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Towards the Innovative University

Hon Steve Maharey
Minister of Social Services and Employment
Associate Minister of Education (Tertiary Education)
Minister for the Community and Voluntary Sector
MP for Palmerston North

Towards the Innovative University

Opening Address at the
Victoria University of Wellington Alumni Association seminar,
"What Does New Zealand want from its Universities
in the New Millennium?"
5 May 2000

Embargoed until 6.30pm, Friday 5 May 2000.

Check against delivery.
Thank you to the Victoria University of Wellington Alumni Association for inviting me here today to open this seminar addressing "What does New Zealand want from its universities in this new millennium?"

I want to start by making a quick survey of the tertiary sector of which our universities are a key part.


What does the tertiary education sector look like?

· We have education delivered by public and private tertiary providers including universities, polytechnics, colleges of education, wananga, private training establishments, and recognised other tertiary education providers (usually at level 3 and above on the National Qualifications Framework)

· We have Vocational Education and Training (or in short-hand industry training) under the aegis of the Industry Training Act 1992, covering Government subsidised on- and off-job education and training for persons who are in a relationship in the nature of employment leading to qualifications at levels 1-4 of the Framework

· We have adult basic education, both credentialled and non-credentialled, which occurs outside compulsory schooling and which usually occurs at or below level 3 on the Framework, including adult literacy and community education

The sector is an incredibly diverse one:

· 38 public tertiary education institutions (8 universities, 23 Polytechnics, four colleges of education, three wananga)
· over 800 providers registered as Private Training Establishments
· 52 Industry Training Organisations
· 11 Government Training Establishments
· and a number of other targeted education providers

The 38 public tertiary institutions have between them combined assets worth approximately $4 billion, 70% of which is held by the 8 universities.

It may be a somewhat controversial thing to say, but let me say it any way - the Government sees these assets as public assets.

The tertiary sector is not just a significant financial asset. It is also important in a variety of ways. The sector:

· caters to a large and growing proportion of the population every year, and over 90% of the population will participate in tertiary education before reaching 25 years

· currently offers over 52,000 courses of study

· employs almost half of the total research and development staff in New Zealand in the universities alone

· is estimated to bring in to New Zealand approximately $500 million per year in export earnings

It is not surprising then that both Government and the public want to be assured that its resources are being used in best possible manner.


Tertiary institutions are required to prepare annual Statements of Objectives in accordance with the provisions of the Education Act. They are also required to prepare annual reports, which must include:

· Financial statements

· A summary of equal employment opportunities

· An account of the extent to which the Council was able to meet the equal employment opportunities for the year in question

· An account of the extent to which the Council has eliminated unnecessary barriers to the progress of students

· An account of the extent to which the Council has avoided the creation of unnecessary barriers to the progress of students

· An account of the extent to which the Council has developed programmes to attract students from groups in the community under-represented in the institution's student body, or disadvantaged in terms of their ability to attend the institution

I am not convinced that the Government's accountability requirements are being adequately met by the existing arrangements. I don't want to see the debate conducted under the same terms that it was in the Green Paper - the issues are not issues of provider capture. But I am convinced that we need to find a better balance between autonomy and accountability in both the statutory and non-statutory governance and public accountability arrangements within the tertiary sector.

Responsibility for the management of the Crown's ownership interests in the 38 public tertiary institutions designated as Crown entities falls to the Tertiary Ownership Monitoring Unit in the Ministry of Education (TOMU). Established in 1998, TOMU monitors all 38 institutions on an ongoing basis and receives quarterly reports from most institutions

A key element in TOMU's approach to monitoring has been the development of a risk classification for each institution - incorporating financial aspects of institutional performance, and over time, non-financial assessments in terms of the quality of systems, and management and governance capacity.

Current legislation provide few mechanisms for direct intervention by TOMU in high-risk institutions, and at times TOMU's work is curtailed by the lack of provisions in current legislation to intervene where a tertiary institution's financial performance poses a real risk to the Crown's ownership interests. This issue is, at times, further complicated by the Councils of some institutions being slow to respond to pressures.

Most, if not all of the country's universities dispute any ownership claims the Crown would make on them. Indeed the legal situation is somewhat unclear as to who actually 'owns' New Zealand's universities. Let me make my own stance very clear - as I have already indicated I see tertiary institutions, including universities as public institutions, and I see the Crown having a legitimate ownership interest.


Beyond that, this Government also has a vision for the tertiary sector, and I want to talk in some more detail about that vision. The sector itself, in conjunction with external stakeholders, will have a role to play in transforming that vision into a strategic plan for the sector, and the vehicle will be the Tertiary Education Advisory Commission (TEAC).

What do we want from our universities?

