Changing risks, disruptions and megatrends in Scottish Higher Education

| Oct 14, 2016

Lindsey Paterson, partner for higher education assurance for PwC in Scotland recently hosted a PwC Higher Education seminar aimed at identifying  issues facing the sector in the coming years with a look at the opportunities and risks ahead.

Scotland and education

Scotland has a proud heritage in higher education and consistently punches above its weight in national and international rankings for the sector. But education is becoming increasingly global in nature and the sector is facing increasing challenges from global megatrends such as digital disruption, shifting demographic and changing regulatory and tax landscapes.

The PwC seminar touched upon PwC’s global megatrends report and the risks that are prevalent in the sector, using recent benchmarking analysis. The challenges and opportunities these trends and risks bring for higher education were explored, particularly from an internationalisation perspective.

Five megatrends impacting Higher Education in Scotland

PwC has identified five global megatrends after conversations with experts across the globe:

  1. Accelerating urbanisation - The rise in prominence of cities in the global economy has been truly unprecedented. In 1800, only 2% of the world’s population lived in cities – now it is 50%. 1.5 million people are added to this total every week.
  2. Demographic shifts - We’ll add another billion people to the world’s population by 2025, making the estimated total 8 billion. At the same time, we’re living longer and having fewer children. As a result, the fastest growing segment of the population will be the over 65s.
  3. Climate change and resource scarcity - As the world becomes more populous, urbanised and prosperous, demand for energy, food and water will rise. But the Earth has a finite amount of natural resources that can be used to satisfy this demand.
  4. A shift in global economic power - By 2030, we estimate that the E7’s purchasing power will overtake that of the G7. As incomes rise in these markets, they will contribute an increasing share of the global middle class. In 2015, we estimate that Asia Pacific will have a larger middle class than Europe and North America combined.
  5. Technological breakthroughs - technology is one of the biggest disrupting forces in all sectors. The time it takes to go from breakthrough technology to mass market application is collapsing, re-shaping the economy at the same time.

When you consider these megatrends in the context of internationalisation, it is no wonder that Scottish universities are increasingly looking to expand their presence overseas to attract international students with spending power as well as key talent.  Many have already looked to E7 markets, in particular China and we anticipate that the next push will be in frontier markets, for example Nigeria.

Expanding internationally represents a great opportunity but is not without risk.  Often internationalisation requires significant capital expenditure and the projects can have a high profile.  Reputation is key across the sector, and therefore having a robust framework for managing the associated risk is particularly important.

The event closed with the feeling that while competition across the higher education is fierce, Scottish universities are well placed to take advantage of the opportunities.

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