Australia’s higher education sector has had a chance to draw breath after 18 months of policy churn. The timely launch of the Universities Australia policy document, ‘Keep it Clever’ has highlighted the importance getting higher education policy right. So what now?

Australia faces significant global economic headwinds. We remain reliant on mineral wealth and mineral exports, and are exposed to a slowing in China’s economy. Australia’s future prosperity will be determined by our ability to compete globally in innovation, technology, science and related disciplines and in the ability of our graduates to work as smart entrepreneurial leaders in a world being transformed by automation and digital disruption. But there are significant challenges that need to be addressed if Australia is to become the highly skilled, agile friend of disruption that our PM envisions.

We know that while Australia performs well in the global ‘academy’ in terms of the quality of its research output, it ranks low within the OECD on business and research collaboration with large firms and SMEs. This is important, as collaborative innovation with research organisations triples the likelihood of business productivity growth.

A second key factor, which has been in the ‘blind spot’ of the higher education policy debate, is the role of research-intensive universities in major regional cities and regions across Australia as drivers of Australia’s economic development. The language around regional universities is often focused almost solely on their key role in skills development, rather than recognising their role as global leaders driving world-class innovation. This ‘blind spot’ seems to be a uniquely Australian phenomenon and contrasts with other jurisdictions where it is usual to find universities which are recognized as prestigious at the end of a journey in a very small plane.

There are lessons to be learnt from the UK where it would be unlikely that the Universities of Cambridge, Warwick and Southampton, for example, would be labelled as ‘regional universities’ in any introductory remarks. In the UK, work on development of a national innovation ecosystem has leveraged the powerhouse of research intensive universities placed in major regional cities and regions across the country. As the National Centre for Universities and Business in the UK concluded in 2014, ‘The more intense the means and patterns of connectivity between universities, business and government, the more successful universities can become as anchors for the regions in which they are set and as smart innovation partners for companies.’

Part of any region’s economic competitive advantage – its ‘magnet’ effect – is a skilled population. Recently, KPMG in the UK published a report examining the characteristics and drivers of what it described as ‘Magnet Cities’, urban and regional communities that had made the journey from decline to renewal. They concluded that major companies looking to innovate, expand or diversify will seek a region where there is a readily available talent pool of great graduates with industry-specific and transferable skills, in a knowledge-rich environment.

Talent is an asset that has supported regions worldwide to diversify their economies and build opportunity. The city of Pittsburgh, a landmark example of regeneration and renewal, has transitioned from an economy based on heavy industry to one of the most knowledge and innovation-rich cities in the US and ‘America’s most livable city’, since its major universities began attracting investment and partnership from global businesses. Apple, Disney, Intel and Google all established a presence in Pittsburgh, creating jobs and opportunities by leveraging the flow of skills, ideas and innovation that characterizes the city’s relationship with its universities.

That regions are clearly part of Australia’s national economic transformation was highlighted by the analysis in the recent Australian Local Government Association Report showing that national and regional income would grow more rapidly if income inequality within regions across Australia was reduced. The Report also highlighted that Australia’s difficulties in adopting the knowledge economy would be eased if the knowledge economy jobs including scientists, engineers, creative industries were decentralized from metropolitan CBDs into regional capital cities.

We need a change in mindset across ‘traditional’ universities, business and policy makers if Australia is to harness the potential of our research-intensive universities located in regions. Policies that focus on enabling these centres of excellence to attract and retain talent, drive innovation and entrepreneurship and create new jobs in new industries would realize a currently unrealized asset. As Keep it Clever signals, it is time for universities to work together to shape and deliver on an agenda for the whole of Australia – not simply to deliver for our capital cities and their suburbs.

So how should we encourage a change in that mindset to drive the outcomes that address the challenges facing Australia?

It is time to invest in the future and build a national research and innovation ecosystem that builds ‘connectivity’ between universities, business and government across Australia with no proliferation of ‘spokes and hubs’ models based on assumptions that the definition of a spoke is a university placed in any location more than 2 hours outside a capital city.

It is time to ensure we invest in the attraction of talent and development of excellence in those universities that are committed to playing a role in the future economic development of their regions through harnessing excellence to have value and impact.

It is time to invest more of our research and research training funds on the basis of productive collaborations between universities and industry and business – to ensure that businesses are attracted to locate wherever talent and excellence is located.

It is time to invest in the formation of Industry Doctoral Training Centres that bring the power of research and the energy of emerging research talent together with industry leaders to develop solutions that will enhance competitiveness and productivity of cities and regions across Australia.

It is time to invest in the development of International Cooperative Research Centres, which support the introduction of regional Australian businesses into the global supply chains through the auspices of the international partnerships built by their Universities.

It is time to invest in a nation building ‘Innovation and Entrepreneurship Program’ that supports our graduates to develop ideas that will drive social, creative and technological innovation in areas across Australia.

In appointing a brand new Minister for Cities and the Built Environment the Prime Minister said, “Making sure that our cities and our regional centres are wonderful places to live in, is an absolute key priority… because the most valuable capital today is human capital.”We agree. As an independent assessment recently demonstrated, the economic benefit of the University of Newcastle in the period 2013-2022 to our region was estimated at $5.5 billion.

Let’s make sure our higher education policy settings ensure that the economic impact of UON and other research intensive universities located in regions is maximized – that will enable Australia to navigate those stormy headwinds.

By Professor Caroline McMillen
Vice-Chancellor and President, University of Newcastle

An edited version of this piece appeared in The Australian.