corporate education reform Archives

How universities have become big business

Australian public universities have undergone extensive policy reforms since the 1980s, driven by neoliberal ideologies that emphasise free markets, competition, efficiency, and reduced state intervention. These reforms have redefined universities’ identity as corporatised organisations with commercial agendas, prioritising revenue generation over knowledge generation (Parker et al., 2023). Traditional values of inclusivity, social cohesion, and social mobility have been challenged, with excellence redefined in terms of research output, innovative teaching approaches, world rankings, business partnerships, and attracting fee-paying students.

The impact was felt when the COVID-19 pandemic exposed these risks to public universities, as they experienced a drop in international student enrollments and funding challenges. Staffing was significantly affected, with limited government support (Guthrie et al., 2022). This has prompted questions about the future strategies of university managements. We highlight the vulnerability of Australian universities to crises and emphasise the need for reimagining them as democratic and purposeful institutions (Martin-Sardesai et al., 2021). We call for a reevaluation of the relationship between a university’s mission, its stakeholders, and those responsible for its administration, emphasising the importance of public consultation and engagement in shaping the future of higher education (Guthrie et al., 2022).

A shift in culture

Governments around the world have implemented policies aligned with New Public Management (NPM) in public service delivery, such as privatisation, contracting out, selling public assets, and reducing income taxes. They argue that these policies align with market principles and improve efficiency. This has led to a shift in university culture towards accounting, economising, and marketisation, prioritising skills over theoretical knowledge. NPM has also influenced the organisational structure of universities, with corporate practices and entities being favored.

In Australia, public universities have adopted a user-pays philosophy, market-driven pricing, and cost minimisation. The Australian higher education system (AHES) follows a centralised policy, with public universities receiving funding from the Federal Government. The Minister of Education and Training regulates the number of universities and controls the number of students in each undergraduate course. Local students pay a higher education contribution fee, while universities can set fees for international students. International student fees play a crucial role in the funding strategy of Australian public universities, subsidising operations, teaching, and research expenses.

Financial gains over resilience

Funding for higher education as a percentage of GDP has been declining, and the government grants only a portion of the sector’s total expenditures. Despite financial challenges, the number of students studying in Australia has been increasing, particularly international students from countries like China and India. Australia has a high proportion of international students compared to other countries. The management of Australian public universities has focused on short-term profit optimisation, prioritising financial gains over long-term adaptability and resilience. This has left the sector vulnerable to external shocks, such as the COVID-19 pandemic and strained relations with China. The COVID-19 pandemic had a significant impact on Australia’s higher education system (AHES). The government implemented border closures and universities transitioned to online teaching, leading to the postponement or cancellation of campus events. The Federal Government did not provide additional financial support to universities during the pandemic.

The literature suggests that universities have willingly embraced the commodification of education and the adoption of accounting practices to align with government policies and VC’s business ambitions (Martin-Sardesai et al., 2017; Martin-Sardesai, 2016). The proliferation of quantified metrics has become an end in itself, overshadowing broader societal values and objectives (Martin-Sardesai et al., 2021). Overall, numbers and quantified metrics have become influential in shaping university processes and outcomes, emphasising commercialisation and performance over broader societal goals. In investigating the mechanisms behind this shift, identify that Australian public universities have undergone extensive policy reforms since the 1980s, driven by neoliberal ideologies that emphasise free markets, competition, efficiency, and reduced state intervention.

The emphasis is on the numbers

These reforms aim to transform universities into autonomous and entrepreneurial knowledge organisations, aligning them with the global knowledge economy. The implementation of these policies is supported by accountingisation, which emphasises performance measures and accountability.

These reforms have led to the privatisation, marketisation, and internationalisation of universities, following the principles of neoliberal economics. Traditional values of inclusivity, social cohesion, and social mobility have been challenged, with excellence redefined in terms of research output, innovative teaching approaches, world rankings, business partnerships, and attracting fee-paying students. The neoliberal agenda prioritises skills, applied knowledge, and productivity, dismissing humanistic, critical, and theoretical knowledge as irrelevant. Universities are seen as tools for training productive workers to support the knowledge economy and generate research impacts.

