Keynote address: ‘How can Australia’s universities stay globally competitive?’ at the AFR Higher Education Summit, Melbourne

I start by acknowledging the Traditional Owners of the land on which we meet, the Boon Wurrung and Woiwurrung Wurundjeri peoples of the Kulin Nation and pay my respects to their Elders, past and present.

It is my great pleasure to be here today, as Chair of the Group of Eight universities and Vice Chancellor of UNSW. I have been asked to address the question: “How can Australia’s university sector remain globally competitive?”

I will address the ‘How?’ but first I need to explain the Why? Why does Australia’s university sector need to remain globally competitive?

The answer is that a strong university sector is critical to the future prosperity and wellbeing of the nation. The theme of my National Press Club address 2 weeks ago was higher education as the new wealth of nations.

Our universities aim to serve Australian society. And they do so. The strength of the university sector in this country has played an important role in Australia’s extraordinary 27-year story of continuous economic growth and all the benefits that has delivered for people across this nation. The sector has much, much more to deliver during the next three decades as we rise to the opportunities and challenges of the knowledge economy.

The globally competitive profile of Australian universities has created what I describe as a virtuous cycle of enormous importance to Australian society.

One key component of the virtuous cycle is research quality, the one feature of universities which is easy to measure and compare globally. Increasing research quality leads to a higher ranking in global university league tables. A higher ranking in turn has two positive consequences in driving that virtuous cycle.

One – it is a key factor in attracting large numbers of international students. Two – it attracts businesses to partner with universities to commercialise our research. This activity then generates increased economic benefits. Which in turn make it possible to invest more R&D funding. Thus driving the cycle of higher quality research.

There are many offshoots of this virtuous cycle – too many to include on one slide but note that the boost to the Australian economy creates thousands of jobs and opportunities outside the university environment and the research itself has direct social benefits.

This is not just a concept. The London Economic report that the Group of 8 released on Aug 14th showed that the combined economic benefit of research, international students, increased trade and commercialisation from this virtuous cycle generates over $65 billion pa from the Group of 8 alone.

So the answer to ‘why?’ is that being globally competitive creates a virtuous cycle which benefits all Australian people. The political turmoil of the last week highlights the need for a long term bi-partisan strategy for higher education to deliver the economic and societal benefits that flow from investment in higher education and research.

With that I move on to the main topic of my talk ‘How can Australian universities remain globally competitive?’. There are many aspects to this. I will offer 10 ideas relating to research excellence, teaching and learning and thought leadership.

I will start with a focus on research quality and the rankings. I suspect that most of you will agree that the rankings have many flaws.

They are based primarily on research outputs – with some limited attempts to assess teaching by surveys or staff student ratio.

Many areas of equal priority for Australian universities are either ignored or underplayed. These include outstanding teaching and learning, global impact, knowledge transfer, an inclusive equitable environment and contributions to thought leadership.

Nevertheless, the rankings are a good measure of research quality and, whether we like it or not, they impact on key elements of that virtuous cycle – attracting students, staff, industry and philanthropy.

The rankings are also a reasonable surrogate for the impact of universities. The institutions in the top 20 worldwide have been behind some of the world’s greatest advances in the humanities, medicine, maths, science, engineering and technology – advances which change lives.

Fortunately, we do well in the rankings. In the latest rankings Australian universities continue to rise.

In this year’s ARWU ranking the universities of Melbourne and Queensland were our highest performers at 38th and 55th places. ANU and the University of Sydney gained significant ground, up 28 and 15 places respectively, and UNSW jumped 31 places. Non-Go8 universities also recorded strong progress, with Curtin University, for example, rising more than 100 places since 2014.

With just 0.3% of the world population we have 25, that is 5%, of the top 500 ranked universities in the QS global rankings. We have more top 100 universities per capita than the UK, USA, China, Japan and Canada.

But we cannot be complacent. As we climb the league tables, many of our overseas counterparts—and those with which we compete for students and staff — are climbing too. China and the US recorded the strongest improvements in the most recent ARWU results, with six Chinese universities entering the top 500, and the US topped the list for the 16th consecutive year.

A country with the wealth, expertise, infrastructure and university strength of Australia can continue to rise in these rankings. We can and should have universities in the top 20 worldwide.

That brings me to my first point. There is a need to better communicate the benefits of funding research. It is essential that public funding for research be seen for what it is – a sound investment in the future of Australia - and not as a charitable donation. The evidence for the economic benefit of research investment is overwhelming.

Most recently, the London Economics report commissioned by the Group of Eight universities, showed that the $1.7 billion of public funding spent on research in Go8 universities yields a $24.5 billion return for the Australian economy. That is more than a 10-fold return.

