Do Universities Need To Be Fundamentally Re-imagined For The 21st Century?

Dr Caroline Burt
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Olivia Williams, Copywriter

In the second half of the 20th century and the early years of the 21st, higher education dramatically expanded in many countries, extending the prospect of a college education to increasing numbers of students from a wider array of backgrounds.[1]

 

Here, we look at the current situation in two major providers of higher education, the US and the UK, to draw some conclusions about how universities can (re-)position themselves for success in a climate that is much less favourable than it was when expansion began, and in which the sector is under significant financial strain.


Current Challenges

 

The United States

 

In the US, college enrolments moved into reverse in 2010, falling by an average of 1% per year since then, dramatically affecting tuition fee income, which represents the largest portion of university revenues.[2]

 

This fall in overall student numbers was despite an increasing US population and a rise in international students studying in the US.[3] This pain, though, has not been evenly distributed.[4] In the US, elite institutions have been largely unaffected (quite the opposite in fact), but smaller private colleges in particular have seen marked declines. A number have already folded (861 between 2004 and 2022 to be precise)[5] and some have merged in order to survive.

 

The forecast for others looks perilous.[6] The present outlook is not promising unless enrolments begin to increase again. Yet, state funding is now significantly lower than it was before the Great Recession and shows no sign of increasing significantly any time soon.[7] The situation is worse in some states than in others, partly because funding reductions from 2008 did not affect all states equally; for example, a number of southern states were disproportionately affected. While the overall average reduction in state funding per student between 2008 and 2018 was 13%, it was above 30% in Alabama, Arizona, Louisiana, Mississippi and Oklahoma.[8] To put this into perspective, at public universities, state funding covers around 50% of teaching costs.[9] Colleges have tried to compensate for declining government income by reducing staffing and restricting the programmes and services on offer, but there is now arguably little left to cut.

 

With concurrent increases in federal government support for individual students not having kept pace with significant rises in tuition fees, a fee ceiling has arguably been reached. Furthermore, the scale of fee rises has led to changes in the way students approach university applications, with the recent trend being for students to set their sights on a smaller number of elite institutions.[10] If you are going to pay more, you might as well aim for a better school with better career outcomes.

 

One recent survey put the difference in preference for a more expensive university with a good reputation, compared with going to a cheaper institution with a lesser reputation, at over ten percentage points for both prospective students and parents.[11] As some universities have pulled ahead in the enrolments game, opportunities have inevitably declined for those students with less money and capacity to travel out of state to university. General perceptions of the financial inaccessibility of a college education came out in a recent survey as the top reason why people decided not to go to college/complete their degree.[12]

 

The new race funded by debt

 

In order to try to succeed in a challenging environment, many universities in the US have embarked on costly infrastructure projects, creating something of an arms race in facilities. To put figures on this, between 2000 and 2010-11, the aggregate capital spend on new facilities was up by over 100%, at more than $11bn per year in 2010 and 2011.[13]

 

A report by EY-Parthenon noted that US HEI long-term debt in 2018 stood at almost $300bn, which represented an increase of 36% since 2011, dramatically at odds with the overall pattern of enrolments.[14] The same report showed that total debt was roughly equally divided between public and private institutions, despite public institutions accounting for around three quarters of total enrolments. In 2023, College Values Online reported on 30 US colleges that had changed a lot in the last five years, showing that in the vast majority of cases infrastructural improvements to academic and other facilities had been core to their approach. Aside from COVID-19-related measures, this was the stand-out takeaway of the summary. This is not to say that other things had not been done—several had increased the number of programmes on offer, improved resources devoted to student wellbeing, generated partnerships with businesses, and focussed on innovation and entrepreneurialism—but the extent to which colleges were looking to improved facilities to appeal to potential applicants was striking.[15] For those without strong endowments or public funding, this is a high-stakes approach, making failure and insolvency likely bedfellows.

 

The Private Equity effect

 

A further trend in the US has seen private equity firms acquiring universities. In 2018, an article in The Review of Financial Studies reported on 88 private equity deals involving 994 private institutions, showing that this led to increases in tuition fees and per-student debt.[16] This was coupled with lower rates of graduation, lower educational inputs, lower loan repayment rates and lower earnings among graduates, the latter possibly explained at least in part by students who would otherwise have attended community colleges being recruited to universities. In other words, there was a trade-off between value creation for the firm and value creation for the institution, particularly its students, in which the latter were the losers.

 

Private equity-owned institutions were also better at accessing government aid after acquisition and raising tuition fees quickly when government loan limits increased. There was a correlation between higher enrolment and an increased spend on marketing, with private equity-owned colleges employing twice as many ‘sales’ staff than other private colleges. As a result, the ratio of faculty to students and spend on tuition declined significantly following acquisition. Going forward, private equity might save struggling institutions, but the cost to students in terms of educational inputs and outcomes is likely to be high.

 

The United Kingdom

 

In the UK, private universities do not exist in the same way as in the US, and different arrangements are in place for each of the devolved nations. In England, central government funding has declined sharply in the last decade, and across the UK it was at its lowest point ever in 2021-22, according to Universities UK.[17] More widely, UK university funding is low relative to many countries: in fact, spending on tertiary education is the lowest among OECD countries. Tuition fees are also high, and only 20% of university spend is on R&D compared with an OECD average of 29%.[18] Russell Group (research intensive) universities indicate that they currently have a deficit of £1,750 per student, with this set to increase to £4,000 by 2024-25.[19]


