The Concept of “Competition” in Higher Education

In a paper published in October 2009 titled “The Writing on the Wall: Responses of Australian Universities to Global Competition in Higher Education,” Donald Bradmore and Kosmas Smyrnios set out to determine how seriously Australian universities approach the issue of competition. The study’s findings – as well as the assumptions the authors use – are instructive.

The authors cite a number of factors that explain the apparent rise in competition between institutions: declining public funds, arrival of foreign competition on Australian soil, new providers that offer education and training in “alternative and non-traditional” forms, and increasingly intense competition among traditional rivals.

The authors conduct what amounts to a content analysis of publicly available strategic plans of Australian universities, published between 2005-7. This, they assume, will provide us with insight into the degree to which Australian universities are addressing competitive pressures. They conclude that “most universities were not as concerned about rapid intensification of competition as many commentators . . . believed they already were or should have been.”

The authors offer two possible conclusions: first, “competition in the higher education sector was not as serious an issue as many commentators believed.” A second interpretation, this one supported by the authors, is that the strategic plans made available to the general public by the universities do not actually reflect the true plans or concerns of the university leadership. The authors point out that it is common for universities to have three versions of strategic plans:

1. a published, publicly available version that tends to avoid provocative issues;

2. a more detailed version with relatively sensitive information – made available to staff on a “need-to-know” basis;

3. an even more “sensitive and confidential” that “might never be committed to paper”, but that resides in the heads of the senior university administration.

A Methodology In Pursuit of a Thesis

The objective of the study was to determine the significance of competition to institutions. Therefore, it may have been more useful if the authors focused on the second and third versions of strategic plans. It is within these versions – rather than the less honest public versions of strategic plans – that the issue of competition will be found (if at all). By focusing on the public, watered-down version of strategic plans, the authors set out to find evidence where they, themselves, did not expect to find it.

Secondly, the essay takes it as given that that “the rapid intensification” of competition is real and that universities are negligent if they are not taking it sufficiently serious. Yet, the evidence that higher education has been transformed by competition is not as obvious as the authors seem to believe. Indeed, the studies that the authors cite as evidence that competition in higher education has increased are, in fact, largely predictions (rather than evidence) of the emergence of competition. The studies cited offer little in the way of actual evidence that competition has intensified.

The authors of this study join the ranks of many other commentators who have overstated the intensity of competition in the sector.   Competition in higher education amongst most colleges and universities in highly regulated markets like Australia is still quite tame. Demand is high, government funding is strong, and supply of key personnel plentiful.

We can use Michael Porters’ classic framework to analyze the nature of competition in higher education.   Each industry has five “forces” that reflect the degree of competitiveness:

  • Existing competitive rivalry between suppliers
  • Threat of new market entrants
  • Bargaining power of buyers
  • Power of suppliers
  • Threat of substitute products (including technology change)

These criteria suggest that conditions in higher education are not particularly competitive – at least in conventional business terms. Contrast the five forces with the following (albeit incomplete) set of conditions in higher education:

  • Demand for higher education has never been greater (allowing for fluctuations in birth rates)
  • The power of suppliers, in this case academics, is increasingly low. We continue to produce PhD’s for which there are no jobs in academia. Adjuncts continue to be available, despite the remarkably low pay.
  • The barriers for new competitors to enter the market remain great.
  • Competition on price is far from intense. Tuition levels have risen faster than inflation for several years.
  • The majority of enrollments in online courses and programs is with local institutions. The arrival of the long-predicted global market in online higher ed is still in its infancy.

Reference:

The writing on the wall: responses of Australian public universities to competition in global higher education. Donald J. Bradmore; Kosmas X. Smyrnios

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4 responses to “The Concept of “Competition” in Higher Education

  1. Pingback: Competition in global higher education « Tony Bates·

  2. Pingback: Notes on “Collaborate to Compete” « higher education management group·

  3. Pingback: Notes on “Collaborate to Compete” « alston road group·

  4. Pingback: Good Strategy/Bad Strategy and Higher Education « Higher Education Management·

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