Traditional values challenged

While universities are public institutions, they are increasingly required to adopt accounting practices and performance measures, influenced by New Public Management (NPM) principles. NPM has shifted power relations within universities and introduced numerical forms of power, leading to changes in academics’ practices and thinking. However, these reforms pose risks to the higher education sector, potentially eroding its critical voice, legitimacy, and transparency. The focus on improvement, efficiency, and standards needs to be balanced with a language of education rooted in ethics, moral obligations, and values. Overall, the reforms in Australian public universities reflect a larger global trend towards corporatisation and commercialisation, impacting the core values and purpose of higher education (Parker et al., 2023).

We are a warning to others

Our research has examined the changes in the higher education system of a country over four decades, focusing on its commercialisation and internationalisation. It discussed the influence of neoliberal philosophies and New Public Management (NPM) practices on universities. We identify the central role of accountingisation and marketisation in this transformation, suggesting it has occurred gradually and covertly. Governments have implemented policies to position higher education as a source of intellectual property and skills to enhance global competitiveness. We highlight the impact of external pressures on universities, including government regulations, professional norms, and market mechanisms. Universities have redefined their identity as corporatised organisations with commercial agendas, prioritising revenue generation over knowledge generation.

While acknowledging the risk associated with the commercialisation of universities, particularly in light of the COVID-19 pandemic, we criticise the reliance on international student revenues and call for a reconsideration of university strategies and government support. The Australian case serves as a warning for other countries facing similar challenges. We also suggest the need for a shift away from performance-based metrics and a focus on ethics, values, and societal impact in education. We raise questions about alternative strategies, the role of stakeholders, and the responsibility for university reform. Ultimately, we call for a reevaluation of the relationship between a university’s mission, its stakeholders, and those responsible for its administration, emphasising the importance of public consultation and engagement in shaping the future of higher education.

Ann Sardesai has recently taken up the position of an associate professor of accounting at Prince Sultan University, Riyadh, Saudi Arabia. Lee D. Parker is a research professor in accounting, the University of Glasgow, Scotland, UK. James Guthrie, AM, FCPA, is an emeritus professor in the Accounting and Corporate Governance Department at Macquarie University, Sydney, Australia.

Private interests shaping public education: let’s not follow the US example

Private interests are playing an increasingly prominent role in public education. It is a global trend that is already evident in Australia, as we can see from previous posts on this blog.

I believe we can learn a lot from what is happening in American education policymaking. In particular, strategies are evident around efforts by private interests in the US, such as philanthropies, to influence education policy using what we call “idea orchestration” — arranging all the pieces in the policymaking process by aligning the efforts of think tanks and other intermediaries in ways that essentially privatize public policymaking.

Few would argue against a need for substantial reform in American education. There is widespread concern with the country’s performance on international measures as well as with its notable achievement gaps between rich and poor or minority students. While chronic concerns with the education system have sparked generations of education reform, (as I show in a new analysis with Jameson Brewer and Priya Goel La Londe in the Australian Educational Researcher) recent policies are driven by private interests and reflect a particular focus on private sector models.

Most notably, these interests are re-shaping education policymaking not through traditional democratic channels, but through business investment-style strategies manifested in education policy as “idea orchestration.”

In some ways, private interests penetrating public policymaking in the US is not new. For generations, the for-profit business sector has advanced its vision of a low-cost system producing employable graduates, while non-profit philanthropies like the Carnegie or Ford Foundations have had their own initiatives in areas such as improving the quality of teaching, or addressing poverty.

The New Edu-Philanthropy

However, the recent wave of what has been called “corporate education reform” features a central role for the private sector that is different in at least three ways.

First, the scale of private resources directed at influencing education policy is unprecedented, as evident by the sheer size of some of the primary movers and shakers. For instance, the Walton family, by far the wealthiest in America, directs a foundation with a primary focus on reforming public education. The Gates Foundation, which combines the wealth of two of the world’s three richest people, has assets of almost $45 billion (USD). Especially in an era of tight budgets and increasing economic inequality, the resources these individuals can dangle in front of policymakers and organizations can be an irresistible enticement for embracing their agendas.

