4 May 2011

National Press Club Address by Professor Paul Greenfield, Vice-Chancellor, The University of Queensland and Chair, Group of Eight universities

Good afternoon and welcome. Thank you for coming.

It’s hard to compete with royal weddings, international actions against terrorists and a looming budget, but I will try to convince you that the university scene in Australia is anything but dull.

• From next year the Federal Government will no longer control the number of places available in universities. From 2012 universities will be allowed to accept as many students as they wish. As a result universities are already accepting larger numbers of students in preparation for the new “student demand driven” system. Tertiary Education Minister Chris Evans reported last week that, “more Australian students than ever before…” are at university. Some 480,000 undergraduate places are being funded in 2011, which is 50,000 students more than in 2009. Encouragingly offers to students from low socio-economic backgrounds have increased faster than for other groups.

• A new national regulator for tertiary education is being prepared (TEQSA).

• A review of university funding is underway, likely to pose as many thorny questions as provide straightforward answers.

• The Australian dollar climbs ever higher, making it more difficult for universities to attract international students who have provided vital funding over the past two decades.

• For the first time research quality within the Australian university system has been measured (ERA); so that we now have a picture of the strengths and weaknesses of university research and the location of these strengths and weaknesses.

• There are signs of greater differentiation within the university sector. It is most apparent at the international level but even within the Go8 research intensive universities we see such signs. The University of Melbourne and UWA have gone one way in offering broad undergraduate education followed by specialised postgraduate education while Sydney, Monash and UQ have gone a different way, offering to students a broad range of entry and exit points. All of this has begun to increase student choice.

“Not dull” is good, but is all well as we go forward? Can universities be part of the cure for the so called ‘Dutch Disease’ – caused by the booming resource economy with soaring exchange rates and tight competition for human and other resources within Australia?

This talk addresses these questions and I will tell you now the conclusions which I reach:

• Australians want an international quality university system. They are positively inclined towards research and its outcomes and understand the importance of a quality learning environment.

• Higher education in Australia will only survive and deliver major benefits to the country if it is internationally competitive.

• Higher education in Australia must be seen through an international lens. It is a major industry, benefiting regions, the country as a whole and, particularly, Australian graduates.
Despite this significance and the very considerable resources provided by the Australian Government, the overall policy framework remains fragmented.

• Achievement of ambitious participation targets at quality levels that are internationally competitive requires a more differentiated and deregulated sector than we currently have; this demands extra resources and greater financial and intellectual engagement with industry.

Australians want an international quality university system.

Let me start with a story of a major research success – it is called the Positive Parenting Program or Triple P and is based at The University of Queensland.

Triple P is a research and evidence based program designed to prevent and treat behavioural and emotional problems in children. It began as Professor Matt Sanders’ PhD project undertaken between 1978 and 1981.

The research and development was refined over the next decade, with the “Positive Parenting Program – Triple P” launched in 1992.

A succession of competitive research grants flowed over this period, grants that were key to building the evidence base, and which ultimately led to the creation of the Parenting and Family Support Centre at UQ (with QLD Govt support).

In 2001 UniQuest, UQ’s principal commercialisation arm, licensed Triple P International to promote and disseminate Triple P globally.

Today, Triple P International employs almost 100 people in seven countries and contracts 200+ trainers. Triple P has helped countless thousands of Australian families, been disseminated to 22 countries, translated into 18 languages and delivered to the families of over 7 million children.

A major study in the USA on the Triple P system in South Carolina showed that per 100,000 children, there would be 688 fewer substantiated cases of child maltreatment, 240 fewer out of home placements, and 60 fewer hospitalisation and emergency room visits related to child maltreatment. The estimated saving to the US economy was 5 billion dollars per year if these results were extended nationwide.

Clearly, this research has had a major impact. The impact was a result, in part, of the quality of the original and ongoing research, although other parties ha270.38€ve been key players in delivering the program to the world. The program continues to evolve in terms of related research and other applications. The interest and support of the community, whether they are actually involved in the program or not, are huge.

