For British higher education, 2014 will be a period of consolidation. Specifically, I think we will see four trends grow as budgets tighten, as the system becomes more market oriented, and as universities face more pressure to produce better education and research with less resources. These developments mean more universities will be forced to ask themselves whether they have the right scale of operations to succeed.

First, there will be much more competition around the student experience. As more and more students find themselves shopping around for the universities that offer the best value for the cost, not surprisingly they will demand more of institutions. That demand will particularly affect universities with large undergraduate populations (say, more than 20,000), which will find it difficult to produce a quality experience across all of their programs and activities.

Second, to make the inevitable Gradgrind point, finance will be king. Universities will need to look at income, not just revenue. However, most British higher-education institutions, outside those like Oxford or Cambridge that are bolstered by large endowments, find themselves with nowhere near enough money being generated from endowments or surpluses to do the stuff that students and staff members want, adding value to both teaching and research while building new facilities, and the like.

Similarly, universities that continue with the practice of so-called bottom-up budgeting are likely to struggle. It is amazing how many universities persist with allocating the bulk of their budgets to faculties or departments with the result that there is very little money in the center at the time when such money is a necessity—for new interdisciplinary initiatives, for new student facilities, for new means of outreach.

Third, all that said, so far as research-intensive universities are concerned, size will become even more important. Research universities that fall below a particular size (in Britain, probably those with budgets of about £300-million to £500-million, or roughly $494-million to $823-million) and that don’t focus on specialized academic fields will face challenges. They may need to think about merging with other institutions or taking over others as a way to grow. Size is, of course, no guarantee of success, but it seems likely that in the future size will become a necessary, if not a sufficient condition, for major research programs.

Finally, the university sector will continue to fragment. In Britain, the 24 members of the Russell Group of universities largely lead in research. Then there are midrange universities that are in the process of deciding on their direction: Some will be able to continue as they are, but some will be the subject of merger or takeover. Then there are a host of smaller universities and further-education colleges that focus more and more on vocational education, increasingly in competition with for-profits. These different parts of the university sector are drifting apart. They have different goals and, increasingly, different means to achieve them. The result of this Balkanization is challenging for students (who don’t fully see the differences in the system), for faculty members (who will increasingly find it difficult to make move between the different segments), and for politicians (who have to deal with constituencies that vary more and more).

Notice that I have not mentioned new technology, not once. No doubt, new technology will continue to have effects—and important effects, too. But the end of 2013 saw the MOOC bubble deflating, at least in part: MOOC hype is now being replaced by a more measured and a more careful response which is injecting the pedagogic expertise that has been lacking.