Secondly, the non-profit and for-profit elements of the private sector are in remarkable alignment in terms of their agendas for education. Earlier efforts to reform education often saw philanthropies and businesses taking contrasting, if not conflicting, approaches. For instance, the Henry Ford II famously lamented the perceived anti-capitalist direction of his family’s namesake foundation. Now, all of the “big six” philanthropies active in education reform leverage the wealth accumulated relatively recently by their business-person founders: the Gates fortune from Microsoft, the Walton wealth from the Wal-Mart chain of discount stores (the largest private-sector employer in the US), for instance. Thus, it can be expected that the efforts of the foundations are aligned with, or at least not opposed to, the business interests of the companies that made their founders wealthy.

Third, the business sensibilities these individuals used in amassing their fortunes are being directly applied in how they manage their philanthropic efforts as well as how they expect the recipients of their largess to manage their own efforts. In fact, there is a remarkable confluence of interest and objectives amongst these leading philanthropies in supporting competition among individuals and organizations, with the implications that schools should be run in the same way that these philanthropists have accumulated and managed their own wealth: through business strategies. Hence they are throwing their support largely behind policies that promote consumer choice, competition between schools, and greater autonomy for schools.

Thought Tanks

In contrast to previous generations of private influence on public policy, current patterns of philanthropic activity are different, focusing not only on giving, but on managing and orchestrating efforts. A defining feature of this new business-based education philanthropy is not simply its endorsement of a private-sector model for schools, but a business-style strategy to bring this vision to fruition. Instead of simply throwing money at an issue, funding a study, a project, or an organization, these business-based philanthropists treat their efforts as comprehensive investments. As with the rise of their own business empires, any investment is buttressed with related efforts around policy, politics, and public image. Rather than just channeling funding at a problem, they take care to align adequate political support, have a policy infrastructure in place, and arrange appropriate media and intellectual resources.

In these efforts, so-called “think tanks” play a crucial role in legitimizing and organizing the concerted efforts of like-minded people and organisations. Funded by these philanthropies, think tanks provide the analyses, evidence and intellectual credibility crucial to their funders’ agendas, but at the same time play a critical role in convening key players in public and private sectors, supplying useful data and talking-points to allied media outlets, and identifying and attacking potential opposition.

For instance, the Program on Education Policy and Governance at Harvard University receives funding from the Gates, Walton, Koch, and Friedman Foundations, and produces research generally aligned with the agendas of those funders, even when that may conflict with a consensus in the independent research community. PEPG also possesses substantial media acumen, and has been successful in placing its associates in key positions in the public and private sector.

However, rather than simply producing ideas (as their label would suggest), many think tanks — even university-based ones such as PEPG — might be more accurately labeled as “thought tanks” to reflect the fact that their efforts generally revolve around one idea: increasing markets in education. That is, rather than developing and analyzing new policy ideas, the primary contribution of groups like the American Enterprise Institute, the Cato Institute, the American Legislative Exchange Council (ALEC), and the State Policy Network, has been in terms of developing strategies to advance free market, low cost policies, rather than developing additional, much less alternative, policies.

While there may be something laudable about philanthropists wielding their vast fortunes to improve schools, the emerging patterns of how they are doing this may also point to some reasons for concern. Their reliance on business-style strategies to push ideas (or an idea) orchestrated through think tanks highlights the marginalization of democratic channels and the rise of privatized public-policymaking.

from left: Joel Malin, curriculum specialist at the Pathways Resource Center and Chris Lubienski, professor of education Christopher Lubienski is professor of education policy at the University of Illinois and Sir Walter Murdoch Adjunct Professor at Murdoch University. His research focuses on education policy and reform, with a particular concern for issues of equity and access, and on the political economy of education policymaking. His co-authors on the paper on which this blog entry is based, Jameson Brewer and Priya Goel La Londe, are advanced doctoral candidates in education policy at the University of Illinois.