Our external environment
In our external environment, various factors affect our capitals and our ability to create value for ourselves and our stakeholders. While we cannot control these factors, we can respond in a way that optimises our ability to create value.
Material external factors that impacted us in 2023 included ongoing societal transformation, academic staff shortages, instability in the higher education, the fourth industrial revolution (4IR) and funding issues, among other things.
- TRANSFORMING SOCIETY
- INSTABILITY IN HIGHER EDUCATION
- 4th Industrial Revolution
- FEE-FREE MODEL
- FEE REGULATION
- State funding
- External research FUNDING
- Demand for IP reduced
- CURRICULUM CHANGE
- DISRUPTIONS: BASIC SERVICES
- NEED: community engagement
- Staff shortages
TRANSFORMING SOCIETY
The NWU is a microcosm of our country, bringing together people from diverse socio‑economic, cultural, religious, racial and other backgrounds. Accordingly, we have set a student transformation agenda that places students at the heart of everything we do and is driven by a large-scale strategic change programme operating across the NWU.
This programme is intended to equip students to overcome obstacles and find new and exciting pathways to greatness. It is holistic, focusing on student access and success; reasonable accommodation for students with disabilities; multilingualism and development of African languages; transformation in the student governance environment; gender rights, and identity and sexual orientation awareness and activism; among others.
Strategic matter affected:
development of a clearly differentiated student value proposition (goal no 4)
Capitals affected:
human, social and relationship, financial
Effect on value creation
It is inevitable that instances of inequality and inequity from the external environment would spill over into the university. Our approach is to recognise these early, address them proactively and manage them effectively. This is key as our student value proposition centres on inclusivity and belonging.
Our strategic response
We seek to build social capital, awareness and partnership within the student community. This entails proactively identifying and implementing support initiatives and programmes contributing towards enabling access and success.
Effecting social change is a collective responsibility. Where possible, we integrate interventions and platforms facilitating social change into existing curricular and co‑curricular programmes, and embed collective responsibility into university functions, structures and policy.
In maintaining a relevant and valuable student experience, we acknowledge the importance of purpose-driven engagement and effective multifaceted communication channels.
INSTABILITY IN HIGHER EDUCATION
Events and developments in the higher education sector influence the way our students receive and respond to university programmes and messages. Scepticism and resistance may come about if students do not understand how the higher education sphere functions, or if sectoral bodies do not perform as they should. Proactive and meaningful responses and interventions to sectoral developments help to safeguard business continuity and manage risk.
Strategic matter affected:
development of a clearly differentiated student value proposition (goal no 4)
Capitals affected:
human, social and relationship, financial
Effect on value creation
Resistance to university responses and offerings could delay and frustrate the development and implementation of sustainable solutions that advance the business of the university.
Our strategic response
We have an inclusive communication and consultation strategy that involves staff, students and community stakeholders, enhancing their understanding of the university’s functions, roles and responsibilities, and strengthening our value proposition.
4th Industrial Revolution
Marking an important shift from the 4IR, the Fifth Industrial Revolution (5IR) combines the digital, biological and physical domains, integrating human thinking with artificial intelligence (AI) to drive innovations.
Universities are essential in cultivating individuals who have the skills to efficiently leverage technological advancements for sustainable growth. Our role is to provide tailored learning experiences, access through digital channels and integrated multidisciplinary studies compatible with 5IR.
It is imperative for the NWU to attract and develop scarce ICT innovation skills.
Strategic matter affected:
all goals and enablers
Capitals affected:
all capitals
Effect on value creation
Operational efficiency is significantly boosted by 5IR technologies, leading to cost savings and improved campus experiences. Expanding digital and online learning platforms increases educational access, particularly for remote or financially constrained students, promoting social equity and inclusion.
Our strategic response
Cybersecurity and data analytics are top priorities.
In safeguarding our intellectual and infrastructure assets, we are focusing on our Data and Analytics Strategy and Operating Model (DASOM).
IT also plays a crucial role in driving the NWU's digital transformation initiatives for academic excellence. Our Learning Management System, eFundi, has experienced significant growth, with daily logins increasing from 4 100 in 2016 to 52 000 in 2023.
Also in 2023, we began preparing to replace the Student Information System and conducted vulnerability assessments for the Kuali Financial System. We also updated the Human Resources and Payroll Systems and introduced a Digital Workplace environment, encouraging collaboration.
We continue to manage the rising costs of cloud storage by engaging strategically with vendors, practising financial prudence and ensuring dependable cloud storage solutions.
THISisUS
We have several libraries on our campuses. Here, students sit in front of the Ferdinand Postma library on the Potchefstroom Campus.
