Portrait of group of university students using mobile phone in the street.

By David Wright

Many of you would have seen the recent article in The Australian Higher Education section titled Regional universities a rich and exciting resource at our doorstep by National’s Senator Bridget McKenzie.  I totally agree with her argument.

HECG acts for both regional and city based universities and I have to say that in many respects the opportunity for sustainable growth in regional universities is more exciting, particularly considering the potential impact.  

However, the irony is that we believe regional universities can best succeed by taking a global outlook, leveraging their region’s strengths to create global impact rather than a local outlook that seeks to attain a reasonable domestic standard to compete against Australian universities. 

For example, the approach of some regional universities has been to follow the traditional strategy of many of their city colleagues: that is, speak about age, rankings, excellence in teaching, modern facilities, cosmopolitan lifestyles and the like – basically “we are just like those guys but farther away”.  Competitive differentiators that are used to try to attract students are price, class sizes, cheap accommodation etc.  

The challenges this approach present is that its success is limited on at least three fronts:

  1. The university is setting itself up to be marginalised – students will go to the city university if they can.  Further, most city colleges are moving quickly away from this approach anyway because it doesn’t even work for them.
  2. In critical international markets and in domestic relocation markets these differentiators are not powerful or defensible: a large university drops prices, private providers offer a price you can’t compete on, gives scholarships, drops entry scores, agents provide cheap city accommodation etc and so value is lost.  And so the cycle starts – you then don’t have as much money to invest in new growth.  Further, price (as one example) can be a marker of quality as Monash Business School saw when it increased its prices – driving demand up.

 

And most of all:

  1. The real competitive advantages are missed.  Sustainable differentiators are not the focus.  City competitors don’t want a focus here because this is where you can actually take students from them and build scale. They aren’t on the beach, reef, in the country: they don’t have the same access to farms and environments that you can visit every day, and even on the traditional research and academic side these have not been as strong a focus.  Further, city universities risk huge losses by diverting focus to areas that are not currently large and productive.  This is the Disruptive Innovation issue discussed by the leading academic Clayton Christensen

Australia is truly blessed with one of the world’s best higher education systems – we refer to the industry as the “Swiss Watch Model of Higher Education” in which every university is high quality.  And so we also act for city-based universities – they too have many fantastic growth opportunities as regionals, but these are not the same.

Here are just a few competitive advantages possessed by most Australian regional universities:

Niche strength to build a Strong Global Brand.  Many future global economic challenges and ensuing industries have regional focuses including Agritech, food security, water, environmental impact mitigation, rural land-use, over-population, public health, mental health etc.  Organisations such as CSIRO and the OECD have identified these as important focus areas.  Australian regional universities now have the opportunity to stake a position in these domains.  Most have strengths in some of these but have grappled with which will give them long term growth and how that might effect the bigger class sizes in the traditional courses – many in areas predicted to decline in demand over time.

We at HECG have a strategy called Brand House which enables the use of niche centres of excellence to grow all cohorts.  We believe that a focus on being world leading in small number of globally significant and growing niches is a cornerstone to a successful strategy.  

For example, if the fictional University of Central Western Australia were known as the world leader in fresh water technologies could they win recognition and apply these values to attract other students? – Yes they can, by proclaiming something like: “At UCWA we are attempting to save one billion lives over the next five years – want to make a real difference?  Come join us”.  Oddly, as JCU has seen, many of the students attracted to these types of missions are not in the specific field but in generic areas such as business:  Yes – business people can care about the future too!  But this also recognises that segments can have different important characteristics and not all academically related – eg, the proportion of computer scientists passionate about mountain biking is not irrelevant but very significant. 

Of course to back this up UCWA would have to identify how to be the best (not just by research ranking) and build that capability and partners, then maintain and grow – but it certainly can be done.  Further, being more focussed means attracting equally focussed international and domestic partners.

A hygiene factor for any niche identified as a good target is:  can you describe a good potential cohort of students (or partners) who will be able to complete the following sentence in mostly the same way: “this is the best University in the world for me because …”  

It is important to not target students that can’t answer this question.  We see so many approaches targeting students with a very low chance of coming to a particularly university over others while ignoring the ones that will.

What’s strikingly apparent is that most Australian research universities already have a great start in their own niches.   And the process for benefit from these strengths is not new – companies look constantly at how to identify and win new segments based on their strengths, while start-ups and scale-ups look to create new segments that they then own.  These same processes can be applied to universities.  But one word of caution – to be successful the Faculty must be truly engaged to create a long-standing success.  

Creative industries thrive in smaller communities.  A major drive around changing our economy and those of most of our economic competitors is to replace legacy and slowing industries with innovation.  While innovation can thrive in large communities it can also go further and faster in smaller communities.

MONA in Hobart is seen as one of the leading modern art facilities inthe world with very high attendances.  Why did they pick Hobart as opposed to larger population cities such as Sydney and Melbourne?   Yes, there were some personal ties but they were able to pull together the community and plug in to a vibrant and connected arts scene and government.  They created something that was not a copy but something world leading and distinctive.  If a small organisation can do this then universities can do the same and provide a different environment where – and this is vital – specific segments of creative people will be attracted.  

This environment can be by culturally driven (like Byron Bay is famous for) or industrially driven where, for example, students can get to work on projects on actual farms – not once a semester but every day while some can live in the actual environment they are seeking to save or savour.  

Most advances in marketing to students or otherwise are moving in at least two directions – personalisation and values based approaches.  When we look through these windows we see many opportunities to attract large number of students.

Community connectedness can enable much closer relationships between industry, government and universities.  Stanford University started in a cow paddock outside of a major city but it continues to this day to have one of the most connected industry communities anywhere.

Work placements and many other opportunities are fundamentally easier to get started and more likely to be sustained when the relationships are so much closer.  The student population is a fundamental asset as both a consumer, human capital provider and innovator.  Most businesses – big and small – in regions should look at having interns, employees and development teams working with them.  In big cities, not only are you competing with a lot more universities and private providers but also your ability as a industry player to get what works for you is much.  

Effective relationship strategies combined with CRM technologies and good old fashioned shoe leather can really prove an advantage. The advantage centres on how deeply you can engage – how deeply you can understand the partners’ needs and limitations, not how many you can see.  This is a true quality versus quantity argument and smaller regionals have huge advantages here.  

For students – like anyone – the idea of being a valued part of the community has tremendous value.  Regional universities can learn a lot from the strategies of regional US universities.  For example – students in the US want to go to Austin Texas because it is a college town and great to be part of.  It has also become the leader in semi-conductors and other industries.  Or how about Huntsville Alabama – a leader in defence and space industries.  Local governments do a lot for the student population in such areas (even when it is a bit painful – Summer Break, Music Festivals anyone..!).

But these successes don’t happen overnight.  Real successes come with a coordinated long-term strategy with measurable outcomes and staged effort between local government (providing the environment), universities (providing the human capital) and industry (providing the long term development opportunity).  Over cycles the impacts become greater and greater – local industry develops and new industry is attracted because the talent is there already, and many come to love these great regions and want to stay.  And students with the right environment can create their own industries.

In Australia towns such as Hobart, Armidale, Bendigo, Darwin, and Townsville and many others could all become hotly-desired student destinations in which particularly regional advantages are combined.  I look forward to it – even if the volume is going to go through the roof!