The cost of academic capital

Increasing the economic performance and competitiveness of New Zealand Inc has become the resounding mantra for our times.

We can expect to hear more of the same during John Key's pre-Budget speech today. If royalties were issued for every time the necessity of so doing was repeated, the country might be a good deal richer. Unfortunately, mere repetition of the idea - particularly when it is issued without fresh insight into how such a state of affairs might be achieved - does little to advance the country's prospects.

Those prospects, especially when set against the achievements and economic trajectory of our near and biggest neighbour, Australia, are no great cause for optimism. Neither is the report, aired this week, of the challenges New Zealand universities face in planning for and recruiting against an ageing workforce.

The report - "Academic Workforce Planning - Towards 2020" - authored by Business and Economic Research Limited (Berl) and commissioned by Universities New Zealand (formerly the New Zealand Universities Vice-Chancellors' Committee) shows the country's universities are facing a shortage of academic staff over the next 10 years due to an ageing workforce and other factors. Through modelling a number of scenarios, Berl estimates universities will need an additional 560 to 920 academic staff each year until 2020. About 500 are currently recruited each year. Universities NZ chairman Derek McCormack has outlined the seriousness of the issue and the challenges it presents: "New Zealand universities are facing a future with a high student demand, capped government funding, a significantly older-than-average workforce and increasingly intense global competition for academics."

Where university recruitment problems and economic performance intersect is at the level of human capital - recently defined in an OECD report as "the knowledge, skills competencies and other attributes embodied in individuals that are relevant to economic activity". To put it another way, human capital is an essential prerequisite for economic performance. Ensuring the stocks are sufficiently, appropriately, and more keenly matched to the demands of the modern economy than that of competitors will, ultimately, pay dividends in the tight global labour market.

This is where our universities come in, and if they are unable to recruit and retain a highly educated and skilled teaching and research workforce, the mantra of economic competitiveness begins to sound hollow.

As the report makes clear, there is little room for complacency, and the University of Otago is conversant with the human resources challenges it heralds. For not only is the academic cohort across New Zealand ageing, it is also increasingly being lured to the private sector, and overseas institutions and educational establishments. As Kevin Seales, University of Otago human resources director, put it this week: "We don't want to catastrophise it because it is not a critical issue right now, but we do need to be prepared, gearing up for it and thinking about it."

Universities in this country have long flagged the difficulties they face in comparison to other OECD countries in retaining highly-skilled and internationally-rated academics. A Deloitte report conducted for Universities NZ, dating from 2008, highlighted the fact sector salaries in New Zealand lag a long way behind those in Australia, Canada and the United States.