The situation has been made particularly difficult by the marketisation of higher education in the last decade, in which caps on student numbers were removed as individual loans to students replaced government grants to universities. Already under strain, universities were forced to compete for students, with some, as in the US, investing heavily in expansion projects, especially infrastructural, creating high levels of debt in the sector.[20] In the same way as across the Atlantic, this debt could only be managed if the institution won, and continued to win, in the battle to recruit and retain students, even before COVID-19. While, unlike the US, numbers of UK enrolments have continued to increase, some universities have begun to lose applicants to competitors. In 2023, the University of East Anglia (UEA), announced a major projected budget deficit of £30m in 2023-24, a figure that it stated was likely to increase by 50% to £45m in three years; while it was trying to avoid compulsory redundancies, it could not rule them out.[21] It cited a challenging student recruitment market, leaving it down on enrolment targets/forecasts, at a cost to the institution running into millions.[22]


It was a similar story at Birkbeck in London.[23] It is currently unclear whether, in what is a relatively new market in higher education in the UK, the government at Westminster will step in to shore up institutions if they end up facing insolvency.[24] Alongside these individual instances of institutional challenges, we are beginning to see significant cracks appear more broadly: disputes about academic pay, working conditions and pensions, and cuts to staffing, are obvious and well publicised ones.[25]

 

General challenges to universities

 

In many countries, the UK and the US not excepted, wider questions have also emerged about the continued relevance of university degrees, particularly in the arts and humanities; and how well graduates are prepared for today’s working world.[26] It is likely that the move towards STEM subjects has particularly affected the smaller liberal arts colleges in the US, and it has had a significant effect on UK higher education.[27] In addition, there are now some employers who no longer require a university degree in order to apply for professional roles with them, complicating the picture further.[28] It is hard to know what effect this change will have, given how recent it is, but existing financial and other pressures already add up to something of a perfect storm for higher education providers, especially when coupled with the rise of competitive online learning companies, the increasing need to make improvements to student support and services, and a general rise in regulation.

 

Conclusion

 

There is no doubt, then, that areas of the tertiary education sector are not functioning well, for a mixture of reasons. This brings with it economic and societal costs. It is still the case that university graduates, on average, earn more in employment than their non-graduate peers: in the US, there is an average 40% pay gap between high school graduates and university graduates, while in the UK it is 30%.[29] So, if fewer students from less wealthy backgrounds attend university, income differentials will increase, to the detriment of both individuals and wider society: we are already seeing these trends among millennials in the US.[30] Furthermore, in areas with lower proportions of college graduates, outside investment is also less likely, exacerbating the problem. It is also generally bad news for economies: nations where university enrolments are falling rather than rising, and which therefore find themselves with a shortage of appropriately trained workers, are likely to see adverse economic impacts. Lack of funding for universities will also affect their ability to innovate and provide graduates with the skills that will be relevant in the economy as it changes, thus creating something of a vicious circle.[31]

 

How can universities respond?

 

Is it time for reinvention?

 

It would be easy to suggest that universities in the US, the UK, and many other nations, need to fundamentally reinvent themselves for a new world of learning and employment. One argument might be that they need to adopt more fully hybrid and digital learning in order to respond to increased competition in the virtual space, and hunger on the part of students for a different learning experience from the traditional university format. At the same time, it might be assumed that many of the traditional degree programmes, especially in the arts and humanities/liberal arts, are increasingly defunct in a working world for which graduates are regularly described as unprepared, and in which the skills needed are very different even from ten years ago.

 

It would be equally easy to point to the likelihood of better times soon as a result of the continued growth of the global (mobile) middle class and of international students from the southeast Asia and India in particular.

 

Both approaches are problematic. The overall growth in the number of international students in the UK and the US looks set to continue in the medium term at least, but in both countries this growth is not sufficient to offset the reductions in government funding or reverse the extent to which student aspirations have become increasingly funnelled into more elite schools and into STEM subjects. Similarly, universities in other countries are competing more strongly with the US (and the UK) than ever before; there is no guarantee therefore that universities in either country will be able to count on international students to help correct deficits in the long run.[32] In the US, this leaves struggling private colleges and state universities, which have seen steady infrastructural decline, in a precarious position that is not likely to change any time soon. State colleges might not fail entirely, but the quality of the education they offer is likely to fall significantly, disproportionately affecting particular socio-economic and racial groups. In the UK, universities with high levels of debt, and which are struggling to fill their places, are not likely to be rescued by international students.

 

On the other hand, while it is always important to look at things from an existential perspective and consider reinvention, it is also easy to fall into the trap of jettisoning both baby and bathwater. There are arguably many things about the traditional HE model that work well, and look set to continue to do so. In-person community is important to students (even if they are increasingly attracted to hybrid), as are career prospects and learning at a high-quality institution with high-quality course content.[33]

 

Furthermore, on the other side of the equation, we know that online learning provision in general is complex, requires high levels of investment, and even for specialists is not yet delivering net profit: Duolingo increased its total revenues by 47% to $369.5m in the last year, but its net loss of just under $60m was not very different from the loss it made in the year before. The growth in revenues is promising, but it remains unclear whether that will turn into net profit in the near future.[34] Pearson Education, whose initial contract with Arizona State University (ASU) was groundbreaking and helped turn ASU into a market leader in online education, has recently offloaded its online services unit to a private equity company. In a crowded and volatile market, it had not been able to keep up with competitors, and clearly did not see a profitable future for itself in online learning.[35] Pearson’s key competitors, Coursera and 2U, have not yet made a net profit, and the history of edX, bought by 2U recently, does not suggest that the viability of non-university online providers of higher education is established. In fact, most of edX’s users already had a college degree.[36] Share prices in some providers have also been falling recently after a warning by one company that ChatGPT was beginning to hurt sales.[37]

 

In connection with this, and crucially, it should be noted that ASU never outsourced the content of its online offering; even when working with Pearson, it produced and updated content in-house using its subject-based expertise. The fact that online success still depends on content developed and regularly refreshed by university staff indicates the extent to which the platform of delivery is just one part of a much more complex and multi-linked picture; universities remain specialists in tuition and research. One good example of how this can be highly effective is the Masters partnership between ASU and MIT which began in 2019.[38]

