Antoni Cahner, UOC general manager and FUOC CEO
It seems almost certain that the pandemic will have a negative impact on the world economy at some point in the near future, albeit to varying degrees in different countries, regions, industries and companies. In a context like this, experts say that the organizations who are best equipped to acquire new and innovative forms of competitive advantage and are able to adapt continuously to change will be the ones that come out strongest. Will the UOC be among them? We interviewed Antoni Cahner, UOC general manager and FUOC CEO, to find out.
What challenges does the UOC face to become a fully digital organization?
We're working on future scenarios that affect our organization and have defined four areas that the strategy should prioritize. One of these areas is to become a digital organization in a new global age. While it's true that the UOC is digital on the outside, internally we're not digital through and through. So now we have to start thinking about how we transition to becoming a truly digital organization and how we approach this transformation holistically.
What impact could the pandemic have in terms of an economic crisis?
When the pandemic started, here at the UOC we envisaged a worst-case scenario, in which we projected a 10% drop in first enrolments for bachelor's degrees and a 15% drop in enrolments for master's degrees and UOC-certified programmes, and a negative impact on re-enrolments of about 5%. Rounding it off, this could mean a contraction of about 6 million euros in revenue and an impact of 4 million euros on budget availability. But, with the data we have now, we can see that this worst-case scenario has not come to pass.
It seems that the enrolment campaign is going better than last year's. This still has to be confirmed, but everything seems to indicate that we're moving towards a scenario in which we'll meet the budget forecasts for 2020 and may even be a little bit above budget in terms of revenue. But we need to see if this trend continues, things could still change.
What will happen in the next few years is a completely different matter, because we're clearly looking at a two-fold effect: on the one hand, it seems that there's a growing trend among the UOC's regular students and among young people in general to gravitate toward online education; while on the other, we have a very negative impact triggered by the economic crisis. It seems inevitable that unemployment will grow and this will mean that there'll be fewer people with the means to sign up for courses. So, although we may be seeing a positive uptick now, looking toward 2021 and beyond, if the economic crisis and the drop in GDP are confirmed, we may experience a fall in demand because people will have lost their jobs and won't be able to afford enrolment.
How do the changes in the Catalan Government's decree on public prices for the 2020/2021 academic year affect the UOC?
The new decree, which was published in the Official Journal of the Government of Catalonia (DOGC) on 30 June, lowers enrolment fees by 30% in Catalan public universities that had raised them by 66% in the 2012/13 academic year. This does not apply to the UOC, where the increase was much lower that year (2.9%), and where no major increases (just 8.8%) were introduced over the following years.
So the new decree regularizes this situation in part and mirrors the price restraint exercised by the UOC during the last seven years. During all this time, the UOC has followed a policy of not increasing enrolment costs above annual inflation.
As regards how much it will cost to study at the UOC next year, there will be no changes in the price per credit for bachelor's and university master's degrees that qualify graduates for regulated professions. For master's degrees that are not in that category, a new bracket is being added setting the UOC and all other Catalan public universities the same credit price (46.11 euros). Until now the UOC didn't make this distinction between types of master's degrees, and there was one single credit price for master's degrees. However, the decree includes an article that enables the UOC's Board of Trustees to allow rebates of up to 30%, depending on the criteria applied. We'll use this to minimize the impact on the price of the master's degrees that aren't directed towards regulated professions. We expect to approve this approach at the Board of Trustees' next meeting, to be held this July.
Upon close inspection, the differences are minimal. In the case of someone who'd like to enrol at the UOC, the price is always an important factor, and we'll make whatever adjustments we can so that the price difference against other public universities doesn't become a major barrier to flexible distance learning.
This can be seen in contrast with what seems to be happening in private higher education lately. In the last eighteen months, two investment funds based in London have each bought a university in Madrid. On top of that, we've recently learned that Alicia Koplowitz has invested 7.8 million euros in Proeduca Altus, which counts the International University of La Rioja (UNIR) among its holdings. Will the UOC follow the same path?
From a macroeconomic viewpoint, education is an attractive growth sector for investment funds, because it's one of the few sectors that can offer double-digit annual growth rates. This catches investors' attention and attracts capital. It means that competition will be increasingly aggressive, with players who will have significant investment capacity. They'll become strong competitors who we cannot afford to underestimate.
In the case of the UOC, we should continue with our strategy of staying competitive by generating our own resources that will enable us to compete in an increasingly aggressive environment. The key remains keeping to a sustainable growth strategy that is compatible with high-quality standards. Under no circumstances are we considering raising capital from investment funds, because what sets the UOC apart from the other private online universities that are currently emerging is precisely the fact that we are a non-profit university. We are a not-for-profit foundation, with a public mandate and a vocation for public service that we wish to preserve, and two conditions for that are being subject to the public prices decree and the Catalan Government subsidizing part of our budget by means of our objectives-based programme agreement.
The Government of Catalonia subsidizes part of the UOC's budget by means of a programme agreement linked to objectives. Is there the possibility of a cut in the government subsidy?
In the short term, no, because we're already negotiating the programme agreement for the next four years. Everything seems to indicate that funding will continue at the same level. However, if the predicted drop in enrolments in the brick-and-mortar universities comes to pass, then the numbers will no longer add up. These universities will have less income and the Government will have to compensate for this somewhere.
At that point, we'll have to see how the Government balances the figures, and whether it decides to continue supporting the UOC, positioning it appropriately as a key accessory to the university system and a necessary, quality response to the demand for lifelong learning in Catalonia and worldwide.
What role could philanthropy play as a new source of funding?
This is one of the subjects we're studying on the Executive Board. We'll soon announce some organizational changes that will seek to give added prominence to this area and enable it to be addressed across the board within the organization, adding the viewpoint of institutional relations and also the alumni network. The goal is to develop it in a more professionalized manner, taking as a reference the model from English-speaking countries, while carefully gauging to what extent this model can work here. In the United States and the United Kingdom this system is a well-established and normal source of funding. However, in Spain, and in Europe in general, it's not accepted in the same way. So, we'll have to work on it and see where it takes us, but the idea is to develop this area.
Now, more than ever, faced with such a volatile, uncertain and complex environment, it's hard to predict changes, let alone get ahead of them. How can an organization be managed in such an atmosphere?
The first thing we must do is be very clear about what we are here to do and update the UOC's mission and vision. Ultimately, there will be things that will be just as valid as before, such as responding to a need for lifelong learning and performing frontier research combining ICTs and social and human sciences. But, at the same time, we need to clearly identify and redefine that which sets us apart from other universities.
In our medium- and long-term strategy, we need to think about where we want to invest available resources to consolidate our advantage. This will be the key to remaining competitive and ensuring that our biggest source of income (enrolments) stays at the levels we've had until now. For our institution to be viable, we must maintain a level of sustainable growth that generates resources to ensure high-quality standards, a scenario in which the UOC could be a university with about 100,000 students, and a level of market diversification where we could depend less on students living in Catalonia, diversifying our product.