Another case comes from my own experience in environmental management for the last 35 years. I remain awestruck at the interest within the Australian community for scientific and other knowledge. There is an underlying community hunger for knowledge; whether about the pros and cons of different diets and treatments, or the roots of current geo-political conflicts, or the origins and behaviours of species. A large media industry profitably services that hunger.

Whether the global contest is in sport, the arts or science, Australians understand that if you want to win you have to prepare seriously, train hard and long, and match it with the best. It doesn’t matter whether you are Susie O’Neill, Grant Hackett, Ian Thorpe, Geoffrey Rush, Barry Marshall or Ian Frazer.

I don’t accept the view that the Australian community is hostile or resentful towards universities and university research. To the contrary, it is this community support that sustains universities. Unfortunately, higher education is rarely a major election issue, and that for the most part, elections revolve around pressing problems for which there are alternative political solutions proposed. Arguably, public passions about higher education won’t help swing a marginal seat – except, perhaps, in the regions.

Responses to surveys of confidence in public institutions have seen the percentage of people having a ‘great deal of confidence’ in universities rising from 11% in 2001 to 24% in 2008.

Only 18% of people have ‘not very much or no confidence’ in universities compared to around 50% for churches, courts, federal parliament and the public service, and over 60% for banks.

The 2010 Australian National University Poll of public opinion found the highest levels of ‘very interested’ responses in new medical discoveries (48%), environmental science (56%), new scientific discoveries (48%) and new inventions and technologies (45%) compared with rates of 32% for politics and 26% for sports news. Australians are overwhelmingly positive about the potential and the benefits of science; with over 85% feeling that it has made life better for most people.

There are other signs that many Australians have a deeper understanding of the importance of discovery and innovation than some in leadership positions. Swift and wide reaction to the proposal floated last month to cut million off health and medical research grants in the 2011 Budget seems to have caught the Australian Government by surprise.

It was not only medical researchers who became active and vocal but the campaign also gained considerable community support – notably from patients – as well as media coverage. We will know shortly how much the Government listened. Either way, I’m heartened that many Australians believe that research matters.

On the importance of learning, we know the sacrifices of parents to give their children a sound foundation from early childhood through primary and secondary school. They see education as a gateway to opportunity, and they want their kids to succeed as learners.

It is not as if a switch is thrown and the lights go off when their children go to university. Even though students themselves, rather than families, may meet more of the costs of higher education, most parents take an active interest in the success of their children as they progress through their studies. Graduation ceremonies are significant celebratory events in the lives of students and their families. They are no less significant today than in the past, and they now reach wider audiences as the student body has grown and diversified greatly.

My first conclusion, therefore, is that Australians support investment in intellectual talent and university education, and they are more prepared to do so when the economic, environmental and social benefits are evident and well explained, and when the quality of the research or learning is apparent.

International competitiveness of Higher Education

My second point is that international competitiveness and benchmarking are essential if we are to deliver to Australians their expectations from the sector – I will focus on universities.

Modern universities operate at multiple levels. They contribute to three inter-related forms of capital formation: intellectual capital, economic capital and social capital.

At the heart of a modern university is the development of intellectual capital via scholarship, research, and discovery. This is seen as the traditional role of a university. It is this activity which plays a major role in establishing the international reputation of universities and is what the recent research quality initiative (ERA) aimed to assess.

The generation of economic capital from universities comes via a variety of routes the most significant being the economic contribution made by their graduates. Dollars are also earned from the effective commercialisation of intellectual capital and when companies, individuals and government interact with research staff and students.

Social capital comes from the translation of scholarship into effective teaching and learning experiences for a broad sector of society. There are other significant contributions to culture from scholarship which I will not discuss.

Quality outcomes at both the individual level (social capital) and at the national level (economic capital) do not just happen. They need to be rooted in a quality scholarship base and then effectively translated into teaching and learning and research training experiences or translated into practical outcomes for the benefits to be realised.

Let us briefly examine each of these elements.