 

A more financially sustainable approach to creating the successful universities of the future

 

To state the obvious, there is no one-size-fits-all method that universities can adopt in order to remain/become successful. But, in a world in which interest rates are rising and liquidity in the economy is reducing, with no guarantee of increasing enrolments, taking on greater debt for infrastructural projects is likely to be high risk for all but a minority of universities – in other words, those with the biggest endowments and the largest sustained intake of students. Particularly given existing institutional debt levels, most universities would be wise to shore up operations in other ways before turning to the highest expenditure initiatives. One persistent issue that is often under-appreciated in its impact is the quality of institutional leadership and management. A series of small decisions can have a major effect when aggregated, so while getting the fundamentals of management right is not attention grabbing, it is an obvious (if far from easy) win. This is not just about inter-personal relationships within an organisation, but about strategy and operations. It is hard because it is the whole package.

 

A good leadership team is more likely to identify the most effective ways for the institution to move forward. Some examples of universities that have made significant strides forward in different ways in the US in recent years are the University of South Florida (USF), the University of Florida (UF) and Arizona State University (ASU).

 

In 2022, USF attained its highest position ever in US News and World Report rankings, and has been the fastest rising US university in rankings. The university has made major efforts in recent years to improve graduation rates, especially among low- and moderate-income students.[39] In 2010 its four-year graduation rate was 24%; by 2020 that had improved to 59% in the most recent federal statistics. Particularly notable was the success rate among Latino and black students, which was roughly equivalent to that of the student body as a whole. Key to this has been proactive support of students identified as being at risk of not graduating, a focus on improving courses with the highest rates of failure and reducing class sizes. Making it easier for students to remain on campus was another important plank of the strategy. Better graduation rates have impacted positively on recruitment too, in a self-fulfilling trend. What is interesting is the extent to which this strategy of improving graduation rates fits in with the weight the state government gives to this in its funding models, something that is not replicated in some other states.

 

Elsewhere in Florida, UF has similarly made a variety of improvements to its operation that have seen it rise further up the rankings, in relation to retention and graduation, class sizes, curriculum quality, in-state and out of state reputation and research expenditure.[40]

 

Meanwhile, at ASU, whilst it might be assumed that it is the university’s successful commitment to online education that has given it an edge on its competitors, that is only one part of the overall picture. Alongside the online offering, ASU has addressed multiple elements of its operation:

 

  • It has reduced its reliance on state funding (at the same time maintaining the lowest tuition fees of the three state universities in Arizona)
  • It has adjusted its approach to philanthropy
  • It has focused on the student experience, significantly raising retention and completion rates
  • It has invested in facilities
  • It has aggressively increased its research income and prestige, as well as research-driven enterprise
  • It has utilised big data to understand what is working well for students and what is not, and to enable interventions
  • It has placed great emphasis on increasing its needs-based funds and on diversifying its student intake.[41]

 

In other words, ASU has taken an innovative and dynamic approach on a number of fronts without removing the core components of how a university has traditionally been defined, and it has done so successfully.[42]


The traditional model of university education can be viable, but in a world where there are few easy wins, this requires strong leadership that analyses the university’s position and does not seek to apply a one-size-fits-all model. Instead, it builds on core strengths as a collective package, and/or seeks to carve out a USP for itself based on effective analysis of its market and operating environment.

 

In the UK, the University of Hull is an example of a university that has had to confront major difficulties, including an unsustainable deficit, and to reimagine itself in the light of those difficulties. The process of change was inevitably painful, but the university has not only weathered the storm, it has also improved its standing markedly. How it achieved transformation is discussed with bell-like clarity by Professor Susan Lea who, as Vice Chancellor, led the institution between 2017 and 2022 when the bulk of the reforms were devised and implemented.[43] As with the US case studies, Hull did not deviate from its core mission as a university; rather, it doubled down on it.

 

How can other universities achieve similar success?

 

Our model below provides an outline roadmap for other institutions to work with. The starting point is that there is no urgent need for a complete existential re-thinking of what a university is. Success can follow on performing the core functions of a traditional university well. This is not to say that innovation cannot be effective – it has always in fact been at the heart of what universities are – but rather that complete re-invention is not called for.

 

The steps to success

 

Step 1: Fully assess the current situation in relation to both internal and external factors; gather and analyse data.

 

Internal

For example:


  • Enrolments by programme
  • Retention and graduation rates by programme and student type
  • Financial position
  • Current USP/brand/niche
  • Origins of students (in-state, out of state, international, etc.), as well as their socio-economic background, ethnicity and other factors
  • Where it is doing well and where it needs to improve
  • Quality of leadership and management
  • Quality of governance structures, engagement and communications

 

External

For example:


  • Its market and the wider market, including opportunities for organic and inorganic growth
  • Brand and Competition
  • Revenue streams and opportunities to create more of these
  • Its operating environment, e.g. skills needs in the region
  • Relationships with external stakeholders
  • Emerging trends

 

Step 2: Develop a strategy and implementation plan based on the above information.

 

The model below signals the array of factors a university leadership will need to consider as part of its overall strategic vision and action plan.

Conclusion

 

Higher education institutions in a number of countries face great challenges, but to imagine that now is the time to rethink the entire function of a university would be a mistake. Fundamentally, universities offer something distinct, for which it is clear that there is still a market. The concept therefore remains valuable and viable, but in a climate of declining government funding, slowing/declining enrolments and a general shift towards STEM subjects, differentiation within the range of traditional core functions will distinguish the winners from the losers. Innovation will be an important part of differentiation for universities, as it always has been, but it should never be an end in itself.

