1 Engagement in an Era of Industrialisation Professor Ron Johnston, Executive Director & John H. Howard, Senior Fellow Australian Centre for Innovation Introduction The demise of the university as we know it, as a result of the dramatic expansion of the economic role of knowledge, has been a recurrent theme over the past fifteen years. Thus the eminent commentator Sir Douglas Hague wrote: Universities will be forced to share, or even give up part of their role as repositories of information and as power-houses for ideas…To compete, universities will have to organise and operate in ways more like those of knowledge businesses themselves. (Hague, 1991, p.9) The only means of salvation, it is claimed, is through increased permeability: The best universities of the 21 st century will bring together brain-power where it is, not where it can be institutionalised. (Hague, 1991, p.14) Others have argued that even greater changes are needed for universities to survive. In an article entitled 'The Inevitability of a Business Model for Higher Education', it is claimed that the combined pressures of new commercial competitors, the emergence of virtual universities, Internet-based delivery of learning, and the steadily rising demand for accredited courses will fundamentally challenge the traditional role of universities. (Abeles, 1999, p.10, p.15) However, it should be noted that the majority of dire predictions have not been realised, at least within this time-span. Private universities, whether modelled on Disney or the essentially virtual University of Phoenix, have captured only a very small proportion of the growing global market for higher education. The combined experience of the limitations of Web-based learning and the 'dot.com' crash of e-based companies has raised serious barriers to the move to virtual learning. Meanwhile existing universities have responded in various ways, and with varying effectiveness, to these new challenges. One response has been the establishment by elite universities of off-shore campuses, using their brand recognition to reach a far larger market. International consortia of universities have also been formed but thus far their impact is yet to be felt. Beyond the pressures of competition, from existing and new higher education providers, and the demands of the knowledge economy (which we will explore further), a broader challenge has been identified: that of maintaining and renewing the largely unwritten social charter between universities collectively and the larger society.