1. Role of Higher Education In Advancing Economic Development
Caroline Perkins
Australia

2. Higher Education and Economic Development
What should higher education do to advance economic development?
How are these roles shared?
Where does this responsibility end?
Issues
background
areas of skills need; and
regional issues.

3. Contribution of education to economic growth
Estimated long-run effect on economic output of one additional year of education in the OECD area generally lies between 3-6%.
People with higher educational attainment have higher participation rates, are in the workforce for longer, and have better health.
Education plays a key role in economic growth. It is through education that individuals develop the skills and competencies to do their jobs.
Pursuit of higher levels of education can be viewed as an investment in human capital (which includes the stock of skills that individuals maintain or develop, usually through education or training, and then offer in return for earnings in the labour market). The higher the earnings that result from increases in human capital, the higher the returns on that investment and the premium paid for enhanced skills and higher productivity.
The OECD report that the long-term effect of one additional year of education on economic output is between 3  and 6%.  The OECD also reports  that people with  higher educational attainment have better mental and physical health, partly due to improved employment prospects and income for the well educated (Education at a Glance – OECD indicators 2004).
Data from Australia’s recent Intergenerational Report on workforce participation.

4. Australian Population of Working Age
Challenges for Australia:
Aging population.
Shrinking workforce relative to the overall population.
Need to lift labour force participation and productivity to increase economic growth and GDP per person.
Australia must also remain internationally competitive. Being part of the fastest and most dynamic region in the world offers both advantages and challenges. The productive capacity of the Asian region is expanding rapidly and many countries are investing heavily in their education systems to improve their own economic prospects.
As a small, open economy, a well educated and flexible work force is one way to ensure that Australia is well placed to meet the challenges that a globally competitive environment poses. The Australian education system can do much to give individuals the skills they need to succeed in a rapidly changing environment.
As stated in the recently released Intergenerational Report, the ageing of Australia’s population poses challenges for economic growth and Australia’s future living standards. A shrinking workforce relative to the overall size of Australia’s population means that enhancing productivity and maximising workforce participation are critical to Australia’s future.
Policies needed to lift labour force participation and productivity will increase economic growth and GDP per person.
Productivity improvements have driven growth in real GDP per person over the past 40 years, and are projected to continue to be the main source of this growth over the next 40 years.

5. Earnings by Qualification and Labour Force Participation by Age
Those with higher level qualifications earn more.
Labour force participation increases by qualification – particularly for older workers – key issue with an ageing population.

6. Australia and Higher Education Attainment
Higher educational attainment is above average in Australia. In 2004
22% of Australians aged had attained a bachelor degree or above compared to the OECD country mean of 19%;
27% of Australians aged had attained a university education.
49% of Australians who were in Year 9 in 1995 had attended university at some point before the age of 24.
Roughly - 22% of Australia’s workforce are university graduates – but issue of what disciplines graduates are qualifying in, and areas of skills need, particularly Science, Engineering and Technical skills.
60% have technical qualifications – but only 30% have good technical qualifications.
Many young people go to university later on. From the Longitudinal Study of Australian Youth, nearly half (49%) of young people who were in Year 9 in 1995 had attended university at some point in the 10 years after completing Year 9 (ie before approximately aged 24).
Issues of what degrees students are undertaking and areas of skills need.

7. Australian undergraduate SET enrolment 2001-2005 – 7% decrease
Role of SET in increasing economic development.
Overall enrolments in SET decreased by 1.5%, taking into account a 27% increase from international students (cf a 7% decrease in Australian undergraduate enrolments. International students may be keeping some courses going.
The growing numbers of international students studying in SET fields may be disguising the extent of the SET skills-base problem as international students do not generally go on to use their skills in Australia’s workforce. Domestic undergraduate enrolments are used in the remainder of the analysis as a better indicator of future SET skills supply.
Domestic undergraduate enrolments in natural and physical sciences increased by 5% but this growth was more than offset by decreases in the other fields – 17% decrease in agriculture, environmental and related studies, 3% decrease in engineering and related technologies and a substantial decrease of 27% in information technology.
Key issue for the Australian economy is whether we are producing enough graduates in SET areas – already shortages of engineers, scientists and computer professionals in some fields.

8. Trends in commencements, enrolments and completions in IT
Australian domestic students

9. Activities to encourage uptake of SET studies
University initiatives
Science camps
School visits by young science researchers
Joint projects with schools etc
University activities to facilitate uptake of SET studies by students – many activities focus on school students (e.g. science camps that foster interaction between scientists and school students); school visits by young science researchers; opportunities for senior students to work with science academics on joint projects with schools, such as the establishment of an environmental education centre.