 

At Cambridge MC, we have the expertise to help universities pivot for a stronger future. Please get in touch if you would like to learn more about our bespoke services. Use the form below or Contact Us page.


References


[1] E. Schofer & J. W. Meyer, ‘The Worldwide Expansion in Higher Education in the Twentieth Century’, American Sociological Review, vol. 70, no.6 (2005), pp. 898-920.

[2] https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/strategy/pdf/ey-the-other-looming-educational-debt-crisis-institutional-debt.pdf?download

[3] https://www.bestcolleges.com/research/college-enrollment-decline/; https://educationdata.org/college-enrollment-statistics; https://researchbriefings.files.parliament.uk/documents/CBP-7857/CBP-7857.pdf; https://www.tandfonline.com/doi/full/10.1080/21568235.2021.1944250

[4] https://www.publicpolicyexchange.co.uk/event.php?eventUID=NE30-PPE; https://hechingerreport.org/analysis-hundreds-of-colleges-and-universities-show-financial-warning-signs/

[5] https://hechingerreport.org/proof-points-861-colleges-and-9499-campuses-have-closed-down-since-2004/

[6] https://hechingerreport.org/analysis-hundreds-of-colleges-and-universities-show-financial-warning-signs/

[7] https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2019/10/two-decades-of-change-in-federal-and-state-higher-education-funding

[8] https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-costs-to-students

[9]

[10] https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-costs-to-students

[11] https://morningconsult.com/2022/06/29/inflation-concerns-college-education-costs-reputation/

[12] https://www.highereddive.com/news/why-arent-people-going-to-college/632915/

[13] https://www.washingtonpost.com/news/innovations/wp/2014/10/13/why-colleges-should-stop-splurging-on-buildings-and-start-investing-in-software/

[14] https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/strategy/pdf/ey-the-other-looming-educational-debt-crisis-institutional-debt.pdf?download

[15] https://www.collegevaluesonline.com/colleges-changes-last-five-years/

[16] https://eml.berkeley.edu/~saez/course131/Eatonetal2020privateequity.pdf: what follows is taken from the same article.

[17] https://www.universitiesuk.ac.uk/what-we-do/policy-and-research/publications/opening-national-conversation-university

[18] https://www.universitiesuk.ac.uk/what-we-do/policy-and-research/publications/opening-national-conversation-university

[19] https://russellgroup.ac.uk/news/russell-group-warns-of-long-term-squeeze-on-uk-skills-pipeline/

[20] https://www.fenews.co.uk/skills/uk-universities-debt-burden-grows-50-in-five-years/; https://www.sciencedirect.com/science/article/pii/S1059056022002076

[21] https://www.bbc.co.uk/news/uk-england-norfolk-64810537

[22] https://www.edp24.co.uk/news/23257565.university-east-anglia-set-make-job-cuts-loss/

[23] https://www.ft.com/content/25f803fd-f5cb-4577-8d86-f120ca03f6e3

[24] https://www.hepi.ac.uk/2021/09/01/why-the-government-should-never-bail-out-a-university/; https://www.hepi.ac.uk/2023/03/21/are-universities-really-at-risk-of-ending-up-in-the-public-sector/

[25] https://researchbriefings.files.parliament.uk/documents/CBP-9387/CBP-9387.pdf

[26] https://www.hrmagazine.co.uk/content/news/employers-think-graduates-are-unprepared-for-the-workplace/;

[27] https://educationhub.blog.gov.uk/2021/02/09/more-young-people-are-taking-stem-subjects-than-ever-before/; https://hechingerreport.org/proof-points-the-number-of-college-graduates-in-the-humanities-drops-for-the-eighth-consecutive-year/; https://www.washingtontimes.com/news/2023/apr/4/focus-stem-education-killing-already-struggling-li/

[28] https://www.businessinsider.com/google-ibm-accenture-dell-companies-no-longer-require-college-degrees-2023-3?r=US&IR=T

[29] https://www.nbcnews.com/news/us-news/americans-are-increasingly-dubious-going-college-rcna40935; https://www.unit4.com/blog/the-us-and-uk-comparing-higher-education-in-the-two-top-ranking-nations

[30] https://www.pewresearch.org/social-trends/2014/02/11/the-rising-cost-of-not-going-to-college/

[31] https://russellgroup.ac.uk/news/russell-group-warns-of-long-term-squeeze-on-uk-skills-pipeline/

[32] https://www.universityworldnews.com/post.php?story=20210610150037741

[33] https://www.universitiesuk.ac.uk/what-we-do/policy-and-research/publications/lessons-pandemic-making-most; https://tallo.com/data-insights/what-high-school-college-students-want-higher-education/

[34] https://www.statista.com/statistics/1247949/annual-duolingo-net-income/

[35] https://www.insidehighered.com/news/2023/03/22/pearson-once-leader-sells-its-online-services-business

[36] https://www.harvardmagazine.com/2021/09/jhj-edx-sold

[37] https://www.ft.com/content/0db12614-324c-483c-b31c-2255e8562910

[38] https://news.asu.edu/20190619-asu-edx-and-mit-announce-innovative-stackable-online-master-science-supply-chain-management

[39] https://edsource.org/2022/how-a-florida-public-university-helps-more-students-get-to-graduation/671805. What follows is taken from the article.