I detailed the Government's vision for the tertiary education sector in the Terms of Reference for the TEAC - let me restate that vision again:

New Zealand needs:

· A more cooperative and collaborative tertiary education sector

· A commitment to excellence in teaching, scholarship, and research

· A greater sense of partnership between the key contributors to the sector, including individuals, local communities and industry

· An environment where all those involved in teaching, scholarship and research are committed to contributing to the nation's future direction

· An environment where Maori requirements and aspirations for development are fully supported, and which gives recognition to the Treaty of Waitangi and its principles

· An environment where participation by all is encouraged, including by Pacific people, other ethnic groups, and people with disabilities

· A sector that fully supports regional and local communities, and

· A sector that comprises a range of well-managed institutions and providers that can work together across the whole system to meet the education and research needs of the nation

The Government wishes to develop a more widely shared strategic direction and understanding about tertiary education with educators, the research sector, business and communities that will enable New Zealand society and the economy to flourish.


The context within which New Zealand universities operate has changed significantly and I want to sketch out the dimensions of that context, before looking at some of the implications for the New Zealand university sector.

Those universities, and the economy and society of which they are a part, are located in a globalised environment - and increasingly complex environment. The main elements of that environment, as summarised in the British Dearing Report, are as follows:

· The organisation of production on a global scale

· The acquisition of inputs and services from around the world which reduces costs

· The formation of cross border alliances and ventures, enabling companies to combine assets, share their costs, and penetrate new markets

· The integration of world capital markets

· The availability of information on international benchmarking of commercial performance

· Better consumer knowledge and more spending power, and hence more discriminating choices, greater competition from outside the established industrial centres

There are a number of implications for higher education:

· High quality, relevant higher education provision will be a key factor in attracting and anchoring the operations of global corporations

· Institutions will need to be at the forefront in offering opportunities for lifelong learning

· Institutions will need to meet the aspirations of individuals to re-equip themselves for a succession of jobs over a working lifetime

· Higher education must continue to provide a steady stream of technically skilled people to meet the needs of a global corporation

· Higher education will become a global international service and tradeable commodity

· Higher education institutions, organisationally, may need to emulate private sector enterprises in order to flourish in a fast changing global economy

· The new economic order will place a premium on knowledge and institutions, and therefore will need to recognise the knowledge, skills and understanding which individuals can use as a basis to secure further knowledge and skills

· The development of a research base to provide new knowledge, understanding and ideas to attract high technology companies


In this context, our expectations of universities have changed.

My own education took place under the shadow of Clarence Beeby, the legendary Secretary of Education who did so much to shape New Zealand's education system in the 20th century. It was he, and Labour Prime Minister Peter Fraser who advanced the proposition that no matter who you are, you should have access to education so you can fulfil your own personal potential:

"The Government's objective, broadly expressed, is that every person, whatever his level of academic ability, whether he be rich or poor, whether he live in town or country, has a right, as a citizen, to a free education of the kind for which he is best fitted and to fullest extent of his powers"

Personally I found this vision of education inspiring. It is a vision related to ensuring all people have the education they need to participate in a democratic society. It is a vision of education as a public good.

Times change and our view of education has changed. In a globalised world there are different drivers of growth, and there are accordingly different imperatives at work on economies, and on institutions of higher learning. In terms of the public policy environment within which universities are situated and operate, different governments have responded in different ways.

We saw one set of responses in the approach taken by the previous government. That response in turn informed the Green Paper on Tertiary Education produced by the then Government in 1997. The path that had been taken, and the path that was foreshadowed more starkly in the Green Paper, was one that sought to extend the imperatives of competition.

It was the wrong path.

It was not wrong to see education and research as the basis of our success in an increasingly knowledge based world - they are - but it was and is wrong to believe we should treat it like any other commodity.

What we need to do is reassert a vision of education consistent with a broader view of education that we have held in this nation over the past century.

I like the approach taken by the Dearing Committee who said:

"Higher education is fundamental to the social, economic and cultural health of the nation. It will contribute not only through the intellectual development of students and by equipping them for work, but also by adding to the world's store of knowledge and understanding, fostering culture for its own sake, and promoting the values that characterise higher education: respect for evidence; respect for individuals and their views; and the search for truth. Equally, part of its task will be to accept a duty of care for the wellbeing of our democratic civilisation, based on respect for the individual and respect by the individual for the conventions and laws which provide the basis of a civilised society. (Summary Report, Para. 8)

This quote captures the essence of what I mean by education. But having accepted what Dearing has to say about education we still have to face up to the challenges of the new environment.

For example:
· the internationalisation of education;

· the growing importance of knowledge to the economy;

· changes in modes of delivery in response to new information technologies

Facing up to these challenges will mean changes in our tertiary institutions.

They will have to become more connected and involved in the society and economy. So much more will be expected of them and they will need to deliver on those expectations by working closely with a variety of constituencies.

They will need to be innovative.

And the Government will encourage all this through its new Tertiary Education Advisory Commission.


The Commission's work will lead to the establishment of:

· A funding system that encourages institutions to work actively together;

· A way of funding research that advances national and international levels of excellence in a complementary way across the sector - we do not want to see unnecessary duplication occurring; and

· A system where institutions identify what they do best in order to serve New Zealand's social, economic and regional needs.

