The Investment Approach

Ara pūtea tautoko

Last updated 10 November 2016
Last updated 11/10/2016

When we started on the Investment Approach, we did so working with tertiary education organisations (TEOs), government agencies and other stakeholders.

We looked at how we could make smarter investment decisions in tertiary education, to achieve better social and economic outcomes for learners and New Zealand. Our focus is on improving value by investing more on the basis of improved information about outcomes.

Our aim is to have an approach to investment that is flexible, transparent, sustainable and adaptable. This will help us create a system that is well placed to respond to future changes in tertiary education. It will reinforce our role as a steward of the sector through partnering, collaborating and co-creating with key sector partners.

This will also help further demonstrate our commitment towards a more open approach to investment with the sector.

Our CE Tim Fowler talks about the Investment Approach: Overview and looking to the future. This is Part 1 of a series of short films about the Investment Approach. (Youtube, 3.04 minutes)

Why is change needed?

We need to anticipate changes and future-proof the system by responding to demographic and economic forces that are already driving change.

Changes in New Zealand’s demographics have seen a reduction in the number of senior secondary students and more students staying on to complete NCEA level 2. This has led to fewer tertiary enrolments in some parts of the sector. Better employment opportunities mean that more young people are choosing to go straight to work from school and technological change is encouraging more workers to take up training to keep their skills current.

At the same time, information is changing rapidly and becoming increasingly available. This includes information such as performance indicators, investment impacts, efficiencies, regional demand and student pathway data.

This means we can now access and use quality data and information from a broad range of sources to create a solid evidence base for smarter investment decisions.

Listen to feedback from the initial round on the Investment Approach and how that has informed planning: Sector feedback and our response (Youtube, 2.49 minutes)  

Implementing the Quick Wins

In Plan guidance for 2017–2018 Investment Plans, we identified a number of Quick Wins – small projects, pilots and initiatives for delivery from 2017.

The Quick Wins looked at areas where we could support TEOs to place more emphasis on the outcomes that learners gain from participating in tertiary education. 


These projects have delivered the first steps in:

  • Reducing compliance for TEOs (including Plan exemptions).

We exempted small to medium-sized tertiary providers from having to submit a proposed plan. About 200 PTEs are now exempt. 

We approved Investment Plans for a three-year period for a selected number of TEOs.

  • Developing more robust measures of performance (improved educational performance indicators (EPIs)). 

We introduced a ‘new’ (cohort-based) methodology that provides a more meaningful reflection of a TEO’s educational performance. This will enable clearer identification of the better performers to enable smarter investments and help TEOs to improve their performance. 

  • Identifying ways we might invest differently in particular areas of tertiary education.

We identified three main areas of investment that respond to government priorities at sector, regional and other levels to deliver better outcomes:

    • Northland (with a focus on Māori)
    • South Auckland (with a focus on Pasifika)
    • Primary Sector Productivity Growth (expanding agribusiness provision).

We engaged differently to bring parties together, including government agencies, industry, employers and regional stakeholders to create collaborative solutions. These were reflected in relevant TEO Investment Plans.

The majority of this work programme has now been implemented as part of our ‘business as usual’ Plan process.

In the process of developing the Plans for the next investment rounds, most TEOs will have seen first-hand what many of these Quick Wins will mean for them and their organisation.

These projects have provided a strong platform to inform our longer-term work programme. 

Changes for the next Investment Plan round

For the next Plan round, and looking to the longer term, we want to introduce more significant changes to how we invest, and how we can support a more self-regulating system that delivers better outcomes for learners and New Zealand.  

The areas that we are looking at with the sector include:

  • The use of labour market data (EOTE data – Employment Outcomes of Tertiary Education data) to develop investment methodologies and measure performance.
  • Getting better value (Return on Investment - ROI) for students and taxpayers from investing for learner outcomes.  

Both these areas focus on using information about the outcomes of education to drive better investment decisions.

  • Educational efficiencies.

This work focuses on developing measures and information to identify system inefficiencies that result in avoidable costs to learners and Government, as well as using this information to drive investment decisions.

  • A capability framework.

This work focuses on developing a framework that provides a more comprehensive and robust view of a TEO’s capability to drive continuous improvement and effectively contribute to a self-regulating system.

  • Information for smarter investment.

Our understanding of how to get better value from tertiary investment will increase due to:

    • better information – as more complete and robust data becomes available through the Integrated Data Infrastructure and via our information products
    • new measures enabled by greater availability of data or from the Ministry of Education’s analysis of tertiary education risk factors
    • evaluation of the competitive funding pilots
    • additional pilots or trials to test the effectiveness of interventions or the ability to bring good practices up to scale.

Ongoing engagement

From the start of our Investment Approach programme, we have been committed to a process of co-creation and design with the sector and our stakeholders. We know from working with the sector on the Quick Wins projects, that early engagement is particularly important.

We will continue to build and develop engagement opportunities to ensure we get the best advice and input we can to deliver the system level change we strive for. We will make use of the information products recently made available to the sector to identify challenges and opportunities to improve value from the system.

We are always looking at ways we can improve and enhance our engagement with the sector all our relevant stakeholders.

Want to know more?

For more information:

• contact your Investment Manager or the Sector Helpdesk on 0800 601 301
• email the Investment Approach Project Team directly
• fill in our online feedback form
• visit the Sector Reference Group membership and activities page