CRC Association

Higher Education Financing and Policy (West Review)

Submission from CRC Association
by
Professor Peter Cullen,
CRC for Freshwater Ecology

Summary

Basic and applied science, and engineering, are crucial elements in the innovation process, essential to Australia moving to become a high technology, value adding country.

The Universities are fundamental to training scientists and for carrying out much of this basic and applied research. Funding cuts, the imposition of increased HECS and full fees, and the obvious lack of career opportunities for young scientists are likely to have a detrimental effect on the numbers and quality of students entering science, the quality of their education and hence the National innovation process. We believe it is critical that science be taught by people who are well trained and at a cutting edge in science.

Governments need to articulate a clear vision as to what they expect of Universities, and University management needs to be improved to provide for more focussed investment of scarce resources to achieve important outcomes. The present sector fixation on inputs rather than outputs is not helpful. Governments need to send clear economic signals to support areas where they see national advantage, and where there appears to be market failure.

The CRCs have been an important element in bringing industry resources into Higher Education and introducing cultural changes, as well as many important innovations in educational practice. There are a number of risks to these contributions.

1. Introduction

Australia critically needs young new scientists if it is to become an advanced and high technology economy. The Universities are pivotal in educating scientists and engineers for these professional roles; they are also important in their ability to raise the scientific literacy of graduates going into other careers such as management, finance, economics, politics and so on. It can be argued that without a more widespread scientific literacy Australia will not be able to achieve its potential.

We agree that the present shake up of Universities has the potential to make them more responsive to community needs and better equipped to focus their investments on areas that will produce value. We welcome this review if it leads Governments to better articulate what they want from Universities, and helps Universities develop management systems that produce desired outcomes.

Theme 1 Role of Higher Education in society and economy

2. Importance of Research and Innovation to Australia

Australia has a long history of doing first class research, and then not being able to develop research findings into valuable products that get to the marketplace. Much of our innovative science ends up being developed overseas. There are many facets to this problem, and one is the linkage between the research community, especially in Universities, and industry. Recent Government decisions to reduce taxation incentives to industry involved in research and further cut backs to University funding are likely to exacerbate this problem and have sent unfortunate signals to industry

Universities have five functions in the innovation process:

provide much of the basic science that might lead to innovation
provide scientists to work in industry and develop ideas,
provide access to the long-term knowledge base
ensure science graduates have an understanding and empathy with industry careers as well as with research careers.
develop applications of knowledge directly through consulting, spin-off companies and other means.

It was in recognition of this problem that CRCs were developed and enjoy bipartisan political support.

3. Threats and Challenges to Universities

The financial cutbacks that Universities have been subjected to over the last 5 years have led to a stagnation and perhaps a decline in science education. There has been little recruitment of new staff, equipment has not been replaced as it ages and becomes outdated and science courses themselves have been reduced with contractions in practical and field work.

The funding and staffing problems, along with increased HECS charges and poor career prospects for new science graduates provide a real difficulty in recruiting top class students into science courses and subsequently into the science professions. This will have a long-term flow-on effect as we shrink the national scientific capacity.

We believe it is critical that science be taught by people who are well trained and at a cutting edge in science. This is not only to ensure that content is up to date, but to ensure students develop the critical spirit of inquiry which is fundamental to science. The brave new world that the Government is now taking the country into will require some fundamental changes to Higher Education.

Effective staff appraisal systems to ensure staff are up to date in the area they are teaching, and are able to model appropriate patterns of scholarship for students.
Quality review should move to the Department level rather than the Institution level, and the new customers should have access to these quality reviews.
We accept that Universities and Departments will need to focus more on what they are good at, and not all will be able to offer a full range of every science - but they never have in the past.
We reject the notion that application of knowledge is in some way inferior to the development of basic knowledge. Both are essential to our society. The main difference is the time to pay off. In our view the solving of real problems of health, environment and industry are what professional education has always been about, and are critical elements in the modern University. We see basic and applied research as both being fundamental to this professional education and to the other values of a University. Without these vocational programs Universities would not only be smaller but intellectually impoverished.
We have trouble seeing any real difference between the early professions (theology, military and medicine) with the more recently established professions. Indeed we expect new professions to emerge as the older ones change. They all warrant high quality education in a University that promotes a spirit of inquiry.
Good professionals understand that professional practice at any time can be improved. As Houle (1980) explained 'The ultimate aim of every advanced, subtle and mature form of continuing education is to convey a complex attitude made up of a readiness to use the best ideas and techniques of the moment but also to expect they will be modified or replaced. The new machine will soon be antiquated, the new drug will be outmoded, the new principle will yield to a more profound one, and the revolutionary approach will become first familiar and then old fashioned. Everyone must expect constant change and with it new goals to be achieved and new understanding and skill to be mastered.'

