New Zealand universities and business schools have a maximum of five years to re-invent themselves in a fast-changing world - or face a "scary" future, according to the Dean of the University of Auckland Business School, Professor Greg Whittred.

New Zealand universities have to re-model themselves quickly, he says, as technological advances take the world to the brink of what is sometimes referred to as the Fourth Industrial Revolution (after steam, electricity, the rise of computers and automation).

The next step is computing and the internet becoming an even bigger part of our everyday and business lives as a fusion of technologies blurs the lines between digital, physical and biological spheres. No one yet knows what this fourth revolution will look like in its entirety - but one of the warnings is that large-scale automation and machine learning could cut jobs around the planet.

The Business School's voice on matters of change is authoritative: in 2014 it was named by the prestigious Massachusetts Institute of Technology as one of the world's top five emerging leaders in entrepreneurship in more challenging environments. It has devoted much time and resources to producing students with entrepreneurial mindsets who have developed more than 120 companies in the last 12 years, raising more than $200m in capital.

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"The pundits are possibly overstating the threat but I do think we will see huge amounts of professional work becoming automated," says Whittred. "That's particularly true in areas like accounting; there are estimates 90 per cent or more of traditional accounting roles could be automated. The legal profession could also be affected and the health industry as well.

"Accounting and finance programmes comprise the core of most business school offerings and produce the majority of graduates. If demand for such graduates reduces materially, they and we are in a precarious position.

"We can't just assume we will suddenly start teaching them all coding and digital marketing and keep the Business School going that way - that's far too simplistic."
Whittred says other factors are driving the need for the university sector to re-model itself: falling student numbers and correspondingly stiffer competition from universities from other countries, like Australia.

"The 18 to 21-year-old demographic, where most university students come from, peaked last year. The government is forecasting a decline in numbers, somewhere between 0.5-1 per cent a year, until 2023 when it will increase again [as birth rates rise]."
The forecast is the same for many other countries, including Australia - universities there are more energetic than ever in marketing themselves to the "cream" of New Zealand students.

That triple threat - a reducing student pool, stronger competition and the impact of digital disruption on professional work and jobs - is joined by a fourth. MOOCs (massive open online courses) mean universities must re-model themselves in terms of what they do and how they do it.

"These days you can get a 'rock star' professor talking to you for 45 minutes for free, with TV-quality production values and TV-quality techniques of retaining attention levels. We and many universities like us have a campus experience to offer. We have to identify, capture and refine what is unique and value-adding so we offer students something they can't get online or elsewhere.

"I look at the Millennials [those born between 1980 and 2000] and think the sector as a whole may be disappointing them. These are people who live on their mobile platforms; they expect to be able to access learning anywhere, at any time."

There is a chance now to bring "blended learning" - online courses plus face-to-face learning for more flexible use of student time. But Whittred says the sector as a whole has been moving very slowly in refining a mix of online plus face-to-face education.
"I think we [the sector] have a very short window in which to do this. We need to be more entrepreneurial ourselves - we have to experiment, fail fast and learn fast to succeed.

"Unfortunately, universities are not environments conducive to acting quickly - they are inherently extremely conservative. Decision-making is collegial, not corporate, risk-aversion is high; change tends to be slow. It's a challenge for the whole sector but if we don't add value to our students in how we deliver education to them, we face a scary future."

Whittred also believes the answer is holistic, rather than just down to change by universities. Governments needed to re-think allocation of funds to education, not just to the tertiary sector but to kindergarten, primary and secondary to help address the vicious circle of disadvantage which sees many denied the very education required to break that cycle.

"Everyone knows education is the only way out of disadvantage but the money doesn't follow the rhetoric."

The Dean also maintained Auckland's universities needed to change within a city that also had to change to survive. Cities like Pittsburgh in the US, for example, successfully switched itself from a dying steel town to a university-led economy built round medical research and artificial intelligence, leading to businesses operating in AI, medical robotics, 3D printing and big data.

But that went hand-in-glove with Pittsburgh's civic reformation, bringing new life to a downtrodden downtown and urban renewal, including residents' access to 150 miles of riverfront on Pittsburgh's three converging rivers.

"If you look at what Millennials want, they seek a good university and a good education sector as a whole - because they have or eventually will have kids. They want a high-quality lifestyle and the amenities and infrastructure (including transport) of a global city.
"Auckland does not yet measure up on a couple of those factors."