MARKETIZATION AND MANAGEMENT IN HIGHER EDUCATION
A Dynamic Reader for further discussion*
What is happening in higher education? Why is the market growing stronger? Is this good or bad? Is higher education being devalued or enhanced by commercial interest and success? What do others think and do?
The following documents attempt to represent, at the time of compiling, the contemporary debate about the marketing and commercialization of higher education (HE). They are intended to be a quick and convenient guide about these issues, to facilitate discussion and help readers to get to grips with the future of higher education in a market environment, and in particular, its impact of university management.
The text is a cross between a reader and a hypertext, that is a network of interconnected texts, deliberately filtered and selected; originating with multiple authors[i]; associated and presented in one place with a set of results on three broad issues. It relies on the internet to become a kind of dynamic reader around a certain theme. There is neither a final text nor authorship apart from citations and these have grown since the download period. So it is both current and out of date at the same time but with the purpose of putting a toe in a flowing river of information and hoping not to drown.
In this period of the internet, the phenomena of “intertexuality”, that is, the explicit or implicit echo of one text to another text, is acquiring renewed importance for academic analysis and the design of public policies. If the word “marketization” is keyed in, then Google produces approximately 139 thousand citations and for “Higher Education marketization” around 52 thousand. “Management” gives 1.950 million citations and “university management” 494 million. In other words, through the WEB issues speak for themselves, acquire a life of their own by intertexuality and this in turn becomes a real challenge for
knowledge-information management.
Take chemistry as an example. According to one expert ,
“To be up-to-date in all areas of chemistry you would currently have to read about 2,000 new publications every day. If you prefer to screen only the short abstracts, you must read 200 pages per day or about 70,000 pages per year. Furthermore, since the number of chemistry publications increases also exponentially, you need to double your reading capacity within the next 15 years” (Joachim Schummer, Coping with the Growth of Chemical Knowledge, 1999. http://www.joachimschummer.net/jslit/eduquim.htm).
This illustrates a generic problem, representative of almost all disciplines - how to be up to date with increasing knowledge and information flows. With the internet in mind, a distinction can be drawn between what might be called pure or primary knowledge and then available public knowledge, found in the WEB. The key categories used for primary knowledge are equally valuable for secondary knowledge. That is,
· know what (that is available information with respect to the issue - it can be broken down into bits and put into databases);
· know why (which refers to explicit or codified knowledge about knowledge-information but also to implicit interpretative frameworks based on experience and intuition);
· know how (expressed as a group of necessary skills in order to search, filter, select, combine and present information, that is the skills necessary for assembling and producing intertexuality) and
· know who (essential in this context as it involves information about who knows what and who knows to do what).
And to these four knowledge categories should be added the key internet skill,
· know where (the relevant information is).
The selection of material is conceived as a kind of tool box about higher education and the market. Their order is as follows;
I. Higher Education Marketization – how the combination of resource competition and privatization is changing higher education systems across the globe;
II. Market Challenges to Higher Education – how different higher education systems and institutions are responding and using the market
III. Web resources on Higher Education Policy and Management
Section |
I. Higher Education Marketization |
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International Trends in HE |
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Marketization: origin & effects |
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Marketization: a world wide trend |
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Privatization in HE: international perspective |
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Locus Classicus: US Higher Education |
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Latin America: private public complementarity |
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Continental Europe; markets as new players |
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Transition Economies: market driven reforms |
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Asia: Higher Education Markets |
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Africa: privatization with expectations |
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Developing Countries: Market gain and market failure |
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Critical voices |
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(i) World Bank policies and Marketization of HE |
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(ii) Higher education as a commodity |
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(iii) Universities assuming corporate business models |
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(iv) Erosion of HE’s commitment to the public good |
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II. Market Challenges to Higher Education |
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Managerialism |
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Institutional Response to HE Systems |
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Australian Universities: changes in governance in the 1990s |
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Trends in State Funding and Mechanism |
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Conditions of Financial Sustainability |
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Leadership and Management |
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Finland’s performance management universities |
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(i) Steering system in universities |
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(ii) Operational expenditures in the agreement period |
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(iii) Core Funding |
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Entrepreneurial Universities; theory and practice |
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(i) Theory – Clark’s Transformational Pathways |
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(ii) Practice: U. of Warwick entrepreneurial transformation |
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(iii) Managing diversified financial strategies |
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(iv) Strathclyde: quality assurance management |
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(iv) University of Twente; technology transfer |
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III. Higher Education Policy and Management Websites |
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Comparative analysts have identified different groups of factors which are changing higher education systems. One of the most complete reviews of the relevant literature [ii] (Harry de Boer et al, 2002) notes the following change agents,
Vincent-Lancrin, of the OECD’s Centre for Educational Research and Innovation de la OECD develops a similar list [iii] and according to this study, the driving forces that will affect higher education in the future are:
Among these trends, it is useful to begin with marketization. This is a term which is part of the vocabulary of New Public Management (NPM) (see Box 1 ) and can be understood as the use of markets, or market type mechanisms (MTM), with the (explicit or implicit) aim of improving public sector activities, including the production of public goods. “New public management is conventionally understood as a recipe for correcting the perceived failings of traditional public bureaucracies over efficiency, quality, customer-responsiveness and effective leadership. Public-management reform is often presented as a functional response to such shortcomings”[iv]. When considering the implementation of these reforms, the term “managerialism” is frequently used.
Box 1 - NPM
Much has been written about NPM, both about its prescriptive recipes (see, e.g., Hughes 2003) and about their actual manifestation in administrative policy reforms throughout the world (see, e.g., Gray & Jenkins 1995). Although NPM practices differ strongly from country to country (Araújo 2001), the smallest common nominator seems to be the “focus on management, not policy, and on performance appraisal and efficiency” (Bevir et al., 2003b, 1). For Lane (2001, 14), “NPM is basically about focusing upon efficiency”. Since NPM assumes that “Competition squeezes slack out of slacky organizations” (Christiansen 1998, 283), it favors the governance mode of markets to the one of hierarchies (Jackson 2001). In other words, the guiding principle of NPM is efficiency, best served by competition (Hood 1991) as guiding governance mechanism and effectively supported by the leitmotiv of “getting prices right” (Jann 2002, 296). Typical policy instruments of NPM are the “marketization” or outsourcing of particular services, the market-testing of public agencies (i.e. public agencies compete with private enterprises), the privatization of state-owned firms (a rather recent phenomenon), and the further disaggregation of departmental structures into service agencies, each responsible for a specific product (Bevir et al 2003b, 13; Hood 1995, 95, 97)”. Reinhard Steurer, “Strategic Public Management as Holistic Approach to Policy Integration. http://www.fu-berlin.de/ffu/akumwelt/bc2004/download/steurer_f.pdf |
The NPM framework together with the policies and measures which are conducive to marketization depend on technical and ideological suppositions [v], which can be summarized in three phrases (i) markets are more efficient ;
(ii) markets are more responsive to consumer demands and thus, (iii) markets (or the use of MTMs) allow institutions and public activities to better adapt to changing environments.
The preferred ways of promoting marketization are by the privatization of firms and public enterprises or their deregulation and liberalization, coupled with techniques for their modernization and the use of MTMs in the public sector, such as : “professional management in the public sector; standards and measures of performance; output controls; emphasis on the shift to desegregation of units in the public sector; competition; private sector management practice; and stress on discipline and parsimony in resource use”[vi].
The terms marketization and managerialism have been adopted by higher education researchers and analysts with reference to both their results and the use of these instruments. A typical example follows:
“In response to calls for “cost-effectiveness” and “value for money”, new managerial doctrines have been adopted and management-dominated type of decision making has become common practice in the university sector. An entrepreneurial competitive culture has emerged and become the new ethos in the university sector. In order to become more competitive, universities have changed the ways they manage themselves. “Terms of new discourse” have emerged such as mission statements, system outputs, appraisal, audit, strategic plans, cost centers, and public relations (Duke, 1992). In addition, the success of higher education reforms is merely measured by the lesser degree of state intervention, while increased management autonomy and market-oriented instruments are playing a far more significant role in such review exercises (World Bank, 1994). Under the strong tide of managerialism, universities have become more managerialist and bureaucratic in nature (Currie, 1998). The global tide of managerialism has accelerated the movement of faculty and universities toward the market, which can clearly be reflected by the ideology of “the market knows best”, business practices, performance indicators, corporate managerialism and line management, commercialization of research as well as commoditization of knowledge (Currie, 1997, pp. 4-5)”[vii].
The most common factors cited in the literature as pushing Higher Education towards marketization are:
Although this discussion is limited to the examination of about their adoption by universities, the effects of marketization management are both broader and more varied, [Box 2]; e.g., the long term effects on research, the direction and management within universities; the public/private balance for higher education; the role of competition on universities development dynamics; private university supervision and quality control; the program accreditation of internet based distance education etc.
Box 2
Unsurprisingly, with the number of developments included, the introduction of markets in HE has a variety of consequences for universities. In terms of relations with governments, universities are now confronted with increased output steering, lump-sum funding and attempts to strengthen the relation between HE institutions and their environment, i.e. students, industry, etc. (Richardson et al. 1998). This development has longer-term implications for research. For one thing, institutions need to be able to satisfy multiple stakeholders, not just the state but also research councils and a host of different private parties (a diversified funding base; Clark 1998). This means that the management of research institution becomes more complicated. Moreover, if universities increasingly need to earn their money on markets, the content of research may be increasingly applied at the cost of more theoretical work. The latter is frequently mentioned as a major threat, in particular by academics, though other stakeholders such as industry and national governments appear to realize the importance of basic research, too (for innovative purposes). The increasing number of private (research) institutions in combination with the fact that universities are earning a larger share of their money from contract research for third parties means an increased competition. This has consequences for the way in which research institutes must operate, which may be increasingly business-like. This may conflict with the public interest that universities are serving. How should private and public interests be balanced in a partly privatized university system? (Newman/ Couturier 2001). From a business-like perspective, for example, universities or their contractors may want to patent (or at least not freely distribute) the results of research, in which case these results are not benefiting the public interest. This development creates problems in the field of quality control as well. Private (for profit) HE institutions operate with considerable autonomy in most countries, simply because they receive little public funding and the government lacks steering mechanisms. But since knowledge important benefits, there is a definite public interest in overseeing these institutions. How much autonomy should private higher education have? Should quality be controlled? Should quality be measured as relevance or academic standards? Can quality control be left to the regulating forces of the market? (Altbach 2000). International markets for HE have become important, and are likely to further grow in importance. In teaching international student mobility has increased and there is growing competition for top-level universities. Since top-level students are of essential importance for the future of research in a country this development has long-term consequences for research as well. In the second place, increasingly as a consequence of globalization, HE institutions are moving to foreign-markets, either through building local campuses, through distance education or through research contracts with third parties. This might create a situation in which HE institutions must compete for market shares on this international market or restrict themselves to being local or regional providers of HE and of research (Goedegebuure & van Vught 2000). Globalization is also a driver for international co-operation, as universities create large consortia that provide education and research on a global scale (Middlehurst 2000). Source: Harry de Boer et al., “An analysis of trends and perspectives in higher education and research”, 2002. |
Higher education marketization, while differing in intensity and achievements, and is, according to Bruce Johnstone [Box 3.] in a paper prepared for the World Bank on the occasion of the UNESCO World Conference on Higher Education, (1998), an international phenomena consistent with “the ascendance, almost worldwide, of market capitalism and the principles of neo-liberal economics”.
