
18 | Can the universities of today lead learning for tomorrow? The University of the Future
“Why do we teach people what they already know?
  Our more experienced learners have already gained
  key skills and capabilities in the workplace, or working
  for themselves. Universities can assess what those
  learners already know using micro credentials and
  potentially make the credentials credit bearing in the
  target degree course. This is more efficient, engaging
  and personalised for the learner.”

 Professor Beverley Oliver, Deputy Vice-Chancellor (Education),
 Deakin University

“Universities will become known as hubs of social
  interaction, engagement, collaboration and recreation
  that interface with the surrounding communities.
  This will enrich the theatre of learning, enabling
  greater engagement and attendance that can drive
  industry collaboration within the industry ecosystem.”

 Greg Pringle, Chief Operating Officer, The University of Queensland

“How will universities be more integrated into
  the decision making and operations of Australian
  enterprises to provide valuable research
  outcomes that in return, increase the demand
  for their research?”

 Professor Peter Høj, Vice Chancellor, The University of Queensland

                    Can the universities of today lead learning for tomorrow? The University of the Future | 19
Future Scenario 3:
                                                          Disruptor University
                                                          In 2030 a hands-off government completely
                                                          deregulates the sector to drive competition and
                                                          efficiency. Continuous learners and their preferences for
                                                          on-demand micro-certificates dominate as technology
                                                          disrupts the workplace. Universities expand into new
                                                          markets and services and compete against a range of
                                                          new local and global educational services providers.

                                                            Scenario drivers

                                                            Government role               • Hands-off government prioritises market-friendly
                                                                                            competition that promotes deregulation
                                                                                          • Majority of funding comes from market mechanisms
                                                                                            rather than government 
                                                                                          • Enrolment is open 
                                                                                          • Prices are uncapped

                                                            Demand                        • Majority are continuous learners and are pursuing
                                                            conditions                      micro-certifications
                                                                                          • They value control and personalisation of their education

                                                            Technology                    • Technology disrupts traditional university models:
                                                            conditions                      education-as-a-service scales up 
                                                                                          • New digital business models realise their full value 
                                                                                          • AI is mainstream and machines are displacing jobs

                                                            Sector structure              • Fragmented landscape with universities in hyper-
                                                            and rivalry                     competition against service providers from outside
                                                                                            the sector 
                                                                                          • Universities compete via new business models and moving
                                                                                            into adjacencies 
                                                                                          • Research and learning are disconnected: universities tend
                                                                                            to specialise in one or the other

20 | Can the universities of today lead learning for tomorrow? The University of the Future
The landscape for                             • The landscape is highly fragmented,               • University degrees are almost
                                                with competing providers including:                 obsolete in some industries.
higher education has                            employers, corporates, professional                 Businesses recognise a diversity of
been disrupted                                  associations, vocational education                  learning experiences, ranging from
                                                providers and universities, which have              higher education micro-certifications
• Technology disrupts employment.
                                                a shrinking share of the market.                    to corporate training to industry
  AI and automation displace professional
                                                                                                    qualifications to work experience.
  jobs; portfolios of skills are more
                                                                                                    Private players credential all types
  important than university degrees as        Universities transform                                of qualifications with digital learning
  prerequisite for jobs; the labour
  market structure has shifted to more
                                              by entering new markets                               passports underpinned by blockchain.
  freelancers than full-time employees.       and services                                        • Switching costs for learners to change
                                              • The core proposition of education-as-               providers are low. Various organisations
• Technology disrupts education.
                                                a-service has transformed the way                   offer accreditation services that
  The sector has seen a steady and
                                                universities acquire and retain learners            recognise work experience along with
  massive movement to learning online.
                                                and provoked substantial changes in                 course work to create personalised
  New ed-tech models include: on-
                                                how revenue is generated. Continuous                learning passports in place of degree
  demand streaming learning, digital
                                                learning has come of age and is now the             programs. Government, training
  courses digitally distributed through
                                                dominant segment. Modular courses                   providers and employers cooperate
  apps, AI platforms that support
                                                tailored to industry needs and delivered            over certification.
  individualised learning, and digital
  learning passports that accredit              digitally account for a large proportion
                                                                                                  • The widening of the learner base
  higher education courses and work             of sector revenues.
                                                                                                    creates greater competition for
  experiences.                                • This new landscape has taken a                      students. Tuition revenue comes to
                                                heavy toll on incumbent universities.               represent a more important share
• Learner preferences change the game.
                                                A number were unable to adapt quickly               of overall income. Research (and the
  People know they need to acquire
                                                enough and were outcompeted by                      best researchers) moves out to public
  and upgrade skills through their
                                                new entrants, who used innovative                   research institutes and corporate
  lifetimes. Learners want learning
                                                business models to rapidly acquire                  R&D divisions.
  that is flexible and on-demand, via
  micro-certifications that provide             significant market share. The remaining           • The university hierarchy remains
  immediate employment payoffs.                 universities are significantly slimmer              strong: elite universities maintain their
                                                and more agile, with well-developed                 research profile, via research that is
• Government plays a hands-off role.            business-to-consumer and business-to-               more demand-driven, specialised and
  It provides basic funding for learners        business models.                                    securing significant financial returns
  and universities but expects universities
                                              • Market forces give rise to institutions             through licensing intellectual property
  to be largely self-funding. Private
                                                specialised by function (teaching vs.               rights. Innovative challengers extend
  providers are allowed to enter the
                                                research), field (business, science,                teaching to the mass market, using
  accreditation market for higher
                                                humanities) and audience (school                    digital models that drive greater
  education. Government switches
                                                leavers, continuous learners, virtual               standardisation and patented curricula
  to playing quality control of the
                                                learning, campus learning). Technology              and teaching methods.
  international market players while
  retaining the value of Australian             is widely used in teaching, with digital
  providers.                                    business models dominating.

