Many people in higher education love to talk about diversity of operating models. Diversity has become a mantra for policy makers and universities, with the aim that one day not every university will have a similar mix of research and teaching. And where has all this talk got us? To more of the same.

The reason for this Groundhog Day is that the very foundations of tertiary education in Australia impose uniformity. Think of the formal definition of ‘university’, which requires all universities to undertake a minimum level of research. Think of the competency-based standards system in vocational education and training. And think of the Australian Qualifications Framework, the Provider Category Standards and the incentive structures built into funding systems.

Making real progress requires policy-makers to go beyond rhetorical support for diversity and put in place policies that encourage it. We need to think carefully about what the community wants from universities, colleges and training organisations, and how those institutions can best contribute to the national economy. We need to consider the roles of research and teaching in higher education, and how they can each be delivered best.

Australia asks a lot of its higher education system. It is a booming part of our economy, welcoming a massive influx of international students, while attempting to meet the needs of students, employers and the wider community. By demanding similar things from each provider, we make it hard for any of them to achieve excellence in any one endeavour.

It is understandable that many institutions are reluctant to try something radically different. Some fear losing existing advantages and worry about giving up access to the funding system created by previous policy settlements. Other commentators argue that the solution is a grand federal takeover but we are not clear on how that will achieve the objective of diversity.

We think things can change and have some recommendations on how to get there.

First, policy-makers need to rethink the definition of a university. Right now, for an institution to be considered a university it needs to undertake research in at least three disciplines, connected to postgraduate research training. For younger institutions, this means they are required to focus on competitive research funding performance, even if it distracts them from their roles of engaging with the community and sustaining regional economies, including with locally relevant research.

Recently I spoke to the vice chancellor of a regional university. The institution, the VC explained, does not compete in the rankings ratings game but is proud of its impact on water, climate and agricultural production, all vital issues for the community it serves. The current funding model gives little support for this local role.

Secondly, policy-makers need to rethink the nexus between teaching and research. Current policy masks the costs of research and teaching, leading to an opaque pricing structure that demands internal cross-subsidies. For our largest universities, this means sustaining their position as research powerhouses by transferring funds provided for undergraduate teaching. Some $2 billion in research-related funding each year is delivered via funded teaching places, but at universities research is frequently managed as a separate unit of activity in budgets.

There is little evidence of a relationship between research and teaching quality. Plotting teaching quality data from the Quality Indicators of Learning and Teaching against Excellence in Research Australia data shows little correlation. Nor is there any apparent relationship between research excellence and either student experience or employment outcomes.

Thirdly, policy-makers need to revitalise vocational education and training. VET providers, including TAFEs, offer a range of trade and diploma courses, which overlap, in qualification level, with university sub-bachelor offerings. If both could be re-energised there could be greater choice for post-school learners beyond bachelor studies at a public university.

Teaching at VET would be reinvigorated by requiring curriculum, higher teaching standards and greater evidence of pedagogy and academic rigour. Not only will this level the playing field with higher education, it will better satisfy employers’ call for staff equipped with the intellectual frameworks to navigate change.

Training packages ought to be considered as assessment packages, which will maintain a standards-based and industry-driven approach, augmented by requirements that contribute to academic outcomes that equip graduates for changing workplaces and labour markets.

Once these regulatory changes are in place we can better direct funding, including separating the cost of research from the funding of teaching places. This would lead to change in the distribution of research funding across institutions and among departments and faculties within universities.

This change is likely to free up significant funds. These moneys should be directed to competitive funding for research and to support for local economic and social outcomes. Universities could choose which funds they would compete for, based on their strengths and missions, unimpeded by the need to stretch resources to meet rigid regulatory requirements.

Thankfully there are some small reasons for hope. Education Minister Dan Tehan will receive the reviews instigated by his predecessor of the Australian Qualifications Framework and the Provider Category Standards, while Shadow Minister Tanya Plibersek has cautioned the sector against assuming unquestioned continuity of current structures. She will no doubt be interested in the same reviews.

The seemingly bipartisan commitment to reconsidering structures and categories in the post-school system may provide a new way through. Sensibly constructed, these policies could properly fund different kinds of research and allow more diversity, at better value, in teaching and learning.

This article was originally published in The Australian on 24 October 2018.

Written by Robert Griew during his time as a Nous Principal.

It was adapted from a policy paper produced by Robert Griew, Jessie Borthwick, Cameron Barnes and Arun Murali.