The economic impact of UK higher education is a source of great pride, but universities are under financial duress. There are many reasons for this, but one reason stands out above the others. It demands energetic innovation to avoid long-term decline.
Not that long-ago optimism about the future of higher education was at its height. Sustained growth in participation (even in the face of the hike in undergraduate fees to £9000) saw unparalleled growth in home student enrolments, widening of access to the less advantaged, booming international enrolments, with UCAS talking about the Journey to a Million. The mood in the sector was upbeat and optimistic.
Even then, there were worrying indicators that all was not well. The decline in student numbers in the US since 2012 carried a huge warning, and we could see shifting employer attitudes to degrees. There were clear signs that the optimism and hubris was overdone.
Jim Collins, author of Good to Great described a conversation with James Stockdale, a US Navy pilot shot down and taken prisoner in the Vietnam war. When Collins asked which prisoners didn’t make it out of Vietnam, Stockdale replied:
Oh, that’s easy, the optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.
Collins called this the Stockdale Paradox, and it offers a very important lesson. You must never confuse faith that you will prevail in the end – which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they might be.
A few years on, things have changed. Half of universities are already in deficit and much has been written about the challenges of rising costs, falling real income, growing immigration controls, weakening political support, growing competition, and growing regulation. To make matters even worse, demographic forecasts show a steady decline in the number of 18-year-olds from the end of this decade. Unbridled optimism has been followed by cost-cutting with momentum building behind mergers and consolidation.
The elephant in the room
All this begs the question of whether this is a transient coincidence of unfortunate events or a much deeper problem. Some university leaders argue the problem is not with the perceived value of higher education, but with a media conspiracy and lack of government support. While that view has some merit it misses the elephant in the room.
Over the last 30 years the increasing popularity of going to university has driven sustained growth in the proportion of 18 year olds making this choice. However, growth in participation at age 18 has stalled and started to decline just as we saw in the US in the last decade. It is hard to overstate the singular importance of growing evidence that demand for higher education is starting to reduce. We must respond energetically or accept its inevitability.
Why is higher education becoming less popular than it was? Students in England have the highest debt in the English speaking world, despite most students now working their way through university. The graduate earnings premium has declined and a significant minority of students would be better off financially if they had not gone to university.
More people now think more carefully about the economic return on their investment in higher education. These concerns about cost versus return must now unleash a much bigger conversation about how to make higher knowledge and skills more accessible and rewarding, not only at age 18 but over people’s lives.
Lifelong learning is the future
The global skills gap is structural and growing. People without a degree (most of us) will now need access to higher skills throughout their lives. Graduates too must acquire the higher skills needed to meet the changing needs of the economy. Higher education can provide the solutions. These needs can only be met through innovation in delivery, content, and partnership. Investment in innovation may be counter-intuitive at a time of retrenchment, but cost-cutting does not fix the underlying problem.
We must find different models of delivery to support the changing needs of learners and reach more people with an ever-sharper focus on employer need. The evidence for demand is all around us. Millions of people (mainly adults) globally now enrol on online degree courses and tens of millions on Massive Open Online Courses (MOOCs). There is a growing consensus that meeting learners where they are through lifelong learning is the future direction of higher education.
More universities are putting their toe in the water and setting up innovative hubs and institutes. But few embrace this idea at an enterprise level, built explicitly into strategy. Doing so requires strong leadership but also great care.
Care to avoid the false dichotomies between knowledge and skills, teaching and research, utilitarian models of employability versus education for intrinsic good, radical change versus evolutionary adaptation. We must fiercely control quality to avoid the pitfalls we see today, particularly in franchised provision. We must build on our strengths. We need to be commercially astute as well as educationally aware.
The US experience
The impressive wave of innovation and growth in several universities in the United States shows what is possible. American universities expanded access to higher education well before the UK did so there are important lessons to be learned from their experience. I’m fortunate to have worked with some of them.
Innovation in education is relatively easy. Taking it to scale is very hard but several American universities have achieved that.
While each of the examples below is different, they have things in common
- They are bold, imaginative, and embrace innovation across the entire institution
- They embrace technology to widen lifelong learner access
- They are not afraid to invest in building their brand and widening their reach
- They stand for something distinctive that is different to elitism
- They put students first
Arizona State University under the leadership of Michael Crow measures itself not through whom they exclude but whom they include and how they succeed. They have significantly increased the size of the university by investing in new faculty, innovative curricula, and immersive learning technologies.
Online delivery is a key element in their strategy, and they reach all ages from K-12 (having established an online school) to retirement. ASU uses partnerships to great effect and has been ranked the number one “most innovative university” for 11 consecutive years by U.S. News & World Report. They co-created the PLuS Alliance which established The Engineering Design Institute in London and have just announced ASU London which will combine a three-year U.K. bachelor’s degree from ASU London with an accelerated, one-year master’s degree from Arizona State University. They have done a remarkable job in setting out a vision for the New American University combining great research with great teaching.
Northeastern University under the leadership of Joseph Aoun built employer relationships and used them to develop a distinctive pedagogical approach built around experiential learning. They have widened access through expanding their campus footprint and through online learning using partnerships as a part of the strategy. Online access features less strongly than some but is an important element. They now have a campus in the UK and offer a “double degree” accredited both by an American and an English university. This is highly distinctive for many international students who want the option to work in the US or the UK. They clearly define themselves as a research university.
Southern New Hampshire University, led by Paul LeBlanc from 2003–2024, has had a remarkable journey of student growth, from a relatively unknown campus with a small number of students to one of America’s largest with more than 200,000 students today. They focused first on online delivery during the 1990s and then on their distinctive Competency Model of learning and access delivered through their “College for America.” They are primarily an online university today although the campus continues to be an important part of the proposition. Unlike some other universities they achieved remarkable growth without significant partnering with so-called OPM providers. They have positioned themselves distinctively as career focused, affordable and transfer friendly which is of great importance to adult learners.
A generational opportunity
These universities have shown an appetite for innovation and risk, perhaps knowing the risk of inaction to be greater, but primarily being confident what they stand for and why it is distinctive. They have widened access to serve lifelong learners and they offer flexibility to traditional students too – the majority of traditional US students now do at least one class online.
Growth in the lifelong learning of advanced knowledge and skills is perhaps the biggest opportunity in education since the GI Bill made higher education accessible to millions of people in the United States after the Second World War. In England, the Lifelong Learning Entitlement provides a welcome catalyst, but only if the ideas behind it are firmly embraced and taken to scale by innovative leaders, will the potential be realised.
James Stockman used a combination of realism and faith to sustain himself as a prisoner. Universities will need this too, but they also hold a key to the door.