10. Activities to encourage uptake of SET studies
Joint activities
Australian Government funding of new undergraduate places in areas of national skills need e.g. engineering
ICT Leadership Group, with membership from industry peak bodies, government departments, universities, technical and vocational education bodies and schools
Careers Advice Australia
Ultimately, joint activities are needed with universities, Government, industry playing a role to attempt to significantly increase the uptake by students of SET subjects.
The Government is providing around 50,000 new places to the higher education sector by 2011 as a result of the Backing Australia’s Future (BAF) reforms and other initiatives. Many of these are targeted to areas of skill shortage.
In October 2006, the Prime Minister announced the allocation of 500 additional engineering places to commence in These places are part of the Skills for the Future package and should substantially address student demand in this area. Universities will be asked to apply for the places and the allocation will be made this year. These new places build on the allocation of 510 new engineering places that commenced this year, and the 216 places that commenced in In addition, Queensland University of Technology was allocated 40 additional places in engineering for 2006.
Information and Communication Technology (ICT) Industry Leadership Group has been established to develop and facilitate improved ICT information and participation in ICT occupations and careers.
The Group is jointly chaired by the Australian Information Industry Association and the Australian Computer Society and has representatives from a range of industry peak bodies, Commonwealth and state government, and other relevant organisations and aims to improve ICT workforce intelligence and increase participation in ICT careers. Four working parties: ICT workforce and labour market research and intelligence; ICT study and careers promotion; ICT in schools; ICT skills development in the workplace.
Careers Advice Australia - The Australian Government has extended its commitment to help young Australians make a smooth transition from school to further study, or from school to work.  The Government’s 2005 Budget commitment of an additional $143.2 million from to will for the first time provide a comprehensive national career and transition support network for all young Australians from 13 to 19 years.  Preferred applicants for Local Community Partnerships will partner with industry and employer groups, schools, in community organisations, parents, young people, youth service providers and other government organisations and professional career advisers. These partnerships are working on promoting careers in SET.

11. Activities to encourage uptake of SET studies
Australian Government Programmes
to promote student engagement in maths and science in schools
activities to promote appreciation of SET careers through activities such as national science week etc
Research into ways to promote community awareness of SET careers
e.g. Schools Initiatives
Australian Government programmes to promote student engagement in maths and science include:
the Australian School Innovation in Science, Technology and Mathematics project ($34 million over seven years)
the Australian Academy of Science-led Primary Connections programme which aims to improve the quality of science teaching and learning in primary schools
CSIRO’s Double Helix Science Club – a science awareness club for children – with 17,000 members
Questacon’s Smart Moves Invention Convention which brings together secondary students and their ideas from around Australia.
Curriculum modules and professional development programmes for teachers and initiatives such the Questacon Smart Moves Invention Convention which brings together secondary students and their ideas from around Australia;
Science career paths
The CSIRO Science Leader Scheme provides an additional 40 new postdoctoral fellows and 10 new CSIRO Science Leaders positions. The CSIRO Science Leader Scheme is directed to high performing scientists with between 5 and 10 years post-doctoral experience. This increased investment will amount to $18.3 million over three years.
The Science Connections Programme, funded under Backing Australia's Ability with $26 million from to , promotes public appreciation of the importance of SET through activities such as National Science Week, and celebrates our high-achieving scientists and science teachers through the awards of the Prime Minister’s Prizes for Science.
Departmental research
Following the SET Audit, DEST is undertaking further work on improving community awareness of SET and SET related careers; improving the capacity of the education and training system to deliver high quality SET courses; and enhancing understanding of SET career opportunities and career paths among early to mid-career researchers.
All sectors have a role to play in encouraging careers in SET – ultimately, cannot force students to study these subjects – have to encourage them.

12. Role of Higher Education in Regional Economic Development
Australia large country with a small population (30%) outside cites.
Relatively lower educational participation rates for students from rural and isolated backgrounds than from metropolitan areas.
On a per capita basis, for every 10 urban people who attend university, about six Australians from rural or isolated areas do.
One driver for maintaining higher education provision in regional areas is the relatively lower educational participation rates for students from rural and isolated backgrounds than for students in metropolitan areas. Overall educational attainment is lower among regional communities. Young people in regional areas are less likely to have parents who have participated in higher education and often their financial circumstances act as a deterrent to higher education, particularly if this involves the added expense of moving away from home.
Students from rural and isolated areas from one of the defined equity groups whose access, participation, success, and retention in education are monitored. The total number of students in higher education from rural and isolated areas has grown since In 2004, rural students constituted 17% of domestic students and isolated students were 1%.
Participation rates for students from low socio-economic backgrounds (many rural or isolated students) 14.5% - no improvement in recent years.
As school completion rates are lower in rural areas, many rural students do not reach the point at which it is meaningful to speak of potential barriers to higher education.
(Students from rural/isolated areas – derived from population density and proximity to large cities based on census data.

