Origins of the education revolution

This is a review article. It begins with the 2007 federal budget, but its true focus is a shift in thinking about knowledge and learning from Australia’s policymakers.

The latest budget has shot to fame as an education-friendly, research-encouraging effort from a government long unwilling to go down that path. Australian Vice-Chancellors’ Committee president Gerard Sutton was quick to call it “stunning”. Of course, in the cold light of day, there are some questions about its mechanics.

There is a 40 per cent run-down on the subsidy to universities for providing courses in accounting, administration, commerce, and economics. Given the national trend for growth in “business studies” subjects, this may make more of a difference to university strategy than Sutton and others have grasped. Will full fees fill the gap? (Never mind whether they should!)

Moreover, as the Deans of Education argue (PDF 48KB), government support for teacher training courses has not grown in pace with additional government requirements upon them. This discipline is being squeezed between relatively high equity standards and extremely detailed quality assurance requirements. People might have expected an “education revolution” budget to fund teacher training adequately.

Another question relates to the Higher Education Equity Fund of $5 billion. Does the projected $300 million annual revenue stream run down the principal? An answer should be easy to provide, but it is not clear from the budget documents. Ross Gittins calls it an exercise in “jam jar economics".

Anyway, rumours that the AVCC represented Australian universities were always greatly exaggerated, but this budget is still a long way apart from any other since 1995. For all its hiccups, the field of vision has shifted radically. So: why the change of course?

Labor is quick to claim credit, but Labor’s productivity-based argument for increased investment in knowledge and learning was not produced in a vacuum either.

Importantly, this budget has come hot on the heels of a range of high-profile statements about research, innovation, education, and training in Australia. These have included publications by the Business Council of Australia, and the Australian Chamber of Commerce and Industry. We can see their influence in the budget’s proposals, and in the responses that will lead discussion from here.

The most significant of these statements came from work the Productivity Commission (PC) did last spring and summer. The PC released its final report on Public Support for Science and Innovation in March this year. It suggests government and industry in Australia are ready to take on a new understanding of research and development activities, although how this understanding should be realised in practice is not yet as clear as it could be.

The PC report has given a clear policy rationale for government support to research and innovation activities. It argues that, to the best of its ability, the Australian government should support research and innovation where there are benefits to the public, and where private interests would not be likely to contribute support. This is a strong and practical argument for the value of public investment in research for the public good.

Additionally, the PC report offers a definition of scientific work that overturns long-held stereotypes of the difference between natural science, technology, engineering and medicine on the one hand and humanities, arts, and social sciences (HASS) on the other. In its own words: “The humanities and social sciences are also included in the scope of this study as they are increasingly seen as part of the sciences.”

This new understanding is in line with the best European and North American thinking. It recognises both the intellectual validity and the economic and cultural benefits of work in the HASS disciplines. It also recognises the importance and the value of collaboration across disciplinary boundaries.

There are shortcomings in the PC report, naturally enough. It does not always follow through on its own logic. It returns to the disciplinary silos in its discussions of extra pay for school teachers in maths and science subjects. Still, it represents a huge change in thinking - and the report acknowledges this was only achieved by strong interventions from HASS lobbyists.

The other important strand of the PC report is the practical measures it recommends. It calls for public research funding to be made more efficient - for example, arguing that there should be more direct funding of universities, rather than growing the competitive grants system. I like this in principle, although some are worried that it may entrench the funding advantages enjoyed by Australia’s research-intensive universities.

The PC report suggests that the new Research Quality Framework have no safety limits on the amount of money unsuccessful universities might lose during implementation. This impeccably rational suggestion demonstrates all the milk of human kindness that economists are famous for; it is unlikely to be adopted.

The PC report has surprised some by calling for a redirection of public funding away from research commercialisation, towards the sorts of public good research that industry is unlikely to support. This is quite different from the government orthodoxy; it cuts across the lines of the BCA and ACCI; but it is a natural consequence of the rationale the report has adopted. The ALP’s Kim Carr has long been a supporter of this line, and was quick to echo it in that party’s recently released “New Directions” policy statement on innovation.

In a similar vein, the PC report calls for reductions to the tax concessions for firms engaging in research and development activity. Canberra believes the tax write-offs have been heavily abused for decades; the PC report takes this anxiety further, arguing for their near-elimination. Additionally, most concessions would be restricted to small businesses only.

This last recommendation touches on a particularly vexed element of public support for research and innovation in Australia. The argument to retain small business concessions reminds us that small business contributes very little to Australia’s R&D system. This is in a context of rapid growth in the services sector worldwide, especially in small and medium enterprises, suggesting a growing need for Australian businesses to innovate in this sector. It is important to look for positive measures that will encourage activity and investment.

One recent overseas development has been the Netherlands’ experiment with an “innovation vouchers” scheme. Through it, a small business can apply for funding, which can only be spent on contracting services from an accredited research and development provider - for example, a university research team.

The first pilot of the scheme allocated 100 vouchers, worth €7,500 each. It has reported an 80 per cent success rate (where success means completing an innovative project that would not have happened without the subsidy), and a 10 per cent wastage rate (where no project was completed). A similar scheme in Australia, if it actively incorporated HASS R&D, could be put to a very wide range of uses.

This reminds us of the policy truism that, once the change in thinking has been made, there are many practical measures a country can use to pursue its new strategy. The PC report’s new way of thinking can now flow through into the terms of reference for public inquiries, into greater disciplinary breadth in the memberships of policy and funding committees, into new policy and funding frameworks, and into new opportunities for Australia’s innovators, researchers, and teachers to put their abilities to work.