                                                              Can the universities of today lead learning for tomorrow? The University of the Future | 21
22 | Can the universities of today lead learning for tomorrow? The University of the Future
“Universities will remain vital places for the                                       In this scenarios
  development of global citizens; a university thinks                                 universities must
  internationally, is based in the local economy, but                                 • Compete to deliver the best content
                                                                                        in the best way, by expanding into
  works for the purpose of national and regional                                        providing education services, research
  development.”                                                                         services and commercial services,
                                                                                        pursuing new revenue streams via
                                                                                        international expansion, subscription
 Dawn Freshwater, Vice-Chancellor, University of Western Australia                      models and franchising.
                                                                                      • Run two distinct, digitally enabled
                                                                                        business models:
                                                                                         1. Business-to-consumer — offering
                                                                                            an array of micro-certifications
                                                                                            strongly aligned to employability
                                                                                            outcomes.
                                                                                         2. Business-to-business — extending
                                                                                            into corporate training, as well as
                                                                                            into new propositions for content
                                                                                            development, aggregation and
                                                                                            distribution.
                                                                                      • With digital platforms requiring less
                                                                                        physical university infrastructure,
                                                                                        universities repurpose grounds and
                                                                                        buildings for other uses, creating:
                                                                                        education precincts that incorporate
                                                                                        primary and secondary schools;
                                                                                        innovation precincts that bring in
                                                                                        businesses; and community precincts
                                                                                        with community-oriented services.
                                                                                      • Staffing structures change. Academics
                                                                                        become freelance resources operating
                                                                                        across multiple institutions — and
                                                                                        moving from universities into industry
                                                                                        to commercialise research.
                                                                                      • The structure of a degree morphs
                                                                                        to include experience plus multiple
                                                                                        education and training courses. Private
                                                                                        providers certify these experiences into
                                                                                        a learning passport for learners.

                                                  Can the universities of today lead learning for tomorrow? The University of the Future | 23
Future Scenario 4:
                                                          Virtual University
                                                          In 2030, an activist government restructures the
                                                          tertiary sector to integrate universities and the
                                                          Vocational Education and Training VET sector,
                                                          prioritising training and employability outcomes
                                                          as humans begin to be replaced by technology.
                                                          Continuous learners are the majority. They prefer
                                                          unbundled courses delivered flexibly online. Universities
                                                          restructure into networks that share digital platforms.

                                                            Scenario drivers

                                                            Government role               • Activist government prioritises learner-friendly regulation
                                                                                            that integrates higher and vocational education
                                                                                            institutions into integrated tertiary sector
                                                                                          • Funding from government exceeds other sources
                                                                                          • Enrolment is open
                                                                                          • Prices are capped

                                                            Demand                        • Majority are continuous learners and are pursuing
                                                            conditions                      individual courses
                                                                                          • They value control and flexibility of their education

                                                            Technology                    • Technology disrupts traditional university models:
                                                            conditions                      learning has moved steadily and massively online
                                                                                          • New digital platforms link teams of higher and vocational
                                                                                            education institutions into networks or consortia
                                                                                          • AI is mainstream and machines are displacing jobs

                                                            Sector structure              • Consolidated landscape with universities linked into
                                                            and rivalry                     networks with other institutions
                                                                                          • Universities compete through acquiring continuous
                                                                                            learners
                                                                                          • Research and learning are disconnected: universities tend
                                                                                            to prioritise learning