[40] https://eu.gainesville.com/story/news/education/campus/2019/09/09/uf-reaches-no-7-among-top-public-schools/3457664007/

[41] https://umdearborn.edu/news/how-arizona-state-reinventing-american-university

[42] https://heeap.org/news/us-news-and-world-report-ranks-asu-ahead-stanford-mit

[43] https://www.hepi.ac.uk/wp-content/uploads/2023/03/Turning-Around-a-University-Lessons-from-personal-experience.pdf

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An Overview of the Current Satellite Communications Industry

by Steve Tunnicliffe • 15 October 2024
The Satellite Industry is in a Period of Momentous Transformation The satellite industry is going through a period of momentous transformation with the emergence of new entrants and new technologies in every segment of the value chain. For decades satellite communications have been dominated by a handful of GEO satellite manufacturers, satellite operators and ground segment manufacturers with almost a cottage-industry-like network of service providers and value-added manufacturers (BUCs, LNBs and antennas). This has been a linear and predictable business model with entirely proprietary technologies. We now see the emergence of new Non-Geostationary Orbit (NGSO), or multi orbit players in LEO, MEO and HEO building completely vertically integrated systems. This shift has significantly driven down capacity pricing: the price of satellite bandwidth for data services has dropped 77% over five years according to analysts Novaspace, formerly known as Euroconsult. Starlink, as the first to market, is making waves by disrupting market sectors historically monopolised by the established GEO players such as maritime, aero and enterprise connectivity. Two years ago, the industry would have dismissed Starlink's impact on maritime or aero connectivity segments. The sentiment was that Starlink has ‘no CIR’ (Committed Information Rate) and therefore would not be considered ‘reliable’ for mobile or critical communications. This notion has since been overturned and the naysayers have paid a price with a significant impact to revenues in maritime—the cruise industry in particular—with Starlink now making inroads into aviation and previously inviolable segments like defence. Starlink has also revolutionised satellite manufacturing, leveraging new technologies such as 3D printing to mass-produce satellites at a phenomenal rate, reducing costs to between $250,000 and $500,000 per satellite. The race is on, with Elon Musk’s Starlink trying to acquire as many subscribers as possible before the challengers like Amazon's Kuiper and Telesat's Lightspeed emerge. Forrester's Digital has predicted that SpaceX’s Starlink broadband-by-satellite system is likely to end 2025 with around 8 million customers (it ended 2024 with approximately 5 million), a remarkable growth rate when you consider that each of the leading GEO satellite operators typically have around 25,000 enterprise VSAT terminals activated. We also see the emergence of Small Sat and MicroGEO manufacturers disrupting traditional commercial models with innovations like satellite-as-a-service. This technology provides additional or targeted capacity for defence and government in hotspot areas. Twenty-five years ago, building and launching a satellite would have cost at least two billion USD. Now we see them being built and launched at a fraction of that cost (circa $60 million), reducing the price per gigabit equal to or below fibre. Starlink has also been fundamental to reducing launch costs. In 1981, launch costs were $147k per kilogram of payload. Starlink’s current generation of rockets have brought this down to $2300 and with the introduction of their new Starship rocket, Elon Musk is talking about a price as low as $100 per kilogram. This scale of reduction in launch costs is driving the democratisation of space by allowing new use cases for space to emerge. The satellite industry is also seeing unprecedented consolidation, coopetition and collaboration, creating a range of new offers to consumers, enterprise and governments. Significant transactions include: In April 2024, SES announced its intention to acquire rival Intelsat. If and when this completes, it will be a significant transaction In May 2023, Viasat completed its acquisition of Inmarsat In October 2023, Eutelsat and OneWeb completed their merger transaction In March 2024, prior to the SES announcement, Intelsat extended its partnership with competitor Eutelsat-OneWeb for LEO services.

Building an AI-Ready Infrastructure

by Duncan Clubb • 6 September 2024
Artificial Intelligence (AI) is the hottest topic in technology for many reasons, good and bad, but it’s happening and it’s here to stay, so how do we build the infrastructure necessary to support it? To start with, we should recognise that there are many forms of AI. The one that has created the most buzz is generative AI, as seen in ChatGPT, Meta's LLaMA, Claude, Google’s Gemini, and others. Generative AI relies on LLMs (Large Language Models) which have to be trained using vast amounts of data. These LLMs sit in data centres around the world, interconnected by vast fibre networks. The data centre industry has not stopped talking about AI for at least 18 months, as it gears up for an ‘explosion’ in demand for new capacity. Some of the most respected voices in technology have predicted immense amounts of growth in data centre requirements, with predictions of triple the current capacity within 10 years being at the conservative end. That’s three times the current global data centre market, which has taken 30 years or more to get to where it is today. And, when we say growth, we’re talking about power. AI systems will require three times more electricity than data centres currently consume. Depending on who you ask, that’s about 2-4% of today’s global electricity production. And we’re talking about tripling that, or more. Data Centres So, what is ‘AI-ready infrastructure’ and how are we going to build it? The two key elements are data centres (to house the AI systems) and networks (to connect them with the rest of the world). LLM training typically uses servers with GPUs (the chip of choice for AI) and, for various technical reasons, these work best when in close physical proximity to each other – in other words, GPUs work best in large numbers in large data centres. Not just that, but the new generations of GPUs work best in dense data centres, meaning that each rack or cabinet of AI kit needs a lot of power. Most data centres are designed to accommodate older kit that is not so power hungry. The average consumption globally is about 8kW per rack, although many still operate at about 2kW per rack. The latest nVidia (the leading GPU manufacturer) array needs a colossal 120kW per rack. The infrastructure inside a data centre designed for these beasts is complex: the cooling systems (GPUs run very hot) and electrical distribution systems are much harder to design and set up, and are also expensive. So, data centres for AI training systems are mostly going to be new, as adapting older facilities is a non-starter. So, where do you put them? Finding land next to the vast amounts of electricity required is increasingly difficult in many European countries, especially in the UK. Most of the utility grids in Europe are severely lacking in spare capacity, and building new grid connections and electricity generation is a slow and expensive process. The answer might be to locate these new AI data centres near new renewable energy generation sites, but those are few and far between, so land with access to power now carries a hefty premium. Small nuclear reactors could also be an answer but might take a few years to materialise – we know how to build them (witness the nuclear submarine industry) but getting planning permission to put them on land is another matter. All in all, the data centre industry seems to be at least a few years away from being able to provide the massive upgrade in capacity that is expected. Even solving the land/power problem leaves the issue of actually building a new scale of data centre, 10 or 20 times bigger than what most would consider to be a gigantic site today. It can be done, we can solve the engineering challenges, but these are huge construction projects. Networks What about the networks? Actually, although very little real research has been done on the impact of large-scale AI rollouts on existing networks, we might be in a better position. The fibre networks in the UK and many European countries have benefited from significant investment over the last few years, so coverage is a lot better than it used to be. That does not mean that fast and large fibre routes, which will be a necessity for most AI systems, are all there, but it will be easier to build out new capacity than it will be to find power. Still, what we really need is some serious research into the amount of data that will need to be moved about and how that maps with existing network infrastructure. All in all, we have more questions than answers. Some people in the infrastructure industry are sceptical that things will ever get to the scale that some are predicting, but most of us do expect it to happen – it’s just a matter of time, and the race has already begun. Cambridge Management Consulting Duncan Clubb is a Senior Partner at Cambridge Management Consulting, specialising in data centre and edge compute strategy. Duncan has extensive experience as an IT consultant and practitioner and has worked with many leading organisations in the financial, oil and gas, retail, and healthcare sectors. He is widely regarded as a leading expert and is a regular speaker at industry events. If you or your organisation require support preparing your Digital Infrastructure for the emerging AI-industry, you can read about our array of Data Centre services, and get in touch with Duncan Clubb, through our designated Telecoms, Media, and Technology service page.

