Knowledge & Insight

The global “university challenge”

Fri 22 November 2019

The role of education in ensuring social stability and economic prosperity cannot be overestimated. Yet universities around the globe face a complex web of challenges that they must overcome if they are to survive and thrive in a rapidly changing environment. These challenges range from rising costs and rising student expectations, to rising student debt, and here we take a look at the four most pressing challenges in 2020.


In most regions of the world, the cost of operating a higher education institution is rising faster than the local rate of inflation. This is simply a consequence of supply and demand – universities operate alongside other commercial organisations, and in growing economies the competition for resources is driving up the cost of energy, utilities, real estate and talent. And this budgetary pressure comes at a time when funding from government is being constricted. The most obvious solution is to shift the burden onto students, but the impact of this policy can be illustrated by the US model, where the total value of student debt is estimated to be over $1 trillion, with around 10% of that in default. So the challenge is to make higher education accessible and affordable for talented students from all socioeconomic backgrounds.

Meeting student expectations

Here in the UK, back when grants were still available to cover tuition costs, students were perhaps less inclined to consider the long-term value of their education. But as students are increasingly being asked to foot the bill, the return on their investment becomes a key driver in the decision-making process. The government’s 2016 Longitudinal Education Outcomes initiative (LEO) gave prospective students clear insight into the likely outcomes in terms of employment and earnings – placing further pressure on universities to ensure they provide high-quality programmes that deliver strong positive returns on their students’ investment.

A global marketplace

UK universities operate in a radically different environment compared to 20 years ago. Two decades of globalisation have created a truly international higher education marketplace, in which universities must compete not only for British students, but thanks to increased individual mobility, for students from around the world. So institutions with well developed international networks stand to benefit from enhanced international competition, yet they must still develop strategies to mitigate the risk of external factors that may adversely impact student recruitment, such as new immigration policies, exchange rate fluctuations which makes UK providers more expensive, and geopolitical instabilities.

Talent acquisition and retention

The ultimate driver of any institution’s effectiveness, and the quality and appeal of their ‘product’, is the quality of their academic staff. So universities must build balanced teams with diversified expertise and experience. They must offer courses that deliver optimal value to students, they must grow research incomes and build relationships with new partners in industry and commerce – in order to climb the all-important global rankings of university performance. Forward-thinking boards are also devising innovative reward packages that look beyond remuneration in order to support the acquisition and retention of top talent.

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