The Council for Industry and Higher Education publishes its advice to the Shephard review today. Patrick Coldstream summarises its report.

More young people than ever before now believe that it is worthwhile to continue their education beyond 16. This fact is plain from the inexorable rise in demand for higher education and it amounts to a social revolution. A wave of educational enthusiasm has built up quite suddenly, catching the Government - and indeed almost everyone else - by surprise.

In its response to the Department for Education's review of higher education, A Wider Spectrum of Opportunities, the Council for Industry and Higher Education has tried to show how it thinks this wave should be ridden. The council believes that if we fail to catch it and ride it, we will fail the future, disappointing not only the aspirations of students - young and mature - but also our ambitions for economic competitiveness and national prosperity.

It is obvious where that wave originates. Not so long ago, in 1980, only per cent of school pupils reached their second sixth-form year. By 1994 that percentage had more than doubled to more than 58. In short many more people are volunteering for post-16 education. Fewer of them are dropping out at 17. More job opportunities might slow growth but the trend is unlikely to change near the end of the century as numbers in the school-leaving age group begin to climb again. The proportion of school-leavers qualified for higher education will reach 50 per cent by 2000. People are already discussing whether the target should be raised to 66 per cent.

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These are just the entrants of school-leaving age. As Alan Smithers and Pamela Robinson have pointed out in a recent CIHE report, as things stand, nearly 60 per cent of 18-year-olds can expect to enter higher education at some time in their lives.

Academics, employers and the country as a whole have to catch up with the notion of higher education as a popular, rather than an elite, activity. Higher education, whether at university or polytechnic, used to be for only a tiny minority - as few as one in eight of the school-leaving age group in 1980. Now, the number is very close to one in three; but the numbers surely show that a much greater expansion is needed if the demand is to be met.

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Growth needs to match demand so that there is room for all who want post-18 education and can benefit usefully from it. The question is: given the figures, how can that demand be met in an appropriate and affordable way?

The United Kingdom now needs to invest in a new post-18 education system that is broadly seen as inclusive, rather than exclusive - a range of education opportunities that can be extended quite quickly to cover the majority of over-18s, including older adults, some of whom will be in paid work and studying part time.

Students have already become a more varied group. Universities are now much less dominated by the sons of the professional and managerial classes. Women students have progressed to near parity. More students are coming without A levels and more are working towards diplomas rather than degrees. Undergraduate entrants under 21 are now in a minority.

Employers will need to redefine what they currently think of as the "graduate job", and extend the idea of "professionalism" throughout most of their workforces. Increasingly the UK must come to depend upon high added-value products - on the fruits of the mind, rather than the sweat of the brow. Employers will therefore want all their employees to be able to do those things for which graduates are traditionally most valued.

They will want numerate, articulate people who can reflect critically on their work. They want people who can work in teams, and can explain things clearly in their own (and another) language. They will ask for recruits who can think laterally around problems; analyse and draw conclusions from muddled information; respond to change creatively, and take responsibility for continuous product improvement.

The talent pool is far from exhausted; the potential is there to be developed. But not all those who will come forward for higher education will be suited to the traditional style of university education. We must imagine new forms of learning, to complement the older ones. This new higher education will need to be organised largely around the concerns of the working world, and the ways in which it sees and does things.

The combined insight of employers and educators should be brought to bear on this development. So far, in vocational skill training for example, we have seen the practice of inviting employers on their own (Sector Lead Bodies) to specify requirements of particular working roles, and then to translate those quite directly into teaching objectives. Such a procedure has proved too simplistic for specifying new sorts of college education, or for setting the tone and guidelines for "vocational A level" courses. Employers and educators must exchange thoughts around the same table. The council thinks this will allow academic and practical emphases to be increasingly intertwined.

The new education must aim for a real richness of its own which the fashionable language of "competencies" does not express at all adequately.

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This is the strongest reason for bringing together the training and education roles of the departments of education and employment. Their current division signals a division of approach - one narrow and specific, the other over-academic. Occupationally directed education looks for parity of esteem with its academic counterpart. All students need a mix of both.

Not all the change that we propose will conveniently fit into the current ideas of what constitutes higher education. The CIHE agrees with Sir Hermann Bondi's suggestion that "higher" education be distinguished not so much by the intellectual levels at which students start and finish, as by the steepness of the slope between.

