In many ways, modern universities are about developing and maintaining an advantage over competitors, be they domestic or global. One key way to do this is through differentiated educational offerings.
Do universities have a comparative advantage?
by Anand Kulkarni
Dr Anand Kulkarni is a higher education professional at Victoria University.
This article represents the author’s views entirely and is an abbreviated version of the article, ‘Do universities have a comparative advantage?’, published by the Campus Review on 12 April 2021.
We use the concept of revealed comparative advantage (RCA) in trade (exports), but we apply it to student load (total domestic and international) for all Table A Australian higher education providers, drawing on Commonwealth data for 2019 for all broad fields of education. RCA measures ‘disproportionateness’ and considers whether a country’s exports of a commodity in its total export mix are higher than the global share of exports of that same commodity in total global exports. We have reconfigured this approach, and instead of commodities, we use load. It is a volume rather than a quality measure.1 In particular, we look at whether load in a broad field of education is over-represented in the load mix of an institution compared to the sector as a whole. A value greater than one for this ratio means that an institution has a revealed comparative advantage for that field of education.
The numbers of Australian institutions with RCA by field of education, i.e., a ratio greater than one, are as follows:
- 25 institutions in education
- 22 in health
- 22 in information technology
- 21 in natural and physical sciences
- 18 in management and commerce
- 18 in society and culture
- 17 in architecture and building
- 15 in agriculture, environment, and related studies
Many Australian institutions have a similar load profile at the broad field level, suggesting a lack of real diversity in the system, and/or that the concept of advantage is less clear compared to exports when used in this context. While student preference, perceived job potential, and labour market demand are likely determinants of the outcomes we observe, it is also possible that the system itself lacks diversity on the supply side. It should be noted that broad field analysis could be camouflaging considerable distinctiveness at the narrow field of education; thus, there might be much more differentiation at the individual course and unit level.
Only 13 institutions out of 39 have an RCA greater than one for engineering and related technologies, which is interesting as one could assume complementarity with natural and physical sciences and even IT. Thirteen institutions have an RCA greater than one for creative arts, while only 6 higher education providers have an advantage in food, hospitality, and personal services. In the latter case, there is clear evidence of specialisation.
There are 11 generalist institutions that we define as having RCA greater than one in more than half the fields of education. Monash University, Griffith University, and the University of Tasmania stand out. Size and/or location appear to be playing key roles here. There are 26 institutions that are semi-specialist, having an advantage in 3 to 5 fields, and represent the bulk of the Table A providers. Only two institutions are significantly specialised, having an RCA greater than one in one to 2 fields. Australian Catholic University and Batchelor Institute of Indigenous Tertiary Education fall into this category. Comparing now to 5 years ago, we observe that load by the institution in the broad field of education has been narrowing towards the sciences in Australian institutions generally.
As the data pertains to 2019, the impact of COVID-19 is yet to play a role in it. It is possible though that we will see a further narrowing of the focus linked to the most profitable fields of education. This may also open the door for new funding possibilities that foster cross-university offerings to promote ‘diverse specialisations’.
Of course, a full consideration of comparative advantage, differentiation, and distinctiveness would involve many more factors, including research, commercialisation of knowledge, community, and industry engagement.
1 The notion of revealed comparative advantage was developed by Bela Belassa pertaining to exports. We have reformulated it as follows: Revealed comparative advantage (RCA) equals (University A’s load in field of education x/University A’s total load) divided by (sector load in field of education x/total sector load). Where this result is greater than one, then University A has an RCA in the field of education x. The analysis is replicated for each field of education for each university.
Anand Kulkarni
AAIR member, 2021
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