FEE-FREE MODEL
The way we administer financial aid has changed significantly since government announced fee‑free higher education through the National Student Financial Aid Scheme (NSFAS) for households whose income is below R350 000 a year.
Where there were 4 837 approved NSFAS students in 2015, we had 27 693 NSFAS students in 2023.
Late NSFAS payments were problematic, prompting the NWU to advance allowances totalling R295 million to affected students so they could continue with the academic year. However, NSFAS has made an upfront payment of only R184 million to facilitate the advance payments.
Delays in approving NSFAS applications and appeals caused significant complications for teaching and learning during the first semester in 2023. There were more delays in the second half of the year when NSFAS appointed service providers to disburse student allowances.
Strategic matter affected:
teaching and learning (goal no 1), financial sustainability (enabler 4)
Capitals affected:
financial, human, intellectual
Effect on value creation
The fee-free model has led to changes in our enrolment patterns. It has become more complex to manage enrolment targets and to administer registrations.
However, the greatest risk to value creation is still the potential unsustainability of the NSFAS model and the proposed Fee Regulation Model. Both could have a substantial financial impact on the NWU and our students.
Our strategic response
We established an internal working group to manage the impact and minimise disruptions caused by possible late approvals in 2023.
A special orientation opportunity was arranged for all late-arriving first-year students, and potential NSFAS students could register provisionally and participate online.
We also improved our administrative processes and kept staff and students informed of financial aid developments.
FEE REGULATION
The Fee Regulation Framework that the DHET is formulating has the potential to significantly influence the financing model of the NWU.
A tuition-fee increase of 5,1% was implemented, which was below the CPI of 6,9% of 2022 and 6,0 of 2023.
Strategic matter affected:
financial sustainability (enabler no 4)
Capitals affected:
financial, intellectual, human
Effect on value creation
If the permitted fee increases do not reflect our cost structure and internal inflation rate, our financial stability could be at risk. This may ultimately affect the quality of the services we provide.
Our strategic response
We have a multifaceted strategy to address the complexities of maintaining financial stability and service quality. While participating in the consultations on the proposed Fee Regulation Framework, we are diversifying our income streams, doing fund-raising, extending our continuing education offering, managing our budget process and improving operating cost efficiency.
STATE FUNDING
From 2022 to 2023, the Rand value of the block grant allocated to the NWU decreased in real terms by 0,7% and the value of the earmarked grants allocated to universities by 53,4%.
With no increase in the block grant, lower-than‑required fee increases and the anticipated growth in funded units, the funding available to universities will not fully cover higher education inflation. This negatively impacts our ability to attract and retain excellent staff.
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
Effect on value creation
State funding contributes to short and mediumterm financial stability. If funding shortfalls continue, however, we would be forced to implement budget cuts and would not be able to fund all operational and strategic activities.
Uncertainties over the sustainability of state funding hamper our ability to create value for our staff.
Our strategic response
We are practising financial prudence by prioritising wisely when allocating the funds available, reviewing current activities and investing in opportunities to improve cost effectiveness, build reserves and manage costs.
In the longer term, we aim to become less dependent on state funding by diversifying income generation.
EXTERNAL RESEARCH FUNDING
Research funding and support have dwindled amid budget cuts in government and industry. The same has happened with pre-commercialisation, and seed and venture capital funding for innovative and new technology development.
Thus, research and postgraduate funding continues to decline and the implementation of the new National Research Foundation (NRF) funding instrument has meant that fewer students are being funded, even though the amount per student has increased.
Strategic matter affected:
research and innovation (goal no 2)
Capitals affected:
financial, intellectual, human, social and relationship
Effect on value creation
Diminishing external research funding may adversely affect our research productivity and the standing of the university in national and international rankings.
Our strategic response
We used our limited resources to alleviate the impact of external funding cuts. We awarded R1 499 455 in mobility grants to our researchers and provided R716 815 for research mentorship. We also contributed R626 664 to the salary component of the research chairs.
THISisUS
Students leave the library on the Vanderbijlpark Campus. Library facilities include the Library and Information Service's open access repository for research material, known as Boloka.
Demand for IP reduced
The reduction in demand for IP was less pronounced in 2023 than in previous years. However, the reduction in early-stage, seed and venture capital funding remained a problem.
Strategic matter affected:
research and innovation (goal no 2)
Capitals affected:
financial, intellectual, human, social and relationship
Effect on value creation
The low uptake of our IP and technologies could result in lost income and reduced licensing and spin-off activities.
Our strategic response
We strive to back up our inventions with trialled and tested prototypes, enhancing the successful licensing of patents. As prototype development and demonstration is expensive, we were innovative in seeking out research funding.
