The changing perspectives of higher educational administration in Australia are traced from the growth of the 1960s and early 1970s to the period of contraction, since 1975. Three major challenges facing administrators in the period ahead are identified: problems of continuing institutional viability with the threat of government intervention; coping with increasing costs in the face of declining financial support; and demonstrating a capacity to innovate in order to respond to the changing needs of the environment and to make more effective use of available resources. The scope for innovation by higher educational administrators in Australia to increase institutional effectiveness, and to resume a dynamic state of growth, is discussed in terms of a framework developed by the economist Joseph Schumpeter and extrapolated to higher education in a period of no-growth by Leslie and Miller. In terms of the framework presented by Leslie and Miller, it is argued that under the increasingly centralized control of higher education in Australia, there is limited scope for the development of new accredited academic programs, or for improving instructional flexibility; but institutions are taking initiatives to obtain new sources of students and new sources of income. Major incentives are being taken by state and federal coordinating authorities to effect reorganization between and among institutions and some organizational initiatives are being taken by administrators within institutions. (Author/PHR)