13. Location of universities in Australia
Speaking notes:
No definition of a regional university. Some regional universities have campuses in the major cities, and some metropolitan universities have campuses in regional areas.
Many regional university campuses share facilities with vocational education and training institutions – some of these have been effective in broadening educational opportunities in regional areas in cost effective ways. Many of these regional campuses have also developed strong links with local government and regional development organisations.
Will briefly comment in the next slide on two regional universities – Charles Sturt in Bathurst, NSW and University of Ballarat in inland Victoria.

14. Regional Universities
Regional university campuses make significant contributions to their host economies
Charles Sturt University and the University of Ballarat have found that 60-70% of their graduates are initially employed in a regional locations.
Rural communities see a university presence within a community as a way of encouraging their young people to stay within the region rather than move to the metropolitan cities. However, It is more likely that the lower participation in higher education of young people from rural and isolated areas is related to socio-economic factors and general attitudes to education. The most successful universities in regional areas are those that develop strong relationships with their communities and build positive community attitudes to education as a long term goal.
Regional universities make significant contributions to their host economies. Charles Sturt University and the University of Ballarat have found that 60 to 70% of their graduates are initially employed in a regional location. Over a third of University of Ballarat graduates found initial employment in Ballarat and its surrounding region, and 40% of Charles Sturt graduates were employed in one of the regions that contains a CSU campus.
Many universities in regional areas have missions that are closely linked with their regions.
Australia is a leader in distance education to serve regional communities e.g. University of New England in Armidale has 70% distance students.

15. Regional issues
Australian Government initiatives to assist regional universities include:
Collaboration and Structural Reform Fund;
Diversity and Structural Adjustment Fund;
Regional loading;
Capital Development Pool; and
Equity measures.
Issue getting students to enrol in regional universities
CASR - Collaboration and Structural Reform Fund - $52 million in funding – to achieve better higher education outcomes in teaching, learning, research and innovation by assisting structural reform and collaboration (between different tertiary education institutions, industry and community organisations.). Agent for change in regional Australia
Introduction of the Diploma of Foundation Studies at Leongatha as a strategy to increase progression of South Gippsland students into higher education
Lead Organisation: Monash University Gippsland Campus
Partners: Shire of South Gippsland; Leongatha Hospital; Department of Education and Training
CASR funding: $120,000
Monash University will introduce a Diploma of Foundation Studies programme in Leongatha, South Gippsland, as a direct pathway into the second year of the University’s Bachelor of Nursing. The programme will provide regional students with greater access to higher education and in this way address the region’s low progression rates to higher education.
Cross-institutional collaboration in the teaching of earth and environmental sciences in regional New South Wales
Lead Organisation: The University of New England
Partners: The University of Newcastle
CASR funding: $152,000
The Universities of New England and Newcastle will jointly develop and deliver a comprehensive degree in earth sciences to students in rural New South Wales, and also collaborate in the teaching of environmental sciences.
University of Tasmania-Renewing the Region – the establishment of a collaborative Institute for Enterprise and Regional Development.
Diversity and Structural Adjustment Fund – new fund starting in 2008 ($209 million) to promote diversity and structural adjustment, particularly for regional and smaller metropolitan universities (absorbs CASR). Focus on building stronger links between regional unis and vocational and technical education institutions – students from low ses/rural backgrounds may be more likely to go to VET sector – improve articulation from VET to HE.
Regional loading - $146 million over 5 years from 2004 on a graded scale to universities located outside metropolitan areas – in recognition of non-discipline related costs involved – regional universities face pressure to offer a range of courses beyond those which would be considered viable for the population being served.
CDP – capital projects, including teaching and learning – priority for regional areas and suburban growth corridors.
Equity measures include: Higher Education Support Programme – allocations based on the performance of students from low SES backgrounds with a weighting to those from rural/isolated areas. Providers target assistance where most needed to enhance access and participation of students including from rural and isolated areas.
Also Commonwealth Scholarships – learning and accommodation.
Youth Allowance, Rent Assistance.
Key issue is the soft demand for places at some regional institutions and the fact that once a decision has been made by a student to attend university, proximity of university campus is not a determining factor.
Research on the participation of young people form rural and isolated backgrounds suggests that once the decision to attend university is made, proximity of a university campus is not the determining factor.