Better funding and organisation in a demanding world essential if we are to maintain our global reputation.

There are about 17,600 universities in the world, with new ones added every year. New Zealand universities consistently rank in the top 3 per cent and are well-respected in the international community.

But they are slipping. The three main ranking agencies are Times Higher Education, Shanghai Jaio Tong and the QS World University Rankings. Each is recording their slow, steady drop down the rankings.

To paraphrase former Prime Minister Jim Bolger, it is tempting to say "bugger the rankings". It is widely acknowledged they are an imprecise way of measuring the quality of a university.

But rankings matter. The university business model is built on quality. The better the institution, the more likely it is to attract better staff and better students, who in turn attract better rankings in a virtuous cycle.


Quality has always mattered, but in the 21st century it has become critical. Nations have become increasingly aware of universities as central to their success.

In the 20th century universities largely determined their own future, focused on an ever-expanding number of students, and allowed staff to research whatever their discipline determined.

In the 21st century, universities have been asked to support the development of their nation by creating economic wealth, solving big problems and ensuring students have something to offer their society. The better the university the more they can contribute.

Then there is the battle to be part of the rapidly growing international higher education market. There are about 5 million students studying outside their home country - a number expected to rise to about 7 million in the next five years. In addition, we are seeing the rapid growth in demand from students who want to stay in their home country while gaining access to education provided by foreign universities. New Zealand will get a slice of this pie if it offers quality.

Research is also internationalising and it will be the universities with the best researchers who have most to gain.

Which brings us back to rankings. They may be dubious but they are one of the main ways students, families, business and governments make their initial judgement of a university. Can New Zealand universities measure up? At the moment, yes. But for how much longer?

There are two elephants in the room. The first is the lack of funding. It is no coincidence that the correlation between level of funding and quality of a university is stark. Universities like Harvard, Melbourne, Stanford and Cambridge routinely sit at the top of all ranking systems because they have by far the most money to spend on attracting the best staff and students.

It has been argued that New Zealand universities have to be more efficient. But New Zealand already has one of the most efficient university systems in the world.


A rough comparison shows Auckland University receives about a third of the income available to Melbourne University. The average New Zealand university spends about $22,000 a year per student - Stanford spends around $164,000. If we want to compete more funding is essential.

What can be done? The Vice-Chancellor of Auckland University has suggested that his institution be allowed to substantially increase fees to ensure New Zealand has at least one world-class institution. It is unlikely he will be granted his wish. But his point will not go away - we need to talk about money. Perhaps the discussion will progress more readily if we take notice of the other elephant in the room. If New Zealand cannot afford eight world-class research-based universities, it may be time to rethink the higher education and science systems.

A visitor might think that a nation with eight universities, 18 polytechnics, three wananga, seven Crown Research Institutes, hundreds of private tertiary providers and numerous private research institutes would have a larger population than 4.5 million. Perhaps a better system would allow current and additional funding to be spent more wisely.

In a world where quality rules and New Zealand universities have to be able to compete on the world stage, it may be time for change - and soon.

Our universities and research institutions rely heavily on an ageing workforce and past success to underpin rankings. Without competitive levels of funding and better organisation, in about 10 years reality will hit hard; very hard.

Steve Maharey is vice-chancellor of Massey University, a sociologist and a former politician.