UK: Challenges facing world-class universities

Britain's leading research-intensive universities are playing a critical role as the UK works and thinks its way back to sustainable economic growth. Our economic competitiveness is underpinned by a higher education system which is recognised internationally for the excellence of its research and educational provision.

The UK's research performance and the attractiveness of the UK to overseas researchers, students, and inward investment, is in no small part because Britain is home to a significant number of the world's leading research-intensive universities.

There is a well-developed body of evidence which has examined the importance and characteristics of world-class universities. World-class universities are characterised by a high concentration of excellence, talent and infrastructure; they generate multidisciplinary research, provide a focal point for clusters of economic activity, and deliver highly skilled people to the labour market.

In doing so, they make a significant contribution to a nation's knowledge base, economy and international competitiveness. The UK's leading research-intensive universities utilise their critical mass of talent and infrastructure to generate real benefits to the UK economy, and are essential to the health of the higher education sector. However, the UK cannot afford to be complacent. Our higher education sector faces an unprecedented set of challenges, all of which threaten to erode the UK's long-standing success in higher education and research.

The first challenge is increased costs. There is evidence of severe cost pressures across the teaching and research activities of Russell Group institutions. Ongoing investment is required to maintain a world-class learning experience, with research-intensive universities facing cost pressures on teaching, particularly in relation to challenges posed by an increasingly digital world.

The nature of research is also changing. Research challenges have become increasingly complex, cutting across a number of different disciplines, and are global in their scope. Therefore there has been a rise in the need for collaborating internationally and across disciplines. Also, advances in technology have fuelled a need for better and more sophisticated equipment. All of these factors have increased the cost of research.

The second major challenge is increased global competition. Developed and developing nations are increasingly prioritising research and higher education as they seek to create more skilled workforces, stimulate socio-economic mobility and strengthen their economic competitiveness.

There are already signs that the UK could be falling behind; we now produce fewer papers than both the US and China and there has been rapid growth in research from non-G8 nations. Britain's share of world publications has fallen since 1999 and in 2008 was less than 8%.

Several of our competitors have prioritised government expenditure to support higher education and research. The US and France have chosen to use stimulus packages to invest in their leading universities to underpin long-term economic growth, and a recent speech by President Obama reaffirmed his intention for the USA "to out-innovate, out-educate, and out-build the rest of the world".

Not only are countries seeking to invest more, they are seeking to invest more selectively. Much attention has been given to efforts in Asia, with initiatives in China and South Korea aiming to transform existing institutions into world-class universities. But these efforts are also occurring elsewhere in Europe. Germany is focussing on funding clusters of excellence to promote top-level research, and France is developing centres of excellence to compete at the international level. Denmark has completely restructured its public research base to create a smaller number of institutions that have critical mass comparable to other leading universities in Europe.

With other countries investing billions of pounds in their leading universities, even before any cuts in the 2010 Comprehensive Spending Review were announced, the UK was in real danger of losing its international competitive edge. When these significant reductions to funding were announced, the importance of averting a potential crisis in UK higher education became even more urgent.

Given these cuts, the government's plans for introducing higher contributions in England are therefore the only viable way forward, so that the UK's leading universities have a fighting chance of remaining world-class, and being able to compete with the world's best universities. However, it is important to recognise that there will be a funding shortfall after the cuts really kick in and before universities are able to access any new fee income.

Income generated by the new fees regime will help the UK maintain a world-class student experience, by supporting the higher costs of excellent research-led teaching. Britain's leading universities need funding to innovate and set the pace of change in university teaching if they are to remain amongst the world's best.

A system of graduate contributions should also facilitate a more diverse market in higher education, where differing models of teaching and learning can be efficiently supported. Graduate contributions provide more incentives for institutions to improve quality and their responsiveness to students' needs, as contributions encourage students to be more demanding of their universities. The retention of a cap on fees will, however, limit the extent of the diversity and dynamism generated by the new regime.

At a time of fiscal austerity, it makes sense to target public funds by building on success rather than trying to spread limited funds too thinly. Funding for research, knowledge transfer and capital needs to be concentrated on institutions with the necessary critical mass, quality of research and excellence in provision, and who are best placed to compete with the rest of the world.

This will ensure that the support for Britain's world-class universities is sustained, and that the whole of the UK's diverse higher education system continues to enjoy the international recognition it rightly deserves. A higher education system which embraces diversity rather than homogeneity will enable the UK to compete effectively in a global economy.

The needs and demands of employers differ widely, therefore the higher education sector, and the courses it offers, should reflect this diversity. Professor Alison Wolf has argued: "To support research and innovation, countries need a sizable, but not vast, number of top-class, superbly trained researchers and developers, not a very large number of imperfectly trained ones."

It is only by continuing to meet the broad range of needs of the economy that the UK can hope to maintain its global competitiveness in the face of ever increasing competition. President Obama has set the challenge that the US intends to out-innovate, out-educate and out-build the rest of the world. Britain must rise to this challenge, and not lose its hard-won comparative advantage.

* Dr Wendy Piatt is Director General of the Russell Groupwhich represents 20 leading UK universities. This article appears in Blue Skies: New thinking about the future of higher education, published by Pearson.

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Louis Coiffait