Universities struggling to modernise despite heavy investment, new research reveals

Eight-in-ten university leaders remain optimistic about future growth – thanks to significant investments in digitalisation. However, according to research by Tata Consultancy Services, most institutions are lagging at the ‘evolution’ stage of transformation, with outdated technology and fragmented digital ecosystems potentially holding back the results bosses are hoping for.

Following the marketisation of the university system in the UK, institutions have increasingly leant on the higher tuition fee rates of internationals – but these have taken a dramatic downturn following the pandemic, and sustained attacks from UK immigration policy. Meanwhile, a report by the Higher Education Policy Institute (Hepi) found many English universities are taking excessive financial risks that threaten not only their own survival but that of others in the sector – with some cases seeing universities report debt at more than 130% of their annual income.

And amid this dire picture, the Office for Students (OfS) warned earlier in 2026 that around 50 providers in England are at risk of market exit within the next two to three years. Given this, it might be argued that there is a gulf between the picture university leaders purport to believe, and the reality of the situation – with research from Tata Consultancy Services finding 59% of university leaders believed they were “thriving” in enrolments, and over half saying they are “thriving” in finances, innovation, and research.

Polling 200 leaders in education across the UK, the US and Australia, TCS spoke to vice presidents, deans, chancellors, provosts, vice chancellors, and principals as well as registrars, chief information officers, chief technology officers, and chief data officers. And despite the issues facing the market, eight-in-ten said they were hopeful when considering the future of higher education.

An overwhelming 79% of university leaders said they were optimistic about future growth – and while it might be expected that this global average disguised more pessimism in the UK, TCS reports that actually, regional variations showed the opposite. Alongside the US, UK institutions were found to show slightly higher confidence than Australia; again reflecting strong momentum in enrolment, innovation, and digital transformation.

Indeed, digital transformation and emerging technology adoption were the third top driver of university growth, according to the respondents. But while digitalisation (and now also AI implementation) have been marketed as a panacea for ailing organisations for years now, the researchers suggest optimism on this front is seldom grounded in a material reality, as opposed to amorphous ‘potential’.

Only a third of leaders said their institution had achieved ‘advanced’ integrated digital ecosystems, or ‘futuristic’ maturity with a future centric vision. In contrast, 57% rated the maturity of the overall digital proficiency as "evolving“ (compared to their peers), indicating significant room for improvement – and 9% remained in ‘basic’ ad hoc territory.

While the majority of leaders at universities feel confident in the future, thanks in no small part to their faith in their own technology investments, this paints a different picture then. The researchers conclude that while some institutions with integrated digital ecosystems may be better positioned to innovate, personalise student experiences, and scale sustainably, many more risk falling behind in a rapidly changing education landscape.

Ankur Mathur, head of TCS’ education unit, remarked, “The higher education sector is built on knowledge, innovation, and the promise of transformation. Today, that foundation is being redefined by digital technologies, where AI, analytics, and cloud platforms enable institutions to deliver personalised experiences, improve operational agility, and make data-driven decisions at scale. At TCS, we see this as a defining moment to help universities become intelligent, resilient, and future-ready—empowering them to thrive in an era of experience-led learning and continuous digital evolution.”