Box 3
The reform agenda of the ‘90s, and almost certainly extending well into the next century, is oriented to the market rather than to public ownership or to governmental planning and regulation. A market orientation implies:
Underlying these orientations is the ascendance, almost worldwide, of market capitalism and the principles of neo-liberal economics. Elements of the reform agenda such as tuition, which shifts some of the higher education cost burden from taxpayers to students and parents, or more nearly full cost fees for institutionally-provided room and board, or more nearly market rates of interest on student loans all rely upon market choices to signal worth and true trade-offs. A greater reliance on market signals brings a shift in decision making power not just from government, but also from higher educational institutions—and especially from the faculty—to the consumer or client, whether student, business, or the general public. This shift may appear “conservative” in the conventional modern political terminology. But it is also “liberal” and even “populist” in an older lexicon. The system of university financial dependence solely on government, coupled with substantial university (meaning especially “professorial”) autonomy enshrined a system that was, by some accounts, elitist, self-serving, and insufficiently responsive either to the students it served or to the taxpayers who paid. The shift to reliance, even only in part, on tuition—and assuming financial assistance to maintain accessibility—shifts substantial influence from the faculty and the ministry to the student and family. And to many economists, shifting some of the cost burden from taxpayers to students and parents also reflects a reform in the direction of greater equity and a more reasonable alignment of those who pay with those who benefit. Part of what may pass for “privatization” may also be little more than the good management practices that have always been more associated with private enterprise, with profit as the driver, more so than with the public sector, which has traditionally lacked rewards for difficult or risky or highly disruptive decisions. As universities and higher education systems pay more attention to e.g., good personnel practices, cash flow, market position, product diversification, and accountability, they will look more “private” than the stereotype of “public,” even if they remain state owned, substantially state supported, and avowedly “public” in their mission. Much of what may look like the agenda of the neo-liberal economist may also be more opportunistic than ideological. With taxes increasingly avoidable and otherwise difficult to collect, and with competing public needs—e.g. basic education, public health, public safety, transfer payments, and public infrastructure—so compelling in all countries, an increasing reliance on tuition, fees, and the unleashed entrepreneurship of the faculty may be mainly the only alternatives to a totally debilitating austerity. Source: D. Bruce Johnstone, “Worldwide Reforms in the Financing and Management of Higher Education” http://www.gse.buffalo.edu/org/inthigheredfinance/textForSite/ReformsFinManHEdWor.pdf |
Marketization can be understood as a form of higher education privatization [viii], a perspective adopted by, example, Johnstone, see [Box 4].
In effect, when Higher Education operates within a market context it involves the development of private sector institutions, forcing public universities to compete and adopt standards and practices which are consistent with private business practice. Further, it is common that government policy makes greater use of market type mechanisms as a way of encouraging public institutions to compete and act as private entities. So HE privatization is both cause and consequence of the marketization process which is resulting in the blurring of the line between the public and the private.
Box 4
Privatization in reference to higher education refers to a process or tendency of colleges and universities (both public and private) taking on characteristics of, or operational norms associated with, private enterprises. Although the term is not a precise one (any more than the distinction between a "public" and a "private" college or university), privatization connotes a greater orientation to the student as a consumer, including the concept of the college education as a "product"; attention to image, competitor institutions and "market niches"; pricing and the enhancement of net earned revenue; and aggressive marketing. Privatization also suggests the adoption of management practices associated with private business, such as contracting out, or "outsourcing" (i.e. turning to private firms to perform non-academic services such as printing, food services, bookstore operations, or general building maintenance), aggressive labor relations and minimization of payroll expenditures, decisive decision-making and "top down" management, widespread use of audits and accountability measures, and an insistence that each unit (department or academic program) contribute to profitability, or at least to the organization’s particular metric of "success." Proponents of more privatized higher education claim that it makes colleges and universities more responsive to the needs of students and employers alike, in addition to generating efficiencies that can enhance the institution’s goals, whatever they may be. Source: Bruce Johnston |
Dimensions |
High "Publicness" |
High "Privateness" |
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Continua of Privatization [Greater Privatization -->] |
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1. Mission or Purpose |
Serves a clear "public" mission as determined by the faculty or the state. |
Mission is avowedly both pubic and private, but as defined by faculty. |
Mission is mainly to respond to student’s private interests, mainly vocational. |
Mission serves private interests of students, clients, and owners. |
2. Ownership |
Publicly owned: can be altered or even closed by state. |
Public corporation or constitutional entity. |
Private non-profit: clear public accountability |
Private for-profit |
3. Source of Revenue |
All taxpayer, or public, revenue. |
Mainly public, but some tuition, or "cost sharing." |
Mainly private, but public assistance to needy students. |
All private revenue: mainly tuition-dependent. |
4. Control by Government |
High state control, as in agency or ministry. |
Subject to controls, but less than other state agencies. |
High degree of autonomy; control limited to oversight. |
Controls limited to those over any other businesses. |
5. Norms of Management |
Academic norms; shared governance, antiauthoritarianism. |
Academic norms, but acceptance of need for effective management. |
Limited homage to academic norms; high management control. |
Operated like a business; norms from management. |
Source: Bruce Johnston http://www.gse.buffalo.edu/FAS/Johnston/privatization.html
Historically, the United States was the first society to organize its higher education by markets, supply differentiation, competition for students, resources and prestige. In fact, comparative higher education analysis regards the United States as a case apart and which is to be found today in the forefront of marketization. [Box 5],
Box 5
The perception of higher education as an industry primarily views public colleges and universities as quasi-corporate entities producing a wide range of goods and services in a competitive marketplace. A research university may be thought of as offering a very diverse product line, especially in the post-World War II era of Kerr’s (1995, orig. 1963) “multiversity”. Alternatively, an entire state’s public system of higher education may be seen as offering an even more diverse range of goods and services: community colleges offer degrees or one course at a time, in many fields, to people of all ages, while the flagship university offers many courses and levels of degrees across hundreds of fields of study, professes to serve national, state, local economic needs, and sells entertainment in sporting and cultural events to the local community. Ideally, according to microeconomic theory, organizations are managed based upon values of economic rationality. The main services of teaching and research are variously supplied and priced to correspond to laws of supply and demand. Students, parents, state legislatures, employers, and research funders are seen as customers. Particular customers have different tastes and preferences. Other people, such as faculty employed by the organization, are presumed to participate out of calculative involvement. As such, they can be motivated to be more productive through the use of incentives and sanctions. Major obstacles to maintaining the organization’s viability include: fixed costs and inefficiencies; competition and oversupply; uncertainty and imperfect information. Guiding principles for the organization’s managers are to know its liabilities and assets, to anticipate costs and benefits, to enhance efficiency and flexibility, and – as realized in the contemporary quality movement – to increase customer satisfaction (e.g., Seymour 1992). The insights of this perspective focus on the harsh realities of market forces and the urgency of doing something to stay competitive, be it planning strategically, scanning environments, attempting to contain or cut costs, correct inefficiencies, or doing whatever it takes to maximize flexibility. Adjustments include changing product lines, substituting technology for labor, and reducing fixed costs through such means as outsourcing and privatizing as well as increasing the proportion of part-time and temporary personnel. Doing nothing is not an option. Such imperatives have been popularized in the reengineering movement in the 1990s, catapulted by variations on Hammer and Champy (1993). Within this conceptualization, it is valuable to view higher education as having not just one major marketplace, as determined by type of student served, or geographic location, or degrees granted. Instead, we can see several types of markets at work simultaneously – not only for obtaining students, but for placing graduates, hiring and retaining faculty, obtaining research funding, establishing collaboration with industry, maintaining endowments, sustaining and extending alumni giving and other fundraising sources, and so on. A contemporary feature of higher education markets is the increased presence of non-traditional providers in several markets, the most prominent being the emergence of virtual higher education aided by new telecommunications technologies and altering the competitive playing field by attracting students (Marchese 1998). The major barometer for managers is to read the market for constraints and opportunities relevant to the viability of their niche; if done well, a higher education organization can capitalize on untapped demand, allowing it to supply the educational product at a higher price. The decision to add an academic program could be seen as a strategy to position the college or university to attract new customers and thereby increase revenue. Similarly, an increase in tuition can be explained as appropriate due to increased demand or decreased supply of a particular educational product (for example, a professional degree in engineering, business, or law). Hence, programmatic changes can be seen as prudent market corrections. All of this should sound quite familiar to observers of contemporary higher education management. The corporate metaphors of production in a competitive marketplace are omnipresent. Knowing one’s resources, comparative advantage, and strategy has become standard in the U.S. and increasingly in Europe (Keller 1983; Chaffee 1985; Hearn 1988; Hardy 1990; Cameron and Tschirhart 1992; Massy 1996; Peterson et al. 1997; Clark 1998). Of course, one might argue that these principles are rendered irrelevant for public higher education, given that the market is heavily regulated by state and federal government through several types of public subsidies, restrictions in pricing, regulated degree offerings and admissions standards. Yet the industry perspective and its dominant corporate metaphor have nonetheless acquired a certain resilience, due in part to their parsimony, to today’s uncritical acceptance of business and economic rhetoric, and to the very real complexity of today’s campus operations. (For example, see Duderstadt’s (1995) characterization of “the University of Michigan, Inc.,” which with an annual budget of over $2.5 billion would rank roughly 200th on the list of Fortune 500 companies.) In many ways, adopting business rationales with strategic management principles has become de rigueur for repositioning higher education organizations to compete within new economic realities. Source: Patricia J. Gumport, “Academic restructuring: Organizational change and institutional Imperatives”. Higher Education 39, 2000. http://www.stanford.edu/~gumport/publications/Gumport2000ARHigherEdRestructuring.pdf |
Latin America is one the regions where higher education is being transformed by the presence of a growing number of private institutions and where discussion is centered on privatization or privatizing rather than marketization. As a result of these changes there is a lively debate [Box 6] about the quality of educational services provided by distinct types of institutions and about the government’s role in assuring higher educational quality, finance, private market regulation, and the promotion and protection of equity and equal opportunities.
Box 6
As public and private institutions expand by providing education for students with limited educational backgrounds, without significant increases in human resources and equipment, they cannot maintain the high standards that are typical of well-endowed, elite institutions. Most private higher education in Latin America is like this, and there are reasons to question whether this kind of “low quality education” has any redeeming value. A recent paper from the Inter American Development Bank argues that it does (Castro and Navarro 1999, p. 57). For the authors, these courses perform important functions, since they add knowledge and information to students coming from very limited backgrounds, providing them with credentials that may open new opportunities or improve their standing in their jobs. They recognize that these course programs are often badly taught, and many students feel frustrated because they cannot get to the professions they where hopping to enter. However, they argue that the lack of correspondence between degrees and jobs is to be expected, since these courses work mostly as providers of general education, rather than of specialized competencies. Their arguments are important to dispel the notion that there is only one type of higher education, and to call attention to the need for policy makers to pay more attention to the positive role private and public providers are playing in opening education opportunities for persons without conditions or access to enter more prestigious careers and institutions. This should not be taken, however, as an argument in favor of any kind of education, but as a plea to take more seriously the effort to learn more about what general and vocational education can actually be. The Latin American experience suggests that we should not look at public and private education in polarized terms. They both perform useful and often complementary functions and both have problems and drawbacks. Governments have the responsibility to regulate and look for quality and relevance in both, but their ability to do so is more limited than it is commonly thought. […] It is common to think on the private world as governed by market competition and the public as governed by normative principles and mandates. However, markets depend also on common values and institutions, which define the “rules of the game”, and assure the good faith of the players; while, in recent years, there has been a tendency for governments to create “quasi markets” for the distribution of public resources. Thus, science councils routinely establish competition among researchers for their grants; students compete for places in universities, and, later, for jobs in public institutions; and private companies dispute bids in procurement markets established by the public sector. It is not true, therefore, that competition is inimical to the world of science, culture, academic and public life; on the contrary, it is a very important part of it; and it is not true that markets are inimical to values and institutions. It is also not true that education and profit are always geared by opposite goals and motivations. The current legislation in Brazil admits that private institutions can be for profit or not, depending on whether they are truly philanthropic, like some religious and community-based institutions. For-profit institutions have to pay taxes like any other private concern, the assumption being that they should behave as any honest business company, selling good, value-for-money education. In the public sector, an outdated legislation still requires that all academics should earn the same salaries, according to rules applied uniformly to all national institutions. This situation makes the universities unable to compete for talent, and to lose their best people to the private sector or institutions abroad. This extreme symmetry is compensated, in practice, by the ability of academics to increase their income through participation in research projects. More recently, in Brazil as well as in Mexico, the government created salary incentives to stimulate dedication to teaching and research in public institutions. Thus, the notion that people and institutions in public education and research should be financially rewarded according to their work, dedication and entrepreneurship, is also gaining ground. My main proposition is that public and private higher education institutions are converging in many ways, and this is a positive trend. As higher education becomes more expensive, and as the private sector becomes the provider of higher education for large segments of the student population, the need to treat public education also as a private good (and therefore subject to tuition), and private education as also a social good (and therefore eligible for support), become stronger. Public institutions are changing the ways they function, and becoming more entrepreneurial in their daily activities. Universities have to dispute resources with each other and with other social programs in the public sector. Besides, they have to look for other sources of resources and support, in the private sector, from other government agencies, from international donors. For this, they need to change the way they are organized, with more power going to management positions, or through decentralization into semi-independent business units, associated with academic departments and institutes. Private institutions, on the other hand, have to respond to public regulations and incentives, and, as they become more complex and bring in large staffs, they have to become more institutionalized, and cannot be ruled any longer as pure business concerns. This convergence is far from being complete, and it is not likely that the differences between public and private institutions will disappear. On the contrary, we can expect that the range of institutional formats and motivations will continue to increase, together with the development of better policy instruments to make sure that they all work to the best interests of society. Source: Simon Schwartzman, “Public and private higher education in comparative perspective” |
The reaction in Europe, the region which has succeeded best in protecting higher education from market forces, is one of cautious interest as the analysis of Hans Weiler [Box 7], to marketization shows. At the same time some countries – the United Kingdom, Holland, Finland and others – have begun to use quasi-market instruments as components of their higher education policies.