24 | Can the universities of today lead learning for tomorrow? The University of the Future
The landscape for                              with allocations to universities based              • Adapt to new learner segments,
                                               on the success of their learners and                  including individuals looking for
higher education has                           citizens receiving help to learn while                recurrent professional development and
been restructured                              they earn. Tertiary Education Quality                 skill upgrading, as well as elderly people
                                               and Standards Agency (TEQSA) is                       enrolling for non-professional reasons.
• When AI began to disrupt employment,
                                               repositioned to assure quality of
  the government merged universities                                                               • Invest heavily in building shared
                                               individual courses across institutions.
  and TAFEs into an integrated tertiary                                                              digital “experience platforms”, with
  sector, with universities shifting to       • Universities and TAFEs merge into an                 harmonised systems, to deliver courses
  digital business models and unbundling        integrated tertiary sector, with regional            and serve learners in a seamless and
  traditional degree programs into              networks, tasked with advancing                      integrated way across the network.
  individual courses, which now account         employment and employability as
                                                                                                   • Consolidate physical footprints and
  for the majority of sector revenues.          people acquire and upgrade skills
                                                                                                     repurpose facilities as hubs for
                                                throughout their careers. Distributed
• Universities have linked into networks                                                             business collaboration, innovation and
                                                virtual environments are now common,
  with regional peers and TAFEs,                                                                     community education.
                                                and the learning experience has been
  collaborating to develop common digital
                                                commoditised, provided to anyone,                  • Put more focus on customer acquisition
  learning and experience platforms.
                                                anywhere, anytime — for a price.                     and retention, and learn to bundle and
  Teaching is prioritised over research,
                                                                                                     price products and services like telcos
  and many universities have refocused on     • A university degree is no longer a
                                                                                                     and banks.
  a narrower set of academic disciplines in     pre-requisite for the professional
  which they excel. Some elite universities     world — portfolios of courses and skills           • Change metrics to include: learner
  have retained their broad-based               are more important. People prefer                    acquisition, retention, satisfaction,
  teaching and research model, but they         individual courses that immediately                  lifetime value.
  are the exception rather than the rule.       increase employability options by
  More research is done outside the             making them more productive at the
  university sector than within.                earliest possible time. Universities and
                                                                                                   What are the most
• Technology disrupts employment
                                                TAFEs are viewed on an equal footing,              significant innovations?
                                                with course quality and fit mattering              The learner profile — a digital profile
  AI and automation have replaced
                                                more than the institution.                         that catalogues an individual’s learning
  more than 20% of Australia’s working
  hours. Freelancers outnumber                • New sources of competition arise from              experience from early childhood and
  full-time employees.                          overseas brand-name universities like              follows them through their life. This
                                                Oxford and Stanford. These iconic                  has become the learning currency for
• Technology disrupts education                                                                    all stakeholders enabled by blockchain.
                                                institutions have “set up shop” in
  The sector has seen a steady and                                                                 Students benefit from understanding
                                                Australia, and more learners are also
  massive movement to learning online.                                                             their capabilities, skillsets and interests;
                                                accessing virtual learning through them
• Learners have been consumerised               as they scale up their digital models.             industry can clearly determine their
  They want more control of the learning                                                           specific requirements and align them
  path, preferring unbundled courses to       In this scenario                                     with the right students; and universities
                                                                                                   prepare their curricula to cater to
  traditional degree programs with poor
  return on investment.                       universities must                                    these needs.
                                              • Standardise and modularise courses
• Government reboots educational
                                                for conversion into digital products
  policy The sector is restructured to
                                                delivered by recognised content experts.
  offer training and career-focused
  education throughout citizens’ working      • Improve speed to market. Universities
  lives. Government remains the                 learn to develop, approve and deliver an
  majority funder of tertiary education,        industry-required course in six months
                                                rather than a year.

                                                               Can the universities of today lead learning for tomorrow? The University of the Future | 25
Scenario business model comparisons

                                                         Scenario 1                   Scenario 2              Scenario 3             Scenario 4
                                                         Champion University          Commercial University   Disruptor University   Virtual University
                                                         the base case                the likely case         the alternate case     the extreme case

                              What are the               Just-for-knowledge           Just-for-work           Just-for-you           Just-in-time
                              jobs to be done            learning                     learning                learning               learning
                              for customers?

                              What products/             Liberal arts degrees,        Work-integrated         Micro-certifications   Individual courses
                              services are we            specialised degrees          degrees
                              providing?

                              How do                     Blended                      Blended face-to-        Digital screen         Digital screen
  How do                      customers get              face-to-face and             face, digital screen
  universities                our services?              digital screen               and workplace
  create value?
                              What support               Lecturer, tutor,             Lecturer, tutor,        Personalisation        Digital classroom
                              does the                   digital assistant            work sponsor,           via artificial         and support group,
                              customer receive?                                       digital assistant       intelligence,          personal coach
                                                                                                              customer service

                                                                                                                                     University
                              How do we                  University owns the          University partners     University             unbundles the
                              produce it?                entire value chain           with business           unbundles the          value chain but
                                                                                                              value chain            orchestrate the
                                                                                                                                     network

  How do
  universities                How do we                  Campus,                      Campus,                 Digital platforms      Digital platforms
  deliver value?              distribute it?             digital platforms            digital platforms

                              How do we                  Annual fees                  Annual fees             Memberships,           Memberships,
                              make money?                                                                     subscriptions          course fees

                              What are key               People                       People                  People                 People
                              variable costs?                                                                 Cloud services         Cloud services

                              What are the               Facilities                   Facilities              Technology             Technology
                              fixed costs?                                                                    infrastructure         infrastructure
  How do
  universities   What are key                            Research, facilities,        Facilities, industry    Digital distribution   Digital distribution
  capture value? investments?                            student engagement           engagement,             platforms,             platforms,
                                                                                      student engagement,     digital content        digital content
                                                                                      research                creators, marketing,   creators, marketing,
                                                                                                              customer acquisition   customer acquisition
                                                                                                              and retention          and retention

26 | Can the universities of today lead learning for tomorrow? The University of the Future
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