Disruption Forces: driving educational workplace change · PDF fileDisruption Forces: driving...

Corporate Solutions Australia | September 2015

Disruption Forces: driving educational workplace change

Disruption Forces: driving educational workplace change | September 2015

1 IBISWorld Industry Report P8102, University and Other Higher Education in Australia, February 20152 “Digital disruption: short fuse, big bang” Deloitte

IntroductionThe economic performance of the higher education sector over past five years in Australia has been strong. 1However, the sector is facing unprecedented change on a number of fronts. Firstly, policy development as the sector moves towards a more deregulated model. Secondly, global mobility potentially reducing the number of international student numbers inbound to Australia. Thirdly, digital disruption manifesting in areas such as Massive Open Online courses (MOOC). These change forces all have implications for the physical environment, yet universities are already under considerable financial pressure to release funds for the physical educational workplace. Where should the investment priorities be? This paper explores how digital disruption and the other change forces are impacting on the higher education workplace including teaching, learning and research environments on campus.

Disruption in the education sectorThe reality is we have not had a choice but to recognise that disruption has become an important dynamic in business and society today as we know it. Disruption has been around since the beginning of civilisation but the reason it has become so

important is due to digital technology and the speed of which disruptive events occur. Disruption is already having a significant impact on how we manage property and facilities within the campus environment across the Australian University network.Disruption transforms the status quo, challenges old assumptions, ignites conversations, it activates authorities, exposes new possibilities, can generate a sense of urgency and perhaps most importantly, it generates innovation. What does this mean for the sector? It challenges institutions to engage in new ways of thinking, new technologies, new processes, new teaching and learning outcomes to respond to the changing market conditions.

According to Deloitte Access Economics, the top five emerging sectors in Australia are gas, agribusiness, tourism, international education and wealth management. They believe one third of Australian industries face a “short fuse big bang scenario” including ICT and media, real estate, finance and professional services and arts and recreation. Another third of the economy face a “long fuse big bang scenario” including education, health, transport and post, agriculture, government services, utilities recruitment and cleaning2.

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Education is earmarked as the sector that will face one of the biggest impacts from disruption and according to Deloitte is a sector with a “long fuse and a big bang”. Ernst and Young classify universities of the future into three major categories depending on how they respond to disruption - the ‘streamlined status quo’, ‘the niche operator’ and the ‘transformer’.3 The streamlined status quo will continue to operate as a broad based teaching and research institution but will transform the way it delivers services and administers its organisations. The niche university will fundamentally reshape and refine the services and markets they operate in, with a concurrent shift in their business model organisation and operations. The transformers will partner with private providers and new entrants to carve out new positions, create new markets and new customers which may include content wholesalers, content consumers, financiers, employers and parents.

3 University of the future, Ernst and Young

However, while digital disruption is a threat, it is also an opportunity. It is through digital disruption that the sector will emerge. It will drive change management and the necessity to increase speed to market. It will lift quality and academic excellence. It will build academic talent and change the workforce structure. Emergence is the potential upside of disruption. Emergence is already evident in the sector with the experimentation and development of MOOC delivery, the change in focus on learning outcomes to align with programs like STEM (Science, Technology, Engineeing and Maths) and the increased focus of international business campuses.

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Transforming environmentsDisruption is changing the expectations of students, academics and researchers in terms of their physical environment. This is happening at incredible speed. Users of campus facilities are demanding a shift from traditional to more flexible ways of learning and interacting. They want more accessible campuses. Universities are seeking more informal learning spaces that can be used socially and for specialised activities. Space that encourages academic innovation, space that incubates business and supports community and cultural engagement, student housing, community and recreational zones.

Digital disruption has heightened awareness about learning outcomes and the role of the educational workplace. It is causing those that teach to really question the workplace they teach in. The teaching environment is moving from the tutor and lecturer focused in front facing classes toward collaborative and active learning environments.4 There is a clear shift emerging from the traditional spaces where there was more lecturing with the professor remaining at the lectern to an open space approach to encourage more discussion, movement throughout the space and greater consultation with individuals and small groups. Alongside designated places for learning, we begin to see the entire campus as a learning landscape, creating an identity for the spaces in-between through multi use in terms of retail, housing and other facilities services. Movement areas must be designed as part of the overall landscape.