Box 7
Now there is a third player in the game, something called "the market". Nobody quite knows what a market is in higher education, but that doesn't keep anybody from talking about it. This construct of the market is an interesting new element in the discourse on higher education in Western Europe, and it is rapidly spreading, with the tender care of the World Bank and the Soros Foundation, to Central and Eastern Europe. It is pretty clear that it won't spread into the United States, because there it has been around already for some time. For Europe, the interesting question may not be so much why the market has recently moved into such a prominent position in the debate about higher education, but why it took so long. After all, we have known about markets at least since Adam Smith wrote "The Wealth of Nations" over 200 years ago (1776). And we know how exasperated Adam Smith was when he incredulously took Colbert, the minister of Louis XIV, to task for daring "to regulate (industry and commerce of a great country) upon the same model as the departments of a public office" (quoted in Lindblom 1977, 33). Somewhere along those 200 years, someone might have had the idea that there may be better ways to regulate higher education than "upon the same model as the departments of a public office". But apparently, until very recently, and with the exception of the U.S. and a few of its imitators, nobody did. But now it seems to have happened. There is not only serious talk, but even some action in the direction of deregulating higher education, of performance-based models of resource allocation, of inter-institutional competition, of efficient management structures, of the development of specialized "products" of higher education, even of "privatization". And the arena of European, and even German, higher education, long a rather sleepy habitat, has all of a sudden become exciting, controversial, and lively. Source: Hans N. Weiler, “States and Markets: Competing Paradigms for the Reform of Higher Education in Europe”. National Center for the Study of Privatization in Education Teachers College, Columbia University, Occasional Paper No. 16, 2001 http://www.ncspe.org/publications_files/850_OP16.pdf |
The countries which made up the former Soviet Union (FSU) have, as part of their transition to market economies and electoral democracies, engaged in a broad debate about the marketization of their higher educational systems.[ix]
Europe |
|
CEE |
Albania, Bulgaria, Croatia, Czech Republic, FYR Macedonia, Hungary, Poland, Romania, Slovak Republic, Slovenia |
Baltics |
Estonia, Latvia, Lithuania |
Central Asia |
|
CIS |
Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan |
Asia |
|
Cambodia, China, Laos, Vietnam |
IMF, http://www.imf.org/external/np/exr/ib/2000/110300.htm#I
In the case of Russia for example, [Box 8], the higher educational reform program has involved various liberalization, deregulation and commercial policies, while the government has encouraged privatization and other market type measures for state universities.
Box 8
The aim of this process is twofold. First, it is the adaptation of higher education to the new market driven socio-economic environment and second, it is the rationalization of the higher education system in the market sense. The main direction of the commercialization of higher education is the creation of the multi-level markets of educational and research services. Ministry experts prepared two concepts of structural/economic reform of the system of education. The first concept, which stipulated a gradual approach to the reform and for an increase in the state, rather than market, influence on higher education, was rejected by the liberal Vice Prime-Minister Sysuev, who oversaw the preparation of the anti-crisis program for education (Startsev, 1998.) The second concept, which was more radical and market-oriented, was adopted as the guidelines for the third stage of the reform of the system of higher education. This radical stage of the reform began with the appointment of Alexander Tikhonov, one of the authors of the second concept of the reform and Minister of General and Professional Education of the Russian Federation in the neo-liberal government of Sergei Kirienko. Tikhonov asserted that higher education would be able to survive and develop if, and only if, it were able to adopt market mechanisms of operation. In general, marketization in Russian higher education means:
Source: Alexei Matveev, “Political Economy of Public Higher Education Policy Reform: The Case if Russia” http://unpan1.un.org/intradoc/groups/public/documents/nispacee/unpan005565.pdf |
On the other hand, the Central European and Eastern countries have identified the marketization process with the appearance of new private actors, and discussion has concentrated on the long term consequences that these changes will produce for higher education. [Box 9].
Box 9
Following the idea that higher education is no longer a unique part of the public sector in Central and Eastern Europe, it is interesting to ask who the competitors of public higher education institutions are. The competitors are of a twofold nature: they are, first, the newcomers in the field of higher education and, second, other public institutions and public services provided by the state today. Other educational providers are, for instance, private national institutions, private foreign institutions, national and foreign corporate certification centers, national and foreign virtual education providers and mixed education providers. They are increasingly for-profit. Most probably, in an increasingly market-oriented social environment of CEE countries, prospective students will be increasingly market-oriented as well. The unreformed institutions will not be able to face the pressure, and either will be reformed on a day-to-day basis suggested by economic rationality, or will lose its student body to other market-oriented higher education providers. The second group of competitors are other public institutions and public services such as, for instance, primary and secondary education, pensions and care for the aged, basic healthcare, social insurance, law and order institutions, prison systems, public administration etc. The competition with other sectors of the public sector is a zero-sum game, though: some sectors win, others lose. At the same time the general amount of the public money received in taxes is likely to be smaller rather than bigger, following the trend in many OECD countries. […] The question is whether the corporate culture, economic rationality and business practices will take over the major part of the academic world in the Region. The provisional answer to the above question would be – most probably yes, gradually, with the passage of time, they will. There is no reason to believe in the uniqueness of Central European higher education. It is following all global trends in terms of falling public trust, weakening public financial support, rapid universalization and new expectations of its main stakeholders. Here are three reasons to support a positive answer to the above question. Firstly, worldwide trends meet right here (also owing to the intellectual and financial backup of supranational organizations) and the gradual “marketization” of higher education is already seen as a perfect response to its critical budgetary situation after 10 years of abandoned systemic reforms. The problems faced by CEE higher education are similar in nature, although different in degree, to problems faced in the Western world. Secondly, to let (the major part of) higher education go “to the market” is for the state in the Region a relatively easy solution of the problem: as every deregulation, it requires tremendous institutional and systemic efforts at the beginning, and then the laws of the market/economic pressures begin to work. Polish lessons show that the state is very consistent in introducing strong market mechanisms in many domains of the public sector. And the dominating attitude in sectors already privatized is that of economic rationality. The unique character of higher education in general and of the university in particular in a set of traditionally public sector services is already lost, especially considering the rapid development of the private, for-profit and non-research institutions of higher education which changes radically the intellectual landscape in which public higher education is supposed to operate. Thirdly, the times have changed: the abandonment of higher education public policy and leaving it merely at the mercy of market/economic forces would be unthinkable 10 years ago; in post-1989 countries higher education reforms were then generally left “to be done” soon. After ten years it is seen much more clearly that social and economic transformations will last for several decades and that higher education needs not only academic freedom and political autonomy but also huge financial support. Within a structure of ongoing social reforms, higher education is no longer a priority for CEE states. Now it may happen that – with shrinking public resources and other social needs growing – the corporate answer to the “higher education problem” could seem almost salutary to the majority of stakeholders. Source: Marek Kwiek, “The Internationalization and Globalization in Central and East European Higher Education”. Society for Research in Higher Education International News, No. 47, November 2001 |
Asia, like Latin America, has an important number of private higher education institutions, of different types and status that principally compete in less prestigious markets, seeking to attract both students and resources. [Box 10].The discussion again concentrates on privatization as Varghese and Suwanawongse (2005) explain,
“Many countries which relied on public institutions have adopted strategies to reduce reliance on the State for financing higher education institutions. Two trends that characterize major changes in higher education can be identified as privatization and the emergence of the private sector in higher education. Privatization implies applying private sector or market principles in the operation and management of the institutions of higher education while the ownership rests within the public domain. The private sector, on the other hand, indicates the growth of the non-State sector in higher education. In most cases, this sector does not receive funding from the government, although partial funding by the State is common in some of the countries in this region” [x].
Box 10
In Asia, private institutions have long been a central part of higher education provision. In Japan, South Korea, Taiwan, the Philippines, and Indonesia, private universities enroll the majority of students—in some cases upwards of 80 percent. The large majority of Indian students attend private colleges, although these institutions are heavily subsidized by government funds. The private sector is also a growing force in parts of Asia where it has thus far not been active—such as China, Vietnam, and the central Asian republics. In general, private universities are found at the lower end of the prestige hierarchy in Asia. There are a few examples of high-quality, private universities—such as Waseda and Keio (among others) in Japan, De La Salle and the Ateneo de Manila in the Philippines, Yonsei in Korea, and Santa Dharma in Indonesia. Generally, private institutions rely on tuition payments, receive little funding from public sources (although in Japan and several other countries limited government funding is available to the private sector), and have no tradition of private philanthropy, and as a result are unable to compete for the best students. However, the private sector plays a central role by providing access to students who would otherwise be unable to obtain academic degrees. It is useful to disaggregate the Asian private higher education sector because of the significant differences among institutions and the divergent roles they play in society. As noted, there are a few very prestigious private universities in the countries in which a private sector operates. In some cases, these institutions are sponsored or founded by religious groups—largely, but not exclusively, Christian. Sophia and Doshisha in Japan, Yonsei and Sogang in South Korea, Santa Dharma in Indonesia, and De La Salle and Ateneo de Manila in the Philippines are examples. These universities are typically among the oldest in their countries and have a long tradition of training elite groups. Another category is the newer private institutions, often specializing in fields such as management or technology, that were established with the aim of offering a key but limited market high-quality academic degrees. The Asian Institute of Technology in the Philippines and its sister institution in Thailand are such schools. These prestigious private universities have been able to maintain their positions over time and rely largely on tuition payments for survival. Semiprivate, specialized business schools are being established in Singapore in collaboration with prestigious management schools in the United States and Europe. Most Asian private universities serve the mass higher education market and tend to be relatively nonselective. The majority are small, although there are some quite large institutions—such as the Far Eastern University in the Philippines, which has a massive enrollment and was for a time listed on the Manila stock exchange. Some are sponsored by private nonprofit organizations, religious societies, ethnic organization, or other groups. Many are owned by individuals or families, sometimes with a formal management that masks the controlling elements of the school’s governance structure. This pattern of family-run academic institutions has received little if any attention from analysts, although it is a phenomenon of growing importance worldwide—even in countries that do not encourage the establishment of for-profit higher education institutions. One of the most interesting private higher education developments worldwide is the rise of min ban (people-run) private institutions in China. There are already more than 1,000 min ban institutions, about 100 of which are accredited by the government. A new law regulating this sector will soon be implemented. The government is convinced that the new private sector is necessary to provide access to students who, largely because of low test scores, cannot qualify for the public universities. So far, most of the min ban schools offer vocational education and do not award bachelor’s degrees. Many Asian countries have had considerable experience in managing large private higher education sectors, while others are still seeking to establish appropriate structures. These countries face the challenge of allowing the private sector the autonomy and freedom to establish and manage institutions and compete in a differentiated educational marketplace while at the same time ensuring that the national interest is served. In India, where the large majority of undergraduate students attend private colleges, these schools are largely funded by the state governments and are closely controlled by the universities to which most are affiliated. University authorities, for example, design and administer examinations, award academic degrees, set the minimum qualifications for entry, and supervise the hiring of academic staff. The universities are all public institutions, and they have key administrative and academic control over the privately owned undergraduate colleges. India’s pattern of public-private management and control is unique and worth studying. Japan and South Korea have a long tradition of rigidly controlling private institutions—going to the extent of stipulating the salaries of academic staff, the numbers of students who can be enrolled, approving the establishment of new departments or programs, and supervising the appointment of trustees. In the recent past, these two countries have moved toward allowing private institutions more autonomy and freedom. Other countries have imposed less strict supervision. As in other parts of the world, private higher education is expanding throughout Asia, and countries that are moving toward a large private sector would be well advised to look at the experience in Asia for guidance. China has a dramatically growing private sector, with more than 500 private postsecondary institutions, most of which are neither accredited nor approved by the government. Vietnam and Cambodia also have rapidly growing private sectors, as do the central Asian nations that were formerly part of the Soviet Union . These countries face the considerable challenge of ensuring that the emerging private sector is effective, well managed, and serving national goals. Asia shows a variety of patterns of sponsorship, management, ownership, and state supervision. Source: Philip Altbach, “The Private Sector in Asian Higher Education”. Center for International Higher Education, Boston College, International Higher Education, No. 29, Fall 2002 http://www.bc.edu/bc_org/avp/soe/cihe/newsletter/News29/text006.htm |
While the debate in most regions examines the opportunities and problems brought to higher education by privatization, in Africa the emergence of private universities is seen as strengthening systems that suffer from a chronic resource deficit. [Box 11].