Legislating AI: A Comparison between the EU and the UK

by Rachi Weerasinghe • 19 August 2024
The EU AI Act In March of this year, the European Union published their Artificial Intelligence Act, establishing a common regulatory and legal framework for AI across the EU. Two significant features of this act include the definition and prohibition of AI practices which pose an ‘unacceptable risk’; as well as the requirement for developers and ‘implementers’ to register high-risk AI models and maintain technical documentation of the model and training results. The AI Act is the first comprehensive AI legal framework in the world. It will help to shape the digital future of the EU and guarantee the safety and fundamental rights of people and businesses. Who does it Apply to? The Act applies to any marketing or use of AI within the EU, regardless of whether those providers or developers are established there or in another country. While this effectively makes the act global in scope, this will depend heavily on how effectively authorities can prosecute outside of the EU. A Risk-Based Approach The EU’s AI Act adopts a risk-based approach which categorises AI systems into different risk levels (Unacceptable, High, Limited, and Minimal Risk), and imposes corresponding regulatory requirements.
Carer pushing a service user in a wheelchair through a rural setting

Supporting Unpaid Carers: Spotlight on the Carers Network

by David Lewis • 30 July 2024
Unpaid carers provide essential support yet face poverty and isolation. Learn about Carers Network’s work in London, trustee Nadia’s story, and how Cambridge MC supports this vital charity helping carers gain recognition, resources, and dignity.

Case Study: Market Evaluation and Go-to-Market Proposition Creation

by Pete Nisbet • 23 July 2024
edenseven Helps ISS to Decarbonise their Operations By conducting a review of their market and target audience to align their organisation with their sustainability goals. ISS is a leading workplace experience and facility management (FM) company which provides placemaking solutions that contribute to better business performance and make working life easier, more productive, and more enjoyable. With a significant presence in the build environment, ISS has a clear focus on delivering sustainable services to their customer base, helping them to achieve their net zero ambitions. edenseven , one of the Cambridge Management Consulting group of companies, were commissioned to review ISS’ current sustainability market offering, and, through an engagement programme, make sure that it was aligned to the requirements of their customers’ long-term sustainability ambitions. Project Overview To review the current market relating to sustainability services within the sector and outline the different types of structures and products being offered. Assess the current product and service positioning of ISS and review how they are being presented and articulated to the internal delivery teams and customer base. Create a clear and concise value proposition which outlines ISS’ breadth of services, and which can be communicated to customers by a broad cross section of the ISS team. Through a customer engagement programme, test the value proposition with a set of key accounts and record areas where refinement would be needed to align it to their requirements. Present findings to the ISS UK board and provide clear feedback and next steps. Skills & Knowledge Data Analysis: A broad knowledge of both the FM and sustainability sectors, and an ability to articulate findings from market research and stakeholder/customer interactions in an effective manner. Report Generation: Create documentation and reports which deliver complex requests and findings in a concise and clear manner to senior stakeholders and customers. Stakeholder and Customer Engagement: Build a continuous feedback loop to senior stakeholders within ISS and across key customer accounts. edenseven captured and reviewed customer needs and service requirements to produce effective and timely decision making. Outcome & Results Market Awareness: A clear understanding of market trends and contractive characteristics relating to sustainability services in the FM sector. Organisational Clarity: An outline of current services and how they are delivered through the sales process. Value Proposition: A clear and relatable value proposition which captures all services in a format which can be delivered by a broad cross-section of the ISS workforce. Forward Planning: A board-level presentation and report outlining key findings and next steps to deliver existing and new services which are focussed on meeting key customer requirements.
A stately council building in England with a neon tint

