We might be coming to one of those watershed times in Australian higher education when the system is transformed. Such transformations have occurred three times before. There was the initial building of national university and advanced college sectors between the late 1950s and the mid 1960s. There was the consolidation of mass tertiary education and its funding in the 1970s. In the late 1980s, in the Dawkins reforms, there was the creation of a mixed funded competitive university sector, with half an eye on the outside world, which had been moved closer by financial deregulation and the opening up of the Australian economy. This chapter argues for the renewal of this national mentality in the age of the global knowledge economy, grounded in somewhat different understandings and mechanisms from those of the 1950s, 1960s and 1970s especially a deeper engagement at the international level. The chapter begins with five overarching challenges for policy on tertiary education, training and research in Australia (hereafter the generic 'education' is used; unless otherwise specified, this includes training and university research). Then the chapter summarises eight specific policy problems and matches those problems to possible policy solutions.
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