ITI Articles

This 22 June 2006 comment by Phil O'Reilly, Business NZ CEO, has been reprinted with his permission. ITI is a Business NZ Affiliated Industry Group and feels that these messages are worth reinforcing in our newsletter.

Business New Zealand sees the government’s tertiary education reforms as an opportunity to improve the level and quality of engagement between the business sector and the tertiary education sector to the benefit of both.

We have submitted to the review of the Tertiary Education Strategy that one of the stated purposes of tertiary education should be meeting business needs (including addressing skill shortages). The current strategy does not acknowledge business need as a purpose of education and we are concerned this may be sending the wrong message (even if by omission) to providers.

Our analysis of the paperwork supporting the initial government proposals was that it overly focused on the relationship between institutions and the government. Business New Zealand’s aim is to see that current quite closed approach broadened out so that the dialogue includes more strongly the views of the customers of tertiary education – employers and students – and well as other stakeholder groups.

Research commissioned by the Ministry of Education states that engagement with business was often dependent on the individuals involved and could vary considerably. In some institutions, the relationships between business and tertiary institutions are weak. The Ministry’s research concludes that “stakeholders [including business] generally perceived providers as too busy and/or under-resourced to have intensive and positive contact with them… Providers perceived contact to be satisfactory.”*

Business New Zealand advocates for a more systematic approach, which recognises the status of business as a key stakeholder and customer of tertiary education. In return, business will have to live up to the responsibilities implicit in such a status.

It is critical that all tertiary education organisations need to engage with business and industry – not just ITPs and ITOs as was implied in some of the early documentation. Indeed, in our submission, Business New Zealand argued that employers and industry deserve some prominence and should not be lumped in with the wider public for the purposes of engagement. It is employers alone who take the risk to invest their own money employing people at the end of tertiary education.

Employers can also make a positive input into the new planning process envisaged by the reforms and are able to make a valuable contribution to the proposed outcome-driven focus. Industry is the best placed to contribute strategic information on skill needs and business needs.

Business can offer a unique and useful perspective provided the nature of the engagement is direct. This perspective cannot be replicated by institutions or government agencies, which is why we took issue with several of the comments in the consultation documents. Business New Zealand would also argue strongly against the stated intention in the reforms that “the assurance of quality will be based on rigorous internal review by providers that is tested and critiqued through external review by quality assurance bodies”. This to us again demonstrates an inward-focused, closed loop approach unlikely to produce the marked improvement in the quality assurance process sought by the reforms.

Proxy assessment is not a desirable characteristic of the new funding system. Business input should be direct and embedded in the system. A true outcome focused system will require a greater diversity of information including some meaningful benchmarking domestically and against international best practice.

In addition to our central comments on improving business engagement, Business New Zealand is urging the government to ensure that the new planning and funding system includes strong elements of competition and retains student choice as a key driver. We are adamant that competition is not necessarily a bad thing. Competition is certainly not the same as duplication. Business New Zealand firmly believes that a degree of competition between institutions (including between state-owned institutions) drives improved performance and customer service, and provides incentives that encourage efficiency and productivity in the sector.

The new funding system also needs to preserve student choice as the main driver of education provision. Employers would hate to see courses considered critical to business capped because of the planning and funding system. If a course is relevant and a student wants to enrol, the system should allow them to do so.

Finally, we made a plea in defence of private providers in the tertiary education sector. Our members tell us that private providers generally deliver focused and relevant education and training. These providers earn their living by delivering a quality output and business is generally highly satisfied with the level of service provided by PTEs. We would oppose attempts to downgrade their status to simply covering any perceived gaps in the public system. This would marginalise a valued part of the tertiary education sector.

Indeed, we would support rolling back some of the current discrimination in the system and allowing PTEs more chances to compete with public institutions for common funding pools. For employers, the primary concern is whether the education and training provided is fit for purpose rather than a fixation about ownership status.

The recent changes in the Budget, which threaten the future of a number of private providers in order to pay for interest free student loans, are a retrograde step in our opinion.

The tertiary education reforms must rise above a focus on the relationship between providers and government or a focus on central planning and ownership. It must address the issues important to providers, government, students, employers and stakeholders – relevance, quality, value and engagement.

We have consistently argued that “increasing educational levels of the population is one way of raising productivity and increasing living standards over time” and that tertiary education has a critical role to play in this development.

These next steps in the tertiary education reforms represent an opportunity to make a real difference for New Zealand and we welcome the opportunity to work with the sector and the government as the process moves forward.

Phil O’Reilly is the chief executive of Business New Zealand, the country’s largest employers organisation representing 80 per cent of private sector employers.

*Reference: “Walking in Step – Tertiary education providers and their stakeholders – a path to collaborative research”, Ministry of Education, 2006.