And the spill-overs into the rest of the economy from research, education, international students and university expenditure generate over $60 billion per annum for the economy and create tens of thousands of jobs in non-university sectors such as tourism, hospitality and construction.

Put simply, there are few more worthwhile investments in Australia today than higher education. We need to explain that to our communities and politicians – not an easy task but one the Group of 8 and Universities Australia are committed to.

My second point relates to the organisation of research. Our research investment must deliver an integrated approach which drives the entire research pipeline – from discovery, to translation, to application, to commercialisation.

The creation of the Medical Research Future Fund has been an important step in the right direction. It links the discovery and early translation of NHMRC funded research, to a funding scheme at the applied end of the research pipeline.

There is much debate about how this funding should be used and my third point is that the debate should consider approaches used in successful schemes internationally.

One example I saw directly was the use of NHS R&D funds in the UK. A key component was the Biomedical Research Centres scheme, with internationally peer-reviewed awards in excess of $100m over five years, provided to six national centres which had demonstrated high quality, integrated, ambitious translational research plans.

Alongside this there was support for key research platforms such as clinical trials, data collection and career training pathways, all in the framework of dynamic Academic Health Science Centres – the parallel to the new Advanced Health Research and Translation Centres which have so much potential for Australia.

Provided the funds are well used, the MRFF is wonderful for the area of health research. But that brings me to my 4th point. The MRFF does not address the big gap in the funding of non-medical research. We have ARC funding for the discovery and early translation of non-medical research but no MRFF equivalent.

An Australian Translational Research Fund is needed to fill this gap linking discovery to application to drive the application of research in science, engineering, business, design and the arts.

My 5th point is that more needs to be done at the commercialisation end of the spectrum. The Go8 and others have been calling for incentives to drive greater collaboration with industry to boost our research outputs.

We have asked the Australian Government to consider an R&D Tax Incentive collaboration premium as a way of encouraging partnership between businesses and publicly-funded research institutions.

We cannot ignore the need for an increase in the scale of funding if we are to stay competitive. Australia is falling behind our competitors in R+D investment with just 1.9% of GDP compared to the OECD average of 2.4%. This is a dangerous trend.

The MRFF will help a bit but we need more to fund the full overhead costs of research, to create the proposed Australian Translational Research Fund and the R+D tax incentive premium. This will not be wasted funding. The London Economics report estimated that a $500m investment – of the scale of the MRFF - will generate approximately a $5 billion return.

And beyond the monetary return on research is the social impact. It is harder to measure, but consider that the Group of Eight universities and our alumni have produced the Gardasil cervical cancer vaccine, solar energy cells, automation that has transformed Australia’s mining industry and a curative treatment for Hepatitis C.

Our researchers are also currently working on critical projects such as 3D replacement skin, efficient water usage for our farmers and eco-friendly alternatives to chemical insecticides.

There are thousands more examples. Our influence reaches every corner of the community – either through our research or through our proud history of educating those who wish to improve their lives.And of course, it enhances our educational environment.

That is the second area of focus of my talk. Ensuring that we maintain our globally competitive status as a preferred destination for international students.

Australia’s international education sector is a phenomenon. It is this country’s third largest export behind coal and iron ore. Australia has just overtaken the UK to become the second most favoured destination for international students in absolute numbers. We are the world leader per capita of population.

The Group of Eight universities host some 100,000 international students. We carry on the tradition started through the Columbo Plan in the 1950s, to welcome students from overseas to not only study but to experience Australia, thereby fostering mutual understanding and respect and creating opportunities for trade with Australia.

Our success in attracting students to Australia is a massive economic driver – estimated by London Economics to generate $18 billion pa from the Go8 alone. Every three international students generate $1m for the broader economy through the activity they create outside our universities, generating jobs for thousands of Australians.

International rankings play a factor in our success – thus perpetuating the virtuous cycle I started with. Australia is also seen as a safe welcoming country, which provides quality university education at scale and a visa system allowing for short-term work experience after graduation.

The good news is that global demand for higher education is predicted to grow rapidly over the next few decades and a significant part will be delivered outside the home country of these new students.

Which brings me to my 6th point. To stay competitive we will need to give even more attention to emerging markets. India is one, as are large markets close by in Asia such as Indonesia.

The concerns from some quarters about Australian universities’ heavy reliance on Chinese students in an uncertain geopolitical environment were somewhat allayed by former Prime Minister Turnbull’s speech at UNSW just three weeks ago – 3 weeks is a long time in politics!

I am hopeful that our new PM will follow the same approach, emphasising the value and importance of links between Australia and China in higher education.