4. Cooperative Research Centres

Cooperative Research Centres have been established in Australia over the last 6 years to develop partnerships between the producers of knowledge and the users of knowledge. Industry is now contributing some $450 million to CRCs, which is around 20% of the funds available to the CRCs. The funds are especially important in that they are long term, based on the seven year contracts that establish most CRCs. The CRC program has led to a distinct increase in industry expenditure in R&D in recent years, although Australia still lags far behind more technologically developed countries in the old and new world.

The CRC Association represents some 65 Cooperative Research Centres that have been established in Australia over the last 6 years. The CRCs have themselves been reviewed recently (Myers, 1995) which found that the CRC program is achieving its objectives of providing powerful links between the providers of knowledge in the research organisations and the users of knowledge in industry and government.

CRCs have become a critical element in the innovation process in Australia, and are being closely studied overseas. They have some special features:

they are centres of concentration for excellent research staff in Universities and other research bodies, and provide for an intellectual dialogue across organisational and disciplinary boundaries that has been difficult to achieve when these groups saw themselves in some competition for funding and institutional support.
they provide an internationally unique interface between the producers and the users of knowledge. The long term nature of CRCs allows trust to develop and an understanding and tolerance of the cultures that pervade the organisations on each side of this divide.
the competitive selection process ensures Centres are at the cutting edge of their fields, and the seven year term is long enough to get on with the job and delivering, but sufficiently short to ensure a focus on outcomes which sometimes seems to get lost in units that believe they should be funded for ever.
the energy and talent within a CRC has allowed some innovative approaches to postgraduate and even undergraduate teaching to be developed and demonstrated. For instances a number of CRCs join together to provide their students with special courses on project management, scientific publication and other topics, sometimes bringing international experts to present them.

5. Contributions of CRCs to the Quality of Education

The importance of Universities in the research effort and the need to have quality training of research workers has been recognised by successive Governments in the requirement to have at least one University in each CRC.

Winning a CRC in the very competitive selection environment is a clear endorsement of the excellence of the University in that particular field. If Universities are being required to concentrate their resources on to areas of comparative strength, then the CRC process allows both universities and the wider community to identify areas of high standing.

CRCs have already made a dramatic contribution to the quality of Higher Education, especially in the postgraduate area. There are three broad contributions being made by CRCs:

increased financial and intellectual resources for postgraduate projects leading to more and better targeted research;
clustering of projects around major areas of research of national importance;
strong links with industry giving exposure to other organisational cultures, and possible career paths and resources

Particular examples of the innovations that CRCs have introduced into postgraduate programs include:

Interactions with Industry

the inclusion of industry scientists as co-supervisors of postgraduate students,
the opportunity for postgraduate projects to be based in industry facilities,
the increased enrolments of experienced industry staff into postgraduate programs,
the enhanced interaction between research students and industry staff, postgraduate students seeing a wider range of genuine career opportunities in industry because of their exposure to a wider range of cultures, role models, mentors and opportunities.

Improvements to University Research and Education

provided high quality graduate education by having cutting edge scientists, important problems and good equipment;
introduced a stronger culture of reporting and accountability, and introducing a culture of completing projects on budget and on time;
provided innovative add-ons for graduate students often with collaboration between several CRCs on topics such as project management, scientific publication and so on;
pioneered joint courses across several Universities. Some of these are delivered electronically, giving opportunities to test new approaches and ideas for using Information technology for the education process;
provided a significant source of research funding to University staff in a mechanism separate from the ARC and other Industry research funds;
developing techniques for managing collaborative research across the intellectual boundaries that divide disciplines, departments and campuses;
developing an orientation in research that outputs leading to outcomes are a far better performance indicator than inputs (ie funds attracted);
enhanced international collaboration in research;
provided an emphasis, resource and skills in transferring the research findings to possible end-users, and developing understanding on the protection and management of intellectual property.