The Funding Crisis in Local Councils in the UK: Causes & Consequences

by Craig Cheney • 11 July 2024
It is no secret that Local Authorities throughout the UK have found themselves in a period of economic turmoil; struggling with a lack of funding and how to distribute it - or, often, deciding to withhold it. Since Northamptonshire County Council issued section 114 (the local council equivalent to declaring bankruptcy ) in 2018 – the first to be issued in nearly two decades – an average of two regional authorities have issued their own section 114 notice each year since. Three local authorities issued section 114 notices last year alone, including the largest in Europe, Birmingham City Council . Referring to this escalation, Jonathon Carr-West , Chief Executive of the Local Government Information Unit (LGIU), said: “This year’s State of Local Government Finance report reveals the desperate, ruinous financial situation councils find themselves in. “With over half of councils warning us they are at risk of bankruptcy within the next Parliament, it is no longer possible to blame individual governance issues.” What are the Causes? Funding The key driver is lack of central government funding. Council’s cannot borrow to run services and so rely on income and reserves in order to pay for day-to-day services. Central government funding cuts have seen councils lose nearly 50% of their government funding since 2010. This has been partially offset by council tax rises, but still means local authorities have lost nearly 20% of their funding in real terms since 2010, with those representing the most deprived areas reaching nearly 30% . Adult Social Care During this time spending on Adult Social Care (support provided to adults, including both older people and people of working age, with physical disabilities, learning disabilities, or physical or mental illnesses) has increased dramatically. An ageing population is driving increased demand while the cost of care home placements has increased by 35% . Child Social Care Spending on Children’s Social Care has increased significantly, particularly since COVID-19 with the number of children in secure units and children’s homes and the number with Education, Health and Care plans both increasing by over 30% between early 2020 and early 2023. The cost per placement has increased by almost 20% over that time period. Both Adult and Children Social Care costs have increased far above inflation over this time, coming on the back of a huge reduction in core spending power. Temporary Accommodation Finally, the cost of providing Temporary Accommodation has risen sharply over the past few years. An LGA report revealed that local councils were spending at least £1.74bn to provide temporary accommodation, with a severe shortage in social housing resulting in a portion of this going to private alternatives including hotels and B&Bs. These figures represented the current situation as of March 2023, when 104,000 households were living in temporary accommodation, an 89% increase over the past decade. Only 8 months later at the close of 2023, this had risen to 112,660 households in temporary accommodation—with the funding required to balance this increasing exponentially, pushed higher by a cost of living crisis and inflation. What are the Consequences? The most immediate and simple way look at this is that while bills have increased significantly for the average council tax-payer, services have been significantly scaled back. Cuts to park budgets, economic development, culture services, and the reduction in spending on Public Health, education, housing services, children's centres and everything else that local government is responsible for have left many cities, towns and villages looking neglected and often struggling with anti-social behaviour and boarded-up high streets. Behind the scenes, many of the essential back office functions have been stripped to the bone in order to protect frontline services: call centres are understaffed; planning services unable to cope with demand; not enough project managers, accountants or procurement staff to deliver on council ambitions or the transformation projects to reduce costs on essential services; not enough HR staff to support those on the frontline and not enough administrative staff to support the social workers, education & skills teams, the transport teams and the rest of local government trying to prop up essential local services. Local government is the government that touches all of us every day, even if we don’t always realise this. The new Labour government will need to focus on this issue for the benefit of every individual, community and region. How Cambridge MC can Help Local Councils If you are currently working in local government and are feeling the impacts of the economic crisis as outlined here, the Public Sector and Education team at Cambridge Management Consulting can work with you and your council to alleviate some of this pressure in both the short- and long-term. Our skilled procurement and contract management team can help you reduce costs; our programme and project management function offers fractional or interim leadership and full lifecycle support for challenging transformation projects; and our process and change management teams can help with process re-design and automation. We can also support your organisation with a range of cyber security issues you may be facing; potential or live, and our Digital and Innovation team can help solve your problems in new ways, using the latest technology to improve outcomes for your residents as well as reducing costs. Led by Craig Cheney, previous Deputy Mayor of Bristol City Council, our service combines an in-depth knowledge and awareness of the Public Sector, its operations, and challenges, with a business approach to help you identify and evaluate obstacles and opportunities for movement within your budget. Learn more about Craig and our Public Sector & Education service, and get in touch with our professionals at https://www.cambridgemc.com/public-sector-and-education , or use the form below.
Picture of African students in a classroom

