Can two universities be stronger together?

It is a great credit to the leaders of both universities to initiate a fresh discussion about the benefits of creating a new emboldened university of scale with a global profile. It is a simple question to ask with many complex implications for students, university employees, employers and their future skills needs, the community, the local economy and Adelaide’s global position as a leading education destination in a country that boasts education as it greatest service-based export each year.

For governments education should be considered as an economic portfolio. Government expenditure in education is an investment not a cost. An investment in the future and more directly in individuals who will shape that future. The return on this investment is a skilled workforce with meaningful and sustainable employment contributing positively to the community.

Let’s explore the potential for a great big new university.

This would be the first ever merger in Australia, not including forced takeovers. There have been other proposals for universities to merge, most recently in 2015 when it was speculated that Murdoch, Edith Cowan and Curtin Universities should join forces in Western Australia.

Professor Peter Rathjen is making a bold stand that will define his tenure as Vice-Chancellor at the University of Adelaide.

The Vice-Chancellor is taking a deliberate consult and decide approach. The consultation process is underway and he and his team have already engaged with about 1000 staff.

The destination. What do we want to achieve?

Leaders from both universities have agreed to determine whether a merger would enable the delivery of greater access and benefits to students, create more opportunities for staff, enable greater collaboration with and contribution to our community, and make greater economic, social and cultural contributions to South Australia. A series of questions have emerged:

• How will we measure success? What will the criteria be beyond university rankings?
• If a ranking inside the world’s top 100 be achieved what would that mean?
• Would a merger generate a stronger institution and provide better education outcomes for students?
• Will there be any savings, cost efficiencies?
• What will the specific impacts be for research profile, impacts on degree offerings, international reach, student pathways alumni benefits?
• What would it mean for the city of Adelaide and the South Australian economy?

Why merge?

Both UniSA and the University of Adelaide are performing well independently, and there is no reason why they will not continue to do so on their own, but they will always lack scale.

Independent analysis has set out the facts bluntly. The University of Adelaide is small and geographically disadvantaged, when compared to competitors in the eastern states.

It has a small student and research scale and is set in the city of Adelaide, with a small population and economy. This makes it harder to attract and retain academics and international students, which impacts the ranking and revenue.

The student experience

What are the impacts for students? What would a new university mean for them?

At present the University of Adelaide (21,500) and the University of South Australia (22,300) have similar full-time equivalent student numbers. If the two universities merge they will create an enormous institution with more than 43,000 students, measured on an equivalent full-time basis. The student population would be 53, 000 with the capacity for further growth. What will that mean for competition, course offerings and quality? Would a graduate be more attractive to prospective employers?

Independent analysis suggests that in terms of their learning experience students would benefit from broader curriculum coverage, more opportunity, and a more comprehensive course offering that is integrated with current and future industries. For instance, the engineering school would be better linked to defence and space industries. In addition, the Adelaide medical and health faculty could be integrated with the allied health schools at UniSA with proximity to the medical and health professions.

It has also been suggested that there would be scope to offer more scholarships and mentorship programs and more resources to support regional campuses, online learning and better access in rural and remote communities. These would be positive outcomes.

The campus would combine significant infrastructure in central Adelaide, linked to cultural, economic and government institutions.

The combined increase of scale and location would boost the ranking and make South Australia a more attractive destination for international students. 

Employment

Universities are much more than sources of significant local employment. However, in terms of the South Australian economy these universities are significant local employers. The University of Adelaide employs about 3800 staff and the University of South Australia has just over 3000. This includes a mix of academic and administrative staff. They also support a range of local contractors and ongoing service provides.

No doubt there will be duplications of services across both universities. There is unlikely to be a requirement for two marketing divisions and two human resources divisions.

There must be support for staff who choose to move on and seek new opportunities. One would hope that there will be new exciting job opportunities including interest from leading academics to come to Adelaide.

Will this mean one less Vice-Chancellor? Which one would remain?

An improved ranking

It is anticipated that a new ranking could be achieved, that is competitive with Melbourne and Sydney, entrenching Adelaide well inside the top 100 universities worldwide.

While domestic students are not too concerned about rankings, they are vitally important to international students. International student fees are vital and support the balance sheet. The university has to find ways to make up about fifty cents in every dollar of the research budget, which was $161m this year at the University of Adelaide.

Say my name

What would the new name of the university be?

Would it focus on Adelaide as the capital city or the state of South Australia more broadly?

Should there be a new name entirely? Should it be named after a prominent Australian or retain the name of the city of state in which it is located?

