Universities ¨C the good ones at least ¨C are long-term thinkers. Scholarship is a slow process.

Market forces demand a different dynamic: something changes, and the implications are immediate.

These are now competing imperatives for many universities, which must operate like businesses in the day to day, and as servants of the public good for posterity.

This is a challenge. As Glyn Davis, vice-chancellor of the University of Melbourne, told Times ºÚÁϳԹÏÍø last week, running a university is not like managing a?corporation because ¡°the current CEO is a small player in a very long chain. The institution will go on reinventing itself over and over; you don¡¯t want a CEO who¡¯ll close your options by making irrevocable choices.¡±

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If prudence is essential, then it is also the case that universities are not well served by leadership that is too timid to make changes at the right moment.

But one person¡¯s bold strategic vision is another¡¯s disaster ¨C a point of frequent dispute between academic staff and their university¡¯s executive and governing board.

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To look at it from a management perspective, institutions that can be hard to distinguish from one another are all seeking to build or amplify their distinctive strengths, and increasing numbers are turning to the capital markets to make it happen.

In our cover story, we ask how and why this is happening and examine the different models for financing major investments and the risks they involve.

Despite the popular idea that universities in the UK are pursuing a US-style facilities arms race, spending silly money on lazy river extensions for campus swimming pools, the reality is usually more prosaic.

Many are spending to expand. UCL is a good example, with its huge ¨C and hugely controversial ¨C investment in a new campus in East London.

Others tell us they are pumping borrowed money into teaching and research, with the University of Oxford, for example, taking advantage of historically low interest rates and its gold-plated credit rating to issue a 100-year bond.

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The time frames involved in such financial commitments, coupled with the immediate operating environment in which decisions are being made, reflect both the long- and the short-term nature of university activities. They also require some hefty assumptions about what universities will and will not be doing decades from now.

A UK university that is expanding, for example, is gambling that predictions about continued growth in student demand will pay out; that a funding system that funnels revenues through student fees will not be turned off; that the ebb and flow of global power in higher education will not swing dramatically to Asia; and that technology will not throw into the mix some curveball that renders all assumptions obsolete.

To play devil¡¯s advocate, though, in the short to medium term, the incentives to grow are clear enough: tuition fee income is the one funding tap that can be turned up or down by universities that have the reputation and the capacity to expand. And in a competitive world, there¡¯s a case for eating your rival¡¯s lunch before they eat yours. Look into your crystal ball, and a future era dominated by fewer, larger institutions protected by global reputations is not so hard to imagine.

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Our feature explores attitudes to debt in a range of countries, and there are significant differences ¨C not least in the US, where the elite private institutions have huge resources (although this does not stop them exploiting the capital markets).

From a UK perspective, it¡¯s worth reflecting that for all the talk of universities being well funded relative to public services during a decade of austerity, they have been starved of capital funding for years. The state investment going into the leading institutions in Asia is just as unimaginable for their British rivals as the endowment income enjoyed by the big beasts of America¡¯s Ivy League.

This was the point made by Louise Richardson, vice-chancellor of Oxford, when the institution took top spot in the THE World University Rankings in 2016. ¡°Frankly,¡± she said, ¡°we do not have the resources commensurate with our global position.¡±

Equally frankly, there are not many places for a UK university to turn, other than banks or bond markets, to remedy such a situation. The danger to be guarded against is that servicing the debt results in a dilution of the very quality and standards that big-spending universities are seeking to protect.

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john.gill@timeshighereducation.com