The global financial crisis has exposed a lot of unfunded holes in different parts of the economy, and the resulting cuts and re-prioritisations are affecting the ways in which a lot of organisations operate. Universities find themselves uncharacteristically in the front line of this process.
In terms of teaching, the sudden enormous increase in fees in England is currently being resisted -- futilely, I think -- in Scotland. The shifting of burden onto students will have long-ranging impact because, as isn't often realised, the increase in fees is being coupled with a projected decrease, applied differentially across subjects, in core State funding for teaching. This means that the huge influx of money from fees will be largely offset by a decrease in other funding: the universities will be no better off.
In research, there is already a shift in the amounts of money available from funding agencies as well as in the ways that money is distributed. Crudely put, in future we'll see a smaller number of larger grants awarded to larger institutions who already have significant research funding from these same funding sources: the funding bodies will follow their own money to reduce risk.
We have no idea what impact these changes will have on the quality of education, research, innovation or scholarship, or on the rankings that (very imperfectly) track these features. What we do know is that they're all intertwined, and that major shifts in the global balance of quality in education and research are not just possible, but likely.
People looking at the university rankings tend to think that they reflect a long-standing, established assessment that changes only peripherally as "new" universities improve. This is actually very far from being the case. To see why, we need to consider the history of universities and their evolving quality relative to each other over the past six to seven hundred years. To simplify I'll focus on what we might regard as the modern, Western model of universities and ignore the university-like institutions in the Islamic caliphate, the House of Wisdom and the like -- although I really shouldn't, and it'd be good to see how they fit into the story.
The designation of "best university in the world," whatever that may mean, has shifted several times. Initially it went to the University of Bologna as the first modern, Western university. But it soon shifted in the eleventh century to be the University of Paris, largely through the controversial fame of Peter Abelard -- an uncharacteristically scandal-prone academic. Over the course of the next centuries the centre of the academic world moved again, to Oxford and Cambridge. So far so familiar -- except that the dynamism that pushed these institutions forward didn't sustain itself. By the late nineteenth century the centre of research and teaching in physics and mathematics had shifted to Germany -- to the extent that a research career almost required a stint at a German institution. Oxford and Cambridge were largely reduced to teaching the sons of rich men. That's not to say that the Cavendish Laboratory and the like weren't doing excellent work: it's simply to recognise that Germany was "where it's at" for the ambitious and talented academic.
When people think of Einstein, they mostly know that he worked for a larger part of his career in the Institute for Advanced Study at Princeton. What isn't often appreciated is that this wasn't the pinnacle of his career -- which was in fact when he was awarded a chair at the University of Berlin. In the early twentieth century the US Ivy League was doing what Oxford and Cambridge were doing fifty years earlier: acting as bastions of privilege. It took the Second World War, the Cold War and the enormous improvements in funding, governance and access to elevate the American institutions to their current levels of excellence.
All this is to simplfy enormously, of course, but the location of the pre-eminent universities has shifted enormously, far more and far faster than is generally appreciated: Italy, France, England, Germany, the US. It isn't in any sense fixed.
Many people would expect China to be next. It's not so long ago that Chinese universities were starved of investment and talent, as the best minds came to the West. This is still pretty much the case, but probably won't be for much longer. There are now some extremely impressive universities in China, both entirely indigenous and joint ventures with foreign institutions. (I'm involved in a project with Xi'an Jiaotong Liverpool University, a joint venture between China and the UK.) It's only a matter of time before some of these institutions are recognised as being world-class.
Whether these institutions become paramount or not depends on a lot of factors: funding, obviously, of which there is currently a glut, for facilities, faculty and bursaries. But there's more to it than that. They have to become places where people want to live, can feel valued, and can rise to the top on their merits. You will only attract the best people if those people know their careers are open-ended and can grow as they do.
The pitfalls include appealing solely to a small and privileged demographic, one selected by its ability to pay and to act as patrons to otherwise weak and under-funded institutions, and of focusing on pre-selected areas to the exclusion of others. Both these are actually symptoms of the same problem: a desire to "pick winners," avoid risk, and score well against metrics that can never capture the subtleties involved in building world-class institutions of learning.