Our external environment
Various factors in our external environment affect our capitals and consequently our ability to create value for ourselves and our stakeholders. The event that took the world by storm during 2020 and severely influenced life as we knew it, was undoubtedly the Covid-19 pandemic.
In the text below, we discuss other material factors in our external environment that affect us directly or indirectly. We also indicate how these are linked to our strategic goals and risks, and how these impact our value-creation ability.
Learn more about our eight risk clusters
Rapidly changing societal roles/views/perceptions
Changing societal perspectives have a direct impact on the university environment as a microcosm of the larger South African and global society. Evolving views on gender norms and roles, cultural perceptions, sexuality and the role of religion have a major influence on how students engage with each other and the university.
This is clear from the level of support among students for current social movements focusing on gender-based violence and Black Lives Matter, as well as discussions on sexual fluidity and calls for cultural reforms on gender roles and norms. As an institution made up of people from many socio-economic, cultural, religious, racial and other backgrounds, we still have to do much more to ensure that we achieve the envisaged diversity at the NWU.
Similarly, the expansion of university online offerings and services, brought about by the global Covid-19 pandemic, exposed the stark inequalities in students' access to technology and the basic infrastructure they need to use such technology efficiently.
Strategic matter affected: development of a clearly differentiated student value proposition (goal no 4)
Capitals affected: human, social and relationship, financial
Risks involved: 2 and 5
Effect on value creation
Conflict often arises when an institution cannot timeously recognise and effectively address changing societal perspectives and needs. This inability poses a risk as it can be seen to further exclude and marginalise the people impacted by such changes. The student value proposition we promote can subsequently be regarded as partially or wholly irrelevant. We therefore have to ensure that our value proposition is not based on a student culture that no longer takes societal norms and values into account.
Our strategic response
We have to keep on refining our student governance model and feedback mechanisms to ensure effective consultation processes. This will allow us to engage and respond to projected changes proactively, and consequently maintain a relevant and valuable student experience. Sporadic and once-off engagements in reaction to changing perceptions do little to create a valuable student proposition.
Our strategic response must therefore consist of structured feedback and purpose-driven engagements, which ultimately inform decision-making processes.
The feedback we receive allows the university to clearly understand the real needs of our students. We can then adjust our existing procedures, processes, systems and structures and come up with new initiatives that support and include changing perspectives.
Possible social instability in the higher education sector
Social instability within the higher education sector could influence our students and may result in messages and decisions within the university being received with scepticism and unwarranted resistance. This could be exacerbated by a lack of understanding of how the higher education sphere functions at a national and institutional level.
Strategic matter affected: development of a clearly differentiated student value proposition (goal no 4)
Capitals affected: human, social and relationship, financial
Risks involved: 2 and 5
Effect on value creation
Stakeholders may resist NWU messages, which could delay and frustrate the development and eventual implementation of sustainable resolutions that advance the business of the university.
Our strategic response
We continually refine our communication and consultation strategy, involving a wide variety of staff, students and community stakeholders. This is further buttressed by improvements in stakeholders' understanding of the functions, roles, and responsibilities of the university, further strengthening symbiotic relationships between critical stakeholders and what our response is.
The Fourth Industrial Revolution
The Fourth Industrial Revolution (4IR), marked by rapid technological advances in all fields, has significant implications for higher education and will fundamentally reshape how universities operate.
The impact of 4IR requires not only the learning of new skills, but also the unlearning of outdated modes of operation (in terms of teaching, academic administration and student support).
Higher education is undergoing a technological revolution that will lead to agile, integrated systems,
ICT innovation will play an increasingly important role in the provision of teaching and learning and support throughout the student life cycle.
Strategic matter affected: teaching and learning (goal no 1), financial sustainability (enabler 4)
Capitals affected: All capitals
Risks involved: 2,3,5 6 and 8
Effect on value creation
We need to keep pace with the 4IR and seize the opportunities that it offers to create value. These opportunities include implementing ICT innovation to support our core business, broaden access to tertiary studies as the move to online teaching and learning gains momentum and being part of worldwide phenomena such as the multiversity, the unbundled university and the blockchain university.
Our strategic response
The development of a digital business strategy to embrace the 4IR was already well under way at the NWU when the Covid-19 pandemic changed the world as we knew it. The consequent lockdown and resulting shift to online learning forced us to accelerate our digital journey.
