Implications for University Asset Use in the Digital Age

Posted by on Nov 6, 2012 in Innovation, Property | No Comments

by Michael Brennan

The internet has rapidly transformed the competitive landscape of industries like retail, media and music. It now has its eyes on the millennia-old industry of tertiary education. Recent research[1] describes the impact of Massively Open Online Courses (MOOCs) on Australian universities, “over the next 10 to 15 years, the current public university model in Australia will prove unviable in all but a few cases”. These courses are provided free to the public online by major universities such as UNSW[2], as well as Harvard, Princeton, MIT, Berkeley and Stanford[3], in all types of subjects.

Universities will have to radically change their business model in order to avoid becoming the Kodak of the education industry. UNSW has recently followed in the footsteps of major American universities like Harvard, Princeton, MIT, Berkeley and Stanford in providing a MOOC program, called Open Learning. The first course they are introducing is in computer science. It is delivered by Richard Buckland who has gained more than two million YouTube views from his computer science lectures. This exemplifies the scale of audiences that can be reached in these types of courses. In an interview with The Australian Financial Review, Maurice Pagnucco, head of the UNSW School of Computer Science and Engineering said the free online resources were a good tool for giving potential students a taste of what the university course is about[4]. In many ways, MOOCs are just as much about marketing for the university as they are about education, informing the market of the calibre of their programs. Moreover, the program integrates learning with social networking features which allow the students to form an online learning community, where they can engage with the lecturer and other students. Ironically, it seems this type of online learning creates more collaboration and interaction than a physical lecture.

Universities will be pushed towards these types of learning modes by the forces of both demand and supply. Consumers find online lectures to be more convenient and even more interactive. Meanwhile, lecturers would not have to spend a whole year at the university to supply lectures. Rather, they could potentially record all the lectures for a course within a week from their office or even at home. This has drastic consequences for the academic labour market. It is possible that a handful of lecturers could supply the entire market. There is not much point in thousands of lecturers providing similar material each semester when a course could be recorded once and then accessed by millions of students. Courses could be designed around digitally available lectures that can be distributed, re-used and re-viewed by millions of people at virtually no cost.

The progression of courses towards predominantly digital delivery means the productive use of physical land and assets at universities is diminishing rapidly. Libraries and lecture halls, in their traditional forms, are becoming redundant. Textbooks and journals are now available online, leaving their physical counterpart to gather dust on the shelves. As students move towards online lectures, many lecture halls now attract a mere 10-20% capacity. Australian universities own huge amounts of land and buildings in some of our cities’ most attractive locations. Our major capital cities are among the most expensive in the world in terms of housing affordability, meaning the opportunity cost of the campus land is astronomical. It is getting harder to justify the existence of 1,000 seat lecture halls, which are hardly ever filled and multi-storey libraries, with books that aren’t ever read. Moreover, the infrastructure is not even used at all over the 3-month summer break.

Nevertheless, there is still demand for physical attendance at universities. Students will want to gain their information online and then go to university in order to apply their knowledge and interact on a more personal level with academics and other students. The implications for universities will be a trend away from large lecture style delivery to more intimate and collaborative workshop environments. The physical form of universities will need to reflect this. Lecture halls and libraries will need to be transformed into tutorial and workshop rooms as well as more informal study spaces which induce collaboration. The old model of providing infrastructure that purely meets educational lecture-style deliver is becoming obsolete. There is increasing demand for university integration with the private sector. For example, reforming university regulation to permit more retail, café, bar and restaurants on campus will allow small businesses to take advantage of the expenditure that 30,000-student universities generate. This will create university villages that will provide students with a better array of facilities and can also satisfy the needs of the local non-student population. Diversifying the land use means the campus can also be utilised during non-teaching periods. Another way to fill this gap is to provide more summer units and progress towards a model of year-long education. This can be easier to facilitate through digital learning.  Lecturers don’t physically need to be on campus all summer; provided tutors are there to guide the learning of the course.

Given the drastic change in the nature of tertiary education universities are going to have to quickly adapt to the needs of a changing market place. The evolution towards a more digital product means universities will now be competing on a global scale.  Funding from the government is likely to become increasingly tight in the future. Universities will have to be increasingly conscious about the productive us of their large asset base in order to reduce costs and stay relevant in an industry undergoing rapid structural change.

[1] Ernst & Young (2012) ‘University of the Future’

[2] Open Learning []

[3] Coursera []

[4] Dodd, T (2012) ‘Brave new free online course for UNSW’, The Australian Financial Review, 15 Oct 2012, []