Current University models will be ‘unviable in 10-15 years’

Apr 17
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Universities structured as broad-based teaching and research institutions, supported by large asset bases and back offices, will face extinction in the next two decades.

Ernst & Young’s University of the Future survey states that, at the very least, universities will need to streamline their operations and asset base while incorporating new teaching and learning delivery mechanisms. The more successful institutions will go further, creating new products that merge with industry.

The report summarises five key trends that will shape the ‘university of the future’:

  • Democratisation of knowledge and access – universities are no longer ‘the keepers of knowledge’ thanks to the proliferation of information online
  • Contestability of markets and funding – competition for both students and government support is continuing to intensify
  • Digital technologies – campuses might remain, but the delivery of education will be transformed
  • Global mobility – although international competition for students will increase, so too will opportunities for international partnerships
  • Integration with industry – universities must re-establish their reputation as drivers of innovation, both in research and in producing work-ready graduates

The report outlines three evolved university business models: Streamlined Status Quo, Niche Dominators and Transformers.

Streamlined Status Quo universities will continue to operate as broad-based teaching and research institutions, but will discontinue unprofitable disciplines. They will invest in digital sales and delivery, and form partnerships with a range of education providers to open up new markets. Back-office functions will be outsourced.

Niche Dominators will fundamentally change the markets and segments they operate in. Disciplines are significantly reduced and specific customers are targeted – e.g. mature age distance learning students. Deep alliances are formed with their chosen industry fields, including R&D partnerships and research commercialisation.

Transformers will consist of private providers and new entrants to the sector. Subscribers to this model will extend the definition of higher education customers and combine their services with related industries, such as media and finance. Student services will be outsourced while customer relations are retained in the cloud.

Where to next?

The report concludes that, “faced with this dynamic industry landscape, Australian universities should critically assess the viability of their institution’s current business model, develop a vision of what a future model might look like, and develop a broad transition plan.”

Read the full report >

The Business Improvement in Universities conference, taking place in Melbourne this June, will provide strategies for delivering service excellence through innovation & efficiency. Book soon to secure early bird rates!

BI Unis 2017

Submitted by Jessica Farrelly

Jessica Farrelly

Jessica is part of the marketing team at Criterion, specialising in content and social media. Originally from Ireland, she’s an avid traveller and moved to Sydney after a year spent living out of a backpack in Asia.

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