The other notable changes are the university library which has transformed to a major activity student hub. Disruption has significantly increased informal and social learning spaces, as well as agile and flexible furniture layouts. This trend is being played out across a number of universities such as QUT and

RMIT. Currently at UTS through the Learning Futures Institute, which is being led by Professor Shirley Alexander, a practice–orientated model of learning has evolved. With the focus on “what students can do with what they know and how they do it”. The learning resources used are podcasts, screen cases, YouTube, open education resources, online learning resources, and reading from digital readings from libraries, social media and text books. The on-campus workplace experience involves primary lectures and tutorial with highly flexible furniture settings, structured labs and individual studios which don’t include a traditional class room setting but a flipped classroom setting.5 UTS have no traditional lecture theatres left on their CBD campus, which is quite a transformation.

The focus on STEM to combat the changing skills required for the workforce of the future, also has an impact on the learning spaces required. In April 2015 PWC asserted that 44% or 5.1 million jobs are at risk of digital disruption, going on to suggest that there is the potential for a 54.7% uplift to GDP if we shift just 1% of our existing workforce into STEM6. To meet the STEM challenge, the flipped class room and increased innovation in campus and learning environment design will challenge universities to embrace change. Yet universities are having to manage this demand in the context of increasingly ageing infrastructure on campus and the emergence of the campus ‘dead spot’. This is a precinct on campus that has no life, no student cohort. Due to poor low utilisation, lack of building condition or function, lack of amenities to attract students and the university community, and misaligned adjacencies between those populations which is creating limited engagement in that location.

4 Design for the Changing Educational landscape, Andrew Harrison & Les Hutton 5 http://www.uts.edu.au/research-and-teaching/teaching-and-learning/learningfutures/new-approaches/case-studies#flipped-learning-approaches6 PWC: A smart move – future proofing Australia by growing skills in science, technology, engineering and maths

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MOOC: The impact of digitalMOOC has proven to be a much-needed catalyst for change for the development of innovative teaching and learning programs. It is creating the momentum for experimentation around how universities deliver teaching and learning outcomes. Universities need to replace the traditional with learning spaces that are linked to pedagogy. This is in essence creating spaces that help create innovative and imaginative environments and that can stimulate learning and encourage different approaches to teaching. The traditional spaces as we know them are becoming less relevant as spaces become less specialised, and more flexible to allow multiple settings that can be changed as learning is underway. More spaces are required around the patter of human interaction.

In addition, the increasing demand for MOOC has introduced new providers to the market which is creating a new competitive landscape. According to EIFC and EdSurge7, the number of universities offering MOOCs has doubled to more than 400 universities, with a doubling of the number of cumulative courses offered, to 2,400. Private providers of online courses offer students the freedom to study whenever or however they want to. But perhaps the most challenging concept is they are able to offer courses with a much lower cost model because they are online and they don’t require the built infrastructure that a traditional university does to operate.

This puts more pressure on the traditional teaching spaces as a viable option moving forward, making the move to the flipped classroom and innovative educational landscape more compelling. The flipped classroom is starting to gain momentum in Australian universities and around the globe, and it will see the traditional learning environment become redundant. This will see the existing (sometimes smaller in floor-plate) inflexible spaces be replaced by slightly larger room which allows for flexible and reconfigurable furniture solutions to meet the interactive requirements of the new methods of learning. The traditional lecture theatre will be transformed into more open spaces with a mixture of fixed and mobile seating. Campus wide, greater optimisation will be increased by having less large lecture theatres and more multi-purpose teaching spaces which are occupied more often and support greater human interaction.

Campus design of the future should consider student hubs or service malls, a collection of cafés, study spaces, consultation suites, as well as business centres where universities can collaborate with industry. It should include digital libraries and collaboration zones to access material online. It should give consideration to academic spaces going to open plan, informal teaching and learning spaces that push the boundaries of modular and reconfigurable furniture and interactive

technologies. It includes innovation and business centres where universities can collaborate with the business community in research ventures.