Box 11
Owing to the numerous development projects competing for government funds, it is no longer possible to cater adequately to the needs of the higher educational sector. There are drastic cuts in spending on public higher education. Salaries of university workers are hardly ever paid. A lack of basic infrastructure for teaching/learning activities, research and administration, and the low morale of teachers lead to poor academic quality. Existing universities do not have the capacity to admit the thousands of candidates qualified for university education. African governments can no longer provide scholarships for university students, neither can they guarantee employment for university graduates. […] Given the background that governments can no longer be the purveyor of higher education, the great question is: who will fund higher education in Africa in the new millennium? Distance education and lifelong learning programs, virtual, open and internet universities which may provide some of the answers to the main question, are dependent on information technology which is not easily accessible to over half of African’s nearly 330 public universities. The reality of the situation is that some universities in Africa still rely on the manual typewriter for their daily administrative and academic operations, as ordinary computers and even telephones are not available. Electricity and water are considered a blessing whenever they are available. How can such universities, with the best of intentions, deliver their programs to their clients in an age of globalization? Perhaps as a more practical and realistic response to the issue of who should bear responsibility for providing access to and the funding of higher education in Africa in the new millennium, private universities are springing up in most African countries. This is a new phenomenon which is considered a welcome development. In fact a recent study conducted by the AAU (July 2000), reveals among other things that there are about 70 of such universities in all the regions of Africa, with 20 in West Africa, 22 in East Africa, 11 in Southern Africa, 10 in North Africa and 7 in Central Africa. They comprise private denominational, private nondenominational, open, virtual and gender universities. Some of the arguments advanced by the Presidents of these institutions for establishing private universities are: • To bridge the gap between the few educated Africans and the millions who need higher education. • To provide new and specialized educational programs geared towards self-employment. • To tackle the problem/reality of who pays for higher education in the new millennium. • To assist African governments in providing an environment conducive for learning needs in the higher education enterprise. • To respond to the global call for privatization, free market economy and individual ownership of establishments. • To help governments respond to the pressure on access to higher education by providing diversity, innovation and independence in the higher education sector. • To provide quality education which will enable the individual achieve his/her potential through the introduction of modern teaching systems and the effective use of information technology. Apart from the reasons articulated above, some of the Vice-Chancellors of the private universities interviewed claim that the actual background to the establishment of private universities is in response to a call by the wealthy class to provide quality education (the type provided by universities in the North) for their children. Some others quote the parents as saying that the rampant/incessant closure of public universities due to strikes and student unrest disrupts their educational plans for their wards, hence their request for private universities where there will be better assurance of academic programming, planning and graduation calendars. There is also the problem of ethnic pressures which allow only a certain percentage of applicants from a particular ethnic origin to be admitted to a public university of the candidate’s choice, thereby limiting access. Only a few of the Vice-Chancellors attributed the establishment of private universities to the falling standards in public universities. In consequence, parents and their wards want alternative universities with international connections so that the certificates issued will be recognized abroad. Some Vice-Chancellors, however, contend that Africa is already backward and should see the establishment of private universities as a positive development and an opportunity to improve her backward situation. Taken together, these observations constitute the African rationale for taking a bold step towards increasing access to higher education. Other international factors/concerns seem to favor this development: • The trend all over the world today is investment in all sectors of the economy to enable market forces to have a free rein. • The philosophy behind privatization is that it encourages competition, provision and protection of quality goods and services in a better managed and coordinated manner. • The principle of freedom of education implies the coexistence of public and private education, as neither of them can at all times provide the necessary quality and quantity of education. The drastic cuts in the funding of public universities and the attendant decline, neglect and poor quality which have characterized them over the years, can only be countered by private universities which will provide education to the great number of learners in a knowledge driven and knowledge-dependent world. In many parts of the world, private universities are known to be innovative, to seek alternative financing strategies, to develop effective management structures and to introduce demand-driven courses. One of the arguments of the new universities is that, with the falling standards in public universities, it is better to establish new universities with fresh mandates and missions than to attempt to ‘patch a rotten system’. The Presidents of these private universities argue that transforming an old university into a new one, with a staff that is used to implementing programs in a certain way, may require a revolution in which many staff members do not wish to participate. Revolutions often have disastrous consequences. In addition, people most often promise to change their old behaviour, to embrace new doctrines or even burn revolutionary documents with their hands, but end up carrying the revolutionary spirit in their hearts. Private universities have therefore the philosophical, social and moral basis or mission to exist and to succeed in their new undertaking of providing access to higher education in Africa. To achieve this they certainly need support in: • research and knowledge creation • improving facilities in information and technology • meeting the challenges of globalization and internationalization • building partnerships with universities of the North • staff development efforts As stated in the introduction, the issue of private universities and their mission of increasing access to higher education is of particular interest to the Association of African Universities (AAU) for obvious reasons. The transformation going on in the higher education sub-sector can lead to competition, the improvement of quality, increased access, relevance of course offerings and encourage cooperation between African universities. As African economies decline, the higher education sub-sector suffers and so is unable to meet its objectives. Improved facilities for teaching/learning, research and salaries in the new universities have the capacity to check brain drain to the North or to the private sector where the payment is better. The industrialized nations in the North are rapidly expanding their internet use in all spheres of university life, while ordinary telephones and computers are regarded as luxuries in many African universities. The new universities can provide the new technologies needed to improve the quality of teaching and learning in the universities. If the Vice-Chancellors of private universities indeed run their universities using only students’ tuition fees, then governments need to be persuaded to establish student scholarship/loan schemes to enable university entrants to pay the fees, since they are all citizens of the same country regardless of whether they attend public or private universities. Otherwise, private universities may end up being for children of the wealthy, a situation which will further limit access. While encouraging strategic planning and reform initiatives in Africa’s public universities, the AAU would like to encourage our European partners to collaborate with selected private universities in Africa, so they can become model universities in their various regions and localities. Source: Chris Nwamuo, “Increasing access to higher education in Africa: emerging issues” |
Finally, the well known report on Higher Education in developing countries, prepared by the UNESCO and the World Bank, [Box 12], attempts to provide a balanced appraisal of the contributions of the state and market to higher education. The report underlines the positive role that competition can play while also noting market limitations and failure. Even where the private higher educational market functions well, it is necessary to have vigorous public institutions as in their absence there is no guarantee that the public interest is being served.
Box 12
Developing countries are currently under great pressure to meet increased demand for higher education, and many are finding it hard to keep up. They are becoming increasingly reliant on fee-based education and private, for-profit providers. In this environment education becomes more narrowly focused on providing a skilled labor pool for the immediate needs of the economy. Market forces predominate and the public benefits of – and responsibilities for – higher education recede from view. Certainly, competition within the higher education sector can lead to higher standards and to significant benefits for individual students. In many developing countries, however, markets do not function well and this leads to a serious misallocation of resources. Access, for example, is limited by income, excluding potentially able students and diluting the quality of the student body. Poor market information dilutes competition, allowing weak exploitative institutions – some of them foreign – to survive and even prosper, and lessening the chances of dynamic new entrants. Even when markets work well and students receive a quality service, private institutions may still fail to serve the public interest. For-profit institutions must operate as businesses, facing the market test and trying to maximize the return on their investment. It may not make good financial sense to invest in public-interest functions, leading to underinvestment in certain subjects and types of higher education, even if these are important to the well being of society as a whole. The public sector thus retains a vital and, in our opinion, irreplaceable role in the higher education sector. This role can take many forms. Governments can be direct providers of higher education; offer finance for its provision; or do both. They can develop legal and regulatory institutions to promote and shape the higher education system, as well as to regulate individual institutions – even when these are privately chartered and funded. But governments do not have an open-ended mandate in this area. They must act efficiently and on the basis of good information, in order to demonstrate that their use of resources provides benefits to the public over and above what the private sector can supply. Whatever their policies, however, they must be able to demonstrate that they are using resources in a way that offers society benefits that the private sector cannot supply. The public interest argument cannot be a cover for public sector waste, inefficiency, and lack of vision. Source: Task Force, Higher Education in Developing Countries. Peril and Promise, 200 |
These three processes - marketization, privatization and liberalization - have awoken strong and varied opposition everywhere. It is necessary to understand these critical voices and the first section of this tool box would not be complete without their presence.
This section selects four distinct perspectives, representing the principal arguments to be found in the literature, which criticize these processes and their effects.
The first commentary is that of Professor Jandhyala B G Tilak, Senior Fellow and Head of the Educational Finance Unit at the National Institute of Educational Planning & Administration, New Delhi [Box 13]. He considers that the World Bank has been an important promoter of marketization and privatization in developing countries since the 1980s.
As a result of these policies accompanied with or part of structural economic reform and liberalization, known in Latin America and elsewhere as the Washington Consensus, the potential of higher education in developing countries is severely reduced [xi]; with a significant increase in public apathy for HE; the public and merit good nature of higher education is being increasingly discounted, and a general drift towards privatization of higher education: financial privatization of public universities, transfer of ownership of public institutions, and establishment of private institutions - private institutions with government support, self-financing private institutions (with no government support), and profit-making private institutions.