We continued improving the way we market NWU IP, technologies and innovative research with the aim of attracing funding, collaborators, commercialisation partners and licensees.
(For more information, see the section of how we create value through innovation and technology.)
CURRICULUM CHANGE
Curriculum change through decolonisation and transformation is crucial in South African higher education. The NWU is systematically conducting curriculum transformation and renewal, in line with the objectives of Goal 1 of our Annual Performance Plan.
Strategic matter affected:
teaching and learning (goal no 1)
Capitals affected:
intellectual, human, social and relationship, manufactured, financial
Effect on value creation
If we fail to decolonise the curriculum, we would not retain our intellectual credibility or be able to equip our graduates to address the contextualised challenges of 21st century society.
Our strategic response
During 2023, the NWU pursued the following strategies:
- providing work-integrated learning (WIL) and service learning (SL) opportunities that foster an ethic of care and social responsibility in our students;
- involving students in a range of individual and collaborative learning and assessment activities;
- continuing to install technology in classrooms to establish a HyfFex learning environment; and
- hosting awareness weeks on race, gender and language.
DISTRUPTIONS: BASIC SERVICES
Loadshedding and municipalities shutting down water supplies at critical times pose severe risks for the university, which must ensure a reliable supply of emergency power and clean water to the campuses.
Strategic matter affected:
all goals and enablers
Capitals affected:
intellectual, human, social and relationship, manufactured, natural and financial capital
Effect on value creation
Running the emergency power-generating plants on our campuses during load-shedding periods places a financial burden on an already constrained utilities budget (and financial capital).
As our central emergency power-generating plants cannot meet the total demand during normal business hours, we focus on supplying power for our core business activities.
The availability of electricity and water from municipal connections may be further exacerbated in future, negatively impacting our activities.
Our strategic response
In the last months of 2023, we began installing large solar plants on our campuses. This will continue in 2024.
We are preparing to install water reservoirs on all campuses.
Water treatment plants are also being installed on the campuses, and we are investigating treatment plants for sewerage.
NEED: community engagement
We acknowledge our responsibility to use campus‑generated knowledge for community benefit and, in turn, to welcome the contribution community support makes in shaping us into a diverse, innovative institution. Embracing knowledge exchange, we engage with communities to learn and share.
Strategic matter affected:
Integrate and align community engagement with teaching-learning and research to develop a culture of active citizenship. (Goal 3)
Capitals affected:
intellectual, human, social and relationship, financial
More detailed information about how factors in our external environment affect our ability to create value and how we respond to them, is available here.
Effect on value creation
Through sustainable, impactful community engagement, we can address community needs, facilitate student placements for WiL and service‑learning, and foster ongoing, sustainable development in communities.
Our strategic response
We build partnerships and formalise and record our agreements on community engagement.
Our interfaces with communities are via service learning, the science shop, engaged research and innovation and engagement platforms. In 2023, three inception meetings were held to consult with 72 local stakeholders per NWU campus.
Some informal relationships are invaluable for addressing community needs and facilitating student WiL and service learning placements.
We monitor, evaluate and report on our community activities, which are incorporated into the Community Engagement (CE) database.
Staff shortages
The shortage of academic staff in South Africa has become even more constrained, especially staff from designated groups at senior levels and in the scarce and critical skills areas.
Strategic matter affected:
teaching and learning (goal no 1), research and innovation (goal no 2) and community engagement (goal no 3)
Capitals affected:
intellectual, human, social and relationship, financial
Effect on value creation
By recruiting and retaining high-calibre academic staff with the required demographic diversity, skills and experience, we are able to maintain our reputation for excellent teaching and learning, innovative research and community engagement with impact.
Conversely, our reputation may suffer and our capacity to implement functional multilingualism be constrained if we are unable to attract such staff in sufficient numbers.
At the same time, we have to optimise employment costs, especially as subsidy income is decreasing and student fees are capped.
Our strategic response
We are addressing the risks associated with recruiting and retaining skills and talent through initiatives such as coaching for senior managers, the Leadership Academy for Academics and succession planning.
Our talent management strategy provides incentives and professional development pathways for sought-after staff, along with fast-tracking opportunities.
Overall, we continued to focus on offering fair, market-related pay and conducive working conditions in 2023.
Greatness without boundaries
One way of retaining staff members is to show them the NWU cares about their wellness.
This was the purpose of three roadshows that People and Culture brought to the NWU's campuses in September and October 2023.
Besides sharing information on wellness and employment-related matters such as annual leave, the events offered staff access to a range of health-screening services.
The amphitheatre on the Potchefstroom Campus was a hive of activity during the People and Culture roadshow.