Ricardo Azziz has held numerous executive positions in higher education and led the merger that resulted in Georgia Regents University, now Augusta University. He is principal at Strategic Partnerships in Higher Education Consulting Group.
This is the first piece in a regular Merger Watch opinion series he is writing on corporate restructuring in higher education.
Two of Japan’s most prestigious universities sign a pact to merge. Hundreds of students protest a decision to merge their university with two others in Yerevan, the Armenian capital. In Scotland, students and the wider community are being asked to weigh in on a proposed merger of three colleges to create an “anchor institution” within the University of the Highlands and Islands.
What can we learn from these pieces of news? First, that mergers in higher education are a global phenomenon. Second, that mergers are being pursued in many countries to enhance global competitiveness. Third, that mergers inevitably arouse opposition.
The global phenomenon of higher education mergers has, in many ways, presaged the expected consolidations unfolding at colleges in the U.S. Over the past several decades, major merger initiatives have been reported in northern Europe, the United Kingdom, Ireland, France, Belgium, Romania, Greece, Australia, South Africa, Russia, Ukraine and China.
In Europe alone, almost 100 mergers or alliances have occurred between 2000 and 2015. In South Africa, mergers have centered on reducing the number of universities and universities of technology ("technikons") in a post-apartheid effort to enhance access and equity, improve economies of scale, and enhance institutional viability and differentiation.
Between 1960 and 1991, Australia undertook what can be seen as three waves of merger activity aimed at improving programmatic and financial coordination. In China, widespread merger activity began in the 1990s, with over 400 mergers involving nearly 1,000 public institutions of higher education occurring by 2005.
While there may be substantive differences in the educational policies, structures and portfolios of higher education in different countries, there are nonetheless lessons that can be learned from the international merger experience.
First, the international higher education community has recognized one factor that seems to frequently elude U.S. colleges' governing boards and governmental leads — that in general, bigger is better. Better in terms of the opportunities and access able to be offered to students and faculty, better in terms of efficiencies and sustainability, and better in terms of local and international competitiveness. Although there are small schools that are very successful, most smaller institutions are more financially fragile and unsustainable than their larger counterparts and competitors. Size matters.
Second, mergers in the international arena aim to create comprehensive, broad-based universities with a greater ability to offer transdisciplinary educational and research programs and a greater potential for enhanced international prestige. Mergers enhance competitiveness.
Third, mergers are often difficult and complex, and not without noisy opposition. That opposition ultimately must be dealt with by the leaders responsible for the corporate structure of the school — its governing board. Internationally, higher education mergers are often advocated for and driven by local and national governmental leaders. In the U.S., the most successful and broad merger initiative to date occurred within the University System of Georgia, which followed similar mergers within the Technical College System of Georgia. Their successful completion was driven by the state’s governors and the governing boards of the university and technical college systems. Merger success cannot occur (or even be considered) without the full and unwavering commitment of institutional governing boards and leaders.
As economic stressors continue to increase, as student demographics and governmental funding priorities change, and as the need for local and global competitiveness rises, the pressure to consolidate institutions in an industry rife with excess capacity will continue — in the U.S. and globally. We would do well to listen and learn from our international colleagues, who have understood that size and competitiveness matter — and that bigger is better, generally.
Further, we should recognize that successful consolidation cannot occur without the complete and steadfast commitment and support of governing boards and, in the public sector, high-level government officials.