How will economic conditions affect student living and learning?

We constructed the scenario matrix for this project using two areas of uncertainty that the team believed, based on their knowledge and background research, would have the most significant impact on the HE sector over the coming 20 years. These were Economic and Societal. These are the same uncertainties used for university_vision and so we were able to draw on the extensive consultation carried out for this other project.

This article focuses on economic uncertainty and the ways in which it could affect the sector. This is probably the more obvious of the two uncertainties.

Uncertainty axes are constructed by posing two opposite situations and creating a credible narrative for each. In this case we used:

• Sustained economic stagnation
• Return to economic growth

Sustained economic stagnation

The global economy remains fragile and any growth is patchy and restricted to a few countries. The poor fiscal situation in Europe and the US has remained, resulting in lower confidence, lower consumption and higher unemployment. The UK and Europe have endured a long recession and US financial markets, exposed to Europe’s sovereign debt, have suffered badly. Governments are naturally inclined towards protectionism but need to trade in some goods and services. Social tensions have increased and relationships between different ethnic groups are difficult. Many societies are unwelcoming to outsiders.

Difficult economic conditions are likely to result in students being more instrumental about higher education. We can, arguably, see recent intakes of students veering towards courses that are more clearly linked to employment. Over time, this could also result in a demand for more cost-effective ways of attaining a degree – perhaps the use of online or blended learning, and shorter, more intensive study patterns.

Sustained economic decline could prompt a trend towards staying in the parental home while studying. Until now we haven’t seen this trend as a result of the economic crisis, but if the economy does not recover, family resources are likely to come under further pressure and we could reach that elusive tipping point. Less drastically, it could drive demand towards budget accommodation with lower service levels – with obvious consequences for the quality of the student experience.

Return to economic growth

The UK and global economies have returned to growth supported by innovation and investment. Markets are open and regulation is laissez-faire. Consumer spending is increasing as levels of personal debt reduce, but consumers are careful; the recovery has been painful and the years of austerity are not forgotten. Most sectors are growing and the job market is reliant on high-level skills that enhance the competitiveness and productivity of each business and economic bloc. Education is valued and domestic student numbers, which have fallen in recent years, are on the rise. Competition between UK universities for international students – particularly from the emerging economies – is fierce.

A return to economic growth in the UK means a greater demand for graduate skills and a greater ability for both the state and the individual to invest in HE, both teaching and research. This is likely to mean a greater proportion of the population pursing some form of higher education, and a likely rise in postgraduate study.

Greater household affluence also frees up students and their parents to invest in the wider student experience, including student living and co-curricular activities. However, the type of student experience they pursue will depend in part upon the prevailing ethos in society.

Tomorrow’s article explores this second area of uncertainty, and how the two axes come together to form the scenario matrix for this project.

Simon Hooton and Jenny Shaw