How disruptive will the skills agenda be to the traditional university model?

Across the UK, governments are reassessing the role of the traditional three-year undergraduate degree in the post-compulsory education system. Technical qualifications, the FE offer and higher and degree apprenticeships are growing in profile – if not, yet, in number.

This need not be immediately existentially threatening to universities – there is every reason to assume that with demographic growth among 18-19 year olds much of the country may see expansion across the post-compulsory sector in the next decade, though government may balk at the cost of rolling out a genuinely flexible student finance scheme that could in principle be taken up by a much larger proportion of the adult population.

Yet, while universities may be looking optimistically at demographic trends, there is good reason to believe that the economy of the 2030s will look rather different from that of the 2020s. And the pressures underlying governments’ skills agendas – the suspicion that, in some cases, traditional three year undergraduate qualifications are not best serving the interests of the students who enrol on them, or the wider UK economy, will only intensify.

In responding to policymakers’ advocacy of further and technical education, some universities have pointed out that a significant proportion of their portfolio already falls into that domain (and that the academic/technical distinction is probably a category error in any case). There remains a lively debate as to what type of institution is best fitted to deliver higher technical provision, and the answer, as usual, almost certainly depends on local and regional institutional histories and cultures, geographies, and labour market patterns.

But there’s a risk that in focusing too closely on the detail of the technical education agenda universities miss the bigger picture of economic change that will inexorably bring pressure to bear on patterns of university provision in a more fundamental way. The Skills and Post-16 Education Bill currently making its way through Parliament paves the way for student finance to be available for single modules, potentially enabling lifelong learning and reskilling at scale, but also reducing the overheads for new providers of creating a higher education offer with student finance attached to it.

In The future of higher education in a disruptive world, Stephen Parker, KPMG’s global lead for education and skills has predicted the end of the “Golden Age” for universities in which “rising costs are no longer matched by a willingness of government and students to pay for them” – and the fundamental UK university operating model has limited prospect of offering the productivity gains that would be needed if, for example, the Westminster government reduced the undergraduate fee to £7,500, as proposed by the Augar review.

Faced with the prospect of permanent change, there are different schools of thought. Those who think the sector should revert to its pre-pandemic state; essentially do nothing on the assumption that the UK reputation for educational excellence will allow universities to ride the storm. Those who advocate renovation: actions that universities can put in place to improve their customer experience and make maximum use of their strategic advantages. And there are those pressing for revolution: a fundamental rethink of the role and purpose of higher education.

In this piece, Mark will play the role of the provocateur, arguing that a decade from now the three-year undergraduate degree will not be the main “product” of higher education. And Sam will set out the case for renovation: supporting students to make more productive choices.

Mark: time to unbundle the undergraduate degree

Should universities revert, renovate, or press for revolution? I reflect on the words of Bill Gates: ““We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”

We face a dislocation caused by Covid; discoveries we have made but cannot unmake will see one-off shifts in the way we work, consume, commute and learn. Some industries, such as retail will see strategic decline in the workforce compounded by increased automation.

Other industries are seeing demand rocket, with less potential for automation; think about healthcare, for example. But with potentially more opportunity for augmentation – using technology to allow professionals to operate more at the top of their license and boost productivity.

Depending on the concentration of sectors in different regions, some places will see a significant need to reskill and retrain individuals to switch careers. More switching means more transferring of skills into new contexts. As automation and augmentation replace tasks within roles, that will lead to a reshaping of the workforce.

That means identifying meta-skills which are transferable and “topping up” with domain knowledge and specialist skills. It also means shorter courses, delivered in parallel to employment, are going to be in much more demand through our recovery.

We need to fundamentally question the relevance of the three year undergraduate degree to the 2030s economy. When 50 per cent of school leavers go to higher education, the fact of having a degree, once an elite qualification in itself, now merely signals “above average”.

But is that the only reason people choose to study? What is an undergraduate degree for?

• To learn metaskills – those transferable skills such as scrutinising sources, making a logical argument, reviewing the available evidence
• Intellectual curiosity
• To leave home/find oneself
• To build networks
• To party hard
• Arts, sport, cultural expansion
• To enhance one’s lifelong earning potential

And those are just my reasons for doing one. My fellow students also gave these as reasons:

• Vocational skills
• As an entry ticket to a profession
• To acquire skills the country needs
• Prestige
• To learn English
• Preparation for a career in academia

And while many of these benefits are intangible, is it really sustainable that the only thing that is documented, which made my CV, was three syllables: “Maths, 2.1.” Or, if I wanted to add nine more: “University of Birmingham”.

If we value meta-skills, we should measure them

The skills I learned – creativity, analysis, problem solving, making an argument – “No-one cares what you believe, Essex, just what you can prove!” – are only captured in the narrative I put around that qualification in an interview. Not a lot of scrutiny for the main economic benefit of a qualification which would cost £27,750 plus living costs today.

