UNE’s online reach makes it an inviting target for a merger

INSIGHTS & RESOURCES

UNE’s online reach makes it an inviting target for a merger

The Australian
by Keith Houghton
3 October 2018

Key Takeaways:

  1. Purdue University Global (PU-G) was created through the acquisition of Kaplan University and leverages Kaplan’s online expertise to offer online educational programs targeting part-time adult students.
  2. PU-G’s strategy is seen as an efficient way to advance Purdue’s online educational programs, positioning the university at the forefront of online education.
  3. While Australia lacks similar institutional arrangements, a few universities, including the University of New England (UNE), have strategic engagement in online education, achieving significant productivity growth.
  4. UNE stands out in the Regional University Network (RUN) with a remarkable productivity growth of 35.2% from 2011 to 2016, compared to the mean growth of just over 12% for other RUN members.
  5. The retirement of UNE’s vice-chancellor prompts reflection on the impact of online education in the Australian university sector.

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Full Article:

This year Purdue University in the US created Purdue University Global. It came into existence from its acquisition in April last year of the Kaplan University operation, which had ceased operations after a period of mixed fortunes.

Through a series of what appears to be complex contracts, Purdue uses the “back office” (that is, the online expertise) of Kaplan to support a large array of online educational programs targeting mostly part-time adult students. The offerings attract thousands of American (and foreign) students.

Some see the PU-G strategy as an attempt to push forward the online educational programs of Purdue in a highly efficient manner. The move provides more easily accessible educational offerings of a mainstream university that is putting itself at the leading edge of online education.

Australia does not yet have the same type of institutional arrangements; however, there are a small number of universities that have strategic engagement in, and significant levels of, online education (other than the special case of Open Universities Australia).

With the recent announcement of the retirement of University of New England vice-chancellor Annabelle Duncan, it is worth reflecting on one aspect of the presence and effect of online education in the Australia university sector.

There are several higher education institutions achieving significant productivity growth. Of the 13 universities that achieved productivity growth of greater than 30 per cent across the period from 2011 to 2016, there was only one smaller institution (with equivalent full-time student load of less than 15,000) that achieved this level of improvement — that being UNE. It achieved productivity growth of 35.2 per cent across the period.

This is markedly higher than other institutions in the Regional University Network, where the mean level of growth is just more than 12 per cent. No other RUN member achieved the efficiency position that UNE has (see the chart in which RUN institutions are shown in green).

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.

Recently released analysis finds that one large Group of Eight university outperformed other public universities in its research and education productivity outcomes during the pandemic.

The joint and common cost problem arises where there are two or more outputs that arise from costs that are shared in the production of these outputs. In many situations, the ability to assign costs to these two or more outputs is not complex. But there are instances where it is highly complex. In these situations, there is a need to use advanced analytics to provide a valid and reliable estimate of costs.

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