How will that name complement existing government and education branding efforts and future campaigns?

Research

Many people would prefer to see more focus on teaching and even teaching only universities. However, the reality is that Australian universities must support increasing research expenditure by drawing on other sources of revenue, typically teaching income. Research activity is a major driver of university effectiveness, international rankings, reputation and competitiveness.

Both universities will be challenged to compete in an increasingly competitive research funding environment.

The Group of Eight (Go8) research intensive universities are fragmenting and the University of Adelaide is becoming fixed in eighth place as it falls further away from the top. Due to lack of scale and scope the University of Adelaide is unlikely to compete with the rest of the Go8. This means that the university will continue to risk losing top research staff to more lucrative offers in the eastern states.

Think globally. An international strategy.

Latest figures indicate there are 800,000 foreign students in Australia and international education injects $30 billion into the economy.

However, in 2016 South Australia attracted less than 6% of international student enrolments.

If an improved global ranking can be achieved a new university could penetrate new student markets and be more attractive partner to international universities and industry.

An expert opinion

According to reports former UniSA Vice-Chancellor Denise Bradley has backed the merger talks. Professor Bradley chaired the 2008 Bradley review, which led to the demand-driven funding system and the rise in university participation rates from 2010 onwards.

Leading higher education analyst Andrew Norton of the Grattan Institute has provided some initial commentary on the risks. He has suggested that the proposed merger will reduce competi-tion due to the many areas in which the two universities compete.

After analysing current student numbers in South Australia’s three universities, Mr Norton suggests that a new bigger institution would have an effective monopoly in undergraduate studies in five areas. These include architecture and urban environment, interior and environmental design, environmental studies and music. In other areas, including teaching, nursing, computer science, mechanical engineering and civil engineering, there would be substantially less competition.

In postgraduate studies, the new university would have an -effective monopoly in numerous areas including computer science, civil engineering, mechanical engineering, architecture, architecture and urban environment, nursing, public health, secondary teaching, business and management, marketing, and law.

Mr Norton has stated that taking some courses from a three university market to a two university market, and others from a two university market to a one university market will reduce choice for students and make the market less competitive. He said competition was particularly important if a future Federal Labor government restored the demand-driven funding system, as it has pledged to, and universities were able to compete for students.

However, competition would still exist in many courses even if the proposed merger went ahead.

In media reports Mr Norton said his inclination was to be against mergers of -already at scale institutions as there is value in competition and universities not dominating a particular market.

Concluding points

The University of Adelaide can continue to be a perfectly successful mid-range university, but there is an opportunity to do better.

Modeling suggests that GSP could be boosted by over $1 billion per year if the merger is successful.

If the evidence stacks up then we should take this opportunity to do better.

It is also an opportunity for our political, community and business leaders to develop a new positive narrative about Adelaide, as a city to support the local economy.

If merged a new university would have more financial clout to compete with Sydney and Melbourne, and internationally. One of only four universities created before Federation, Adelaide was the third university created in Australia, after Sydney and Melbourne, but it hasn’t kept pace. This reflects what has not happened to Adelaide in so many areas, and it is time for this inertia to stop.

So can two universities be stronger together?

Without pre-empting the outcome, at this stage it seems, that yes they can be. If it is better for students and better for South Australia then they should merge.

Mark Smith is a candidate for the University of Adelaide Council election 2018.

Next steps. Consult and decide.

It is anticipated that a decision will be made in December of this year on whether or not the merger should proceed. If it does, then the complex merger process would take at least two years, taking us to the start of 2021.

A discussion paper will be released in early August ahead of a Green Paper in October before the decision in December.

I would encourage interested parties to proactively engage with the consultation process to be announced over the coming weeks. Submissions will be called for across August-September. You may also like to consider engaging with university leaders and formal working parties

A joint body, drawn from the two governing bodies, will be created to provide oversight of the process. This group will draw on the expertise of external leaders in tertiary education, including:

• Professor Glyn Davis AC (Vice-Chancellor, University of Melbourne)
• Emeritus Professor Ross Milbourne AO (former Vice-Chancellor, University of Technology Sydney)
• Hon Dr Jane Lomax-Smith AM (Former South Australian Government Education Minister and Chair, Higher Education Base Funding Review 2011)
• Mr Andrew Pridham, highly regarded alumni of the universities of Adelaide and UniSA respectively.

A joint working party convened by the Vice-Chancellors, has also be established.

The Nous Consulting group has been engaged an independent third party to help manage the process.