Look at any list of top ten skills sought by employers today and you will find meta-skills such as judgment, critical thinking, and creativity feature highly – one of the reasons KPMG’s graduate intake features humanities as well as accounting graduates.

But the level six skill that earned the humanities degrees is measured and the meta-skills around assessing sources (valuable in the audit profession) are not, directly or separately. Is that sustainable in a world in which job roles and skills are becoming more atomised and people seek to gain specific meta-skills in shorter formats?

Put it another way: do we think that the majority of demand for graduate skills in the 2030s will continue to be met by a single product – the three or four year undergraduate degree, delivered by a single institution in a single place including something like 84 weeks tuition over three years, Delivered to predominantly 18-21 year olds via face to face lectures, tutorials, and independent study, at a single pace which precludes the ability to earn as you learn other than a part-time or holiday job to top up one’s living costs.

Would you design a system that way today if you had a blank sheet of paper? Because disruptors have exactly that: a blank sheet. New entrants to the market will be eyeing up the low cost to serve modules with a view to cherry-picking the profitable bits of courses. After all, when budget airlines started to charge separately for meals on a flight, it was only a matter of time before “premium airlines” had to stop throwing them in for free.

Sam: we need to rethink choice

Mark outlines a plausible future. I think that demand will be met by greater variety and choice to allow learners to create a more personalised education experience. But choice alone is not enough to increase satisfaction. Indeed I worry that too much choice can lead to poorer outcomes, especially where that choice is not supported by effective information, advice and guidance.

The Augar review describes a future in which lifelong learning is a widely understood concept, in which students stop and start the learning in a flexible way over their entire career. In some ways this isn’t new; it has always been possible to defer study for a year, or to do some modules at other institutions, but this kind of flexibility is not the norm. Taken to the extreme, there would no longer be meaningful cohorts as students would be mixing and matching so much as they take their “learning passport” from institution to institution.

As someone who advises universities on their operations, I know that there is a good deal of logistical complexity involved in making modules more portable. Timetabling, accommodation, and real estate capacity come to mind. But there is also a potential for enormous increase in transaction costs arising from interoperability; in accrediting and validating students’ prior learning without all the quality control levers available within your institution.

But that flexibility isn’t just difficult to deliver. It may also threaten quality. There is a good deal of (often unfair) criticism levelled at the “Mickey Mouse degree”. I think it would be more accurate to think about “Mickey Mouse modules”. Students can be overwhelmed by the range of options and it is possible to select poor combinations. If the pick and mix degree adds the choice of everybody’s full menu we could create some very odd degree combinations which run the risk of failing to meet standards, or achieve students’ objectives.

I think in the future we will see universities offering a more personalised but also more curated experience, one in which students have some flexibility to study what and how they want – but with more active support to align their learning pathway to their future aspirations.

Those who seek specific skills to support a particular career, but who take tangential subjects may lose out in the competition for jobs against peers who have followed a clearer path.Those who are studying for reasons of intellectual curiosity, personal fulfilment or to pursue a particular academic field may want a broader exposure. One size doesn’t fit all, but all students will benefit from guidance and pathfinding support.

How can institutions respond?

Those who favour a “revert” strategy may have the institutional brand power to hold firm. I think there will always be a place for the three year undergraduate degree; we only have to observe how many of today’s students are so keen to return to campus life. Demographic growth in 18 year olds in the next decade suggests a ready pool of traditional students.

But I think many more institutions may find they need to renovate their offer to attract the students they want. And there are new entrants looking to bring revolution to the sector, not least from employers themselves. Corporates offer degree apprenticeships, powerful brands and potential for guaranteed jobs. It’s a compelling offer and it is no wonder that more students are considering bypassing the more expensive alternative.

To compete, I think universities will need to provide more evidence than Mark’s three syllables. I expect universities will need to demonstrate that they have equipped their learners with those meta-skills in a measurable way. In turn, this may well bring about more scrutiny of the components of individuals’ degrees.

One strategy would be to create networks of institutions who recognise each other’s standards and co-develop multiple institution courses. This means creating sustainable, mutually valuable partnerships is going to be increasingly important.

Another approach would be to try and meet the demand for flexibility within your own provision. For example, if students need or desire to spend time away from your campus, respond with more flexibility. That could mean taking a term out instead of a year out. Or exploit technology to study for a term remotely from another location. The institution’s role would be to help students create the right programme for them.

Whichever the strategy, I think institutions that will have the most success are those who understand students’ goals, help students chart a course, and then provide flexibility to allow the overall plan to adapt to events and uncertainties.

This article is published as part of a series produced in association with KPMG.