Box 13
Policy prescriptions, particularly from the World Bank, have argued against the expansion of higher education, and for the exclusive focus on primary education. The unquestionable acceptance of the above has led to the overall neglect of higher education. Many developing countries have showed apathy towards higher education, deliberately ignored it, reduced public investments in it, allowed laissez-faireism, and even adopted policies towards marketization of higher education. Market forces have become very active, but since the markets in developing countries are incomplete, and imperfect, the outcomes are also far from perfect, and in fact, in some cases, the market forces produced disastrous consequences. In this context, some of the developments in the arena of higher education policies are worth noting. The chronological developments of the recent period […] narrate a story of a steady drift in the development of higher education. The 1986 World Bank policy paper, that has clearly recommended reallocation of public resources in favor of primary education and against higher education, has a tremendous effect on educational policies in developing countries. Second, a major positive outcome of the 1990 Jomtien conference on Education For All was that basic education received serious attention of the national governments and the international community; but at the same time this produced an undesirable effect on other levels of education. It was widely felt that basic education goals could be reached only if the public attention is diverted rather completely away from secondary and more particularly higher education. Thirdly, the 1994 World Bank paper, Higher Education: The Lessons of Experience, reiterated the same much more eloquently. A few major developments followed that however, did not influence much the public policies in higher education in developing countries. One was the international conference on higher education that was organized by UNESCO in 1998, after realizing that in the context of global EFA activities, higher education was getting neglected. The second one was a report prepared by the Task Force on Higher Education and Society (2000), whose members include, inter alia, staff members of both World Bank and UNESCO. Both the International Conference and the Task Force have highlighted the need to pay serious attention to higher education. These ones and the World Bank’s (2002) strategy paper on tertiary education argued in a sense a serious u-turn in the policies of the World Bank and of the governments that discouraged growth of higher education in developing countries. But they attracted little attention of the governments, which are engulfed in a ‘continuing education crisis’ and governments in developing countries continue to show apathy towards higher education, which is reflected in public sector disinvestment in higher education, and corresponding growth in private higher education. Either higher education was ignored in the policy planning exercises of the governments and of the international organizations, or special measures were initiated to reduce the intensity of public efforts in higher education or both. Many policy and plan documents, and public discourses on education policy tend to pay at best, some lip service to higher education and to focus on preparation of plans for literacy and primary education. If at all the growing demand for higher education is recognized, it is assumed by the governments that such a demand can be met either by distance education programs or by private sector, in neither of which governments have to invest any substantial resources. […] Further, the economic reform policies that include stabilization and structural adjustment, introduced in almost all developing countries during the last quarter century, required a drastic cut in public expenditures across the board, including higher education. In fact, these policies set the tone for drastic reforms in higher education; and on the whole, higher education suffered severely (Tilak 2002). Public expenditure on higher education declined - in terms of relative priorities (proportion of GNP or of total government expenditure that is allocated to higher education), and/or in public expenditure on higher education in absolute terms in real prices (and sometimes even in nominal prices) - total as well as per student. Noticeable cuts could also be noted in several countries specifically in public expenditure on quality and equity related inputs in higher education (e.g., research, and scholarships). Recovery of costs of higher education from the students (in the form of high and even full cost-equivalent fees) has been an important strategy adopted in most countries, along with raising of resources from other non-governmental sources including industry, by forging close university-industry links. As a result of all this, developing countries continue to lag behind the advanced countries in development of higher education systems. Gross enrolment ratios in higher education in many developing countries continue to be low. In Sub-Saharan Africa, for example, on average hardly four per cent of the relevant age group youth are enrolled in higher education. […] In many low income countries the ratio is less than ten per cent, while in many high income countries more than three fourths, and on average more than 60 per cent, of the relevant age group youth population goes to higher education. Along with a significant increase in public apathy for higher education, one can note a reemergence of forces in favour of private higher education. The lack of resources is one oft-cited reason for the growth of private higher education. But an equally important reason is the changes in attitudes towards higher education, and towards private higher education, and towards ‘for-profit’ private institutions of higher education, in particular. The public and merit good nature of higher education is being increasingly discounted. Private higher education is projected as an efficient system that can improve access and quality as well as equity! The march towards privatization of higher education is taking place through a variety of measures: financial privatization of public universities, transfer of ownership of public institutions, and establishment of private institutions - private institutions with government support, self-financing private institutions (with no government support), and profit-making private institutions. They also consist more of institutions without government recognition. As Johnstone (1999) described, the march towards ‘high privateness’ in higher education is steady and even fast. The purpose of the universities, their ownership, sources of revenue, norms of management, and the role of the government in university development have been changing very fast. The changes are not confined to newly established institutions, but even the universities established several decades ago, if not centuries ago, are affected by these changes. The role of higher education is reinterpreted and redefined. Traditionally higher education is viewed as one that creates and diffuses knowledge. Rather expansion of frontiers of knowledge was regarded as the most important function of higher education. Secondly, higher education was viewed as an instrument of personal development of individuals, expanding intellectual horizons of the individuals, their interests and potential and empowering the individuals to have better quality of life, as contemporary sociologists and psychologists argue. Thirdly, higher education was viewed as an instrument of social engineering, socializing individuals to the values of the society -- social, ethical, cultural and political, so that societies become more virtuous with more and more higher educated people (a la sociologists like Durkheim). Lastly, the human capital theorists placed emphasis on the role of education in transformation of human beings into human capital, an instrument of production and economic growth and thereby economic well being of the people and societies (a la Theodore Schultz and Gary Becker). Many institutions of higher education in the contemporary period aimed at serving all these functions. Now with privatization, particularly with rapid pace of privatization characterized by profit motive, all these functions are getting replaced by financial motives, such as financial efficiency, measured in terms of revenue generation. In short, the emerging higher education system can be summed up as a transformation of academic institutions into ‘entrepreneurial universities’ and ‘commercial institutions,’ whose single most important objective seems to be mobilization of more and more resources (Raines & Leathers 2003; Bok 2003). Source: Jandhyala B. G. Tilak, “Are We Marching towards Laissez-faireism in Higher Education Development?” CICE Hiroshima University, Journal of International Cooperation in Education, Vol.8, No.1, 2005 |
The second critical commentary argues that Higher Education has become a commodity [Box 14]; that is something to be produced, packaged, sold, traded, outsourced, franchised, and consumed. The “marketization” of Higher Education is at the root of this “commodization” and redefines its nature by transforming it from a collective public good to a private investment. In consequence, universities suffer from a series of disadvantages; in their organization, management and governance; in their relations with society at large and in particular their own students who have no become clients or consumers; and in their financial relations with the state.
Box 14
The market has been the seen as the ideal model on which to base educational arrangements. Competition between students, staff and institutions has been encouraged. Students have been redefined as 'consumers', and tertiary education institutions have become 'providers'. Bureaucrats now talk of 'inputs', 'outputs' and 'throughputs' in the education system. Any notion of educational processes serving a form of collective public good has all but disappeared; instead, participation in tertiary education is now regarded as a form of private investment. As such, the expectation is that students will pay a growing proportion of the costs associated with their chosen programs of study (Peters, 1997a). The philosophy of 'user pays', routinely cited as a justification for charges in a whole range of public service areas, has become the order of the day in education. Education, in short, has become a commodity: something to be produced, packaged, sold, traded, outsourced, franchised, and consumed. The rhetoric of 'choice' has permeated many official statements on education in recent years (Codd, 1993a, 1993b; Olssen, 1997). Students are regarded as roving, perpetually choosing, rationally autonomous consumers, always seeking out the best value for their educational dollar. Educational institutions, on the other hand, are forced to compete -- if they do not their viability is threatened -- with other 'providers', the imperative being to 'sell' themselves and their programs effectively in order to keep enrolments and revenues at healthy levels. There has been a significant change in the teacher-student relation. This is now no longer seen as a pedagogical relationship but a contractual one (Codd, 1995). Students, in paying ever higher fees for the privilege of attending an educational institution, expect good value for their (private, self-interested) investment. When the services they 'purchase' do not measure up to expectations, 'providers' can -- as a recent case at Victoria University in Wellington demonstrated -- be threatened with legal action for breach of an implied contract. Tertiary institutions must, we are constantly reminded, be 'accountable' for what they do, and when they fail to 'deliver the goods', they should pay a (legal and/or financial) price for this. Faith in the authority, commitment and professionalism of institutions and the staff within them can no longer be taken for granted. In the current environment, a long tradition of university education is simply one more factor for students to take into account in attempting to maximize utility through their tertiary purchasing decisions. There has been a constant drive -- initiated from the centre and bolstered by influential business organizations (such as the New Zealand Business Roundtable and the Employers Federation) -- to make education more 'efficient', more closely tied to the 'needs' of industry and employers, and more 'business like' in its processes and practices. Gaining greater value from the educational dollar has been a key goal, but the battle has also been an ideological one (Butterworth and Tarling, 1994). Transforming educational institutions and organizations into corporate entities -- geared toward the ideal of making a profit or at least minimizing losses and inefficiencies -- has been an important objective. Traditional forms of university governance are no longer seen as appropriate; the best model for optimum performance, it is believed, is a 'board of directors' system, with fewer people involved in key decisions and a smaller proportional representation from university staff. Source: Peter Roberts, “Rereading Lyotard: Knowledge, Commodification and Higher Education”. Electronic Journal of Sociology, 1998 |
The third commentary is provided by George Haddad, the Director of UNESCO’ s Higher Educational Division, [Box 15], who considers that “marketization can be seen as damaging to the intrinsic values and ideals that education represents”. In particular , market forces drive universities to adopt a new and unnatural model, - that of private business – and abandon their mission for the public good.
“The very purpose of universities is being redefined within the concept of the economy and business. Governments encourage universities to alter their internal management and governance in line with a model of private sector Corporation, which for many are images of effectiveness and efficiency. Vice-Chancellors are portrayed as chief executives setting up stream-line decision making systems accountable for productivity”.
So the university forced to adapt to the market is, together with its traditions and values, being transformed.
Box 15
Marketization for some is seen as progressive and evolutionary whilst others, including myself see it as damaging to the intrinsic values and ideals that education represents. Traditionally universities were portrayed as “places of learning, research and service through the application of knowledge” (Altbach 2001) for the ‘public good’ and a collective investment for mutual benefit (Welch and Wright 2004: 80). However it is now viewed as a private investment concerning future economic success, for both the individual and society. Education has always been instrumental in creating a well-educated and skilled workforce allowing Britain to maintain a position of superiority within the global economy, but it has also encapsulated a more developmental aspiration - personal maturity, knowledge advancement and intellectual stimulation. However these values are being eroded with universities taking on corporate business models in an attempt to deal with funding crisis’s and intense pressure from the government to work closely with industry and produce business-minded citizens (Powell, Harloe and Goldsmith 2001: 45). This has led to corporate universities and ‘borderless education’, the movement of students/teachers/knowledge and academic programs abroad. This has also included the rise of virtual education, which is the selling of education as a format to users around the globe. As Clarke stated in 2003 “my central argument is that universities exist to enable the British economy and society to deal with the challenges posed by the increasingly rapid process of global change” (cited in Welch and Wright 2004: 82). The very purpose of university has been redefined within the concept of the economy and business. This can be visibly seen with governments encouraging universities to alter their internal management and governance inline with a model of private sector Corporation, which for many are images of effectiveness and efficiency. Vice-Chancellors are portrayed as chief executives setting up stream-line decision making systems accountable for productivity (Welch and Wright 2004: 84). These ideas were enhanced further in the 2003 Lambert Report which called for codes of practice, similar to those in leading Corporations. Introducing market forces into higher education is assumed to give greater power to the consumer of education the student, thus consequently producing better value-for-money and higher efficiency. However for a market in any situation to be successful many assumptions are made. These are the existence of independent buyers and sellers who can not influence the market, producers who make homogeneous products, freedom to enter and exit the market and buyers who have full knowledge of the market (Mace, Lambropoulos and Karadjia). It therefore becomes apparent that there is little chance of education ever resembling a perfect market. Attempts have been made for a decade but the British education system is still closely controlled and regulated by the state and people have little faith in a market that needs such state intervention. Some have even described our education system as a ‘quasi-market’ organized on market principles, but underpinned by government financial organization and regulation. With the state dictating the supply and demand factors it undermines the concept of free economic agents exchanging resources in the market system, a concept which is integral to a working market. Many economists believe that higher education in Britain has moved towards the business sector not through rational choice but through necessity as a result of a continual funding crisis. Governments have consistently cut university funding with financial support per student falling by 40% in 20 years (1997 Government Summary Report cited in Welch and Wright 2004: 83) and universities on average projecting an annual surplus of only 0.5% (Brown 2004: 4). The state has also introduced disciplines intended to make them conceptualize their activities in economic terms. Since the conservative government suggested that universities were failing the economy there has been a concerted effort to make them more relevant and efficient. This pressure has also mimicked the belief of many students who in recent times have demanded that universities offer a more “solid base for professional careers and economic security” (Coaldrake 2001: 79). However this demand rests on a desire for immediate gratification and does not investigate the wider implications. This has been interpreted through a business model only. If this business model was able as hoped, to allow the under-represented social categories full access to university then the social effect would be incredibly beneficial. However this does not seem to be the case with the university population being made up of predominately middle-class students. This gap will deepen especially with top-up fees which will make higher education merely a dream for some people. Top-up and tuition fees are an obvious example of the commercialization of higher education. Top-up fees gained great attention when the Higher Education Bill received its second reading on 27th January 2004 to enable English universities to levy a contribution of up to £3000 towards the cost of tuition fees. This was introduced alongside grants and subsidies for lower income families, but ultimately the cost of university was increased dramatically (Brown 2004:3). This resulted from a lack of government funding, yet a drive to encourage 50% of the population into higher education. With the numbers increasing most universities had no choice but to ask for the maximum contribution, creating financial difficulties for poorer potential students. This was an attempt by the government to allow the British education system to compete with the world’s best, notably America. However as Palfreyman (2004:8) points out, the government has capped the fees at £3000 therefore they will be of no real value by not creating a true market but just “watering down the degree of proposed deregulation” (ibid: 9).Therefore entrance into higher education is no longer personal improvement and subject interest but the need to gain qualifications to compete in a ruthless labor market. To maximize career opportunities most people are expected to have gained a degree, with employers now looking for people who are able to constantly up-grade their skills. This emphasizes flexibility and adaptability, which the government has termed ‘lifelong learning’. This places responsibility on the individual to learn throughout their life which is set within a new ‘learning society’, a society based around the necessity for people to learn how to learn, which will teach people to ‘learn how to earn’ (Welch and Wright 2004: 79). This is one of the founding arguments for increased top-up fees for students at university. Source: George Haddad, “Now Comes the Time for Action: Action Research dealing with the Marketization of Higher Education”, 1999 http://www2.warwick.ac.uk/fac/soc/sociology/research/fkuc/research/diss.doc |
The Futures Project –Policy for Higher Education in a Changing World, has produced a broad repertory of ideas and criticisms about the negative consequences for universities as a result of the tension that exists between the marketization of higher education and the public interest. [Box 16]. The title of their last report “How We Can Restore the Ideals of Public Higher Education in a Market-Driven Era” captures their concern. After commenting critically on recent Higher Education changes in the United States, a result of increasing competition, they propose,
“A new compact between higher education and the public, negotiated by higher education officials and state policymakers. The compact would provide state control over the mission of public colleges and universities to ensure that the sum of institutional missions meets the state’s economic, social, and democratic needs, while espousing a philosophy of greater operational autonomy for institutions to conduct daily functions”.