Universities are responding to the challenge of new entrants by investing in online course development. Universities including the University of Melbourne, RMIT, University of Queensland all have dedicated teams to make the transition in course delivery. It is expected that the university segment will use this as an opportunity to leverage its content (via virtual and blended learning) in their own campuses and continuing education curriculums.

MOOC and digital disruption is challenging the model that increased university enrolments should result in additional floor space. Students are now seeking a blend of university learning, workplace experience and live projects to contribute to their career development. Managing this space utilisation equation will become increasingly difficult in a shifting learning delivery model.

Universities need to consider the whole of campus experience and the non-traditional learning environments will become just as important in student education as traditional lecture and tutorial facilities. This will drive campus re-orientation and re-development planning. Underutilised spaces such as corridors which are main arterials between prominent spaces, external courtyards, under cover zones and vacant undeveloped land between buildings are an opportunity to enliven the campus. Universities need to understand how these spaces can contribute to their vision and master plan and consider non-essential space as part of their capital works and funding decision making process.

7 http://www.uts.edu.au/research-and-teaching/teaching-and-learning/learningfutures/new-approaches/case-studies#flipped-learning-approaches

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Will digital disruption and online learning result in a lower footprint for universities across Australia? Will we see forward thinking institutions divest real estate and parts of the campus as part of a strategy to operate a smaller campus foot print or a blend of commercial, residential, industrial and educational uses? Will those investment funds be redirected to other sources to enhance the student experience and drive enrolments? Universities will need to invest in identifying where they can leverage their campus to generate revenue to inject funds back into the parts of campus they need to transform. Once that is achieved they need a detailed and robust capital works program to plan and implement the projects required to fulfil the transformation. This will then require adjustments to asset management and maintenance plans to ensure the appropriate levels of funding moving forward.

Universities such as Curtin University are seeking to bring research, business and community onto campus to enliven the urban precinct the university operates in. For universities with low utilisation and those located away from urban hubs this creates a real opportunity to create a community.

Achieving quality learning outcomes in a physical environment enhances the student experience, motivates them to attend class in person instead of jumping online to attend the lecture. It also attracts the academic to the university to be a part of

the environment and the learning experience. To create the new type of learning and workplace environment, an institution must translate the future direction of learning into design recommendations. This will also have the additional benefits of productivity improvements and improved staff retention and wellbeing. User engagement is a key part of the process which should include workshops, interviews, surveys and focus groups with students, academics and researchers, business partnerships, industry peers and technology providers to envision and explore learning processes and understand the unique requirements appetite for change, as well as obtain user feedback. Change management is also a critical success factor in achieving and effectively implementing a improved learning experience.

One of the first steps is actually understanding utilisation rates, using data and analytics of the property portfolio to drive timetabling decisions. In many institutions there is a disconnect between space utilisation and timetabling data. This gap needs to be bridged so that universities can make strategic long-term decisions around investment. There is also a disconnect between asset management plans that inform future maintenance requirements and the number of break downs and failures on campus. Big Data and advances in Building Information Management systems will enable the sector to track failure trends more accurately across multiple buildings.

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Managing Space in the FutureFor facilities management teams this shift means a different type of service delivery model. A model that is driven by the teaching and learning requirement not by funding availability. The model will have to provide more support to the academic and student community so that they are inducted and trained to change and reconfigure the room layout for different learning types and modes. Procurement teams will need to develop different vendor arrangements and large supply chains to ensure furniture components are always available. Vendors will need to have supplier arrangements for ad-hoc repairs and servicing. These new environments will start to operate for longer periods, some will even operate 24/7. These spaces will require greater levels of serving in terms of cleaning and waste removal, as well maintenance and minor works for increased levels of wear and tear. Ultimately the changing educational environment will require a more service intensive model. This poses a challenge when we are starting to see some universities forced to operate with a “thin” service delivery model.

