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Keith Rankin: Universities of Technology

Universities of Technology

By Keith Rankin

Two important stories this year have been Unitec's long struggle for recognition as a form of university, and the record high balance of payments deficit that New Zealand is now experiencing.

Yet I have not heard the $10 billion deficit mentioned once by Labour or National politicians as a key issue. And the only aspect of tertiary education that has become an election issue is the student loan scheme.

The central point that Unitec wished to make in its application to become a university is that New Zealand needs a new category of tertiary institution; a category that includes the word "university".

The reason New Zealand needs to reinvent its second-tier tertiary sector is that New Zealand's wealth depends in large part on its success as a trading nation. New Zealand's economic growth since 2003 has become unsustainable, however, because New Zealand's tradable sector has not been allowed to play anything like its full part in the growth process.

Farmers have hung on, thanks to high world dairy and meat prices. But the important new parts of our tradable sector - the knowledge and creative industries - are struggling in the face of a significantly overvalued exchange rate and a monetary policy that completely disregards their importance to our future growth.

New Zealand's institutes of technology have been important earners of foreign exchange for New Zealand since 2000. Their schools of languages, business, information technology and design - to give just four examples - have supplied educational services that are attractive to Asian customers.

However, their contribution to New Zealand's export revenues has been compromised because of the lack of university status of our degree-conferring institutes.

International students want university degrees. Our competitors - equivalent institutions in Australia and the United Kingdom - are able to award university qualifications because their former polytechnics are universities. New Zealand suffers a major competitive disadvantage because of an easily correctable omission; the absence of the u-word on their degree certificates.

As a part of its policy to reduce the balance of payments deficit, the next government could commit to giving all degree-conferring institutions that are not currently universities the status of University of Technology. The government should then back up that by resourcing the university of technology sector to continue to provide internationally-competitive higher education. It is, among other things, an opportunity to spread international education more widely through our provincial cities.

One minor problem is that we already have a university (AUT) that is called a University of Technology but is not a university of technology. We now have an excellent opportunity to change that, with the recent passing of one of New Zealand's greatest statesmen, who also happened to be a Minister of Education.

In 1926, following the death of New Zealand's first distinguished Prime Minister from Mangere, Massey College (now Massey University) was created. Now we could honour our second distinguished Prime Minister from Mangere, by branding AUT as Lange University.

Indeed, all eight existing universities should remain as first-tier institutions, contributing in their own many ways to the health of the New Zealand economy.

New Zealand, despite its unpreparedness, is about to experience an increased foreign demand for its educational services. The key drivers are the economic growth of Asian and Latin American countries, the imminent revaluation of key Asian currencies against the New Zealand dollar, and the renewed sense in East Asia that New Zealand is much less likely than the USA, UK or Australia to experience a terrorist attack.

Indeed my source in China tells me that the reputation of New Zealand in China as a place to learn is improving markedly.

The bad news stories about New Zealand in China last year were largely a result of our inability to cope at a time of unprecedented growth in export education for which we were not prepared. Some teaching did not meet the required standards, and many Chinese students reported unsatisfactory home-stay experiences.

New Zealand needs a government that is committed to the sustainable growth of the university of technology sector as a foreign-exchange earning industry. (Of course, like most export industries, the sector also requires a strong domestic base.) Sadly, at the present, and for reasons known only to itself, the government has lost interest both in exports in general, and in the knowledge wave in particular.

Unitec (West Auckland University of Technology?) has an important leadership role to play. If only it were not hamstrung by a government with no vision of how a competitive modern economy could work in the twenty-first century.


Keith Rankin teaches economics in Unitec's School of Accountancy, Law and Finance.

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