Intellectual capital and scholarship

It is in the research space (i.e. intellectual capital formation) that the link between national and international standards is most clearly recognised. Senator Carr and the Australian Research Council, in pushing forward with ERA, have acknowledged that being internationally competitive is the only quality benchmark of value in research and scholarship, and that requires measuring yourself against international levels.

While there remain some methodological issues, Government is to be congratulated for making it harder for mediocre and poor research to hide and pretend that it is otherwise. As a result of ERA, Australia understands better where our national research strengths and weaknesses are and where the loci of excellence in different disciplines exist.

ERA poses a bunch of questions for universities themselves, for the national tertiary education regulator (TEQSA) and for Government in terms of focus, quality and funding of competitive research and research training:

• Should Australia encourage the training of research students in discipline locations which are not at an international standard?

• How significant is “research power” i.e. having a critical mass of researchers in a highly rated area? Should this be rewarded by encouraging a much greater focus within universities?

• Should the funding of research capacity and capability raising be separated from the funding of excellence via competitive grants?

• Is there a link between research quality, as measured by ERA, and research impact? In other words, does the quality of the intellectual capital that is generated via the research or discovery process relate to economic or other outcomes?

When we look at the various world university rankings, Australia appears to be punching above its weight, with 7 in the top 200 on one measure and 2 or 3 in the top 100 on another measure. However, these findings are no grounds for complacency. The rankings that show Australia in reasonably good light at present reflect some legacy factors built into their metrics.

When we look at growth in the ratio of researchers to the population, Australia’s trend is flat in contrast to China, Canada, Korea, Singapore and other countries where the ratio is rising steeply. When we look at research citation impact analyses, there is no field in which Australia outperforms the US, the UK, Canada or Germany. And citation metrics are typically five years lagged. A serious problem with lagging indicators is that it may well be too late when the hard evidence comes in for Australia to recover its place in the world. Meanwhile, no one is waiting for us to catch up.

Capturing the economic and social benefits from research and scholarship

Impact is the most significant measure of the benefits from research, but it is recognised as very difficult to measure in a meaningful way. Former Chief Scientist Robin Batterham summarised the challenges as follows:

“Whether the final user is in the public domain (e.g. in health education) or the private domain, the chain between R&D and innovation involves multiple steps and multiple players making impact measurement a real challenge.”

Batterham also referred to US studies which showed a correlation between share price movements over a 10 year period and the citation impact of publications which underpinned the prior art disclosed in patents held by those companies, implying the importance of the quality of the underlying basic research.

Australian policy makers might take note of the German Excellence Initiative, which concentrates investment in areas of research excellence, selected through internationally peer-reviewed contests, without regard to government priorities. This is based on the assumption that the best science is more likely to generate worthwhile results than fair to good science aimed at arbitrary targets set within the political system.

I have already outlined the Triple P program and its impact. I have one further example that demonstrates the impact that high quality research can have both socially and economically.

Both examples demonstrate the time it takes to capture the benefits of top-class research.

My second example, which I am sure will be no surprise, relates to the development of a papillomavirus vaccine, the object of which is to protect women against cervical cancer, and which resulted from the research of Professor Ian Frazer and the late Dr Jian Zhou at UQ.

Research began in the late 1980’s, building on earlier discoveries about the virus; UniQuest took out the first patent in 1991 and licensed the technology to CSL in 1995 who sub-licensed to the US company Merck. Food and Drug Administration approval was obtained in 2006 and the first product entered the market in Q2 2006.

Today the vaccine is approved for use in 121 countries and worldwide over 65 million doses have been distributed. Sales have reached multi billions of dollars, some of which has been returned as royalties to CSL shareholders, UQ and the inventors. This case illustrates the fact that significant innovations result from research that is internationally competitive.

As with the Triple P example, it also exemplifies Batterham’s concerns on measuring impact.

Clearly, its social and economic impact continues to be significant, but could we have quantified that impact back in 1995 or 2000? Even today can we know the extent of its future impact?