The rise of MOOC and more course content being available online will have an impact on how space is utilised. The questions universities need to consider include what is the amount of space required? What is the type of space required for teaching and learning? And, do universities need to continue funding the level of maintenance to support underutilised teaching and learning spaces? This in turn will challenge the campus environment.

Facilities management departments will need to review their current policies and business processes. They will need highly responsive and intuitive help desks and services centres to manage a changing demographic in work order volumes. They will need to be able to accurately identify furniture components for servicing requiring some universities to implement a more detailed asset tracking system. As departments lose more funding given the financial pressure faced by the sector, they will need to explore more integrated approaches to engaging vendors which include a greater part of the asset lifecycle. Outsourcing will need to comprise multiple bundles, not single bundles to achieve greater levels of accountability and efficiency. Contractual agreements will need to become more incentivised around performance and partnering.

Flexible learning models seek to create non-designated spaces for students to study and collaborate in and around what is been coined the “space-in-between”. This means that spaces are being designed for patterns of human interaction rather than the specific needs of the academic department. Accordingly the facilities management service delivery model will have to to change allowing for increasing serviceability. The traditional cloistered corridors will be changed to zones for collaboration generating more utilisation, waste and the need for the surfaces in those spaces to be regularly cleared and cleaned to ensure and encourage utilisation by students. More variable funding models and vendor management will become a key requirement for institutions.

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Internationalisation and global mobilityThe global education market has grown by 6.6% per annum over the past decade. The number of international students in Australia on a student visa studying in higher education grew 8.9% from 2013 to 2014. According to JLL research, international student growth is even higher in 2015 after a number of years of fluctuating demand driven by the high Australian dollar, relaxation of the student visa and improved perception of student safety.

The internationalisation of education has two impacts on Australian universities, putting pressure on inbound student populations as well as creating an impetus to compete in overseas markets through outbound strategies. Recent statistics provided by the ICEF shows US and UK institutions are leading the way in outbound education with 50 and 24 international business campuses established, while Australia has 138. China, South Korea and Malaysia are emerging as the leading global destinations for international students which will fundamentally change the Australian landscape. Increasingly, Australia will be competing with new and innovative campuses in these destinations that have campus environments with access to multi use retail precincts that provide greater levels of access and services.

The increased competition for international students calls for an industry-wide approach including engagement by universities, Federal Government, State Government, private operators and private capital sources. At a macro level, institutions need to have a vision for their campus that will allow them to compete on the global stage. At a more micro level, universities must understand the changes in student demand around learning styles and experiences and what that means for the education

workplace and the places in between. They need to challenge where teaching and learning, student housing, facilities and services, recreational facilities are located and plan to create a better connected campus environment. Policies and processes need to be reset across administrative departments to harmonise and to support transformation. Then there is the challenge of funding, which requires strategic intent to re-direct and re-position the university to achieve transformation. While Governments need to help provide better infrastructure and transport options to and from campuses and consider the provision of accommodation.

Universities now recognise that the academic brand is an important commodity in building its organisational brand on the global arena and there is a war for talent. Universities will need to attract high profile academic talent, as well as provide high quality accommodation within proximity of the campus. It is critical for universities to develop their thinking around investment decisions in student and academic housing adjacent to the campus, potentially partnering with the private sector to create a compelling university experience. Universities need, with the investment community’s support, to provide more affordable housing in CBD areas particularly in Melbourne, Brisbane and Sydney. There needs to be greater levels of support services to help the international student get orientated and established in the first couple of months of their study stay.

The outbound strategy of establishing IBC locations is a significant investment decision but one that has been made by Monash University, RMIT, Australian Catholic University, Swinburne University, Wollongong University, Curtin University

8 http://monitor.icef.com/2015/02/managing-growth-maintaining-standards-international-branch-campuses/

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and Murdoch University over the past five years. There are a number of different models to consider as part of this outbound strategy including:9

▪ Operating in facilities that are wholly owned by the home campus (28% of IBCs)

▪ Adopting a government partnership model whereby the local or national government subsidises the cost of, and thereby owns, the local campus (22% of IBCs)

