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This year, 2012, could well be dubbed a year of change - for UWA with its new curriculum structure and for providers of tertiary education across Australia as a deregulated market place for undergraduates is rolled out. And the University's new Vice-Chancellor points to even greater challenges on the horizon.

Trea Wiltshire reports.

When he spoke to the business elite at the Committee for the Economic Development of Australia (WA) in February, UWA's Vice-Chancellor, Professor Paul Johnson, threw down a challenge for Western Australia: follow California's lead and build a world-class university system.

The economic historian stresses we need to look beyond the minerals and energy sector to think about what comes next. "Because there is always a next," he says. His answer is to follow the lead of California, a state that - like WA - has an economy that was initially powered by a gold rush, then by oil and gas.

"But from the 1970s through to today, California has transformed itself into the high-tech engine of the US economy. It did that by building a world-class university system which includes universities such as Stanford, Berkeley, Caltech and others," he explained.

"We have the potential to create a global knowledge and innovation hub here in Perth," he said, "but it will not happen by accident. This is not something that the University can do alone; it is not something the government can do alone; it is not something that industry can do alone. It requires focus, partnership and, above all, a common commitment.

"We have unparalleled opportunities. The question is: are we brave and bold enough to turn them into reality?"

The Vice-Chancellor went on to tell his audience that education is a big business across Australia - substantially bigger in terms of foreign currency earnings than natural gas, petroleum, wheat, travel and tourism - and the potential for growth is significant. As such, if Australia builds on its strength as a world leader in education, the nation will advance our contribution to knowledge and innovation in a century that has already been dubbed both the ‘Asian Century' and the ‘Knowledge Century'.

The new Vice-Chancellor has taken up his appointment in a year of significant change, as UWA launches its new curriculum structure and welcomes a record number of undergraduate students.

This is also a landmark year nationally. After decades of government control of numbers and courses, the Federal Government has responded to the Bradley Review by rolling out a deregulated market place for undergraduates.

While the significance of this radical move has been likened in its potential impact to the 1983floating of the Australian dollar on world money markets, the changes have not generated as much discussion in the wider community.

Canberra now funds universities based on the number of undergraduates they enrol. From now on, Australia's 39 universities will grow or contract in response to student demand. Student preferences - rather than those of bureaucrats or academics - will shape what institutions offer.

When he addressed the National Press Club in March, Professor Glyn Davis, Vice-Chancellor of the University of Melbourne, predicted: "Thirty years from now, the higher education sector will be transformed. By embracing the recommendation for a demand-driven system, we have signed on for a very different future."

UWA Vice-Chancellor Professor Paul Johnson agrees, and points to even greater challenges beyond deregulation on the horizon.

"We will also see market-related changes," he predicts. "There are some very large companies now offering tertiary education across the world and they're integrating. Today the world's biggest university is an online, for-profit business owned by a venture capital company.

"We'll see international players setting up in Australia because it's becoming much easier to do so. At relatively low cost and by developing more material online, they won't lose their economies of scale.

"Technology will facilitate the internationalisation of higher education, and the introduction of for-profit providers will be a fundamental change for a university model that has been around for a hundred years.

"The Australian government has already turned down one application for a private university but more are coming through. Sooner or later, we'll see the full commercialisation of education. That's an even bigger challenge, and it is a threat.

"Are people in universities thinking about this? Senior management certainly is, but academic and professional staff? Probably not as much as they should be."

Professor Johnson points out that the deregulation advocated by the Bradley Review relates to numbers of students enrolled, not to fees for courses. These are still set by the government, so if a student chooses to study medicine at one university rather than another, the cost will be the same.

However, the Vice-Chancellor expects that too will change - and before the end of the decade. Price flexibility has been the trend in countries with deregulated markets where public and private universities co-exist.

These changes have unnerved some in Australia. In a demand-driven system, they ask, what if students accelerate a nation-wide trend away from studying maths and science in higher education?

"It is interesting that here at UWA, the majority of our students in our new curriculum structure are in fact studying sciences, so at this University we're not seeing a movement away from maths and science," says Professor Johnson. "But you would be very worried if that started to happen, given this State has a booming economy largely driven by engineering and minerals sectors that are heavily science-based - and we also have a large medical science research infrastructure."

"However, I think there is a challenge in relation to maths and science teaching in our school system. International studies by the OECD reveal that Australia has been going down the league table while countries like Korea, China and Finland go up.

"Part of the challenge is that a smaller proportion of high-performing secondary school graduates is choosing teaching and, more particularly, maths and science teaching. Science graduates can earn much more in other areas.

"So you end up with lots of schools where maths and sciences are taught by non-specialist teachers. If a teacher isn't very competent or excited by the subject, kids are quick to pick up on this and they lose interest."

Professor Johnson says that UWA has been responding to this deficit on several fronts: by offering its highly successful, one-year Graduate Diploma in Education (Secondary) and a Master of Teaching for the three specialty areas; and with its popular Masters in Science Communications and Education that allows graduates to teach in high schools and work in science-related organisations with an education mandate.

He also cites UWA's new Masters Degree of School Leadership that was recently launched by Education Minister Liz Constable, who is a graduate of this University. The course is designed to equip aspiring principals with the skills, understanding and knowledge to lead schools with confidence.

"We really want good leaders in schools because there is a lot of evidence that a school's performance changes for the better with good leadership," he says. "Within a couple of years, an underperforming school starts getting better results.

"In addition to these initiatives, WA's Chief Scientist - our own Professor Lyn Beazley - is out there talking to school children because she's passionate about promoting maths and science. This University is also working closely with Scitech and we're very proactive about bringing school students to our campus."

Does the Vice-Chancellor believe that a deregulated system will drive down standards?

"Absolutely not!" says Professor Johnson. "In a more commercial, market-driven sector you will see more differentiation in the types of providers and in the nature of how and what is provided.

"As in any other market of goods and services, there will be price differentiation - when you buy a car, are you prepared to pay for a top of the line vehicle, a mid-range car or an economy model?

"The challenge for UWA as this market develops will be maintaining quality. We absolutely support quality and quality costs money to provide, so in future we will inevitably have to charge higher prices.

"How then do we preserve access? How do we ensure that students with the capability and application - who haven't benefited from good home support or specialist teachers in high schools - can still come to UWA to develop their skills to the highest degree. Our challenge will be what do we do about scholarships and access in a future regime of higher prices.

"That is something I will be focussing on with my UWA colleagues but it is also a significant issue for both the University, its alumni, business, industry and the wider community. We need to appreciate that before the end of this decade, the costs of higher education will go up."

Professor Johnson cites initiatives that UWA has already put in place to widen access. The Aspire UWA program, supported by both Federal and State governments, encourages students from 24 schools (some in metropolitan Perth, several in the Pilbara) whose students are under-represented. The University's newest equity program Fairway, a support program for final year secondary students, is now helping Year 12 students to complete the Fairway journey and gain entry into a UWA degree course.

"I absolutely believe that those of us who benefited from a free education can't just say, ‘We were the lucky ones - sorry, mate, you'll have to pay'.

"If we believe in a fair society we have a moral obligation to provide the opportunities we enjoyed for current and future generations. We need to build up our scholarship funds and I am very keen to do that now, in anticipation of what is coming."

Published in Uniview Vol. 31 No. 2 Winter 2012