Triple P and Gardasil are just two of a myriad of examples from the university sector that demonstrate the value of high quality research in improving the economic and social worth of Australians and others. Not all quality research is aimed at or leads to invention, not all quality research is effectively translated into clinical, commercial or industrial practice or policy formulation, and innovation is certainly much broader than just research commercialisation. However, the evidence of the relationship between research quality and the impact of that research is strong.

Queensland has recognised this link. I lived through the times when Queensland was disparaged by ‘southerners’ as an intellectual backwater, but over the last twenty years the Queensland economy has been diversifying.

Opportunities for growth in jobs have been underpinned by a commitment to invest in bright people and clever ideas. The Beattie and Bligh governments have understood the importance of universities to Queensland’s future. I’m not sure we can yet claim political appreciation of this fact nation-wide, just as some Australians may not appreciate just how different Queensland is today. The evidence that Queensland has benefited from its investment in quality research infrastructure and research is clear.

A recent set of studies carried out by Allens Consulting looked at the economic benefits to Queensland of investment in four research institutes created at UQ over the last decade. Using a conservative methodology agreed to by Queensland Treasury officers, the results demonstrated a return of between 4.5- for every dollar outlaid, a number significantly higher than for areas such as tourism. These results are reflected in many other studies carried out by a range of universities, both private and public, in the US and elsewhere.

Public policy needs to be realistic when it comes to research commercialisation. The commercial success rates from early stage intellectual property are low and high pay-offs are rare. If a university was motivated only by the prospects of financial gains from research commercialisation, it would not do it. Research commercialisation is but one element in the sharing of know-how and the formation of relationships between universities and business enterprises. New knowledge can move enterprises into leading market positions beyond the point where existing technology can be imported and adapted.

Nevertheless, the great bulk of innovation, involving enterprises competitively responding to demand drivers, derives from clever modifications of existing knowledge broadly embedded in the creative, technical and organisational skills of individuals. In this regard, the major contribution that universities make to national innovation remains the development of talent.

There is a challenge for universities to lift their game in this space by making their knowledge outputs and know-how more accessible to firms. To that end the Go8 has developed a web portal –Australia’s Knowledge Gateway – with a searchable database linking directly to researcher expertise.

Capturing the benefits of scholarship in the learning process

The link between national and international standards in the teaching and learning space is nowhere near as strong as for research. This is curious because of the significance of the international student cohort in the Australian higher education framework. It is almost as though the learning experiences and outcomes of international students are unrelated to those of domestic students.

The benefits of a university education are well recognised by the Australian community.
Indeed, it’s accepted dogma that 3-5 years as an undergraduate student is a lever to social mobility.

• The current Australian Government’s laudable focus on increasing the participation rate for students from low socio-economic backgrounds reflects broad agreement that this will improve social capital.

• The Business Council of Australia agrees and quotes data showing significantly increased labour participation rates for people with a Bachelor’s degree or above, relative to those with Diplomas or only high school qualifications.

• Studies in the US have demonstrated the higher life-long earning (and therefore tax paying) levels of graduates versus non-graduates.

Participation in the higher education sector can only take most people so far. Students deserve access to a quality learning experience to reach their full potential. Government currently seems to be focussed on numbers like reductions in rates of unemployment among the most disadvantaged population groups. Such a commendable concern for personal dignity and social equity needs to be set in the global context, where the focus is on quality.

The Business Council captures these concerns concisely:

“What these issues reinforce is that we need to consider more than just the level of participation of individuals in tertiary education. A critical aspect of the contribution of higher education to productivity is the quality of teaching and learning.”

This concern on the quality of the learning experience is shared by students, universities, businesses and, I believe, the community at large.

Governments around the world are under intensifying pressure to secure the capacity of their economies to generate the wealth necessary to provide the services needed in a more demanding future.

If they cannot improve the skills base required to move up the curve of value added economic activity, their economies will falter and talent will flow elsewhere. Raising productivity is an imperative.

It requires not only real gains in efficiency (i.e. greater numbers) but also improvements in quality.