We can predict that the number of Chinese students will gradually decrease as the scale and quality of educational options in China increases, but the prospects in the long term for our international education market are exciting.

In addition and this is my 7th point I believe that the significance of Africa, in the longer term, is underestimated. The Columbo plan laid the ground work for our success in China and elsewhere in Asia and I proffer the thought that a similar approach to Africa now, will yield major benefits in the long term.

I was at an exciting meeting of the Australia Africa University network in Perth on Monday where the opportunities for Australia to contribute to rapid developments on that continent were discussed. Note in that context that the distance from Sydney to Beijing 8,900 Km is almost exactly the same as the distance from Perth to Nairobi. Africa is closer and more accessible than many think.

My 8th point is that in the international context, we also need to embrace the opportunities that digital technology provides for delivery of outstanding education.

The current model of 3-4 year full time degrees, face-to-face in a campus environment which we all grew up with and love, will not disappear in the imminent future. But it will be supplemented by new approaches involving digital technology for distance and online learning, blended learning options, combining campus and distance experiences, and ongoing learning throughout the working lifetime with new short course and skills-based learning to keep pace with demands of the 21st century workplace.

The online learning options of today are increasingly sophisticated, social and interactive, they can monitor the students’ development and adaptively respond to their progress. They also open up options for provision of high-quality education to those who cannot readily access it or afford it.

If we truly believe education is a tool for bringing prosperity and equality to our world, we must make it as accessible as possible.

Offering more flexible learning options is not just about remaining competitive. It is also central to our pledge to serve the local and global community. In due course Australian universities can evolve to reach not just the hundreds of thousands of students who attend our campuses but many millions of students and working people, through high quality distance learning with very different cost points and timescales to those we are now used to.

Another aspect of ensuring we remain internationally competitive in teaching and learning is to make high quality education, at scale, a competitive advantage. We cannot and should not try to replicate the models of small-scale research focused institutions such as Harvard, Stanford, Oxford and Cambridge.

Australian universities operate effectively on a much larger scale. To respond to this increasing demand for higher education both domestically and internationally we need to embrace academic specialisation which is my 9th point.

The 40:40:20 model, with all of our academics contributing equal time to research and education, cannot respond to the much greater increase in teaching expectations in the digital environment, or relative increase in teaching demand compared to research funding. We need to nurture, reward and promote outstanding scholarly teachers whose primary role is the design and delivery of excellent education whilst at the same time allowing our best researchers to have more dedicated research time than 40%.

There will always be a significant proportion of academics who have a balanced load of research and teaching but that does not need to be an inflexible requirement.

Developing career pathways for excellence in teaching and learning and harnessing new technologies, will be critical in maintaining our record of educating large numbers of students, both domestic and international.

And that brings me to my 10th and final point - thought leadership and global responsibility. Society is looking for true leadership and often from non-traditional quarters. Universities can rise to that challenge.

Our universities are apolitical and open to all, pursuing the cause of imparting knowledge to generation after generation. They are champions of freedom and independent thought and a vehicle for expression – a cauldron of ideas.

And if we embrace models of collaboration that work across disciplines, across institutions, across sectors and across borders, we build a worldwide network that has no peer.

The sharing of knowledge and ideas across oceans is one of those rare endeavours where our geographic location does not present a tyranny of distance.

The more universities join together to find solutions to the grand challenges of our time – global development, the environment, migration, conflict – the more trust we build with individuals, with governments and with each other.

We can build on and honour the legacy of universities, that have made the world a better place, whether through medical and scientific research, the preservation or nurturing of art and literature, as the keepers of true history or simply by teaching good minds to think well.

That global contribution will bring benefit to Australians and people around the world. So to sum up, Australia has universities which are highly competitive globally. That brings enormous benefits both societal and economic. We cannot be complacent if these benefits are to continue.

Our universities are committed to serving Australian society and to continuously improving the way we do so. We need our political leaders of all parties to harness the superb higher education sector that has been developed, to expand the virtuous cycle which makes us globally competitive, bringing economic and social benefits to the people of Australia whilst also making a global contribution.

We can do this by building on and investing in Australia’s already enviable research capacity, to drive the research pipeline from discovery to commercialisation and generate social and economic benefits, jobs and opportunities.

We must play to our strengths, using our large scale in education as an asset and developing flexible learning options that utilise the latest technology to reach even more students from around the world.

We must value those who are outstanding teachers. We must attract and retain the academic services of the best and brightest from around the world. And we must continue to offer our expertise and our vast networks, being generous in partnership with a commitment to collaboration, so that we can be a force for good – increasing the prosperity, equality and wellbeing of people in Australia and around the world.

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