▪ The campus is owned by a private partner, typically an investment firm or property developer who builds the campus, and sometimes receives a stake in the IBC’s revenues (20% of IBCs)

▪ Rent their campus space from a private party (18% of IBCs). There were instances where multiple IBCs rent space in the same or nearby buildings, creating a “shopping mall effect” that gives students a variety of academic options

▪ Operate within a campus owned by an academic partner, but use its facilities to independently offer stand-alone academic programmes (12% of IBCs)

Each property model comes with its advantages and disadvantages and is dependent upon the institution’s risk profile, potential government support and level of funding. Where partnering reduces the financial risks, it could lead to

the dilution of the strategic and academic intent.10 Conversely, establishing a wholly owned IBC affords the opportunity to create an educational workplace that is aligned with the teaching and learning strategies of the home campus.

Establishing in an overseas location requires an understanding of the local real estate markets, the country government policies, local vendors and local culture. There are a number of key phases that need to form part of the IBC investment design, which include:

Project Establishment – including execution planning, project brief and scope definition, architect and engineer appointment, communication and programming, procurement, risk management, cost planning and reporting.

Design and Tendering – design team management, coordination, team management, constructability reviews, value management and value engineering, contract and vendor prequalification, tender management, contract preparation and execution.

Construction, Contract Administration and Handover – quality monitoring, mock-up coordination, contract administration, contractor performance management, site and safety inspections, coordinate defect rectification, handover phasing & acceptance, contractual close out.

9 http://monitor.icef.com/2015/02/managing-growth-maintaining-standards-international-branch-campuses/10 http://monitor.icef.com/2015/02/managing-growth-maintaining-standards-international-branch-campuses/

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ConclusionThe higher education sector in Australia is facing unprecedented change from a number of forces including digital disruption, changing government policy and global mobility. These influences are challenging the traditional learning models and therefore infrastructure that an institution requires to deliver learning outcomes. Those universities that rise to the challenge and adapt to change will secure their long-term competitive positioning. They will see the entire campus as a learning landscape, creating an identity for the spaces in-between through multi use in terms of retail, housing and other services.

They will invest in delivering an innovative campus workplace experience that moves from a traditional classroom setting to a flipped classroom setting, includes lecture and tutorial facilities with highly flexible furniture settings, as well as structured labs and individual studios. It is those institutions that can understand the role the physical campus has to play in the digital world that will remain relevant. For facilities management teams this means a different type of service delivery model. A model that is driven by the teaching and learning requirement not by funding availability.

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About JLLJLL has a dedicated team of higher education specialists who provide a comprehensive set of real estate services to higher education institutions. Having completed over 20 consulting projects across Australia’s Universities, we bring the insight and experience to advise and support you. Our real estate experts have first-hand experience with the challenges specific to your community and the needs of your unique set of stakeholders. We combine our local connections and insights with our national and global resources to develop tailored solutions that align with your goals. When you engage JLL, you’ll have the confidence of knowing you have the best and most experienced real estate team in the field of higher education on your side.

AUTHORNaomi Nielsen Head of Education Business [email protected] 02 9220 8692

Naomi Nielsen heads JLL’s Education sector business. Naomi has more than 22 years of real estate experience in Australia, having worked with many tertiary institutions in an advisory capacity including University of Sydney, RMIT, University of NSW, University of Western Sydney, Murdoch University and University of Canberra. She held the role of Deputy Director – Facilities Management Services, The University of New England for six years and General Manager, Facilities at Campus Living Villages for three years. Naomi also has extensive experience in the corporate sector, having held roles with AMP, Haden FM and Brookfield and provided real estate advice to leading corporate brands including Credit Suisse, Nortel, Commonwealth Bank, NAB, KPMG, Suncorp and Woodside Energy. Naomi’s strength comes from having both consulting and advisory skills, as well as having driven the corporate real estate agenda internally.

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COPYRIGHT © JONES LANG LASALLE 2015. All rights reserved. For further details or to unsubscribe, please email [email protected]. The items in this publication have beencompiled from the various sources acknowledged. The information is from sources we deem reliable; however, no representation or warranty is made to the accuracy thereof.

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