One question that universities and other higher education institutions may have to address in the period ahead is how they can generate the revenues that will make up for the shortfall in public funding. Clearly it is possible to reduce expenditure on education – in fact, the ultimate ‘efficiency gain’ would be to admit the student and, instantly, hand them a degree parchment and say goodbye. The cost of that would be minimal, but obviously it would not satisfy anyone’s quality expectations. So on the understanding that a student is entitled to a quality education with an acceptable ratio of students to staff, reasonable facilities, good source materials in the library, and buildings maintained to at least a minimum level, I have calculated that the current unit of resource – i.e. the sum of money paid by the government to pay for each Irish or EU student’s education – is now about €250 per student less than the actual cost of providing such an education. So if a university has, say, 7,000 undergraduate students in this category, they are losing it €1.75 million.
We could theoretically deal with this in one of three possible ways: (a) stop admitting Irish or EU undergraduate students, or at any rate reduce their numbers significantly; (b) admit the students, but adapt the programmes to the financial realities and accept there may be quality risks (larger classes, reduced materials, out of date equipment and less well maintained buildings); or (c) develop other income streams in order to subsidise undergraduate education. I shouldn’t neglect to mention the other option, which is to look again at how students are funded, and either adjust public funding levels or else introduce student contributions; none of that seems likely to happen right now.
If you take the view, as I do, that option (a) is not possible for political and indeed ethical reasons, and that option (b) should not be adopted without at least trying to do something better, it seems to me that higher education institutions must all now develop much more vibrant commercialisation strategies. This does not mean that the core activities should be commercialised – nobody is anticipating that Diageo will sponsor lectures – but rather that we need to look much more closely at how we can exploit commercial opportunities in appropriate contexts. For example, we should look at how consulting can be organised and developed as a business, or how university services could be built up as commercial businesses that also look for external customers as part of a business strategy.
The business model for higher education has, I believe, been fatally undermined. We will need to ensure that we protect our educational core activities through revenues secured on the basis of our expertise. And if we do so successfully, we may also be able to use such success to lessen the bureaucratic influence of government over our activities. In the absence of tuition fees, I see no realistic alternative.