Universities in the industrialised world face further financial pressure as rapid student growth and government underfunding continue, according to the Organisation for Economic Co-operation and Development.

Writing in the March issue of PEB Exchange, Michael Shattock, registrar of the University of Warwick, predicts that numbers will grow so that most advanced industrial countries reach an age participation rate of 50 per cent, with some advancing well beyond.

"We are only at the first stage of massification," he said. "We shall see a much larger, more stratified tertiary education system with at one end community colleges caring for a local constituency and at the other great universities which in their size, complexity and international character could remind us of the great monasteries of mediaeval Europe.

"The relations of these universities with the state will probably be as turbulent as the relations of institutions lower down in the hierarchy will be compliant. Tertiary education in the first decade of the 21st century will not be a comfortable environment in which to work."

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He anticipates that the concentration of research funding in fewer universities will create a "super-league" in which universities both compete with and support each other.

"Such a group could attain a status in society and an influence in cultural and even political affairs that would be national, international and global in its impact."

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As participation rates soar Mr Shattock predicts an increasing reliance on private funding.

"No state will be able to afford the size of the system it has created so that increasingly the costs will be transferred from government to the student.

"In an unregulated and competitive market, the strongest universities (which will normally be the most research-intensive ones) will charge the highest fees, offer the best facilities, and attract the highest-qualified students. But the unregulated financial market will put some institutions at risk, and some will fail."

As the private sector moves to secure a significant market share of professional and vocational programmes increasing competition will lead to market failures on both sides.

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