Universities – A thousand year old industry on the cusp of profound change

Wow, Ernst and Young aren’t pulling any punches in their latest report on universities are they? They’ve just published “University of the Future“, and it hits pretty hard at the current model of universities in Australia, with its subtitle of “A thousand year old industry on the cusp of profound change“. Of course, there’s plenty of reasons to suspect that a harsh wind of change is appearing, like the fact that International student numbers continue to fall in Australia, and predictions from people like Professor Steven Schwartz, ex-VC at Macquarie University of the online mantra of  better, faster, cheaper, coming soon to a university near you, leading to a question that asks will the university business model get turned upside down in five years?

Their announcement starts off with a hard hitting sentence:

  Time is running out for traditional university business models. New technologies, increased competition and flat-lining government funding will force universities to fundamentally reinvent themselves in the decade ahead.  

And they go on to make some pretty clear judgements:

  • “There’s not a single Australian university than can survive to 2025 with its current business model”
  • “At a minimum, universities will need to get much leaner, both in terms of the way they run the back-office, and in use of assets”
  • They found that only one university has less support staff than academic staff

imageOf course, as management consultants, Ernst and Young have used the rule of three and created three models for how universities might evolve in the future:


Model one – “streamlined status quo” – runs similar teaching and research programs to today, but uses digital technologies in teaching and learning, is much leaner and has deeper partnerships with industry and international collaborators

Model two – “niche dominators” – focuses on a small range of teaching and research programs, but is truly world class in those programs and integrates work experience, career opportunities, life-long learning and research commercialisation into the programs.

Model three – “transformers” – sees universities form partnerships with media companies and global technology providers to change the way education and knowledge is accessed and delivered – in Australia and in a range of cities and rural areas in Asia, Latin America and Africa. This model will transform the world, creating new opportunities for millions of young people, their families and the societies they live in.


And, of course, with these changes there’s a bright future ahead according to the report – “This is a sector that, more than any other, will shape Australia’s future as a high-performing knowledge economy”

The research interviewed 15 university vice chancellors as well as leaders from private providers and policy makers, so this isn’t simply a case of people outside of the higher education sector deciding on its fate – it is people within the business looking around and realising that profound change is around the corner.

Learn MoreRead the Ernst & Young news announcement, and download their free “University of the Future” report