In late 2025, the Australian National University (ANU) found itself in the spotlight for reasons less flattering than its academic reputation. After only two years at the helm, Professor Genevieve Bell resigned as Vice Chancellor. There were months of speculation, debate, and even criticism.
Four universities sit at the top of teaching and research efficiency
INSIGHTS & RESOURCES
Four universities sit at the top of teaching and research efficiency
The Australian
by KEITH HOUGHTON
17 July 2024
Earlier this year, the Higher Education and Research Group released its latest annual analysis of the productivity of the Australian university sector, including, for the first time, the three large private universities.
Also, for the first time, HERG examined a potential link between productivity and global university rankings. More on this shortly.
Of the public universities, four institutions achieved sector-leading performances in cost efficiency, with variation in their education/research intensity mix – from highly research-intensive to more teaching-focused. One result will be unexpected and, for some, counterintuitive.
The four institutions performing at the “leading edge” of productivity are shown in the chart.
The chart shows research and education productivity for public universities.
This “leading edge” of productivity is shown as a blue line reflecting the highest level of performance in the sector for a given year. It is referred to as the “efficiency frontier”.
Why is strengthened university productivity important?
By definition, improved productivity involves producing the same education and research outcomes at a more efficient cost. So, higher productivity can result in a university unlocking funding for strategic redirection – for example, into projects lifting performance – and affecting the achievement of strategic goals, including, for some universities, global rankings.
The productivity results discussed here are measured by reference to university expenditure on academic and academic support activities. Other costs, such as investment losses and asset impairments, are excluded from the analysis.
Note also that adjustments for the differential costs associated with varying levels of quality are included only in client-based productivity analyses that reflect differing views on the calibration of such costs.
Because of a lag in the publication of federal government education data, the most recent whole-of-sector dataset relates to 2022.
For the current analysis, there are three “newcomers” to the efficiency frontier. These are The University of Sydney, Flinders University, and Edith Cowan University. The fourth university, the University of Western Australia, has been at the efficiency frontier for some years. Significant funding from historic philanthropy is one factor relevant to UWA’s success.
While the three newcomers will each have an interesting story about why they have delivered strong productivity growth, Sydney is an especially interesting case because, if its productivity growth is maintained, its ability to compete for the position of highest-ranked Australian university will be strengthened.
At this point, it must be remembered that Sydney is one of Australia’s largest universities, as measured by student numbers, income, or total assets. Since HERG records commenced in 2001, it has been rare for Australia’s largest universities to appear on the efficiency frontier.
In work undertaken for the Universities Accord review, HERG provided empirical data consistent with the presence of cost inefficiencies due to diseconomies of scale, both large- and small-scale. The work also included an analysis of the potential sources of certain inefficiencies.
While a larger scale, particularly if accompanied by a large research presence, can be a positive factor in global university ranking, the presence of diseconomies of scale can have a limiting effect. This makes Sydney’s result both interesting and important.
What could be the impact of the productivity trajectory of Sydney?
The medium- and long-term continuation of a positive productivity trajectory can result in a university amassing strategically important discretionary resources. These resources can be employed to support strengthened academic outcomes, funding for new initiatives and, over time, improved global ranking.
This result does not mean all areas of the campus are contributing equally and are equally efficient. Variability across academic units will and does exist. This gives reason to believe that if Sydney can drill down and identify further granular efficiency opportunities, there will be added room to improve its position.
Global ranking is an implicit or explicit goal for some, and can affect international student interest. Climbing these rankings is not a short-term game. Historically, thanks in part to significant commonwealth “block grant” funding, the highest globally ranked Australian university was the highly research-intensive and modestly sized Australian National University. Then came a period when the ANU and the University of Melbourne competed for this place, with Melbourne’s strong income stream from international students providing significant funding for research. In more recent years, Melbourne has further strengthened its position while ANU’s cost-efficiency and productivity returned to levels seen in the mid-2010s.
As HERG’s analysis shows, with important contributions from productivity growth and cost-efficiency improvements, Sydney is strengthening its position. So, if it chooses to, it could, in time, compete strongly to become Australia’s highest-ranked university. Will this trend continue? Strengthening productivity is something of an “arms race”. By not improving, there is always a risk that you are going backward relative to others.
Keith Houghton is chief academic strategist of the Higher Education and Research Group.
Australia has, on average, some of the largest universities in the English-speaking world. Some might speculate that this is an idiosyncratic outcome of the Australian education funding approach. While this is possible, even likely, the effect of global ranking algorithms may also factor into this. Those who have attempted to reverse engineer the three or four largest rankings appear to recognise that controlling for scale is a near-impossible task.
There is growing anticipation that the federal government’s response to the Universities Accord review’s final report will come soon. Given this and the fact that the budget is less than a month away, it is timely to review one of the final report’s key insights.