Vale University of Western Sydney


So the University of Western Sydney (UWS) has entered a death spiral. In a demand driven system, its current approach to education means falling revenue. Or put another way, the students are choosing its competitors. So it is doing the obvious, and slashing courses, including economics. Which will make it less attractive to students, etc. An article from the Australian higher education section is here.

The problem for UWS is increasing competition. Other universities, that students prefer, are accepting more students and students are voting with their feet. Seeing the UWS offerings, students are going elsewhere. This is the very nature of competition, and UWS is losing.

We know other universities in Sydney have dropped their cut-offs dramatically to take more students and will undoubtedly continue to do so.

This is good for the students. They get to go to Universities they prefer. It is bad for UWS – but what does it expect? Did it really think that students would choose it over U.Syd, UNSW, UTS or Macquarie U? And if so, why? It offers the same type of courses taught the same way but has less prestige and is viewed by students as being lower quality.

The University leadership at UWS should ask itself one simple set of questions:

  • In the last five years, how has UWS changed its educational offerings to differentiate itself significantly from its competitors? How has it invested to make those differences real and to stake itself a viable and competitive place in the educational market place? How has it differentiated to create a viable business model for its future?

I suspect the answer is simple. They haven’t. If they have, then the results show that the attempts by senior management have failed. If UWS was an equivalent private firm (or indeed a corporatised GBE) the leadership team would now be out looking for new jobs instead of adopting knee jerk reactions that will almost certainly make matters worse.

So – the bottom line?

First, the cuts at UWS are an indictment of the failure of our university leaders to understand the competitive international environment that Australian higher education faces.

Second, it is clear why economics is one of the first areas to go. Clearly none of the senior UWS administration has training in this area. If they did – they wouldn’t be in this mess!


8 Responses to "Vale University of Western Sydney"
  1. yes, a sad day for UWS and the remaining economists there. It looks bleak for them. And you are right: there seems to be no strategy in what UWS is doing. They are probably axing more on the basis of grudges than anything else. Still, hard to see how they can get out of this mess.

  2. Actually, I imagine a big reason UWS is going broke is that it is inconveniently located to where good catchment areas are, so I doubt there’s much they can do at all in this situation, apart from turn themselves in the U.of.Phoenix (and who benefits from that?). I think these sorts of things are big factors for mid-tier universities — mine benefits from it, and it may well be the biggest factor for why students choose it when faced with a choice of other mid-tier ones, and the university even has data showing this (not that I’d trust the statistically illiterate morons that collect it). So I have some sympathy for Steven Keen on this, because one of things it does, especially in cities like Sydney which are prohibitively expensive in terms of housing and where transport is a nightmare, is to essentially exclude smart kids from poor areas going to uni (or at least forces them into a situation where they spend all their time working instead of studying), whereas all the dumb kids close to universities can still go.

  3. Victoria University’s Department of Applied Economics disappeared (staff scattered across Finance and International Business) in the last few years.

  4. Terrible outcome that reflects much more than a failure to be distinctive and a flawed business model. A triumph for the intellectual barbarians at UWS who will doubtless continue to teach business degrees without economics.

  5. Stephen raises some good points.

    One thing that many related articles seem to overlook is that more competitive universities are not actually letting everyone in. They may not set a prior minimum cut-off (although Melbourne does) but they will still ration places to try to get the best students and maintain the prestige of high entry “standards”. This is particularly the case in our system where the competition for $ from international students (for popular but low infrastructure cost disciplines in particular such as commerce or law) is a big monetary driver, as maintaining a prestigious image helps attract such money.

    Looking at 2012 cut-offs, there were still many courses at UWS which had cutoff scores of 90+. Is it unreasonable for an institution to focus attention and money on those departments which have been able to differentiate their offering, or which are able to give an opportunity to students who would otherwise not be able to study their preferred discipline (primarily law, sad to say)?

    However, taking strong actions on first-round preferences appears shortsighted. Perhaps it is different in NSW and there has been no signalling that ex-post entry standards will still exist/places will be rationed. When a student gets a rank of 60% when results come out in December it just seems unlikely that the University of Sydney, UTS or UNSW will be clamouring for their business. There will inevitably be a trickle down to other institutions, but perhaps not enough to sustain every course.

  6. UWS also has the disadvantage of having limited scope for price competition in the domestic undergraduate market. However, like David Marks I would not be so quick to write them off as an institution based on one course closure. I have not seen their 2012 numbers, but in the partially deregulated market over 2010 and 2011 they increased their domestic numbers by nearly 5%.

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