Universities differ hugely in their views of the opportunities and threats posed by the new world of marketised higher education and their priorities for responding to them, our latest survey of UK university vice-chancellors shows.
While most are optimistic and expect their institutions to emerge from the changes bigger and stronger than ever, a significant minority fear for their long-term sustainability.
There is surprisingly little correlation between the academy's various groupings and the tenor of responses to our survey. The mission groups are equally represented across the spectrum from optimism to pessimism, contradicting simplistic assumptions that the coming changes will favour or disadvantage particular types of institution. There are, however, some distinct patterns to the responses, in part reflecting how far different institutions have come on their journeys to adapt to the post-Browne, post-Comprehensive Spending Review environment.
There are those who are "quietly confident" that their combination of blue-chip branding, healthy reserves and resolute cost-cutting will see them through. Others are "distinctly nervous" that they lack the reputational strength, competitive offers and/or resources needed to compete successfully. And some are "newly energised" by the freedom and possibilities opening up for new models of higher education fit for a 21st-century world.
Of these, the newly energised institutions are by far the most interesting, since they are the ones that will shape the system in the not-so-distant future. Across the survey, about half of institutions of all kinds emerged as quietly confident, about one-third as distinctly nervous and perhaps one-fifth as newly energised.
Both the quietly confident and the distinctly nervous university leaders expect their institutions' business to remain focused on publicly funded and directed higher education, including the regulated markets for home undergraduates and government-sponsored research. The differences arise over their expectations of these markets.
The quietly confident believe the public sector will continue to generate good business, albeit from more discriminating customers, and that they will have the reputation, offers and market presence to sustain themselves in the new world. The distinctly nervous foresee a marked fall in student demand as higher fees kick in, and are worried that they will not be able to reorient their operations sufficiently to substitute fee income for lost grants.
In contrast, the newly energised are looking outside the public domain. They expect state-regulated teaching and research to provide at most a small part of their future revenue, and some are even planning to disengage from publicly regulated academic markets altogether. These institutions are looking to alternative home and international markets for higher education services, including work-based and professional education, knowledge-based enterprises and new areas such as academic management services. As well as looking beyond the boundaries of conventional higher education, these universities are rethinking their organisational borders. They are entering into partnerships, joint ventures, collaborations and risk-sharing with a range of players, moving towards the kind of globally networked organisations seen in other sectors.
These innovations represent much more than an extension of the "third-stream" work undertaken by most universities to extend and subsidise their core public-facing activities: they are genuinely game-changing developments, with the potential to reshape the academy - and they are happening now.
Examples in the public domain include: the University of the West of England's strategic business partnerships with Hewlett-Packard, IBM and others; Durham University's tied undergraduate programme with KPMG; the University of Liverpool's international marketing links with Laureate; and the hotly debated establishment of the New College of the Humanities. These and other universities are exploring the implications of new business models for their constitutions and governance: the University of Warwick is considering how it might give its staff ownership stakes, while the University of Northampton has announced plans to reconstitute itself as a social enterprise. We know of many equally pioneering examples at earlier stages of development.
It is too early to judge the full impact of the innovations being pursued by the newly energised universities. Some will be tried and found wanting; others' successes will be only marginal to their core businesses. What they do show is the willingness of a substantial and diverse group of universities to look beyond the constraints of the policy and funding agenda, to explore alternative markets for their wares and novel ways of reaching them. The revolution is just beginning.