In summary, they propose that universities reaffirm their mission for the public good which has been eroded by market forces, by restoring a greater sense of public obligation with a better balance between equity and efficiency, private and public finance, general education and professional training, academic and commercial research etc.
Box 16
Colleges and universities are under growing pressure to cut costs, measure and report on performance, and compete ever more strenuously for students, grants, funding, and prestige. In order to survive in this changing environment, many institutions have been forced to risk their long-standing dedication to core functions—from providing students of all kinds with real opportunities for social and economic mobility, to conducting high-quality research and offering valuable services that advance the well-being of individuals, communities, states, and the nation. The changes confronting higher education are altering the very climate in which higher education operates, making campuses dramatically more market-oriented. Institutions of all kinds have splurged on state-of-the-art computer labs, luxury dormitories, and sparkling new gymnasiums to lure the best, brightest, and most affluent students. Financial aid packages are increasingly used as a competitive tool, designed to reduce the sticker price for students with high test scores and GPAs, rather than to ease the burden for those with financial need. Meanwhile, the growth of private for-profit institutions—long regarded as marginal players in higher education—is adding to the pressures faced by traditional colleges and universities as the for-profits provide more options for students seeking alternative educational pathways. Increasingly, state policies have come to favor an open market that has the potential to create the kind of unhealthy competition that does not necessarily lead to increased access, better instruction, lower costs, or greater efficiency. The outcome is that higher education is becoming much more competition-driven in many arenas. Today, many academic leaders feel compelled to chase revenues and rankings rather than to focus their efforts on providing a high-quality education to an ever-expanding share of the population. Colleges and universities have intensified their competition for students, research dollars, donations, athletic championships, and prestige of all kinds. However, the new environment on campuses has created the superficial appearance of a consumer-oriented market, exacerbating the widening gap between what higher education preaches and practices. What we are seeing is nothing less than a great erosion of higher education’s long-standing commitment to advancing public priorities. Already, state subsidies to higher education make up a smaller share of budgets, and colleges are turning to tuition increases to bolster revenue streams. Limited availability of grants in aid is forcing more low-income students to incur dangerous amounts of debt. It is not far-fetched to think that in the not-so-distant future: Access to higher education will be limited to those who can pay the cost of tuition. Success in higher education will be limited to those with the advantages of wealth, preparedness, and savvy, college-educated parents who can help navigate the process. The liberal arts curriculum will shrink, leading to the gradual decline of non-revenue-producing disciplines like philosophy and the classics. Flagship public colleges and universities will move toward privatization, reasoning that they can replace dwindling state subsidies by tapping into other revenue streams. Some institutions will have to close, particularly mid-tier institutions such as small private colleges and state comprehensive universities, which depend on tuition revenue to cover operating costs. The integrity of research results will be constantly called into question as the public increasingly assumes that researchers are beholden to corporations and other benefactors Source: The Futures Project: Policy for Higher Education in a Changing World, “How We Can Restore the Ideals of Public Higher Education in a Market-Driven Era” http://www.futuresproject.org/publications/Correcting_Course.pdf |
In response to higher education’s unfolding contextual changes - marketization, privatization, deregulation, shrinking government funding, increased competition – there are also increasing demands by different stakeholders and to which universities also are have to adapt by changing their development strategies, diversifying their funding, and adopting new management and organizational structures. This section in mainly concerned with these institutional changes and how universities are adapting to new context.
“Organizational adaptation refers to modifications and alterations in the organization or its components in order to adjust to changes in the external environment. Its purpose is to restore equilibrium to an unbalanced condition. Adaptation generally refers to a process, not an event, whereby changes are instituted in organizations. Adaptation does not necessarily imply reactivity on the part of an organization because proactive or anticipatory adaptation is possible as well. But the emphasis is definitely on responding to some discontinuity or lack of fit that arises between the organization and its environment”.[xii]
According to an exhaustive review of the literature “researchers have examined several dimensions of institutional adaptation, including retrenchment, restructuring, improved performance, redefined missions, reorganization, mandated change, governmental reforms, institutional autonomy and accountability, diversification of funds, strengthened administrative core, entrepreneurial periphery, transformational leadership, and quality management”[xiii].
Box 17 – Strategic Adaptation
Various environmental factors, i.e., framework conditions in which institutions operate, have played an important role in changing attitude to strategy and quality in most systems and universities: (a) requiring universities directly to operate or conform to externally designed quality processes for assessing teaching and research, a culture of compliance; (b) requiring universities to develop internal processes which are intended to satisfy broad external criteria and benchmarks, a culture of introspection; (c) requiring universities to set standards for accreditation purposes, a culture of normalization; (d) requiring universities to have an institutional strategy and transparent quality processes, a culture of quality management; (e) requiring linkages between quality reviews and resource allocation, directly or indirectly, a culture of retroactive strategies; (f) benchmarking university performance in such domains as teaching, research, cost effectiveness, value for money, resource base, student satisfaction, income generation, a culture of transparency. Pierre Tabatoni, John Davies and Andris Barblan, “Strategic Management and Universities’ Institutional Development”, European Association of Universities, 2002 http://www.eua.be/eua/jsp/en/upload/Strategic_Manag_Uni_institutional_Devlpt.1069322397877.pdf |
These strategic changes (see Box 17) which are consistent with the ideas and techniques of NPM (see above) – critics term it managerialism—represent the replacement of the traditional university management by a new model, often known as entrepreneurial or “business-like”, which are successfully adapting to the new environment by becoming largely self-financed, high-performing institutions operating in competitive markets.
Some characteristics of this paradigmatic evolution, simplified to illustrate a trend, are shown below.
Traditional university |
"Business-like" HE institution |
|
Supply-led |
Market-driven |
|
Reactive, resists change |
Pro-active, strategic |
|
Depends on state funding |
Portfolio financing |
|
Consuming assets |
Investing for the future |
|
Administered |
Managed |
|
Risk averse |
Manages a range of risks |
|
Source: OECD, On the Edge. Securing a Sustainable Future for Higher |
||
Education, 2004 |
||
According to Barbara Sporn[xiv] recent study the key features of European universities institutional response have some of the following features:
In summary, the main findings from a three year Australian Research Council (ARC) financed study (1995-1997) of management practices and organizational cultures in Australian higher education are as follows:
Source: Simon Marginson, “The Enterprise University Comes To Australia”. Annual conference of the Australian Association for Research in Education, Melbourne, 29 November- 2 December, 1999
http://www.aare.edu.au/99pap/mar99470.htm
“ While the State remains the dominant or core funder of HE, in many countries the proportion of institutional funding from the State has now declined (see Table below) and in same cases state funding for public universities is also declining[xvi].
State revenue as % of total income |
|
Australia |
60% |
England |
60% |
Germany |
95% (most from Länder) |
Ireland |
80-90% |
Japan |
55% |
Netherlands |
65% |
Sweden |
65% |
USA |
35-50% |
In some cases there has been a decline in the amount of state funding per student (usually because student numbers have grown faster than funding in real terms). Sometimes, institutions have been encouraged to recruit additional students with only marginal public funding to support them. Often, government funding has risen at a lower rate than employment costs and other inflation. The impact of these factors has been a reduction in the overall unit of resource – government funding for teaching per student. In some cases, there was scope to increase efficiency, but this has also put pressure on the quality of delivery and financial security of institutions. This might affect other policy objectives such as widening participation.
As well as from core government funds, research is funded by other ministries and public bodies; by private industry; by charities and foundations; and by international organizations. Many of these bodies fund only direct project costs, expecting the infrastructure for research to be provided by the institutions themselves.
For some institutions, the rapid growth in project or activity funding for research has outstripped the level of investment in the core research infrastructure. This has led to problems of decaying infrastructure and an imbalance between investment and consumption.
There has also been a growth in “other” activity related to the knowledge base of HEIs. Knowledge transfer activity includes contract research, testing, consultancy and advisory services, exploitation of intellectual property (licensing, spin-out companies, etc.). This is seen as an important contribution to economic growth by many governments and as a source of income, staff development and other benefits by institutions. However, few are well equipped to manage such activity which needs a similar financial and managerial environment to a commercial business (risk-taking, rapid response, ability to invest and disinvest in staff and services). While a few institutions have been very successful, for most such activity has added little to their income or financial security, and it can expose them to new financial risks.
At the same time, Governments increasingly prefer targeted and short-term initiatives and mechanisms that require institutions to make matching financial contributions or to deliver specific outputs. Such methods include:
Requiring institutions to provide matching funds can ensure institutions are committed to projects, but it can also lead to deferral of necessary spending in other areas. Bidding schemes create an element of competition which can lead to good value for the taxpayer, but institutions incur costs associated with preparing bids which may never be recovered. The provision of separate capital grants can risk creating an institutional dependency on this source of funding. This is particularly important in respect of investment in infrastructure, which is one of the critical areas for financial sustainability. All such targeted schemes can make strategic planning by institutions more difficult if they distort institutional priorities and encourage opportunistic behavior. This may not be in the HEI’s best interests – or its stakeholders’. Well-designed programmes can avoid these dangers.
These funding pressures, coupled with other factors, have led to pressure on the sustainability of HEIs which is manifested in a number of ways:
Box 18 Policy challenges – public funding
ü Who is ultimately responsible for the sustainability of the higher education base? Is it the State or the HEIs themselves? Is the public funding appropriate to maintain the long-term productive capacity of the HE system? ü How does the government secure the outputs it wants and what incentives does it need to provide to do so? Are the right incentives given to institutions? ü Do the funding mechanisms make it easier or more difficult for institutions to take a responsible long-term view of their investment needs? ü Are we content with the current size of the institution and the balance of activities and funding sources? ü Do we have an adequate critical mass and a strong enough financial base to enable us to plan and manage the institution strategically? ü Do we have enough uncommitted income and enough discretion over how the income is used, to permit academic and business developments? ü What is the nature, scale and scope of external funding? ü How can/should HEIs best use such resources in fulfilling their core tasks of teaching, research and service to society? ü What is the effect of such external funding on the integrity of the higher education enterprise? ü What are the practical implications of increased reliance on external funding, including in particular grants which do not cover the full costs of the activities or projects for which they are intended? |
“ For many institutions, it is no longer appropriate to assume that their future role and position in their respective markets will remain as in the past (or that it will be driven solely by academic aspirations). It may have to change for a variety of reasons:
Good financial management in the traditional public sector sense, while necessary, is not sufficient to deal with such challenges. It will not protect institutions from poor strategies, from market risks or from inadequate funding, (or from their own unrealistic plans). Nor will it help them adequately to position themselves to deal with the much broader range of commercial and other opportunities they now have.
An institution is being managed on a financially sustainable basis if it is recovering its full economic costs and is investing in its infrastructure (physical, human, and intellectual) at a rate adequate to maintain the future productive capacity needed to deliver its strategic plan and to serve its students and other customers.
This definition implies four key elements to managing for sustainability:
Here we will take on only one of these four elements: strategic analysis. Institutions need to take a conscious decision to review their strategic positioning and to adapt their strategies accordingly (See Box 19 ).
Box 19 Emergent strategies
Every time an institution hires or dismisses a faculty member, starts a new program or curtails an old one, decides to recruit students or staff in one way or another, it is creating a strategic plan through its actions. The greatest influences managers have over institutions is through the daily choices in what (Baldridge and Okimi 1982) once called ‘Jugular vein decisions’, which build their institutions’ internal strength and condition and enable them to respond favorably to opportunities or threats. Cumulative, everyday decisions can have a lot more impact on an institution’s destiny than any master plan. These decisions ….create ‘emergent strategies’ (Mintzberg 1994) that ‘Converge in time in some sort of consistency or pattern’ (Hardy, Langley, Mintzberg and Rose 1983) R. Birnbaum, Management Fads In Higher Education, Jossey Bass, 2000 |
Institutions need to ask themselves a number of strategic questions. Those related to students and academic markets might include:
|
Without this they can find themselves reacting to external pressures and dealing with change forced upon them.
There will be other sets of questions in other areas of strategy such as human resources, estates, learning resources etc. The way these questions are posed and dealt with is important. There should be a proper institutional policy debate. This needs to involve a range of staff, and to recognize that there will be some areas of tension to be resolved. Choices will have to be made and priorities agreed. Not all desirable activities will be affordable (and not all financially-viable activities are appropriate). Institutions may have to choose not to do some things. The outcome of such debates should be a strategic direction for the institution. This might be discussed with the stakeholders of the institution”.
