What Value NZ Universities ?

Gareth MorganPolitics

Gareth Morgan, Director of Gareth Morgan Investments

The government continues to fund second rate university education for NZ students. The recent spectre of university staff protesting about levels of pay and the commonplace occurrence of university lecture halls filled to overflowing as the high numbers of tertiary students strain the capacity of facilities, suggests the institutions either are undercapitalised or the whole concept of NZ university education should be reformed.

In the commercial world it’s increasingly the case that the difference in performance of firms can be sheeted home to differences in the quality of the human capital employed. Some of that human capital quality derives from the quality of training provided by universities. In an internationally competitive world the quality of our workforce’s training needs to be the highest attainable. That NZ’s universities do indeed provide the best university training that our workforce can procure, is doubtful. Why should they? Yet one must ask why not?

University education internationally is a reasonably competitive field, at least on the supply side, with the best academics tending to gravitate to particular schools much in accordance with Porter’s theory of clusters of specialists. From the consumers’ perspective though, while the ideal university education is a degree from one of the schools which are world leaders in their field, geographic and physical constraints have until now provided effective barriers to consumer access. A degree granted by second or third rate academics though worth far less, has been the only alternative for most.

In a deregulated world where global information flows have become passe a re- engineering of NZ’s tertiary education system becomes feasible. There now appear to be few insurmountable barriers to NZ students having access to the finest universities in the world. If government were prepared to put the provision of training up to tender, allowing international universities to compete, student choice would dictate allocation of the education resource.

The student could be offered an alternative to being crammed into a lecture theatre listening to some third rate academic disgorge their wisdom. The choice is having access to a beamed in presentation from the finest academic on the subject available. The benefits- communications technology can bring to the training of our tertiary students are ones that the NZ economy can ill afford to do without, facing a competitive commercial world where the quality of labour must be high if it’s wage is to continue to be.

The annual university budget is of the order of $600m. Increments to that budget may be more effectively channelled on investment in technology to provide our students access to the leading teaching institutions of the world, than on propelling the current system of indigenous university supply and unnecessarily producing graduates of less than world-leading quality.

Placing the local teaching academia in a more competitive environment, would gradually improve their own quality as the supply of NZ-based graduates from leading schools expands. The international competitiveness of our own tertiary institutions would improve along with the rest of NZ industry.

What Value NZ Universities ? was last modified: December 15th, 2015 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.