Morning all.  Yes, the summer is over and classes are returning, but fortunately your daily intake of higher education commentary/snark/contrarianism is back as well.  I missed you guys, too.

Anyways, welcome to the 2022-23 academic year.  This was supposed to be the year we got back to “normal”.  And the occasional campus mask mandate aside (which I fully approve), on the surface maybe this year will feel a bit 2019-ish.  But if you look underneath the hood, things are not well.

The biggest issue out there right now is inflation, which is making everyone poorer, even (especially?) those who negotiated contracts last year.  It’s cutting the real pay of hundreds of thousands of university and college employees, and it’s making it harder to afford all the other goods and services required to make a higher education institution run.  The revenue from tuition and government in 2022-23 will both be worth less than it was last year, maybe by as much as 4%.  That financial catastrophe we all worried about in the opening weeks of COVID?  It’s here, just 30 months later than expected.

Now you might expect me at this point to go into my usual rant about how obviously this is just going to lead to institutions taking on more international students and we’re sleep-walking our way into an education system focused on immigration to the exclusion of domestic priorities.  But while that is no doubt true (except for Ontario colleges, which already went down that route a few years ago), I want to make another, larger point, which is simply that if you think this is bad, the next few years are going to be brutal. 

To be clear, I am not making any specific predictions about where, when and how things are going to deteriorate.  But we are in a very different kind of world, geopolitically, than we have been at any time since World War II.  Between aggressive anti-democratic political movements, the return of large-scale inter-state warfare, climate change and the apparent stalling of the Chinese economy (the driving force in world economic growth these last two decades), what you have is a recipe for much higher levels of political and economic volatility/instability.  The “new normal” looks a lot more like an endless 2021-22 than it does 2018-19 (let alone any pre-Trump year).  You can’t tell in advance where the crises will occur, or what specific effects they will have, but it seems inevitable now that things that we used to think of as “black swan” events are just going to be more common.  And – possibly – if the move away from fossil fuel grows because of rising climate alarm, that’s probably going to have a significant effect on the economy too (some positive, some negative).  As French President Emmanuel Macron said last week, we are facing not just “the end of abundance” but also “the end of insouciance”.

OK, how does that affect higher education?  Well, two ways for certain.  First: society is going to be poorer than it would have been had pre-COVID conditions persisted.  That means less money available for pursuits both public (tighter budgets) and private (grouchier electorates).  Slower real income growth in the private sector means even less appetite to pay for higher education via tuition fees; slower public sector growth means even less appetite to pay for post-secondary education (which has been stuck at current nominal levels since about 2008).  And if you think international students are going to keep saving us, ask yourselves what a more politically hostile and economically volatile world means for international students.  Imagine what would happen if India went through something even a quarter as bad as what Sri Lanka has been through these last 12 months: the effect on international enrolments in the college sector would be shattering.

And that’s before we get to the other elephants in the room: demographics and health care costs.  The demographic problem is simply this: our labour force is stretched in ways it has never been before.  In 2001, there were two people over 65 for every ten working-aged person in Canada; by 2031 there will be four for every ten.  If you don’t think there are enormous implications for how provincial governments spend their limited (and possibly declining) budgets, in ways that are not favourable to post-secondary education, I have a bridge to sell you.  And as for health care – well, look, even apart from demographics, health care is becoming *much* more expensive (I’ll be writing about this sometime this fall).  Scientific and therapeutical advances mean we can cure more diseases and allow people to live better lives – but the price tag is going up.  And since no one likes to say no to health care, the budget available for everything else is being squeezed.   This isn’t a specifically Canadian issue – the age-independent rise of health costs has been similar across OECD countries no matter how care systems are organized.  But it has nasty implications all the same.

There are two upshots here.  The first is that if institutions want to continue to grow merrily at inflation plus 2% per year, as they have done for most of the past two decades, they will need to become more reliant on private income: the prospect of a rescue from public funding seems remote.  The problem is that “private money” can no longer just mean more international students, because in a more volatile world means that’s harder to guarantee.  And then there is the second, probably more important issue: in a volatile world, institutions are much more likely to face financial and political shocks of various kinds.  The ability to react quickly to these shocks will likely be a defining trait of those institutions who emerge most prosperous from the coming decade. 

The question is how to develop the ability of quick reaction in institutions which are legendarily slow in implementing change but which, all things considered, didn’t do too badly under COVID.  The most successful institutions are likely to stand out in two ways.  Firstly, they will have relatively light-touch external governance structures; that is the Board does not have a tendency to micro-manage and allows management wide latitude to achieve some commonly-understood goals in times of upheaval.  Second, they will be able to exercise “rapid collegiality”.  Simply being “fast” or “nimble” does not really cut it: significant change without deep buy-in across an institution tends to mean change which is superficial. 

A term like “rapid collegiality” may seem an oxymoron, but to my mind this is mainly because this equates collegiality with soul-sucking committee processes most institutions have seen fit to use these past few decades.  The trick is not to equate collegiality with committee-based discussions about rules and policies, but rather with wide community engagement on objectives and planning.  Institutional leaders need to use a variety of both formal and informal techniques to encourage exchanges of ideas with both its internal committees and external stakeholders with respect to alternate future pathways and what future pivots might look like.   The point of rapid collegiality is not to have a lot of palaver when disaster approaches; instead, leaders should understand community values and preferences at a deep enough level that it can move quickly in ways that it knows will command community support.  It’s about re-invigorating the spirit of collegiality through inclusive planning and engagement rather than accepting collegiality as mere proceduralism.

Governance matters.  And it’s going to grow in importance as the external environment for universities becomes more complicated and shock-prone.  The time to get serious about it is now.

Onwards!