policy & reform
Academics need commercial acumen because the reality of universities in the present and the future is that the federal government is expecting universities around Australia to become more selfsufficient.
UWA is one of Australia’ s Group of Eight universities intensive in research and comprehensive in general and professional education. UWA is one of Australia’ s most prestigious universities. It was established in 1911 and has formal arrangements with nearly 230 institutions around the world, which complements its 4500 international students.
“ I also think universities can tap into the knowledge of business leaders by having them sit on boards,” Dolan says.“ I think it would be helpful for vice-chancellors and deputy vice-chancellors to have business experience.
US experience
“ In the US the vice-chancellor role is all about external fundraising and universities are coming under more pressure to find income outside their traditional sources.”
A good example of a university tapping into a successful businessperson’ s skills can be seen in UWA’ s relationship with Mark Barnaba. He is chairman of Macquarie Group, WA as well as chairman of the university’ s business school board. He is also an adjunct professor in investment banking and finance at the business school and has an MBA from Harvard University.
“ Universities need people with both sets of skills – academia and business acumen,” says Barnaba.“ The reality is that business people won’ t do the research but that doesn’ t mean that their other assets, such as a forging a career in an area of business, can’ t be imparted to young minds.
“ One model that works well in the US is that of professors at large. They don’ t teach in any one faculty but move around disseminating their knowledge to wherever it can be best utilised in the university. That way the crème de la crème is spread throughout.
“ Universities train people for the external world and we need to tap into the expertise in all fields that students want to enter. Universities need to tap into the knowledge of successful business people in some capacity in order to make university learning relevant and to gain an insight to what is happening out there now.
“ If universities don’ t change to become more real world accountable then they will make themselves irrelevant in the future,” says Barnaba.
The ever-increasing presence of international students entering into Australian universities makes that reality stark. The international student presence in Australia brought in $ 16.3 billion to the Australian economy in 2010-11, according to the Australian Bureau of Statistics.
Many universities now rely on the income from full-fee paying international students to assist in the provision of quality education to all students both international and domestic.
The ABS figures also reveal that 22 per cent of students in Australia at tertiary level were international students. With static and potentially declining federal government funding, the pressure to retain these students and even increase their numbers with a high Australian dollar remains a priority.
It is believed that some of the top universities in Australia only receive 30 per cent of their income from federal government funding, meaning the emphasis on securing outside funds has become even more critical. Employing senior leaders with business knowledge, skills and contacts will become even more crucial in the future.
“ Universities have extremely competent people,” says Jim Birch, the Oceania leader for Ernst & Young’ s government and public sector area.
“ The issue rising now is the increase in turnover not just in the corporate central but also in the faculties, which can exceed $ 100 million alone. There is a definite need for an understanding of managing budgets and understanding the realities of business.”
For the past six years Birch has been involved in organisational review, program evaluation, strategic planning, financial turnaround and change management. He believes it is time for universities to undertake a thorough examination of their management structures.
IT and marketing
“ I don’ t think universities should adopt a‘ one-all’ policy in regards to change but they need to look at potentially centralising transactional services in areas of IT, finance and marketing. However, you can’ t apply a central model and take away the incentives for individual faculties because you will demoralise them but maybe there is a way of centralising some services.
“ The conflict arises with academic rigour versus the business reality. Private fundraising will become increasingly more important in the future and this might conflict with the fact that research at universities is rising in importance with worldwide ranking systems,” says Birch.“ Universities need to acclimatise to the fact that they need to raise different revenue streams and may need experts in that area to help them. The importance of international student revenue can’ t be underestimated.”
But how will universities cope with a fundamental need to utilise more business people’ s skills full-time within academia?
A cultural shift will have to be undertaken and that could take years to be fully embraced.