By Jock Finlayson

Like many sectors, the field of higher education is changing. A number of economic, demographic and technological forces are affecting both the demand for post-secondary education (PSE) and the means by which it can be supplied, as documented in a recent report from the Boston Consulting Group:

1. There is an increased focus, by students as well as government policy-makers, on the economic returns from PSE, including traditional university undergraduate degrees.
2. The private sector is playing a greater role in providing and financing education and training.
3. As an industry, post-secondary education is “going global.”
4. Technological innovations that enable new delivery models and learning platforms are being adopted in some parts of the education system.
5. Many PSE institutions are grappling with revenue challenges as provincial (and most U.S. state) governments struggle with fiscal pressures and student enrolment numbers dwindle in some jurisdictions.

Steady Growth of Knowledge Economy
Underlying all of these shifts is a broader macro-level trend: steady growth in the demand for well-educated workers to propel and sustain the knowledge-based economy. Human resources managers are aware of this trend, and employers across the economy are contributing to it by requiring that prospective hires in most occupational categories—including front-line customer service jobs—possess educational qualifications beyond a high school diploma.

Advances in communications technology are opening up new and less costly ways to supply learning and foster interaction between students and instructors—as well as among learners themselves. The rich and continuously expanding array of information and research resources accessible through the internet has revolutionized many aspects of knowledge development and dissemination.

As digital resources continue to expand, 20th century models of information-gathering and transmission may wither. More students today are getting degrees and diplomas on-line, bypassing institutions in their own communities. The introduction of “massive open on-line courses” (MOOCs) could disrupt the economics of existing university education and teaching models. All of these developments pose risks to PSE institutions, but they also create opportunities to use digital and other communications technologies to widen the reach of education, improve content, and increase efficiency—reaching more students at a lower unit (per-student) cost.

Demographics Impact PSE Futures
Population aging is also influencing the post-secondary education marketplace. In some parts of Canada, both the 15 to 24 and 18 to 29 age groups will be declining over the next two decades. These are the age cohorts from which PSE institutions historically have drawn almost all of their students.

Increasingly, the workforce will be made up of older and more experienced individuals, many of whom will require (or have an interest in obtaining) further education and training as part of their career development or to re-tool for new occupations. In this environment, PSE institutions will need to tailor more of their programming and delivery mechanisms to meet the needs of the adult workforce.

Globalization Impacts Education
Another trend affecting the PSE sector is globalization. Across the world, universities and colleges are stepping up efforts to recruit international students and establish partnerships with foreign institutions focused on instructional programming as well as research. Many Canadian universities have become active globally, often resulting in significant economic benefits.

Close to 100,000 foreign students are now studying at Canadian universities and colleges in any given year. Because they pay higher “market-based” tuition fees, international students represent an attractive revenue stream for PSE institutions. Indeed, a number of provinces, including B.C., have targeted international education as a growth industry.

Further Funding Sources Required
Finally, the system for financing post-secondary education in Canada (and the U.S.) is under strain. In the 1970s and 1980s, governments covered 80-85 per cent of the costs incurred by universities, colleges and technical institutes.

Today, the figure is below two-thirds, and it is likely to decline further, as the provinces wrestle with ballooning health care costs that already absorb half of all provincial government revenues. This is forcing PSE students to pay more, and pressuring institutions to pursue other funding sources and become more responsive to the needs of learners and employers.

Bottom Line?
While the university and college system is undergoing far-reaching changes and there are questions about the sustainability of traditional ways of doing business, one should not lose sight of the benefits of a post-secondary education. As shown in a new report from B.C.’s research universities, young adults holding undergraduate degrees continue to enjoy higher incomes and rates of employment than their counterparts lacking such qualifications.

American studies also indicate that, despite steeply rising education-related costs, acquiring bachelor degrees and other college credentials still makes overall economic sense for most young adults. All of the evidence suggests that HR managers will continue to seek candidates with various kinds of PSE qualifications to fill a large and steadily growing majority of available job openings in the coming decades.

Jock Finlayson is the executive vice-president of the Business Council of BC.

(PeopleTalk Winter 2014)