There have been few worse ideas in South Australia than the proposal to merge the University of Adelaide and UniSA.

This has now been raised to the status of government policy by the Labor leader Peter Malinauskas following the preparation of a written proposal during his time in opposition.

Since SA manufacturing industry collapsed in the 70s, SA governments of both persuasions have cast about for ideas to try and revitalise the economy. These tend to be grand in scale, bold in conception and economic duds. The plan to expand the State Bank, which led to its bankruptcy, is but one example: the MFP, another.

In the merger document, the now Premier says: “The harsh truth is that each of our universities alone are too small and too undercapitalised to make it into the list of top international universities.”

Yet in 2023, the University of Adelaide made it to No. 88 on the Times Higher Education (THE) World University ranking, just behind UNSW at 71 and far ahead of its fellow Group of Eight member the University of Western Australia at 131.

UoA and UniSA are not too small to succeed. Individually, they already enrol more students than either Harvard, Oxford or Stanford, all of which are in the top five universities worldwide as measured by the Academic Ranking of World Universities (ARWU).

In fact, only one university in the top 10 and seven of the top 50 in the ARWU are larger than the University of Adelaide. Nearly all highly ranked research universities have between 10,000 and 25,000 Effective Full Time Student Load (EFTSL), which is roughly the size of UoA and UniSA.

The University of Adelaide significantly outranks Australian universities with much larger revenues and student numbers, including RMIT and QUT. By comparison, UniSA is towards the bottom of the THE ranking and behind all the other universities in the Australian Technology Network. Its research performance has been consistently poor for the simple reason that it is a university focussed on the teaching of vocational courses. This is an important mission and is no way a criticism, but it is very different to the research driven objectives of the UoA.

Prior to COVID, higher education was SA’s biggest single export, earning about $1.2b per annum. The bulk of this was delivered by students at the University of Adelaide which had over 7000 international EFTSL, many of whom were doing high-fee courses such as medicine and engineering.

The likely result of the merger will be to damage the ranking of the merged institution compared to UoA, and we know that ranking is the number one tool used by the parents of international students to choose a university. It will also dilute the pricing power currently exercised by the University of Adelaide, resulting in the merged institution setting a lower price point for international fees. These impacts have the potential to reduce SA export income by a significant amount, perhaps in the order of a hundred million dollars per annum. It may also reduce domestic research income by lowering the measured quality of research across both institutions.

The merger won’t do anything to attract more domestic students. The most popular universities in Australia as assessed by students are all smaller than either UoA or UniSA and according to survey data, smaller campuses deliver better student experience and engagement. To suggest that a merged Adelaide University will be more attractive to international or domestic students than the University of Melbourne, the University of Sydney, Monash University, UNSW or the University of Queensland is pure fantasy.

The fact that nearly all highly ranked universities are between 10,000 to 20,000 EFTSL suggests that there is an optimum size for a university, not simply that bigger is better.

If scale alone guaranteed success, then RMIT, which is one of the largest universities in Australia with bout 54,000 EFTSL, should be high performing, but it is not. RMIT has a bottom quartile research ranking in Australia, relatively weak connections with industry research and only middle of the road student satisfaction scores.

There is no evidence that a university the size of RMIT has any cost advantages over UoA or UniSA, as can be demonstrated by analysis of the financial information on universities collated by the Commonwealth Department of Education.

If the SA economy were more dynamic and had higher growth it would have a stronger university sector, but to expect the university sector to grow the economy is wishful thinking; this has never happened anywhere in the world

As universities get larger, the cost of their executive management grows quickly. Until recently, the VC for the University of Sydney was being paid nearly $1.6m per annum, assisted by nine Deputy Vice-chancellors (DVC’s) and 12 Pro vice-chancellors (PVC’s) with a total executive salary bill of well over $25m. This contrasts with the UoA which has four Deputy Vice-chancellors and four or five PVC level positions. The current UoA VC, Professor Peter Höj, is paid $1.015m, but despite this disproportionately high salary, the executive of the UoA are paid around 60 percent less than their equivalents at the universities of Sydney or Melbourne, roughly pro-rata with the number of EFTSL at each university.

Merging two universities is a costly business. The merger of the University of Manchester and UMIST cost £85M in 2004. This merger was supposed to put Manchester in the top 25 universities in the world. Twenty years later, Manchester is ranked 38 in the Academic Ranking of World Universities,up slightly from its position in 2004 but a long way short of the goal.

As the Malinauskas paper correctly notes, both UoA and UniSA are thinly capitalised. On their own, they cannot afford to pay for a merger. Neither can the SA Government, which has many priorities including fixing health and K-12 education. While the current federal government has made noises about the possibility of funding, not one dollar is on the table and under current and proposed federal funding arrangements for HE, the merger will not add a single dollar of income from the federal government to South Australia.

Even now, the immediate impact of the proposal has been to dampen the recruitment of able academics to both universities. What academic will want to join a School or Department that may not exist in five years time?

Wisely, Flinders University has already decided not to be involved in this process which leaves it free to get on with its important work. Flinders is an excellent university and although the smallest of the three, punches above its weight compared with its interstate competition when its performance is adjusted to compare with the lower levels of population growth and growth in Gross State Product experienced by SA in comparison to all other states except Tasmania.

This is the nub of the problem. If the SA economy were more dynamic and had higher growth it would have a stronger university sector, but to expect the university sector to grow the economy is wishful thinking; this has never happened anywhere in the world. The Government has got the cart before the horse.

There have been few successful university mergers anywhere in the world. The “big success” referenced in the Malinauskas paper was the merger of the University of Manchester with UMIST in 2004. If this was such a success, why have other universities not rushed to copy it? The obvious answer is that it was expensive and has largely failed in its objectives. Manchester is not a top 25 university, and it is not demonstrably more cost effective than Manchester University was in 2004.

If we want a successful SA university sector, the University of Adelaide should continue to carry the research flag as it has done remarkably well, and UniSA should focus on educating people for vocations, which is what UniSA does well.

Even now, the immediate impact of the proposal has been to dampen the recruitment of able academics to both universities. What academic will want to join a School or Department that may not exist in five years time?

The threat of the merger will also encourage successful incumbent research academics at both universities, particularly those with large research grants, to consider whether they should take their work elsewhere. This is a potential disaster.

The best thing that can be done is to kill the idea of a merger once and for all, and to adopt a model that will support all three universities to do the best they can.

If funds are available, there are far more effective ways to improve the performance of the HE sector in SA:

• The provision of a relatively small amount of capital would allow for UoA to build a world class large-scale characterisation suite, something which it has lacked for years. This would allow it to pursue research in several fields, such as nano fabrication, that are currently impossible.
• Fund scholarships for deserving low-income students to attend UniSA, backed by the provision of affordable accommodation for students who live in remote and disadvantaged areas of SA.
• Attract more international students by maintaining a better recruitment network in SE Asia and India, something which UNSW learned many years ago. Reach out to aspirational international students using the quality of life that Adelaide offers, including its Festival culture.
• Fund a joint effort by all three universities and the VET sector to boost brand recognition for Adelaide internationally, based on the model developed in Perth. Name recognition for Adelaide in Asia is poor.
• Copy Queensland’s successful Smart State policy, which funded targeted research and has resulted in UQ going from the bottom of the Go8 to the top.

Geoff Hanmer is Adjunct Professor of Architecture at the University of Adelaide