What that will do is alter the drivers that underpin how universities and other institutions operate. This Government, following TEAC's recommendations, is going to set the drivers to steer our tertiary system in a more cooperative and collaborative direction.

There may be a bit of disquiet about that from some places. It means a departure from the last ten years where universities were effectively told - we don't care what you teach or research, or how you do it, and we don't care how you manage yourselves: "You get the students in the door and you'll get the EFTS dollars."

There is a real tension between the need for a strategic vision for the sector and an ethos of institutional autonomy and academic independence.

Following TEAC's work one of the main challenges to universities will be to work together.

I am firmly of the view that academic independence, and the independent role of universities as the critics and conscience of society must be protected. I am less firmly of the view that protecting this will require a continuation of the present statutory framework and accountability arrangements.

If the sector is willing to buy into a cooperative framework there may not be any need for the government to act to assert what I see as its legitimate ownership interests. But I want to make it absolutely clear that I retain the right to act and will act on the recommendations the TEAC puts to me.

When people ask, why can't you just leave us alone?

I tell them: because society has changed its mind.

Society has decided that we may have left research priorities predominantly in the hands of academics last century and that may have worked well on the whole. But times have changed.

Knowledge is now a very important item throughout our society. Research is now in many cases extraordinarily expensive. And the expansion and multiplication of knowledge areas means that no institution, or country, can be expert in all of them.

The knowledge society puts universities in a complex position. On the one hand, they are more important than ever before. Their services are more in demand and more crucial than ever. But that also means the decisions they take have greater consequences than previously.

On the other hand, the social status of universities is more precarious than ever, and this too reflects the knowledge society. Universities no longer have any kind of monopoly on information. There may well be more scientists in a large company these days than in a small university.

Both sides of this equation have important implications for the relationship between society and its universities. Together, they add up to a dramatic decline in disinterest towards this important social asset.

We want to know what's going on in our universities, and we want to make sure that these huge storehouses of knowledge and expertise are focussed on the same problems as the rest of us. This is because we can no longer afford for them not to be. They're just too important for that.

That doesn't mean micro-management of every operational detail; or for that matter political direction of the research agenda; nor does it mean in-depth workforce planning inflexibly determining student numbers. We absolutely stand behind both academic freedom and institutional autonomy.


What it does mean is that institutions are going to be asked to look at what they do best and how they can reinforce those strengths. And they'll be asked to consider how their range of offerings can be developed in the ways that have the most to offer to the tertiary system as a whole.

This will be a challenge for New Zealand's universities. It will also been an opportunity, because we are saying that we don't expect each one to be all things to all people, that they don't have to all adhere to the same mould. This creates an opening - for the emergence of the Innovative University.

And the Innovative University is one in which the Humanities and the Social Sciences can flourish. Underlying the Dearing Report is an explicit recognition of the role of the arts and the humanities in contributing to economic growth and to social and cultural development. I won't detail the contribution that the Humanities and Social Sciences can make to social and cultural as well as economic capital, but I would make the point that the Innovative University needs to be one that make a contribution to the public good of the nation by providing joined-up solutions to joined-up problems, and one of the most important contributions is producing graduates who have the capacity for critical reflection and judgements.

I don't want to turn our universities into arid institutions that meet the imperatives of the global economy in an economistic way. But I am very clear on the fact that, as public institutions universities need to be making their contribution to what I refer to across all my portfolio areas as the challenge of human capability - for it is in enhanced human capability that the seeds of our progress as a nation will be sown. Universities provide opportunities for the individual and collective acquisition of capacity.

Capacity plus opportunity equals enhanced human capability.

We can, and will, supply the drivers towards a more cooperative and collaborative national tertiary system. But it is up to the universities themselves to take it from there.

We have eight universities in New Zealand. We want them to be eight very different universities, each with their own distinct institutional character, every one of them trying new things, pushing the envelope. And each one contributing something different to an overall system that also encompasses polytechnics, wananga, colleges of education, private training establishments and industry training.

I do not believe this is a departure from the traditional educational values I started my educational career with. I see it as an extension of them.

Not least because I believe the secret to success as an innovative university is being strong in your traditional core - valued and committed academics, collegiality, quality support services, and the opportunity to build a strong rapport between students and staff.


I have been gratified by the response that this Government has received for a vision of a tertiary education sector that effectively serves its community. I believe there is a real will to take up the policy changes that come out of TEAC, and run with them.

People in the university sector want focussed institutions with a real sense of mission. They want a tertiary system that is relevant to the needs of the 21st century and the knowledge society.

I thank the Victoria University of Wellington Alumni Association for initiating this seminar and giving researchers, business, Maori, the creative community and students a chance have their say about what they want from their universities.

This is the kind of dialogue that this country needs, and the university sector needs.

It is on the basis of this kind of dialogue that our universities can crystallise their unique institutional missions in ways that make them meaningful to their staff.

Thank you for helping to build the innovative university.


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