The future of higher education

nullHow the crisis might transform higher education: some scenariosHow the crisis might transform higher education: some scenarios Stéphan Vincent-Lancrin OECD Centre for Educational Research and Innovation OutlineOutlineEnrolments Expenditure Levels Possible impact on stakeholder Scenarios nullTertiary education enrolmentsEvolution of the 18-24 population by 2025 (2005=100)Evolution of the 18-24 population by 2025 (2005=100)Source: United Nations, Population division (revision 2006)Scenario 1: Projected tertiary enrolments in 2025 under current conditions (2005=100)Scenario 1: Projected tertiary enrolments in 2025 under current conditions (2005=100)Source: OECD, Higher Education 2030, Vol. 1 DemographyScenario 2: Projected tertiary enrolments in 2025 under recent trends (2005=100)Scenario 2: Projected tertiary enrolments in 2025 under recent trends (2005=100)Source: OECD, Higher Education 2030, Vol. 1 DemographyWhy the trend scenario is more likely…Why the trend scenario is more likely…Supply will not be too limited Knowledge economy Crisis-related political reasons (better to have students than unemployed people) Demand will increase Individual returns remain high (compared to high school returns) Decrease of opportunity cost (crisis) Demand of retraining from unemployed workers Less apprenticeship available (crisis)…with limiting factors…with limiting factorsRising cost to public authorities Rising cost to students and families in a context of unemployement and saving/capital losses Less ability to contribute of the business sector Some qualitative changes in the student populationSome qualitative changes in the student populationMore demand from mature students More demand for short term programmes More demand for vocational programmes More difficulties for students from lower working and lower middle classes Where caps on student numbers Where high tuition fees Where insufficient student aid Tertiary educational attainment (%) of 25-64 populationTertiary educational attainment (%) of 25-64 populationnullImpact on tertiary education expenditureProjections of total expenditures for tertiary education institutions in 2025 (% of GDP): pre-crisis scenarioProjections of total expenditures for tertiary education institutions in 2025 (% of GDP): pre-crisis scenarioSource: OECD, Higher Education 2030, Vol. 1 DemographyGDP set at 2% growth and educational costs per head projected linearly according to 1995-2005 growth rate (constant prices)Change in student/staff ratio to stay at 2005 expenditure level Change in student/staff ratio to stay at 2005 expenditure level nullPossible Impact on stakeholdersPublic funding for HEPublic funding for HEBudget pressureUnemployment and social benefits Consolidation of public budgets Ageing-related expenditure Continued expansion of HE Rise of eligible students for student aidResponse (?)Cuts on expenditures to HEIs after relative protection under stimulus packages Slower growth of public expenditures in the longer run Rise in tuition fees Inadequate student aid (?) More competitive allocation of funding and further segmentation of systems Private funding for HEIsPrivate funding for HEIsPressureLess business: Cuts on R&D expenditures Cuts on corporate training Less endowments of foundations Less willingness to have interns and apprentices? (unless they can contribute to production)Response (?)Less ability to fund university research, to fund their employees for training and and to participate in university programmes But this source of funding is marginal in most countries (except Canada and US)Household funding for HEIsHousehold funding for HEIsPressureDecline in revenues of parents Less ability of intergenerational transfer as older people are hit by budget consolidation Unemployment for parents and difficulty to work while studying Inadequate student aid for lower SESResponse (?)Willingness to invest more in HE where household cost has been low so far Difficulty to do so in countries where tuition have already rised significantly recentlyInstitutional responseInstitutional responseRevenueRaise tuition fee levels (if they can) Look for new revenues (international students where differential fee, part-time students, further education, non-degree education, etc.) Compete more for research funding Efforts to raise more corporate funding where it is small (but slow process)CostPostpone maintenance and infrastructural costs, including library costs Look for further administrative efficiency Freeze hiring of new faculty More differentiated status of new faculty (teaching/research) Increase student/staff ratio or decrease face-to-face instructional time Impact of the economic crisisImpact of the economic crisisShort term impact on access issues: Increase in participation in tertiary education Increase of the share of higher education expenditures in public expenditures and GDP Costs will be a limiting factor in countries where there is a significant share of household funding Possible rise in inequity Longer term impact: Risk aversion of students and family: less confidence in loans and financial products and less investment in higher education? Slowdown or acceleration of internationalisation? Restructuring of higher education systems? Intermediate conclusionIntermediate conclusionBefore the crisis In most countries, the budgetary impact of the crisis was not significant Ageing could have affected priorities, but no strong evidence After the crisis Budgetary impact could become more significant (under very conservative assumptions) Public consolidation after stimulus packages and crisis-related social benefits will make difficult for HE budget to grow nullScenarios in the light of the crisisScenarios for higher education systemsInternationalNationalMarket Demand-drivenAdministration Supply-drivenScenarios for higher education systems4 scenarios4 scenariosOpen networking Serving local communities New public responsibility Higher education, Inc.Scenario 1: Open NetworkingScenario 1: Open NetworkingDrivers International cooperation & harmonisation of systems Technology Ideal of open knowledge Related developments Bologna process, international academic partnerships and consortia, Increasing computing power and culture of openness challenging traditional intellectual property rightsFeatures Intensive networking among institutions, scholars, students (& industry) Modularisation of studies under academics’ control International collaborative research Strong hierarchy between networks but quick spillovers Lifelong learning outside the HE sector Scenario 2: Serving local communitiesScenario 2: Serving local communitiesDrivers Backlash against globalisation More geo-strategic sensitivity in research Cost efficiency Related developments Anti-globalisation movements Crisis?Features (Re)focus on national and local missions Public funding and control of the academic profession Convergence between universities and polytechnics Elite universities struggle to stay more internationalised Less research, mainly on humanities Big science relocated to government sector (more secretive and less internationalised)Scenario 3: New public responsibilityScenario 3: New public responsibilityDrivers Pressure on public budget (ageing, public debt, etc.) Diffusion of governance structures based on new public management Related developments Autonomy given to HEIs (sometimes legally privatised) Debates on cost sharing Encouragement of competition between HEIsFeatures Mainly public funding but autonomous institutions controlled at arm’s length (incentives + accountability) Mixed funding: new markets + more tuition fees (income contingent loans) Demand-driven system with more marked division of labour (specialisation but most HEIs continue to do some research) Research funds allocated through domestic competitive process (except for Europe) Scenario 4: Higher education, Inc.Scenario 4: Higher education, Inc.Drivers Trade liberalisation in education (GATS, bilateral) Related developments Rise of trade in HE & inclusion of education in trade negotiations International competition for students Increase of cross-border funding of researchFeatures Global competition for education and research services Public funding for non-commercially viable disciplines exclusively Segmentation of the education and research market Vocational higher education: important share of the market Strong (international) division of labour according to competitive advantage Concentration of research and worldwide competition for funding English as main language of studyScenarios for higher education systemsServing Local CommunitiesInternationalNationalMarketAdministrationOpen NetworkingHigher Education Inc.New Public ResponsibilityScenarios for higher education systemsNew publication: Higher education to 2030New publication: Higher education to 2030Forthcoming: Volume 2: technology Volume 3: Globalisation Volume 4: ScenariosTHANK YOUTHANK YOUStephan.Vincent-Lancrin@oecd.org www.oecd.org/edu/universityfutures www.oecd.org/edu/innovation