I’m not sure the dual features of productivity are fully appreciated in Australia. When the Government’s policy is to produce more graduates at lower unit costs, the result is a blow-out in student-staff ratios which means less intensive student interaction with teachers and a lower quality learning experience.

The overall student staff ratio in Australian universities has risen from 12 to 1 in the mid-1990s to 21 to 1 today. We have clear evidence that the level of student engagement with university teachers and a number of other indicators reflecting the quality of the learning experience are lower in Australia than in the US and the UK, and this has scary implications for the future. Quality is not some minimum standard set by a group such as the Tertiary Education Quality Standards Agency (TEQSA) - important though that may be - but must be measured against international benchmarks. If we are not prepared to fund it sufficiently then we should not claim it to be what it is not.

Higher education within an international context

Australia has developed a world competitive resource industry by building on the comparative advantages of major deposits being located on or beneath its terrestrial land mass, continental shelf and its controlled ocean areas. The factors which have led to this transition are well understood; relative political stability and enforceable legal rights, investment in physical infrastructure, access to both national and international capital, acceptable taxation policies, supply of a trained workforce and proximity to and relationships with key growing markets.
What is the relevance of the Australian resource sector to the Australian tertiary sector, you are no doubt thinking? The answer is simple – INTERNATIONAL COMPETITIVENESS.

The resource sector, along with other export sectors, exists because of this simple fact – simple to state but difficult to achieve.

We also have an internationally significant competitive higher education sector:

• A 2010 Report for the Australian Technology Network Universities concluded that “international education is Australia’s third largest export industry, generating billion in exports in 2009. It is 50% larger than tourism-related travel, and has grown by 94% since 2004.” Higher education generates around billion or 57% of this export income.

• A 2009 Access Economics Report “The Australian education sector and the economic contribution of international students” carried out for the Australian Council for Private Education and Training reached similar conclusions for the period 2007-08.

• Recent assessments in the UK, USA, Canada and New Zealand reach very similar conclusions and interestingly refer to Australia as the first mover in developing international education and, in particular, higher education as a major export business.

• Melbourne University vice-chancellor Glyn Davis reported at a recent CEDA meeting on the overall economic impact of Victorian universities (not just from international students). Melbourne's seven universities are the city's biggest employers and the largest contributor to state economic development over the past 25 years. He pointed out that higher education's contribution to economic prosperity is rarely discussed, even though it is the largest service export industry in Australia.

The ground beneath higher education’s international significance is shakier than the resource industry’s. The underlying comparative advantage of the resource sector lies in the size and quality of the resource, both of which are fixed in space and time – that is, the ore body or coal or gas reserve cannot move and its quality has been determined by millions of years of geologic history. Competitiveness comes from adding the necessary elements to deliver product to markets at the right price.

On the contrary, the main currency of the higher education sector is its reputation for delivering a valued experience relative to the overall costs. Strong reputation built up over time, easy access, a safe welcoming environment, equitable climate, pleasant life style may all provide an element of advantage but, except for reputation, evidence suggests their roles are small. Costs, visa issues, work opportunities both during and after graduation, education opportunities for children, all of which are determined either by the market (e.g. exchange rates, tuition fees) or by governments define the competitive space. In other words, unlike the resource sector, there is no in-built comparative advantage, just a set of competitive factors.

Australia gained its pre-eminent position by being a first mover in utilising existing hard and soft infrastructure. Quality was not the key competitive edge (most surveys show Australia has never been the first or second choice for most international students), but overall quality per dollar outlaid was, at least when the Australian dollar was worth around 80 US cents. The differential pricing by Australian higher education providers in the international market by and large reflect their perceived reputation for quality. Overall, however, Brand Australia was seen as good value for money.

As the Australian dollar soars, Australia’s value per dollar outlaid as an educational destination loses altitude. The overall picture is a mixed bag, however, but the positive moves by government have not gone far enough. Credit is due for initiating the Strategic Review of the Student Visa Program; hopefully, this will lead to action restoring some of Australia’s competitive edge.

