3 June 1994 Lincoln Economics Professor Floats Alternative Vision for Organisation of Tertiary Education

Freelance academics selling their services like doctors and lawyers ... students "purchasing" education with Government-issued vouchers ... rented teaching space ... and good food guide- type "star" ratings for quality assurance. These were some of the speculative visions of a brave new world of tertiary education presented by Lincoln University's Professor of Economics, Peter Earl, in his inaugural lecture given recently.

Speaking to the topic "The Economic Rationale of Universities: A Reconsideration", Professor Earl offered a scenario based completely on decentralisation, market forces and the principle of user-pays.

"If a 'New Right' government closed existing universities, auctioned off their assets and opted out of any further involvement in arranging delivery of higher education, there is no certainty that the forces of free enterprise would select universities  -  albeit private ones  -  as the dominant delivery system for tertiary teaching and research," he said.

"It is quite possible that several systems would prove viable in the long run."

To illustrate the point Professor Earl drew parallels with the travel industry, contrasting the choice of packaged holidays with itineraries based on personal arrangements.

"You find the two systems operating in parallel but with differing risks for the suppliers."

Professor Earl said that universities themselves appeared to be opening their minds about possible ways of delivering educational services that increased student choices.

"They are making cross-creditation of subjects much easier; they are increasingly making use of specialist consultants or external teaching contractors rather than presuming that, wherever possible, tasks should be handled internally by long-term employees; and they are getting involved in franchising activities."

Professor Earl devoted the bulk of his lecture to a speculative future scenario for the tertiary sector based on an analysis of universities not as factory-like physical structures but as contractual systems for getting things done. It was a perspective he adopted from research work on firms done by 1991 Nobel Economics Prize Winner Ronald Coase.

Looking at an "alternative contractual system" for delivering tertiary education, Professor Earl said that while currently the degree and diploma industry was largely the preserve of state­ owned, budget based institutions rather than privately owned profit seeking firms, it was easy to imagine tertiary teaching and research activities being arranged without any involvement of institutions like present-day universities.

"There is no inherent need for a nesting together of tertiary teaching activities to be accommodated in a set of buildings owned by a single institution known as a university.

"In a decentralised, user pays market based delivery system, customers  - students and research clients - would make contracts with self-employed academics just as some students hire private tutors and individuals or organisations purchase professional services from lawyers, dentists or management consultants."

Professor Earl said that the student fees academics would receive under such a system would come from government vouchers and he saw a user-pays delivery system as entirely compatible with a continuing government involvement in funding tertiary studies.

"Students would have to decide for themselves how to budget their finances between different academics' offerings: they might opt for relatively poorly rated but cheap units in some areas of study in order to invest more to study other subjects with renowned scholars. Academics would thus have to compete with each other for business, and the pay-offs to competitive success would accrue directly to individual academics."

Ian Collins, Journalist, Lincoln University, Canterbury, New Zealand.