That's the forecast from UON's newly appointed Deputy Vice-Chancellor Global, Professor Kent Anderson, who spoke to the Newcastle Herald following the publication of EY paper The peak of higher education - a new world for the university of the future, which said that universities would need to reposition themselves as the knowledge services sector to survive disruption caused by COVID-19.

"What if, after decades of growth, the size of the traditional higher education sector has also reached its upper limits?" it asked.

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Professor Anderson said the paper's authors had "put out a polemic".

"What I would say with the underlying proposition is I don't think 2020 or 2021 have created existential moments for universities, I think what they've done is accelerated some things that were already existing and I think they've accentuated some vision points that were already there," he said.

"The whole digital [move] and how that was impacting particularly on education, that precedes the pandemic and it will go beyond the pandemic, but the pandemic is just this leap in time because we've had to respond to it."

Professor Anderson said three per cent of Australians were university graduates in 1975 compared to 42 per cent in 2020.

"Employment and employability is a driver of education," he said.

"We know all of our students are coming in with much greater expectations, that the reason I'm doing this is to get a better job, to help my family and myself economically.

"To be honest I think we need to embrace that and I think that's one of the things coming through in the EY paper, is to say 'Universities, you can't be ivory towers, you need to step closer to the industry and the economy because that's what your consumers - your students - are asking for, but also because your role has changed when you go into this massification'."

Professor Anderson said he understood "resistance" to the argument about employability and that a "small slice" of students enrolled solely "for edification and the broadening of the mind", which he said raised further questions about taxpayers contributing to this.

"I hope we give everyone skills to make a productive contribution to society," he said.

"I think we need to make sure people have skills so that they can achieve those other things they want, economic stability for themselves and their family.

"I love multidisciplinary [programs] and I would love to see someone who has got a passion for the arts, for example, to combine that with maybe a basic business course."

The EY paper posed four 'what if' questions for 2030: what if the cost of learning is driven down to zero, what if accreditation is the new battleground, what if the government funds individual learners not institutions and what if commercialised research funds university operations.

The paper is based on the premise that traditional demand for higher education never returns to its pre-pandemic levels, but Professor Anderson said this was "flat out wrong" and there would be an increase in demand for qualifications, but these may be delivered by a number of providers.

He said UON had around 38,500 students, including about 5000 international students.

He said UON had seen the number of domestic students grow in 2020, stabilise in 2021 and expected "modest growth" in 2022.

He said this reflected demographics, the global trend of seeking qualifications and higher education growth being counter-cyclical to economic growth.

He said the international student numbers told a more surprising story.

The 5000 does not include those who deferred their studies and returned overseas.

The number is mostly made up of international students who stayed in Australia, but also a small number of offshore students learning online, including some new students who signed up to study during the pandemic.

"We thought as soon as the borders were closed no-one would sign up," he said.

"But that has not been the case, so there have been more international students willing to sign up and say 'The borders are closed, I'll do my first semester or my first year online and as soon as the borders are open I will come across and I will have two more years to study out of the three."

He said the strongest demand had come from China and the weakest demand was from India, largely because Chinese students wanted to study specifically in Australia, while Indian students wanted to study overseas.

The EY paper asked people to imagine in 2030 "the classroom is dead" and that rather than sitting in a classroom at a set time, students will seek on-demand access to personalised and high-quality learning materials from a digital platform.

It said learners would be empowered by choice and aided by artificial intelligence, with Spotify-style platforms recommending courses based on interests and aptitude.

Professor Anderson said UON was proud of and committed to its face to face offerings "and that will always be a key, core element of the Newcastle education".

"But I think you need to enhance with different digital offerings," he said.

"Some of it is enhancement to the face to face, but some of it, in certain specific areas, it will be 100 per cent online," he said.

"I think what we do is provide a number of different modes and then the student in some ways knows who they are as a learner and which way they want to go on that."

He said COVID-19 had improved UON's online offerings, but this had already started before the pandemic and would continue to grow.

"Newcastle is committed to one strand, which is face to face, and I think they will add more strands of what we call blended, which is face to face supported with online, and some threads that are purely online and every shade in between that."

Professor Anderson said even with an increased proportion of learning online, UON's overall number of students continued to grow.

"The Vice Chancellor and myself, the university, we are convinced that activation and engagement in good learning happens when you've got people bouncing ideas off each other," he said.

"We're wary to see an evacuation of space and so keeping a certain level of density on campus is really important to us."

He said UON was investing in campus activation and while the city campus benefited from its location and proximity to industry, UON was "doubling down to activate Callaghan for those that want that deep research experience, for those who want to connect with those mindful projects".

The paper asked people to imagine in 2030 that work is considered the new university and employer-licensed accreditation courses will take on universities for workplace relevance, with students seeking out credentials that best position them for guaranteed employment.

Professor Anderson said UON would "absolutely" consider expanding its range of micro credentials.

He said students in UON's enabling program already received a micro credential that could be built upon to become a diploma and a bachelor's degree.

He said the strongest growth however was in UON's four-course online postgraduate certificate program in a specific subject, which could also be built upon to become a diploma and a master's degree and was "going gangbusters".

"When there's 50 people in a village it's pretty easy to identify who has got what skills, when there's 26 million people and 40 per cent of them have university qualifications it's really hard to differentiate who knows what and so that qualification helps with that process," he said.

"On the student side, particularly in an economy in transition... people want to do slightly different things, this goes back to 'You're going to have 27 jobs in your lifetime', so there's a whole bunch of shifts that we'll want to happen along the way."

The Australian university system is largely funded through government research and teaching grants and student fees.

The EY paper asked people to imagine that students in 2030 can choose from a range of government recognised knowledge services providers and be fully or partially reimbursed.

Professor Anderson said this reflected the demand-driven model that had been in place since 2012, when the government removed the cap on the number of places it funded for bachelor degrees, but said there were "some constrictions" moving between the university, TAFE and private training organisation models.

He said commercialised research was not a "magic bullet" or able to completely fill the role of government funding, as the paper suggested.

"Maybe industry as one of the chief beneficiaries [should also contribute]. I'm arguing not just that universities need to take a step closer to industry, but industry also might need to take a step closer to universities, because of its self interest of getting an employed and skilled workforce."

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