Smart Schools, Bright Futures: The Role of ICT in Africa's Education

by Elia Tsouros • 8 July 2024
Since the 1960s, significant strides have been made to provide and increase access to quality education for children and young people in Africa. The educational environment has not remained stagnant, and the continent is all the better for it. However, this unfortunately does not paint the whole picture, and there is a poignant reality that lies just behind the statistics. In short, merely having access does not guarantee an improvement to the actual quality of this education; as rightly noted by Faturoti, “Although all African countries have legal provisions recognising the right to education, there is no corresponding law on access to the Internet.” Yet, Africa’s unique combination of challenges has left more than just gaps in knowledge: 2019 saw 17% of African children not attending primary school, and 53% of teenagers not attending upper secondary school . The harsh blow dealt by COVID-19 has only deepened the educational crisis globally. Yet, despite these challenges, there is a resilient spirit that refuses to be extinguished. The pandemic has underscored a powerful lesson: technology, when harnessed with the right connectivity, can be a transformative force, offering a ray of hope in the quest to overcome educational barriers. In this article, we will explore how we can take the barriers blocking this intelligent future and support the growth of a digitally connected classroom, ensuring that no one is left behind in the continent’s transformation. The ways in which learning is conducted has never been more important: to learn is to grow and the progress which begins in the classroom will soon be reflected across the continent. From Challenges to Change: Barriers to a Connected Classroom In the expansive landscape of Africa, a sobering reality appears –only 39.7% of the population is woven into the digital fabric, standing in stark contrast to the global average of 66.3% as reported by the International Telecommunication Union (ITU). This digital divide is not just a technological hurdle but a societal challenge, one that deepens when faced with the simultaneous necessity to invest not only in advanced technology but also in financial literacy. As we grapple with the intricacies of digital inclusion, the first bridge we must construct is one that spans connectivity disparities: the use of online educational platforms can ensure that students not only have access to educational material relevant to their studies, but also that this material is the latest available. Electrical reliability stands as a foundational must-have for the successful implementation of digital learning initiatives. Investment in expanding telecommunications infrastructure , such as laying fibre-optic cables and deploying wireless networks, is crucial to bridge the digital divide and ensure widespread connectivity. Furthermore, enhancements in power generation including the use of traditional and renewable energy sources and distribution systems are essential to guarantee uninterrupted access to online educational resources. Uninterrupted power supply ensures that students can access online lectures, assignments, and collaborative activities seamlessly, fostering a conducive learning environment. Put simply, enhanced learning makes for more engaged and enlightened students. Furthermore, technical support is indispensable for ensuring the effective implementation and maintenance of digital learning infrastructure. However, limited access to skilled technical personnel, inadequate training, and insufficient resources present significant challenges. Training and capacity-building programs must be enhanced to equip individuals with the necessary skills to support complex ICT infrastructure effectively. There are many projects already underway which promise to forge this change and training. Investing in training programs, certification courses, and apprenticeship initiatives promise to cultivate a skilled workforce capable of delivering and, importantly, sustaining these changes. Addressing these interconnected challenges requires a holistic approach, encompassing political commitment, infrastructure investment, educational reform, and skills development initiatives. Without sustained political commitment and investment, efforts to expand internet access and improve electricity reliability risk being compromised, perpetuating the digital divide. The strategy was endorsed by the Thirty–Sixth Ordinary Session of the African Union Executive Council held in February 2020 , who recognised this: only through collaborative efforts and sustained investment can Africa bridge the digital divide and unlock the transformative potential of digital learning for all its citizens. Looking Forward and Building Change Yet, by overcoming these challenges, the future is bright and worth investing in. We must recognise what is at the core: education is a basic right to all communities, globally. Results are already beginning to bear fruit: UNESCO’s forum on quality public digital learning reveal how bright the prospects could be. Van Manen et al. (2021) emphasise the remarkable impact of digital learning on advancing SDGs , highlighting how it enables countries to address key challenges such as poverty, inequality, and access to quality education without the need for extensive physical infrastructure investments. By leveraging digital technologies, governments can reach underserved populations, bridge educational divides, and empower individuals with the knowledge and skills needed to uplift themselves and their communities. The continent’s digital uptake has also been staggering and speaks to a unique adaptability and adoptability when faced with change. In a 2020 study conducted by GSMA, it was revealed that over 1.4 billion subscribers on the continent utilise their mobile phones as powerful tools for educational enrichment , underscoring the widespread recognition of digital learning's value in shaping the future of African youth. From accessing online courses and educational apps to engaging in virtual classrooms and interactive learning platforms, mobile devices have become indispensable companions on the journey towards academic achievement. This should not be ignored: beyond mere convenience, this shift represents a democratisation of learning, where access to knowledge is no longer limited by physical proximity or socioeconomic status. Instead, digital learning empowers individuals to take ownership of their educational journey, enabling them to learn anytime, anywhere, and at their own pace. Yet, the role of ICT initiatives in classrooms can go even further, providing a visionary tool for tackling existing education inequalities. Behind stark statistics lie the stories of over 129 million girls’ dreams , which are deferred by the harsh realities of poverty, gender-based violence, and early marriage. Each day, countless young minds are forced to miss out on the transformative power of education: girls miss up to 50 days of schooling each year due to the lack of sanitary wear according to Life Healthcare . ICT-equipped classrooms do not promise to solve these issues but bridge the gap: if remote learning becomes a possibility, so does change. Key stakeholders are also ready, able, and actively engaging with the modern education landscape to make the path to learning easier. We’ve seen initiatives take root here in the UK, with Mobile network operators (MNO’s) offering zero rated connectivity packages for education platforms such as BBC Bitesize . Yet, these changes can be seen across the globe and felt deeply: in Kenya, Nigeria and South Africa, initiatives have revealed whole new possibilities for access to information . With software providers also offering free subscription platforms with available content and data, it is clear that the future is brighter than ever. Amidst these challenges, digital learning platforms emerge as powerful allies, tearing down barriers and extending the hand of opportunity to every corner of the globe. Through the magic of digital tools, students are no longer confined by the limitations of geography or circumstance. Instead, they can connect with specialists and mentors from across the world, unlocking new realms of knowledge and inspiration. Conclusion Connected classrooms provide a bridge to change, change which is exciting and necessary. Access to a learning which is digitally engaged promises to enrich education opportunities and better the outcomes for future students. Yet, beyond mere access, digital literacy becomes a lifeline, empowering individuals to navigate the complexities of the modern world with confidence and resilience. In the midst of a rapidly evolving digital landscape, these skills serve as a passport to a future where no dream is too big and no obstacle too daunting. How We Can Help At Cambridge Management Consulting, we stand out from the crowd, particularly in the dynamic and intricate landscape of Africa. Our commitment goes beyond quick fixes; it's about crafting tangible and enduring impacts that resonate with the unique challenges and opportunities present in this diverse continent. Just as digital education offers a cost-effective avenue for countries to enhance their performance on Sustainable Development Goals (SDGs) without the need for expansive physical infrastructure, our consulting philosophy embraces innovative solutions that recognise and leverage Africa's unique dynamics. At the heart of our approach lies our handpicked team of experts, deeply passionate and intimately connected to the pulse of Africa. With a nuanced understanding of the challenges and opportunities this diverse continent presents, we strive to positively impact businesses in the most authentic and sensitive manner, echoing this article's recognition of the transformative potential of digital education in Africa.
Row of old analogue telephones

PSTN Switch-Off Delayed to 2027: What this means for You

by Clive Quantrill • 24 June 2024
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