The result was a digital transformation in teaching and learning and the development of support systems such as a digital workplace management system, an automated work-integrated and service-learning management system and an online platform for student assessment.
We also have a team of education technologists who assist staff with the integration of technology into their teaching strategies.
Shortage of academic staff
An ongoing constraint is the limited pool of academic staff in South Africa, especially from designated groups at senior levels.
Strategic matter affected: teaching and learning (goal no 1)
Capitals affected: intellectual, human, social and relationship, financial
Risks involved: 2 and 3
Effect on value creation
High-calibre academic staff are central to our ability to add value to students and the community. Failing to attract sufficient staff with the requisite demographic diversity, skills and experience may detract from our reputation for excellent teaching and learning, innovative research and community engagement with impact. It may also limit our capacity to implement functional multilingualism. Another risk associated with the recruitment challenges we are experiencing is an overreliance on temporary staff, which further constrains our core business capacity.
Covid-19 has added to the financial pressures on the university and necessitated stringent measures to optimise employment costs. Apart from freezing positions and transferring the associated funds to the central budget, we put special cost containment measures in place in line with the Staff Cost Risk Mitigation Plan.
Our strategic response
Improving the representation of employees from designated groups is a priority for the NWU. Our line managers are pursuing strategies that include identifying and fast-tracking professionally qualified academics from these groups.
Through our talent management strategy, we offer staff at all levels opportunities to build successful and satisfying career paths, and provide incentives and professional development to attract and retain scarce skills, particularly black academics.
The individual remuneration review process, which is ordinarily used to ensure fair, market-related pay had to be put on hold in 2020 as a result of the uncertainties brought about by the Covid-19 pandemic. Instead of conducting such reviews, we focused on cultivating a supportive and caring working environment through our strategic initiatives to construct a welcoming and unified culture.
Fee-free higher education affects financing model
There has been a marked increase in students qualifying for funding from the National Student Financial Aid Scheme (NSFAS). This, coupled with the evolving administrative system of NSFAS, has necessitated changes to our financing model and presented challenges in how we administer financial aid. These challenges have gained momentum since the announcement of fee-free higher education for households whose income is below a minimum threshold of R350 000, and are expected to increase significantly due to the impact of Covid-19 on the economy. Any potential that NSFAS might not be sustainable in its current form would therefore pose a significant financial risk for NWU and our students.
The increase in the number of NSFAS-qualifying students has placed pressure on all the relevant internal business processes as the number of students assisted has increased by over 370%. Where there were 4 837 approved NSFAS students in 2015, the number climbed to 22 758 in 2020.
Strategic matter affected: teaching and learning (goal no 1), financial sustainability (enabler 4)
Capitals affected: financial, human, intellectual
Risks involved: 1,3,5 and 8
Effect on value creation
Although the current higher education financing model has the potential to disrupt our systems, we also recognise that the model might hold financial value for the NWU and our students. Fee-free higher education has opened up access to higher education opportunities to students who would previously not have been able to afford it, while also bringing temporary financial stability to the sector.
At the same time, the fee-free model has precipitated dramatic changes in our enrolment patterns, resulting in a more complex process for managing enrolment targets and affecting the administration of registrations. The greatest risk to value creation, though, remains the potential unsustainability of the NSFAS model and the financial impact that this could have on the NWU and our students.
Our strategic response
In 2020, the challenges linked to the increased number of students qualifying for NSFAS, as well as related administrative demands, had the potential to lead to interruptions in the academic year. We averted any such interruptions by harnessing effective administrative processes and keeping staff and students informed of developments around financial aid under the unprecedented circumstances caused by the Covid-19 pandemic. We also continued to build our long-standing relationship with NSFAS and Department of Higher Education and Training (DHET) as valued stakeholders.
Fee regulation by the DHET
Each year since October 2015, the DHET has made recommendations on tuition-fee increases, which the NWU Council then takes into consideration in its decision-making. During December 2019, the department requested a sector-wide tuition-fee increase of 5,4% for 2020, followed in 2020 by a tuition-fee increase of 4,7% for 2021. While the DHET task team working on a suggested fee regulation model had to postpone its work to focus on addressing the impact of Covid-19 on the sector, we expect to participate in this process again in 2021.