Management challenges – institutional strategy ü Do we have a clear view of our strategic positioning and of changing supply and demand factors in our main markets; including the nature of the competition we face; and opportunities or threats for the institution? ü Have we identified our areas of strength and do our plans enable us to develop and exploit these? Are we investing appropriately to ensure that we retain our market strength in the areas where we are a leader? ü How secure are our main sources of income? Is our income base adequate for the strategy and sustainable in our operating environment? ü Are we exploiting opportunities for collaboration and strategic change which could further strengthen our position? ü Do leading academics own the financial and business strategy and objectives? Are our strategies properly integrated? Are academic strategies for teaching, research etc. informed by market and cost data and the institution’s agreed strategic positioning? |
“ Just as the roles of governing bodies are becoming more critical, so are those of the senior managers of institutions, and particularly of the chief executive. Vice chancellors and Presidents or Rectors increasingly have to combine the roles of academic leadership with strategic business management. This is not a common combination of skills and increasing attention is being paid to the recruitment, training and development of heads of institutions. Sometimes individuals are brought in from outside higher education, but these skills also need to be developed within the next tiers of institutional management to support corporate management of institutions, and to develop leadership capacity for the future.
Of particular interest is the discussion about the role of university governing bodies, in particular the composition of university councils or boards and their relationship with senior management.
Box 20
ü What should be the roles and responsibilities of governing university bodies? ü Is there general agreement in universities that Councils should focus on the three primary roles identified by Hoare: external accountability; strategic planning oversight; and performance monitoring? ü If not, what should be included or excluded from focus and how do these relate to basic university values? ü Does there need to be a clear separation of responsibilities of councils, clearly separated from those of senior management, and academic boards? Or can some if not most responsibilities be considered shared? ü Would goals of universities be more effectively achieved if there were a separation of broad policy from implementation of those policies? Can that be achieved in practice given the distinctive nature of universities? ü Are members of the Council of a university to take on the role of custodians of the University or are they to be more like delegates? Are these bodies themselves to be more like a board of directors or a forum of participatory democracy – somewhat like a Parliament and representative of stakeholders? How can academics be made more aware of the role of their Councils in protecting their interests? Meredith Edwards, Deputy Vice-Chancellor, Director, National Institute for Governance, University of Canberra http://www.atem.org.au/pdf/Governance.pdf |
Modern higher education institutions need professional strategic managers in the key non-academic functions of finance, personnel, estates, systems etc. A number of English research universities are now recruiting senior managers from industry and changing some of the titles of traditional roles (for example one leading research university no longer has a “Secretary and Registrar” but has recruited a “Director of Commercial Services” with many of the same responsibilities). The changing role of the Director of Finance is particularly critical in the context of financial sustainability.
ü Have we developed an integrated management team in which the academic and nonacademic managers respect each others’ contribution and share a common set of values and objectives? ü Are our academic strategies informed and supported by the most professional management skills in the financial, estates, personnel and systems areas? ü Do our strategies enable us to develop and grow our position in the market, playing to our strengths rather than maintaining under-performing or historic activities? ü Are we taking greater responsibility for our own future, or are we still too dependent on decisions made outside the institution? ü Are we strong enough to deal with risks and contingencies which may threaten our sustainability? ü Are we developing our staff to become the strategic institutional managers of the future? |
“ With management by results and target-setting, the Ministry of Education seeks to promote the central aims set for the development of education and research in the Government Program, the Development Plan for Education and Research, the Ministry's own Action and Economic Plan and other national strategic programs. The aim in the development of university performance management is:
• To secure favorable conditions for the operation of a regionally representative university system
• To ensure strategic steering, with emphasis on evaluation in development
• To support universities in defining their strategies and profiles
• To achieve a high quality of university operations and their strong impact on society and the regions.
The performance agreement process and the setting of target outcomes starts in June (year n-2) when the Ministry sends the instructions based on the strategic guidelines to universities for the following performance negotiations. The performance agreements concluded between the Ministry of Education and the universities determine quantitative and qualitative targets, the resources needed to achieve these targets, the monitoring and evaluation of outcomes, and further development of operations. The university target outcomes are set for a three-year period. In the intervening years, the targets are reviewed and confirmed and resources are determined for the following year. Aims relating to quality and its enhancement are largely the university's own responsibility.
In the agreement period 2004-2006 quantitative targets will be set for entrants to Bachelor's and Master's programs; for Master's degrees; for doctorates; for international student exchanges; for foreign degree students; for full-time equivalent student places in open university instruction; students transferring to degree programs via the open university track; and for the share of non-budgetary financing. The target numbers are set by fields of study. Where no quantitative targets can be determined for societal impact, the objectives describe the nature of activities. All except the quantitative performance targets are common to all universities, but an effort is also made to take account of each university's own specific profile and relevant aims.
The performance agreement process also includes preparatory seminars and other joint events for the universities and the Ministry of Education before they embark on the actual performance negotiations. The aim of these events is to increase interaction between different levels and to promote commitment to the targets. The universities send their target performance materials to the Ministry in February (year n-1), such as strategic policy lines, project proposals and a brief memorandum describing the achievement of the previous targets and explanations for possible failure in it. At this point, the KOTA data[xviii] are made available for the preparation of the performance agreements. In March, before the actual negotiations, the Ministry of Education sends a draft agreement to the universities. They give their opinion on the agreement to the Ministry before the negotiations, which are conducted in April, when the universities' financial statements are available. In the Ministry-university performance management procedure, monitoring is mainly based on the financial statements and the KOTA database. The database shall be developed to include better documented planning and monitoring data and to be more flexibly accessible to the various parties. In addition to these data, the Ministry requests separate reports on the progress made in national programs and projects.
In the performance negotiations, the universities are given oral feedback concerning the previous year's performance. In June, the Ministry gives written feedback about the quality of reporting, the effectiveness of operations and development needs in strategic priority areas. University finances are audited by state auditors elected by Parliament and the independent State Audit Office attached to Parliament.
The statutory obligation of universities to assess the quality of their operations is defined in the Universities Act. In Finland, the premise is that there is no significant connection between evaluation findings and the resource level, especially as concerns teaching. The purpose of evaluation is to enhance the quality of operations, and the main responsibility for using evaluation findings rests with the university.
Evaluation findings also have significance in monitoring activities which cannot be given quantifiable targets. Universities are assisted in educational and other evaluation by the Higher Education Evaluation Council. The Academy of Finland is responsible for evaluating research”.
“ University resources consist of state funding, allocated by the Ministry of Education, and external funding. The resources for the Ministry of Education sector are annually decided by the Government in a budget framework. The Ministry determines the share of the university budget within this framework.
The Ministry of Education steers university activities financed from the core funding, primarily concerning itself with financing university research and relevant teaching and with maintaining the relevant infrastructure and thereby the infrastructure of the whole national research system. The basic principle is that the main responsibility for managing externally financed activities rests with the university. However, external financing is linked to the steering system through economic planning and net budgeting. The expectation is that external funding supports the university's basic mission.
The purpose of the development of the financing system is to secure continuity and to include only the funding of essential development needs in the financing model. Another purpose is to effect a closer connection between aims and resources. The aim is that the expanding activities and the growing facilities expenditure are reflected as a corresponding growth in the budget.
The core funding formula based on unit costs has been developed as a national framework allocation model geared to secure both the core mission of universities – teaching and research – and the financing of the societal services they provide. Universities use their own criteria in internal resource allocation.
The financing allocated by the Ministry of Education to universities during the agreement period 2004–2006 comprises the following (as a percentage of operational expenditure in 2004):
• Actual core funding (89.4 %)
• Financing of national tasks (1.5 %)
• Financing of national programs (4.7%)
• Project funding (1.9 %)
• Performance-based funding (2.4 %)”.
“ The aim is to keep core funding as stable as possible and at a level which covers a major part, around 87 %, of operational expenditure. The core funding is allocated by means of the unit-cost formula, which has been designed to be as transparent and predictable as possible. The purpose is to divide the framework funding between the universities, not to target funds directly to different degrees or other activities. This shall also secure the prerequisites of activities other than undergraduate and graduate education. Whenever necessary, activities not covered by the formula are agreed as part of the societal services financing.
The formula used to allocate university core funding comprises four segments: extent of activities, teaching, research and societal services. Except for graduate schools and Open University[xix] teaching, universities allocate core funding at their discretion.
The extent factor comprises the basic component allocated to all universities, resources based on the target number of new students determined in the performance agreement, and facilities expenditure.
The basic component is determined in relation to the 2003 operational expenditure. The new students allotment is determined in relation to the target numbers set in the performance agreements for 2004–2006 and the facilities expenditure divided in relation to the 2002 data on realized budgetary expenditure on facilities in the KOTA database. The extent funding is agreed for a three year period.
In the teaching and research appropriations, the criteria are the target set for Master's degrees and doctorates (coefficient 2/3) and degrees conferred (coefficient 1/3) in each field of study. The realized number of degrees is calculated as a three-year average to minimize annual variation. The target and realized numbers of Master's degrees are further weighted with a field-specific cost coefficient.
As regards doctorates, it is assumed that the costs do not vary between fields to the same extent as in undergraduate education. The differences are further leveled out by external research funding. Field specific cost factors are difficult to determine because different fields of study differ in their internal structure. In addition, separate financing is granted to certain activities in some fields of study. There are still some weaknesses in the cost calculation data with regard to time use. The Master's degree coefficient in different fields of study in the period 2004–2006:
• I group (1.25): humanities, economics, law, theology, health sciences and social sciences
• II group (1.5): education, sport sciences and psychology
• III group (1.75): technology, natural sciences and forestry-agriculture
• IV group (3.25): pharmacy, veterinary sciences, dentistry and medicine
• V group (arts): fine arts and art & design (3.75), music (4.5), and theatre and dance (5.5)
In the allocation of the research allotment, account is taken of the financing of graduate schools, which is decided by the Ministry of Education on the basis of Academy of Finland evaluations and the proposal of the graduate school follow-up group.
The size of the societal services appropriations is based on Open University provision and other non-core services. The financing of Open University is based on the target and realized numbers of fulltime equivalent student places (2/3–1/3).
The funding allocated to other societal services is intended as support especially for equipment intensive activities and those that reinforce the university's regional impact. The financing is partly calculated on the basis of
Box 21 - Challenges
The administrative reform in Finnish higher education has produced visible results, but, as often happens in the context of change, it has also generated dispute. In other words, Finnish higher education has issues—and some of them are hot. http://www.fulbright.fi/uusi/suomi/php/lehdet.php?id=149&lid=32&was=hae_lehti |
Burton Clark, Allan M. Cartter Professor Emeritus of Higher Education, is closely linked to the idea of the entrepreneurial university. Not only is he a principal advocate but has studied this phenomena with persistence over time.
Given the importance of this idea, it is best that the theory is read in his words [xx], to be followed in the second part of this section by a brief description of one of the most discussed examples of the entrepreneurial university, the University of Warwick.
“ How do universities move from a traditional posture wedded to the status quo to a new posture that is change oriented? That posture can be variously named -- the innovative university, the proactive university, the entrepreneurial university. Call it what you will, the key point is how it is accomplished.
I have been engaged in an effort that started in 1994 and has continued for a decade to find out how that transformation is negotiated. The research effort centers on institutional case studies reported in narrative form, in which I looked for what a set of universities have in common and at the same time tried to grasp their uniqueness, their singularities. Narratives about each institution allow for this combination. My efforts over a decade had two main parts, the second building upon the first. The earlier one, a mid-1990s burst of field research that led to my 1998 book Creating Entrepreneurial Universities, subtitled Organizational Pathways of Transformation was followed by a 2000-2003 round of research, largely based on document analysis. This effort led to a second book, Sustaining Change in Universities, subtitled Continuities in Case Studies and Concepts, published in late 2004.
To summarize quickly, I saw five common elements as pathways of transformation: first, diversified university income; second, strengthened steering capacity; third, an extended developmental periphery consisting of non-departmental research centers and outreach programs; fourth, a stimulated academic heartland -- old departments newly activated; and, finally, an embracing entrepreneurial culture – the build-up of a system of beliefs that wrapped around the more material features identified in the first four pathways.
In the most successful cases of entrepreneurialism in universities, what is sustained is a capacity to go on changing. That capacity can be seen organizationally as a steady state of change. In an early dim sensing of this type of steady state -- in contrast to the ordinary steady state that exists when a university is married to the status quo – I concluded in the earlier book that "the five elements of transformation become just that by means of their interaction. Each by itself cannot make a significant difference. Those who see universities from the top-down might readily assume that the strengthened steering core is the leading element. But a newly constituted management group, for example, is soon without teeth if discretionary funds are not available, if new outreach units spanning the periphery cannot be constructed, if heartland departments fall into opposition, and if the group's idea of a transformed institution gains no cultural footing”.
