Covid-19 is accelerating digital transition at all universities, as for many subjects normal face-to-face teaching will not be possible. Adapting can be stressful for students and lecturers, but in the long run it potentially provides the opportunity to deliver courses more suited to lifelong learning or apprenticeships.
Maybe we will see increasing partnerships between industry and universities as a result. Businesses need students with artificial intelligence and big data skills, and may be glad to partner with higher education so that they can grow their own talent pool.
Place & Community
Some subjects, such as physical sciences and medicine, need physical infrastructure. But if online teaching and more remote students play a bigger role in higher education, universities may not need all the real estate they have access to. Repurposing this could be relatively simple – student accommodation is often quite new, does not need a change of use, and is in prime city-centre locations.
But the rise of distance learning might not be welcomed by all students. Many sign up to the social interaction of the campus experience. During the pandemic, with students isolated as a precaution, there are problems with satisfaction, quality of learning and mental health. If universities are to thrive, they must find a way to protect students and replicate the advantages of campus life.
Economy & Finance
The education sector has been building up a debt and deficit that will be hard to pay off in a low-inflation economy, with potentially high unemployment.
Levels of student debt continue to build. More than £17bn is loaned to 1.3m students in England each year. By March 2020, the outstanding loans were £140bn. By the middle of the century, the value of outstanding loans will be around £560bn.
This is a problem for future students, who may struggle to find the employment needed to pay off debts for longer. It is also a challenge for government. In 2018 the Office for National Statistics changed the treatment of student debt to recognise a large chunk will never be repaid, so it contributes to public-sector debt.
Higher education also has one of the last-remaining defined-benefit pension schemes, but the Universities Superannuation Scheme (USS), the UK’s largest private pension fund, is underfunded. On 31 March 2020, the fund’s deficit was between £9.8bn and £17.9bn. If the USS continued to offer the same benefits, the costs would be between 29.4% to 37.6% of payroll, provided by staff or universities. If it wanted to repair its deficit, the cost could be up to 67.9% of payroll, according to the USS Trustee consultation with Universities UK.
This would bankrupt many universities. So pension levels, an attractive benefit of a career in higher education, will be less generous in future.
This is one aspect of operational efficiency that many other businesses have experienced already. While universities seek to differentiate their teaching and student experience, their back-office infrastructure, HR and facilities are similar. If they were to consolidate these, it could reduce operational costs – but at the cost of some independence.
Health & Meaning
Higher education will continue to lead in sustainability, through teaching and actions to learn about this life-changing issue.
There is huge potential for this kind of teaching, not just on degree courses, but in the workplace, where businesses could make this a staff benefit. With the well-reported preference of Generation Z to choose employers who reflect their values, the ethics of the education sector can make a significant contribution to a values-based economy.
Megatrends: five essentials for higher education
- More competition in the sector could lead to more specialisation, offsetting skills shortages in STEM or healthcare.
- Hybrid university courses that are part study, part work, offer an opportunity for businesses to grow their own skilled recruits.
- Remote study will become more common thanks to changes in teaching practice, which widens access – but at the cost of the campus experience.
- There is serious financial pressure on universities in the near future, most importantly, the pension fund.
- Universities are committed to teach ethical, sustainable values. Businesses can benefit from collaborating or giving this education as a staff benefit.