Strategic matter affected: financial sustainability (enabler no 4)
Capitals affected: financial, intellectual, human
Risks involved: 1
Effect on value creation
Fee regulation could put our financial stability at risk if the permitted increases do not reflect our cost structure and internal inflation rate. This may ultimately affect the quality of the services we provide. Adding to the risk of quality erosion is the still-unquantified impact of the Covid-19 pandemic.
Another issue is that regulations such as these have the potential to erode the autonomy of universities.
Our strategic response
Maintaining financial stability and the quality of our services is a complex task that calls for a multipronged strategy. This entails identifying opportunities to increase our income, for instance extending our continuing education offering and focusing on fund-raising activities, and diversifying our income streams, such as by implementing new third-stream income projects in our faculties. Our strategy further includes managing our budget process and improving operating cost efficiency. We also aim to make a positive contribution to the modelling of the future funding design for higher education.
State funding
The R-value of the block and earmarked grants allocated to universities increased by 6,5% and 1,2% respectively from 2019 to 2020 before adjustments were made to accommodate the Covid-19 responsiveness grants. However, these increases, coupled with the expected growth in funded units and the lower-than-required increase in tuition fees, do not fully cover higher education inflation in the long run, and in fact represent a decline in state funding in real terms.
Strategic matter affected: teaching and learning (goal no 1), research and innovation (goal 2), student value proposition (goal 4) staff profile (goal no 5), financial sustainability (enabler 4)
Capitals affected: human, financial, intellectual
Risks involved: 1, 3 and 8
Effect on value creation
Funding shortfalls may compel us to make budget cuts, meaning that we would not be able to fund all operational and strategic activities. In the short and medium term, however, the funding provided by the state does contribute to financial stability, bearing in mind that the impact of Covid-19 on future state funding is still unknown.
Our strategic response
We continue to follow the path of prudence: prioritise wisely when allocating the funds available while reviewing current activities and continuously investing in opportunities to increase efficiencies.
External research funding declines
Owing to the pandemic, most government and industry funding agencies experienced budget cuts. This led to the reduction or even discontinuation of research funding and support.
Postgraduate funding declined following NSFAS cuts and the implementation of the new NRF funding instrument, which saw fewer students being funded, although the amount per student increased.
Strategic matter affected: research and innovation (goal no 2)
Capitals affected: financial, intellectual, human, social and relationship
Risks involved: 3 and 7
Effect on value creation
Less external research funding may adversely affect our research productivity and the standing of the university in national and international rankings. At this point, however, research journal outputs have not been negatively affected and even improved. On the other hand, as was to be expected given the international travel bans in 2020, international conference proceedings outputs were down.
Our strategic response
Cushioning the impact of external funding cuts, we provided support in the form of mobility grants (R1 404 500) and research mentorship (R842 700), including assistance with NRF rating applications. We also contributed R850 000 to the salary component of the research chairs.
Low-growth economy inhibits commercialisation
Subdued economic conditions led to suppressed private sector interest in licensing our intellectual property (IP) and technology, and also reduced the flow of early-stage, seed and venture capital funding for NWU start-ups.
Strategic matter affected: research and innovation (goal no 2)
Capitals affected: financial, intellectual, human, social and relationship
Risks involved: 3
Effect on value creation
Loss of potential income and reduced licensing and spin-off activity are some of the possible consequences of low uptake of our IP and technologies.
Our strategic response
We take a long-term view on funding, taking steps to develop and maintain good relationships with funders across economic cycles. Our approach is to engage with industry to understand their needs and challenges so that we respond with relevant solutions and innovations.
We are also improving our marketing of NWU IP, technologies and innovative research so that we can continue attracting funding, collaborators, commercialisation partners or licensees. (For more information, see 'Create value through innovation and technology'.
Challenges in recruiting international students
Students from the Southern African Development Community (SADC) and other African countries have traditionally been an important target market for our postgraduate programmes.
It is becoming more difficult to recruit such students, due to stricter visa requirements for international students and intensified competition among universities for good postgraduate candidates. The DHET requirement that the NWU should prioritise South African students for postgraduate studies could also be a contributing factor.
In 2020, the pandemic prevented many international students resuming or completing their studies, resulting in a decline in the number of international students registered with the NWU.
