Calder: Balancing the tertiary books

By PETER CALDER

John Hood has a lot on his mind, as you would expect of anyone in charge of a $400 million business. He's worrying about the New Zealand cricket team who - over the night after we speak - will have to hold out the South African bowling attack for a long, last day of a test in Bloemfontein with only five wickets in hand.

"I think our best option might be rain, actually," he has just said, with an expression rather more gloomy than a summer sky on the high veldt.

"It's a thin game in New Zealand," he says at last. "It's a thin talent base and it's not easy."

It's a comment that I will be inclined to remind him of as we talk about the matters which really consume most of his attention. The vice-chancellor (which is to say the boss) of the University of Auckland, he's drawing to the end of his second year in charge of the country's biggest educational institution.

In those two years the phrase "knowledge economy" has become the nation's rallying cry, peppering the discussions of the century ahead as well as the diagnoses of the ills that ail us. It's a phrase which at times seems cheapened by being more uttered than analysed.

But the linking of the two words has always made me a bit uneasy. An old teacher of mine focused that uneasiness this week when he told me he preferred the phrase "knowledge society," which describes "a society which sets great store by the education of its citizenry." It seemed quaintly archaic, the notion that learning might be valuable precisely because it is priceless, that education might be a good investment even if it doesn't yield a quantifiable economic outcome - a bigger butterfat yield, say, or a harder-wearing tyre or a reduction in rates of tuberculosis. Indeed, it seems faintly heretical in an age when education is business, and big business at that.

When Dr Hood, now 48, was appointed to the top job at the university, many on the hill flinched. Here was a man who had, at one time or other, headed most of the arms of Fletcher Challenge (he left when he missed out on the top job there) and had sat as their representative on the Business Roundtable, the primary apostles of privatisation of education. His strong links with the business community - he remains on several boards, including that of the ASB Bank - seemed to confirm fears that the "commodification" of education would continue, if not gather pace. So I was keen to ask him whether he saw education simply as a business.

The university, he argues, is a complex organism, like a business in many respects but having "many non-business aspects."

But he says it bears a strong resemblance to systems he grew accustomed to in the private sector, "where decisions were made by committees of colleagues [and] the power of the idea, well-debated, was considered paramount."

He values his contact with the private sector, "particularly with a very well-governed and innovative organisation [the ASB Bank]. Every time I go there I come back enthused with new ideas for the university."

Squeezed between the need to perform internationally and the desire to maintain access, the university in July accepted a 2.3 per cent increase in Government money in return for agreeing to freeze tuition fees next year (they rose 11 per cent this year). The result is a $4 million budget deficit, but Dr Hood is unfazed. The university, he says, has to be more creative about its partnerships with industry and with crown research institutes, for which it at present does around $40 million of work a year.

But none of that escapes the cold, hard fact that we are spending less on education, particularly at the top end, than we ought to be. The VC fires ideas, figures and acronyms across his office table in a virtually unbroken stream and they don't make pretty reading. Among other things, they show that Auckland University gets by on state funding of barely $7500 per [equivalent full-time] student while the average for Australia's top eight universities is more than $12,000. The Australians, meanwhile, lament that they are grossly underfunded compared with other universities in Asia-Pacific.

"If we want to have internationally competitive research-led universities in New Zealand they have to be funded at comparable levels to the Australians' at least. If we settle for second-best it will flow through to the rest of our economy."

It's not just the amount of money but the way it's divided that concerns him. We don't distinguish, in the way we finance tertiary education, between a hairdressing course in the Manawatu and groundbreaking medical research in Auckland.

"The most research-intensive universities clearly have higher costs because they are employing higher-cost people to do higher-cost things," he says. "You have to ask: is the funding model right? Should the existing funding be restructured? It's a classic flaw and I don't know of any other jurisdiction which has fallen into that trap."

Which gets me wondering about that cricket team. John Hood won't let me say our academic talent base is thin - in fact, he returns three times during our talk to a rhapsody about how much with how little our academics achieve - but maybe our taxpayer pool isn't deep enough to finance world-class, research-based university education.

"I don't agree with that at all," he says. "If we compare ourselves with Israel [population 5 million] 3.5 per cent of their GDP goes on non-military research and development investment. In New Zealand, we spend 1.1 per cent.

"We have not got the right incentives and policies in place to make sure the flow of research and development keeps going ... the current funding system does not recognise the difference between institutions in terms of their research intensity."

All this talk of R&D might make a member of the arts faculty jittery. As everyone scrambles to hold aloft the torch of the knowledge economy, the future of the liberal arts - languages, say, or literature or history - might seem in jeopardy. Morale is reportedly low in that faculty.

But Dr Hood says he is committed to a healthy liberal arts faculty, which he says is fundamental to a civilised society, and he adds that arts graduates who "do an excellent mind-training" are ideally equipped to make an enormous contribution to the economy.

The vice-chancellor is a man who, by the accounts even of his critics, works hard and fast (he said his working hours per week were a subject "not to be trumpeted about the town," but it's fair to say the numbers would make most of us break into a cold sweat) and he expects, even demands, that those around him keep up. But if he is driven by his job, it's because he believes in education as the key to our prosperity - a message which takes some selling in a country which is slow to celebrate its intellectual heroes.

"Slowly the New Zealand consciousness is being alerted to the importance of knowledge," he says. "This can't happen fast enough. You are starting to see it come through in policy and in what's written in the papers. But I don't think we are through it by a long shot.

"What I would like to see more widely accepted is the idea that education should not be a political football, but rather enshrined in the baseline of what all political parties understand. In New Zealand, election after election, each new Government wants to reform this and change that. We haven't yet accepted that knowledge is fundamental to economic growth. If we could get that ingrained in the New Zealand consciousness the rest would be easy."