For Australian Higher Education to remain a major economic earner for the country, it must obsess about being internationally competitive across a range of different drivers. In particular it must recognise that it cannot rely on any inherent comparative advantage i.e. Brand Australia is starting to look shabby.

Yet there appears to be a broad lack of understanding within Australia that university education is a competitive, worldwide industry:

• In politics and business, there is a sad lack of recognition of the success of the higher education sector in achieving such a stellar export position. Until recent initiatives from Ministers Evans and Bowen in taking steps to protect that position, the sector received more lip service than action.

• At State Government levels, a range of issues affecting international competitiveness (e.g. issues with schooling, transport, housing, etc) generate little sympathy and less action.

• Until recently, the proposals being put forward under the Australian Qualifications Framework (AQF) showed no understanding of international trends in North America and Asia; thankfully this omission has now been addressed in part.

• The CRICOS Act (registering institutions and courses for overseas students) is a bureaucratic nightmare that impedes international trends such as two or more universities wishing to pool their resources and expertise to offer an international program.

It’s perplexing that domestic and international issues are so delineated - because they are essentially the same set of issues. Do Australian employers aspire to different levels of expertise than international markets? Given the choice would all Australian students choose to pay the same price or might they calculate a value per dollar outlaid as international students do? Where is the evidence that a more de-regulated sector would lead to fewer opportunities for students from low socio-economic backgrounds?

It was implied at one Universities Australia meeting on AQF standards that Australian students are less capable than their North American counterparts to compare different degree programs. Do you believe this? I certainly do not.


To be competitive in a global knowledge economy, all nations must widen participation in higher education, while concentrating excellence at the top end of their university systems i.e. both broadening the base and strengthening the top. Achieving both aims will help to guarantee Australia’s competitiveness and prosperity into the future, create a fairer and more inclusive society and enable us to deal with future challenges, including those we have not yet imagined.

If, as some analysts suggest, Australia is set to enjoy a protracted resources boom over more than a decade, barring a collapse in China’s growth or other catastrophes, we need a strategy for managing the overall economic impact (i.e. the ‘Dutch Disease’). The ‘Dutch Disease’, which leads to increased exchange rates and also heightened internal competition for available resources, affects many industry sectors other than education.

Government is responding in various ways but one active option is by investing in education, research and infrastructure in order to increase the competitiveness of strong sectors such as international higher education, which have the capacity to adapt and remain competitive.

However, a cure for the ‘Dutch Disease’ needs to be wider than just shoring up the competitiveness of the education industry. Because universities underpin all economic sectors, it has a major role in improving the capacity of players in non-booming sectors to seize the opportunities that flow from excellence in research and education.

If I was marking Australia’s overall performance in an international report card, I would give it a B, close to a B+, with the comments:

“Strength in some areas, tends to lose track of the big picture, becomes easily distracted, would benefit from a more flexible approach, has the potential for better performance but there are concerns about a downward slide.”

It is currently a reasonable higher education system producing skilled people for a variety of roles. It has received from the current government increased support over the past few years, addressing specific concerns such as indexation and research overheads.

I would argue that universities are delivering on the Government’s policy objectives implicit in this funding. ERA has shown that we have a rich and diverse research base creating many opportunities for commercial activity.

At an international level, however, we are “off the pace” in teaching and learning.

Structurally, the sector is too rigid and not particularly coherent. Worse, only part of the system (research) is viewed through an international lens. International competitiveness in all parts of the business should be the goal and we should know where we stand by international benchmarking.
Our research position, while competitive, is fragile; it takes a long time to build up but can be eroded rapidly. In several areas the innovation culture is underdeveloped and there are capacity gaps. And, most significantly, the combination of higher education expansion and increasing efficiency is putting at risk the quality of the future workforce.

Government in its responses to the various review processes currently underway can make a difference. It will not be easy, but a government that squanders these opportunities will be judged harshly by future generations.

Thank you for listening.


I thank Mike Gallagher and Kerrie Thornton of Go8, and Fiona Kennedy and Debbie Terry of UQ for their contributions and insightful comments