The variety of higher education opportunities needs to become as wide as possible. This means enlarging the range in favour of a broad, general education rooted in the applied rather than the pure. It must approach theory, but must do so through the practical engagement with objects, operations and projects. The scope of study in these new areas will be broadly defined by the actual or foreseen concerns of the working world.

For this to happen, the post-18 curriculum must mesh with that of post-16. Already, universities are complaining that schools, by giving more emphasis to pupils' general skills, are equipping them less well "intellectually". "Vocational A levels" could exacerbate the difficulty if universities do not adapt to provide appropriate courses for those who follow that route. UK universities have been very successful in producing graduates quickly and cheaply with few dropouts. That achievement must be protected; but doing so will depend on there being a continuity of style and pace between 16 to 19 and higher education that is not always there even now.

The key feature of higher education to be preserved is that of personal attention by teacher to pupil. We believe this is crucial to building the confidence and "core skills" which employers so much value in graduates. To free lecturers for that properly human task, we think that the processes of HE teaching will need systematic re-analysis - and reconstruction where necessary. No doubt this will involve major investment - for example, in new IT equipment and software. But if the whole edifice of higher education is to be enhanced, rather than turned into an agglomeration of electronic excrescences, new techniques must be integrated with rethought learning objectives, and not just "bolted on" to the current architecture.

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For this reason, and for reasons of affordability, universities need to be encouraged to collaborate as well as compete, and to develop in different and complementary ways. The university funding system must encourage diversity, not homogeneity.

The council has told Gillian Shephard, Secretary of State for Education: * Employers will expect to recruit highly educated people for a much wider variety of roles * The balance of courses should shift much further towards a broader education applying intellectual skills to practical issues.

* To help in this, further education colleges should contribute more - without succumbing to mission-drift away from their traditional role - to this spectrum of post-18 education. At present, about 12 per cent of higher education students begin their studies in the colleges. Some complete them there, others at universities. We should not be surprised to see that figure move towards 25 per cent, as now in Scotland.

This will mean fostering the links that exist between the colleges and their neighbouring universities. It will also mean revitalising the colleges' connections with employers - as we urged in our 1993 paper, Changing Colleges. The CIHE has already joined the Further Education Funding Council in commissioning research into what kind of policies would encourage both these things to happen.

* Patterns of study should be diversified. The traditional three or four-year degree course will remain, but must not be seen as the only appropriate pattern. Shorter full-time, coupled with more part-time study may be better for many - and should be encouraged.

In future, more students must learn with (relatively) fewer staff, more efficiently, and to higher standards. But universities have already increased their productivity to a level very close to the limits of present education processes.

Industrial experience suggests that steep changes in productivity always mean fundamental rethinking of processes, which must be a condition of future investment in technological aids.

* Policy and funding mechanisms, including quality assurance arrangements, should reinforce the standing of teaching as an activity.

* The priority of teaching should be reflected in the proposed programme of research and development into modern learning. We need to know more about how people learn, and the potential of new techniques. The UK has attained a world lead in pioneering distance-learning methods, and these need to be extended and built on.

* The logic of a realistic commitment to expansion, diversity, high quality and rapid change demands that Government opens public debate soon about education priorities - and how the cost of higher education should be shared. Government, employers, individuals and their families all have their parts to play. But companies cannot be mainstream financiers.

Funding, higher productivity, new objectives and new methods are all linked. The debate over whether to increase the proportion of individuals who contribute to the cost of their education - and if so, how - must be carried out in the context of expanding opportunity and investing in quality. A realistic funding strategy is essential, but none is possible without public debate involving all political parties.

It could be beneficial for more individuals to become more financially engaged with their own higher education. The funding discrimination between modes of study - particularly the distinction between full-time and part-time - must be removed as the distinction itself fades away in our expanding post-18 continuum of higher education.

This debate is urgent and it must be joined in the run-up to the next General Election. Any decision to change the balance is a political one. Politicians need to grasp the dreary consequences of an underfunded expansion.

Post-18 education has three purposes: to acquaint with the basics - the "grammar" of a subject; to suggest to students how their capacities may be best applied; and to give them the enthusiasm they need to go on learning. That is the way to create the "reflective practitioner" workforce the country needs.

Higher education must continue to fire people of all ages with what we call "passionate inquisitiveness", which will encourage them to continue learning throughout their lives. Learning is an attitude, and appetite for it is a national resource as important as coal, oil or natural gas.

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The author is director of the Council for Industry and Higher Education. A Wider Spectrum of Opportunities is available from the Council at 100 Park Village East, London NW1 3SR.