One of the more curious claims made in submissions to the higher education review is that markets will drive homogenisation rather than diversity. In my submission (pdf), I identify four market design problems that I believe limit diversity:
* access of foreign-owned providers to the FEE-HELP loan scheme is made very difficult (I expand on this here)
* Commonwealth-supported places are not available to most private providers of higher education
* student contribution amount regulations means that all public universities have to operate at the bargain-basement end of the market (though the effect of this has been alleviated somewhat by international student fees)
* a rigid quota system of allocating student places limits the scope for disciplinary specialisation
On reading submissions from the private providers of higher education I should probably add a fifth factor, the inefficient systems of accreditation and accountability to which they are subject. This reduces the financial viability of small and start-up institutions. (They are not questioning the need for accountability and accreditation, but they have to go through quite similar processes multiple times for different authorities, and some state government higher education authorities are very slow.)
None of the submissions asserting this point provide much detail to support their homogenisation claim.
The NTEU (p.20) thinks that Hotelling’s law applies to higher education, which means that they believe it is rational for higher education providers to make their products as similar as possible. This means that differentiation will be through ‘marketing and branding’ rather than genuine differences.
It’s true that degrees with similar names will often have similar content; this is a product of common professional admission requirements or core knowledge that everyone with that qualification would be expected to have. But there is still scope for considerable diversity in how the material is taught (online/classroom, small classes/large classes, lecture/socratic method), when it is taught (part of Bond University’s innovation was teaching year-round, for example), and the campus context – from none in the case of online, to a residential campus with a wide variety of student services. The current system pushes convergence on large classes over about 6 months of the year with minimal additional campus services (thanks to VSU price restrictions).
Perhaps the NTEU’s argument is that a market would create a new point of convergence, reflecting a new set of environmental pressures. That may be the case with year-round teaching; the current system reflects the history of universities as being run in the interests of the producers, who want to do research, rather than consumer, who may want to finish his or her degree more quickly. However, it is hard to see why there would be convergence on other aspects of educational delivery, since there are likely to be markets for all the options.
institutions will all seek to maximise their offerings in those fields of study that attract high student demand, particularly if that market demand allows them to charge high fees and/or the the field of study is less expensive to deliver.
It’s certainly true that institutions will do more to seek to satisfy demand under a market system, but markets have strong self-correcting mechanisms: if too many institutions compete for the same group of students some institutions will lose out. In any case, as I have pointed out before, demand-side market share between disciplines is quite stable over time. Why would universities engage in cut-throat competition for (say) business students when students in other fields of study can be had with much less effort?
Lyn Meek and Vin Massaro refer only (pdf, p.3) to an uncited ‘substantial body of higher education policy research literature’. This literature is, I presume, that relating to ‘isomorphism’ (eg here).
The main point to draw from the ‘isomorph’ argument is that most of the universities are motivated more by status than by money or the interests of students. They will therefore try to copy those institutions seen as being of high status – in Australia, the comprehensive research universities – rather than differentiate themselves.
There is something to this point (eg pathetic attempts to look good in global rankings). But it goes more to the issue of whether or not institutions would give up on research, and focus instead on teaching, than on whether they would differentiate their teaching services. The market pressures would remain, I think, to offer more variety in the student market, and some high-prestige universities would almost certainly decide to charge more and offer much higher levels of service.
Whatever the public universities do, the private providers will offer added diversity. Simon Marginson, who has supported the isomorph argument in the context of public universities, supports this point:
“We have a burgeoning private sector. It fills a gap in the (post Dawkins university) system, which is a lack of small specialist institutions,” he said.
At minimum, more equal treatment of private providers, as opposed to the status quo discrimination against them and their students supported by Innovative Research Universities Australia, will add to the diversity of Australian higher education.