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Smart Moves: Corporate universities threaten the old guard

The battle between companies and mainstream universities for the hearts and minds of British youth is growing in intensity as global competition heats up.

The number of corporate universities has steadily increased over the past 10 years, posing a direct threat to established seats of learning throughout the UK. Already, a nervous Committee of Vice-Chancellors and Principals, which represents more than 100 universities, is warning that the increase in competition represents "a key challenge facing the UK university system".

Not everyone sees the inroads into academia that large corporations are making as a threat, however; such initiatives, they argue, are complementing the existing system rather than replacing it. But with universities themselves becoming more autonomous and financially accountable, the rivalry is set to intensify.

Competition comes from organisations such as Anglian Water with its "University of Water", British Aerospace and its "virtual university", McDonald's "Hamburger University", Unipart's "U", and Motorola's "University of Europe, Middle East and Africa". Now BT looks like it's going to get in on the educational act too, with plans to set up on-site learning bases for its 125,000 employees, offering tailor-made degrees and vocational courses, turning it into one of the world's largest education institutions.

It would be designed to maintain BT's competitiveness against its rivals in the US, where about 6,600 corporate universities are well established. The BT Academy - to provide an "effective umbrella" for BT's training and research programme - is expected to operate a series of colleges, each specialising in a particular subject. BT sources sought to play down the rumours, however, saying its in-house training is merely being restructured.

So why are companies muscling in on education rather than doing what they've always done - providing training through apprenticeships? The move can be partly seen as an indictment of higher education's over-academic training. Britain's polytechnic system sought to redress the balance in the 1960s but the problem was so deeply entrenched that the task needed more radical restructuring than a handful of institutions could ever achieve.

The rapid pace of technological change has meant that companies have had to pay far more attention to the re-training and updating of skills of its employees. Power and prestige lie increasingly with the growing army of IT knowledge workers.

Globalisation also demands strong branding, so international companies achieve their impact by making their operations and image consistent throughout the world. There is no variation in the look and behaviour of McDonald's outlets, for example, and this is achieved by the core training given to "crew members" by its Hamburger Universities. Likewise, its UK managers - 9,500 pass through the dreaming spires of its academies in East Finchley, Woking, Sutton Coldfield and Manchester each year - are similarly processed by 20 full-time training consultants.

In today's topsy-turvy world of downsizing and short-term contracts, the long-term prospects that companies with universities potentially provide may be far more of a lure for a young person than a dry and dusty mainstream university course. Tom Bacon, restaurant manager at the McDonald's branch in Harborne, West Midlands, certainly thought so. "I started out at McDonald's part-time while I was a student," he said. "I could see a definite career path so I stayed on after my degree. Friends who gave me a hard time then are impressed now - I have responsibility for 35 staff."

Being mindful of the personal and professional development of staff also helps companies to retain their employees. Loyalty and continuity of employment have again become buzz words in industry and corporate universities have a vital role to play in achieving this.

At the centre of Unipart's U is the belief in employee development. This involvement of staff - nearly half the company is owned by employees - means that much of the decision-making process is a direct result of the deliberations of its "Our Contribution Counts" (OCC) circles. Problems in the workplace are brought to these regular get-togethers and thrashed out between managers and workers before reaching a consensus.

Like Motorola, Unipart extends its learning facilities to its suppliers and customers so that "everyone is speaking the same language". Tying in stakeholders in this way helps ensure market continuity. Participants also get the feeling of belonging, something that alienating technology is eroding.

"The Unipart U has become the platform from which we can see the directions for the future," said John Neill, group chief executive. "There's a good commercial argument for it. It's a route to competitive advantage and it enhances shareholder value by preventing our people's skills from becoming obsolete."