Strategic matter affected: research and innovation (goal no 2)
Capitals affected: financial, human, social and relationships
Risks involved: 3
Effect on value creation
The number of international students enrolled at the NWU decreased from 6% of the total cohort of postgraduate students in 2016 to about 3% in 2020, which may lead to lower global rankings. As already mentioned, the pandemic had a serious impact on international enrolments in 2020 compared to 2019.
Our strategic response
Having opened global engagement offices on two more campuses in 2020, we are able to offer higher levels of administrative assistance to international students, making it easier for them to study with the NWU. Previously, only the Potchefstroom Campus had a global engagement office.
National call for curriculum change and transformation
National and global trends continue to influence the higher education sector. Most recently, we have experienced the effects of the Covid-19 pandemic, which has driven massive change in the way we teach and the way students learn. The advent of the 4IR and decolonisation of the curriculum have further highlighted the need for curricular innovation designed to transform higher education.
The shifts taking place across multiple fronts – political, economic, societal and technological – are changing the requirements for excellence in university teaching and impelling the further evolution of the university curriculum. In response, the NWU has deliberately embraced internal and external scrutiny of our modules and programmes to expand on teaching and learning opportunities and enhance the relevance, responsiveness and transformational potential of our academic offering.
A number of new postgraduate programmes that satisfy these requirements have been registered on the NQF, including master's programmes in nursing science, occupational hygiene and mechatronic engineering, and postgraduate engineering diplomas in industrial engineering infrastructure management and construction project management, among others.
Programme and Qualifications Mix (PQM) clearance was received for five postgraduate diplomas in nursing, three higher certificates in health, palliative care and theology, and several other qualifications in early childhood care and education, agriculture and theology.
Strategic matter affected: teaching and learning (goal no 1)
Capitals affected: intellectual, human, social and relationship, manufactured, financial
Risks involved: 2 and 3
Effect on value creation
Our Strategy Statement is "To transform and position the NWU as a unitary institution of superior academic excellence with a commitment to social justice". 2020 had the effect of making this commitment real in ways not anticipated. The sudden dispatch of students and staff to their homes during Covid-19 lockdown levels 5 and 4 had the dramatic effect of transitioning the university to support the functioning of its core business away from the campuses.
Our strategic response
The NWU rose magnificently to this challenge as our academics and professional support staff took the academic offering online with great success. The university was able to procure a number of devices for students with limited resources, who also received data packages to ensure they could complete their modules online.
Faculties established call centres for additional student support, and the Centre for Teaching and Learning developed a "keep on teaching and learning" website with focused lecturer, contact and distance student support pages that were updated daily and whenever a need for support arose.
Despite the tremendous challenges of a disrupted academic year, the NWU did not lose sight of other important teaching and learning imperatives, such as improving the way we prepare our students for their various transitions: from first year to their final undergraduate years and onwards to postgraduate study, and then into entrepreneurship or the workplace.
With this in mind, we revised our teaching-learning strategy, focusing strongly on giving expression to graduate attributes such as self-direction and project and problem-based learning, which we as a university and prospective employers value. The revised strategy will impact the revision of the faculties' Integrated teaching-learning plans and the university's teaching-learning and assessment rules.
National call for greater access to universities
Widening access to as many qualifying students as possible, is still a priority for the NWU.
Having taken the strategic decision to develop higher certificates for access purposes, we are following through with action. Three higher certificates received PQM clearance in 2020 and submission for accreditation will follow. These certificates, in health promotion, pastoral and palliative care and theology, are entry-level qualifications that will offer enrolled students additional vocational pathways and, most importantly, enable them to progress to bachelor's degree studies.
Strategic matter affected: teaching and learning (goal no 1)
Capitals affected: intellectual, human, social and relationship, financial
Risks involved: 2, 3 and 5
Effect on value creation
These entry-level access qualifications epitomise our commitment to higher education for the public good. The target market for the three higher certificates are people who are already active in their respective fields, meaning that the additional skills and knowledge they gain will add immediate value to their communities. Acquiring these qualifications will enable the student to progress to enrolment in further studies, with additional benefits to the student and community - and to the NWU in that we increase our intellectual and human capital, and our capacity to create value.
Our strategic response
Still on the subject of wider access, the NWU continues to offer 49 extended curriculum programmes (ECPs): 31 in the BSc, 14 in the BCom, four in the BAdmin degrees, as well as an extended LLB programme. We are looking forward to reviewing the ECPs in the Faculty of Economic and management sciences in 2021.
