In recent years, the lexicon of higher education has expanded to include higher level skills, business-facing universities and employer engagement. Last year was the one in which these phrases were translated into policy drivers and embryonic funding models. Over the past 12 months, the Government and funding agencies have been digesting the key messages of the Leitch report and considering how to bring higher education into the implementation plan. If, as the Leitch team argues, the UK needs a further 3.5 million graduates by 2020, then universities have a crucial role to play. The key questions are whether employers themselves are ready and whether universities are geared up to deliver.
At the highest organisational level, there is evidence of employer interest. At a stimulating Skills Summit in December, a large number of institutional heads and deputies joined chief executives and senior staff of sector skills councils for the first time to discuss practical ways of co-operating. Meanwhile, the new UK Skills Commission is clearly casting around for ideas, and this offers an opportunity for universities to become better integrated with the network of skills councils at a time when the structure is being reviewed.
On the other hand, Richard Lambert's inaugural Universities UK lecture last month contained some uncomfortable messages from the business community. Like the Higher Education Funding Council for England, Mr Lambert is aware that engaging with business can be risky for universities: the cycles of activity are so different and employers tend at present to be more concerned with basic and intermediate skills. In a world where chief executives disappear more quickly than vice-chancellors, he argues, partnerships may have a short shelf life. There is work to be done to convince employers of the need for sustainable long-term collaboration.
There are further challenges for the traditional university system. Most employers say they need specific competencies and skills, delivered bite-sized, rather than additional qualifications over a protracted period. Yet universities' track record in delivering this kind of product is generally unimpressive; in contrast, the private sector is strong in the area of continuing professional development. Winning the support of the Confederation of British Industry and the sector skills councils may be only half the battle.
Embracing the skills agenda within universities will require some major strategic developments. For one thing, the business-facing university requires business-facing academics. If the economy benefits from raising our skills game, what is the benefit to the academics? Some are currently teaching subjects that, according to received opinion, are less economically valuable than others, while most entered higher education to develop their personal intellectual interest. The reward structure has, by and large, reinforced academic achievement. To my knowledge, no one has yet gained a conventional readership or chair for employer engagement; now, perhaps, is the time to start.
A major shift of emphasis by a university, therefore, must include a programme of staff development and a recognition that becoming more business facing does not mean abandoning academic values - a difficult message to convey to a rather sceptical audience, if the pages of Times Higher Education are anything to go by. There is a need to communicate strategic benefits clearly to internal as well as external audiences.
If there are risks for institutions in embracing new policy drivers, they are modest at present. The amount committed to employer engagement this year represents about 0.5 per cent of Hefce's Pounds 7 billion budget. Yet the change needed to achieve a further 3.5 million graduates is enormous, which is why this is an issue about institutional evolution and employer attitude as much as funding. With the cohort of 18-year-olds due to decline from 2012, moreover, a growing proportion of those acquiring higher level skills will be older, work based and part time - the least well-funded. And, of course, this does not take into account the need for continuous upskilling and personal development. Someone embarking on the most economically relevant course in 2008 may find his or her skill set outdated by 2020 without further intervention. For this alone, traditional teaching methods will not be enough, nor will the metrics by which universities are now measured and funded. We must reinforce support for lifelong learning and rethink the degree of support for part-time study.
The pace of change is accelerating. What was once a small group of business-facing universities is becoming a significant sub-sector. Universities have prided themselves on being at the forefront in quality and efficiency and in the development of their academic disciplines. In 2008, perhaps they can also be at the forefront of economic change.