Donosaurs bid to save distinction from extinction

October 15, 1999

In his scathing but affectionate portrayal of Oxford and Cambridge dons 30 or 40 years ago (page 20) Noel Annan quotes with evident agreement Jasper Rose and John Ziman's assertion that Oxbridge dons "will not vote for change unless it is the only hope of survival".

The underlying theme of a conference, "Market-driven Higher Education" organised by the magazine University Business in New York last week was that for that very reason change in traditional universities is now unavoidable. The pressures on publicly funded higher education - growing costs, falling subsidies, ever more students and growing competition from for-profit organisations taking advantage of modern technology - now pose a serious threat. There is a luxuriant blossoming of for-profit enterprises in the post-compulsory education market, described by The New York Times as "a world of piranha economics", where non-profit institutions that do not adapt are destined for extinction - a warning Charles Leadbeater (page 18) repeats.

Estimates in the United States put working adults at 44 per cent of the potential higher education market. There are now 1,800 corporate universities in the US set up to provide them with courses through their workplace and a growing number of for-profit universities such as Phoenix and DeVry offering them courses at convenient hours near their homes or via the internet. Major finance houses have education divisions and more than $800 million was raised on Wall Street this year for education investment. New organisations, taking advantage of up-front capital and low-cost delivery through the internet, are threatening to cream off revenue from traditional insitutions. Meanwhile, traditional universities are impeded by slow decision-making, lack of risk capital, high infrastructure costs and government regulation.

But the donosaurs are not dead yet. Faced with the asteroid, traditional universities are mobilising to capture the new revenue streams for themselves. Out-reach and extension departments are being turned into for-profit distance-learning operations, using the credibility of their brands to counter competitors. And in the most dramatic move yet, the Massachusetts Institute of Technology is taking Microsoft to its bosom (back page).

Columbia now has a company to market its intellectual assets along lines familiar to university technology transfer companies. UNext, a for-profit company set up by Chicago and others (including the London School of Economics), will package and sell courses, content provided by the universities' faculty. Harvard sells its business courses worldwide. Britain's Open University has the US by the ears with its high-quality materials and well-honed assessment systems. And Heriot-Watt's distance MBA had become the market leader in Canada and the US before being sold to Pearson's.

No surprise then that Cambridge should be reappraising its mission (page 1). The scandal would be if it were not. But the cautious tone of its consultation document shows how difficult this kind of discussion is in traditional universities. Change threatens vested interests and democratic systems encourage obstruction. Agreement is hard to reach and easily comes unravelled, as John Kay found when he tried to bring change to Oxford through the Said Business School.

Cambridge's paper raises some of the right questions: are traditional teaching methods too expensive? Should the university get into distance learning? How should minority subjects be sustained? Is expanding undergraduate numbers a good idea? But it is limited. Questions are not raised about the structures needed to protect core values while exploiting new opportunities.

Unless traditional universities are willing to look at such issues and act on the findings, the democratic traditions that have made them such successful survivors in the past thousand years could prove their undoing in the next.

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