UK higher education’s funding model is not ready for the tech revolution

As we enter what we hope will be the first full year of “normality” since the outbreak of Covid, all universities will be preparing for the usual swirling mix of challenges while juggling a seemingly ever-expanding list of priorities.

High up among these is a challenge that also presents an important opportunity: how to accelerate the much-needed digital transformation of our institutions.

Next month will mark the start of my first full academic year as vice-chancellor at Abertay University, Dundee, and one of my top priorities is to push on with our own digital transformation. It’s a journey we’ve been on for some time but, as with all universities, it’s an issue that’s becoming increasingly pressing and one that the sector has yet to properly embrace.

The opportunities presented by new technology and the fourth industrial revolution are many and will have a massive impact on teaching, learning, research, innovation and university management. In years very quickly to come, students will have increasingly personalised routes through learning and any “one-size-fits-all” approach is going to feel outdated.

Assessment will change for the better to become more authentic and realistic. This may prompt questions around whether exams at the end of a defined period of study remain the best option.

Students will have greater understanding of how the tech revolution is going to shape both their studies and their future careers, and if predictions are borne out, they will need to upskill and reskill throughout their lives. They may well have multiple careers, meaning that we as providers must adapt.

Advances in technology will benefit every research discipline across every institution, far more than we can imagine, leading to more interdisciplinary work and interaction between research projects, which will influence how we prioritise and fund research.

At Abertay, we are already seeing this work begin in projects such as InGAME (Innovation for Games and Media Enterprise) where research into video games technology is aligned with research into significant societal issues such as food poverty, child protection, health and many others. Meanwhile, our new Abertay cyberQuarter will provide the skills levels demanded by employers, create opportunities for partnerships between business and academia, and grow the number of cyber jobs in Scotland.

Within universities, new technologies will also speed up and, in some cases, automate many services. This will result, for example, in more flexible timetabling, better ways to manage/monitor our campuses and new options for academic support.

Externally, this tech can support civic missions by helping us integrate with the local community through shared services and working to create hyperconnected smart cities, the seeds of which are already being planted in our own city of Dundee.

We’ve already seen how tech can reduce our carbon footprint and while there will never be a substitute for face-to-face engagement, I don’t see a time when we would (or should) return to the road or air miles that were clocked up prior to the pandemic.

At the heart of this transformation is artificial intelligence (AI). Automation is not enough anymore – our tech must be intelligent, intuitive and embedded into everything we do. Within a few years, our students and staff won’t accept anything less. If institutions wish to compete at international level, whether that’s in student recruitment, research or anything else, then automation and AI cannot be ignored.

Of course, this level of change is not without challenges – not least the ethical and privacy issues it raises – but none of these should stop the progress required in the sector. The scale of the coming overhaul is mammoth and achieving it will need not just significant additional funding but a wholesale change in how we view innovation and our digital spend. Yes, most universities are currently under-investing in digital, but it is our funding model and thinking in this area that is broken.

According to research consultants Gartner, the global banking sector spends around 12 per cent of its turnover on tech. That compares with around 5-6 per cent in education and just 3 per cent in higher education. But this headline lack of investment is only part of the problem. Perhaps the bigger challenge is the change of mindset required by the sector: most universities still see investment in digital technologies not as a strategic asset, but as a cost centre to be minimised where possible. Now is the time to take a broader view and fully commit to investing in technology and upskilling our staff and students to use it.

Another overlooked point is that the vast majority of our IT services will soon be in the cloud (or similar), rather than being supported by on-campus servers, so our funding model will need to switch towards revenue rather than capital spend. This quickly creates substantial costs that many organisations may not be able to afford, meaning they will struggle to keep pace with better equipped international competitors and to properly prepare their students for the impact of technological change.

A change in thinking at both sector and government level is therefore required to ensure our wonderful universities have the digital maturity needed to thrive and compete on the global stage.

None of this is easy, and the spectre of some costly previous failures to transform institutions looms large. But happen it must, and we need to start the conversation about how we support each other to achieve it.

The good thing is we are not alone. Business models that have stood the test of time for decades, or even centuries, are being disrupted at lightning speed across all sectors. We in higher education have taken our first steps to transform teaching and learning as a result of the pandemic. The important part now is recognising the challenge and taking collective action.

Liz Bacon is principal and vice-chancellor of Abertay University, Dundee.