CRCs have also made significant contributions to undergraduate education, including innovations such as bringing together lecturers from around Australia to discuss how their discipline is taught in curriculum workshops, and providing industry practitioners to take part in teaching programs.

6. Threats to University-Industry Cooperation through the CRC Program

University Funding

The current cutbacks to Universities are very real and are causing significant damage to the quality of science teaching in Australian Universities. What Senator Vanstone might describe as a mere "nick" - the 3% cut, when it is seen in the context of science faculties commonly with around 90% of their budgets committed to salaries, can be seen as closer to a 30% cut in actual operating costs. Considering this alongside an unfunded salary rise of around 10% then the future for traditional science teaching looks grim. Many Universities do not yet have appropriate management structures or processes to effectively manage these changes after years of centralised control.

This places considerable stress on Universities when maintaining their contractual obligations to CRCs, and impacts upon their opportunities to be involved in ongoing or new CRC bids.

The charging of differential HECS fees for science courses had a patchy response around the country, and we see it as another impediment to attracting high quality students to science and engineering courses.

We would urge your Inquiry to renounce the fiction that HECS fees are based on the cost of supply ( for instance the law fee), and seek to establish them on the basis of national needs.

We would urge that funding to science teaching and research in Universities be maintained in the national interest.

Industry Research Funding

The Government is achieving a significant multiplier effect on its investment in research through CRCs. Industry funds to research have markedly increased because of the leverage of the Federal CRC grant and the 150% tax concession to research. The reduction of this favourable tax treatment may well reduce industry commitment to undertaking research in Australia.

Efficiency Dividends

DIST are now requiring CRCs to provide a 3% efficiency dividend back to Government. We think this demand should be seen for what it is, a tax on research.

National Competition Policy

We would like your inquiry to clarify the likely consequences of the National Competition Policy on collaborative ventures between Universities and between the providers of knowledge and the end users (industry and Government).

Findings and Recommendations

Theme 1: role of Higher Education in society and economy

The research carried out in the University sector, and the graduates produced by the sector, are fundamental to Australian industry and to the innovation process.
The CRC program has been a significant bridge between industry and Universities, and should be commended for this role. Governments should build on this collaborative linkage by maintaining and expanding the current CRC program.
The Government achieves an important multiplier through its investments in CRCs in focussing both industry and University funds and resources on to areas of national priority. Notions like efficiency dividends should be demonstrated in the research units, or this Government withdrawal of funds should perhaps be more honestly named as a tax on research.
We believe science and engineering in Universities are under sustained budgetary threats since they are costly and do not attract large numbers of students. We expect this to reduce our capacity to provide for innovation and sustenance of our industry base. As an area of national importance, we believe science and engineering should be protected from these cuts, and that further funding should be provided to rebuild the scientific and technology infrastructure in Universities which in many cases is now seriously degraded.

Theme 3: regulatory and administrative framework for Higher Education

The quality review framework and funding should be refocussed to be based more on outputs and outcomes rather than inputs. Quality assessment activities and funding should be focussed on the Departmental rather than the whole organisation level, since many Universities seem to have trouble focussing resources on areas of comparative strength.
We seek clarification on the role of the National Competition Policy on collaboration between Universities and between Universities and Industry, and would urge that no further bureacratic hurdles be placed in the way of such collaboration.

Theme 4: financing higher education teaching and research training

We seek clarification on appropriate principles of cost and revenue sharing for postgraduate students in CRCs. At present there is the possibility of double counting where Universities are funded directly to provide postgraduate education, and resources from the CRC program are actually used to deliver the education.
We do not see simple mechanisms for the major beneficiaries of Higher Education, industry and the professions making a greater financial contribution, and since Government itself is a major direct and indirect beneficiary we believe Government should contribute the bulk of funding of postgraduate education from the general tax base.

Theme 5: funding of higher education research

We believe government funds for higher education research should be focussed on areas of demonstrable excellence rather than spread thinly across all areas in a University.
We believe the CRC program has demonstrated a number of significant benefits from industry-University collaboration in research which have been outlined above.
The CRC program has also made a significant contribution to innovation in Australia.

Reference:
Houle, C.O (1980) Continuing Learning in the Professions. Jossey Bass. San Francisco

Contact: Professor Peter Cullen,
CRC for Freshwater Ecology
University of Canberra
PO Box 1, BELCONNEN, ACT 2616
Phone 06 201 5168 Fax 06 201 5038
email: cullen@science.canberra.edu.au

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