The five elements of transformation become just that by means of their interaction. Each by itself cannot make a significant difference. Those who see universities from the top-down might readily assume that the strengthened steering core is the leading element. But a newly constituted management group, for example, is soon without teeth if discretionary funds are not available, if new outreach units spanning the periphery cannot be constructed, if heartland departments fall into opposition, and if the group's idea of a transformed institution gains no cultural footing.
In the 14 case studies written up cumulatively over a three year period, I gained one hint after another about the central importance of interaction among the structures of transformation. The continuous diversification of income -- think development officers -- freed up discretion in the steering capacity that stretched from basic departments to mid-level schools and colleges to the university's top offices, groups, and committees. The stronger steering capacity -- think entrepreneurial groups -- worked to spread and energize the search for income, to develop productive multidisciplinary outreach in research and teaching, and to make more creditable the claim of distinctive culture. The continuous reworking of the periphery fed back upon income diversification and the distribution of authority, including challenging the primary of traditional departments. Round and round it goes. You can enter the cycle of interaction at one point and you are soon in the company of the other basic features.
In an effort to clarify a very complicated flow of change, I set forth in the new book three "dynamics of change": the dynamic of reinforcing interaction, the dynamic of perpetual momentum; and, most powerful, the dynamic of ambitious collegial volition, the intensifying of collective willpower.
The Dynamic of Reinforcing Interaction
Sustained change in universities is rooted in changes on many fronts that lead to a combined infrastructure in which the substantial alterations are interlocked and mutually supportive. There is an emergent organizational foundation that we can appropriately understand as the steady state of change. Traditional universities have a steady state oriented toward inertia: the status quo has the upper hand. The universities that transform themselves on a number of fronts develop a steady state too -- one also full of vested interests, standard operating procedures, and sunk costs -- which is oriented toward change. The new status quo is development oriented. Out of interaction with one another and now linked together, the newly institutionalized elements resist a sliding back to the old status quo. The first new principle, then, is that elements of transformation become elements of sustainability as they become interlocked and reinforcing in a new basic organizational character.
The Dynamic of Perpetual Momentum
The steady state of change itself changes incrementally. As step-by-step adjustments are made to changing demands and newly appearing opportunities, cumulative change rolls a university forward. The institution acquires a steady momentum that need not have a particular stopping point. Depending upon small incremental gains, fashioned essentially out of learning-by-experimenting, such forward movement does not depend on lucky throws of the dice in selecting one major investment. Rather, momentum is acquired from the cumulative thrust of small steps.
Our second new principle then is that elements of transformation become elements of sustainability as their cumulative incrementalism produces a perpetual momentum. The interlocking composite acquires a forward impetus. The university leans toward the future. Think Warwick on the European stage. Think University of Michigan in the U.S. system since the early 1980s.
The Dynamic of Ambitious Collegial Volition
Is there any doubt that some universities try much harder than others to improve their performance, especially when that improvement means much hard work to effect long-term change in character? The play of sheer will repeatedly comes to the surface. Behind the interlocking interaction and the perpetual momentum, something like institutional will plays a basic role.
In understanding what is at work, the concept of volition, borrowed from political economy, is helpful. In the framework developed by Charles E. Lindblom, democracy (or polyarchy -- rule by many) not only follows from the will of the people but also induces and shapes that will. "Polyarchy is a process that forms volitions as well as a process for making policy respond to them." A volition is "an emergent act of will," in the form of a decision to pursue a certain path of development.7 In organized settings, volitions are collective decisions producing collective commitment. In this fascinating explanatory framework for understanding political democracy, people create, rather than "find" their wants, needs, and interests. The decision decides what the want is to be, and what is needed. It creates the interest.
But how and why do certain volitions get made in universities, whatever their stressful situation? We have to turn back to ambition and to a stream of decisions that follow. A strong example is when Warwick was faced with a severe reduction in state support back in the early 1980s, along with nearly all other British universities. Decisions to go backward or to stand paralyzed were seen as simply not acceptable. The institution decided on a new approach, an earned income policy originally defined in the form of save-half/raise-half to get the money needed to cover the government cut. The raising of additional income proved surprisingly successful. The initial volition -- the decision to try out a certain new path of development -- then became a determined commitment that encouraged a variegated stream of ongoing decisions leading to much greater self-reliance. In the beginning, and then onward, ambitious volition helped to propel the institution forward to a transformed character over a twenty-year period. Along the way, Warwick acquired much confidence in its capacity to face the future.
In all the institutions studied, there was the volition to take the risk of being highly proactive, even entrepreneurial, in contexts of much contrary even hostile academic questioning of the propriety of this choice. Other universities decided it was not worth the effort; or that it was best to wait for government to come to its senses and provide the needed funding (a little like Waiting for Godot); or that, as a matter of principle, we should hang together and share equally the pangs of poverty; or that old ways would prove best over the long term. Inertia in traditional universities has many rationales, all leading to avoidance of the needed hard choices that the Shapiro brothers had called for.
To restate: the increasingly self-reliance university is built and sustained out of blocks of will reflecting assertive ambition. At the beginning of change there is volition, along the way there are emergent acts of will, and in the end the ambition to deliberately fashion an even better university remains. If there is a single secret in significant university change, perhaps this is it.
To put the matter in striking terms: there are two miracles in the deliberate transformation of a university. One is having gotten started, having faced down the fear of failure before beginning. Many universities will simply not try to start down a new road. It seems risky; a revered institution may be laid low; it may lose its soul along the way. The other miracle is sustaining a virtuous circle of successful accomplishment over a decade and more, facing down the multitude of conserving tendencies in organizations – especially in universities -- and among organized sponsors -- especially ministries -- that bring change to a halt. At the heart of each miracle lies willful agency.
Source: Burton Clark, “Plenary Address to the Valencia Seminar on the Enterprising University”. Center for the Study of Higher Education Management, Technical University of Valencia, June 8-9, 2005.
http://porterow.cfp.upv.es/cambioestrategico/ponencias2/Burtton_Clarck.pdf
The University of Warwick is a campus university which, despite its name, is located mainly inside the southern boundary of Coventry, England, some 11 km from the town of Warwick.
Despite being one of the UK's younger universities (founded in 1965), the University of Warwick has, in recent years, established a reputation in UK Higher Education. Tony Blair characterized the university as "the university of the future" and US President Bill Clinton chose Warwick to deliver his last public speech. Departments with a particularly strong reputation include Mathematics, History, Philosophy, Warwick-Horticulture Research International, Computer Science, International Law, Economics and Business. It is also home to the Modern Records Centre, Britain's largest repository of the archives of trade unions and industrial relations.
A recent addition is the Leicester-Warwick Medical School, one of the first graduate medical schools opened in an attempt to respond to the chronic lack of doctors in the UK.
The University was ranked 5th among the UK's 100 universities for quality of research in the UK Funding Councils' 2001 Research Assessment Exercise. Over 91% of the University's academic staff is located in departments with top research ratings of 5 or 5.
22 of the 24 University academic departments which have been assessed under the Subject Review process conducted by the Quality Assurance Agency for Higher Education have been rated 'excellent' (scored 21 or more points out of 24) for the quality of their teaching. Seven departments have achieved the maximum score of 24 out of 24.
In what follows, Jim Rushton explores how far the five “clarkian-transformation elements” apply to the development pathways of the University of Warwick since 1980 and concludes that there exists a strong correlation[xxi].
First, the strengthened management core. This is certainly a most important feature. Warwick has a very tight group at the centre which meets weekly to advise the Vice-Chancellor, to discuss policy and to take urgent decisions in between meetings of the main statutory committees. This body is called the Steering Committee and consists of the Vice-Chancellor, three Pro-Vice-Chancellors, three Faculty Board Chairmen, the Chairman of the Graduate School, the President of the Students' Union and the Senior Officers (Registrar, Deputy Registrar, Academic Registrar, Finance Officer, Administrative Secretary, Estates Officer and others as required). There are four points to be made about this arrangement:
1. The Vice-Chancellor and the Officers are permanent appointments whilst the Pro-Vice-Chancellors and Faculty Chairs are elected for three and two year periods. This gives a good balance between professional and academic concerns and between continuity and democratic representation.
2. The Steering Committee has strong links into the academic heartland and therefore has the confidence to take quick action when necessary.
3. Warwick has a strong centre and strong departments with little in between. There are no Deans and the Faculty Boards are committees with little or no management responsibility. This helps quick and efficient communication and decision-making.
4. For many issues of strategic and financial importance, the lay Chairs of the Council, Finance Committee and Building Committee will have a considerable involvement. These Chairmen are usually widely experienced in business or public service, and there is no doubt that the University benefits enormously from their experience and advice.
5. The Registrar is the senior administrative officer under the Vice-Chancellor with the additional responsibility of providing the secretariat to service all statutory University committees. This unified administrative function is most important. It frees the Vice-Chancellor from having to arbitrate in sectional disputes, but much more important at Warwick has been the ability to set high standards across all sections of the administration and to ensure that they all follow centrally driven policies to be 'customer' oriented, to be flexible, to be non-bureaucratic, and to see their role as supporting the main academic and revenue-generating activities of the University. The importance of this central coordinating, motivating, standard-setting function cannot be underestimated in the Warwick context
Secondly, the development and expansion at the periphery is demonstrated strongly by the Warwick experience. Between 1980 and 1997 the number of research units and centers increased from 3 to 44. These units and centers represent an area of flexible and often responsive activity, very often with links into the community, very often dependent on winning grants or providing services for their survival. The University's three residential management training centers, the Science Park with its 65 companies and 1350 employees and the Arts Centre which has 250,000 visitors per year further exemplify a vigorous presence at the periphery. In addition, all the support functions such as industrial liaison, research contract support, patent and copyright, fund-raising and public affairs were introduced at Warwick after 1980.
The third factor - an increased and diversified funding base is clearly demonstrated by the reduction of Government funding as a proportion of total income from 85% in 1980 to the present day figure of 44%. The earnings which last year totaled L76 million come from 55 different activities, all of which report to the Earned Income Group chaired by the Registrar.
The fourth factor - a stimulated academic heartland again very much reflects the Warwick experience. The tremendous growth in all subjects - but especially the Warwick Manufacturing Group, the Warwick Business School and Continuing Education, the development of the Graduate School and growth of graduate student numbers to 40% of the student body, the high scores in the Research Assessment Exercise and Quality Assurance Agency Teaching Assessment, and the recent establishment of a Medical School - all testify to a vigorous and buoyant academic heartland.
The fifth factor - an integrated entrepreneurial culture has been carefully nurtured at Warwick by the early and transparent use of performance indicators, by means of incentives and rewards for success and by appropriate internal and external publicity. Professional press management and public relations are a vital part of this process.
Clearly the Warwick experience supports Burton Clark's conclusions but there are other factors which contributed to Warwick's ability to transform itself during the nineteen eighties into an innovative and entrepreneurial institution.
First, and arguably the most significant, were the radical higher education policies being implemented by the new Conservative Government from 1979 onwards. These included a large reduction in state funding, an increase in the number of students, the intrusion of market forces and competition into the macro and micro management of higher education, and measures to encourage institutions to become more relevant to the social and economic development of the nation. Of these the financial depredations and consequential prospect of serious damage to the quality of academic life created a climate within the University in which previously unthinkable policies could be introduced as dire necessity, but which were subsequently accepted as salvation and eventually embraced with pride as part of 'the Warwick Way'. Without the external 'threat' it is most unlikely that Warwick would of its own volition have initiated the radical program of change and transformation.
The Warwick response was a decade of hyperactivity, of innovation and of growth. It was a decade which saw the University's 'earned income' grow from 15% to 50% of total turnover. Above all it was a decade in which the University came of age as a contributor to the social and economic development of the region. The major contributions came through a rash of new developments outlined below:
A Department of Continuing Education was established and after the transfer of Responsible Body status from the University of Birmingham in 1984 the number of local Open Studies courses and attendees increased tenfold. The Continuing Education Department was also responsible for the introduction of access courses and the innovative 2+2 degrees in collaboration with local Further Education Colleges. To further underline the University's concern for local matters, the Continuing Education Department established an advisory centre in one of Coventry's more deprived areas.
In 1980, Professor S K Bhattacharyya established a Department of Manufacturing Engineering within the School of Engineering Sciences. By addressing regional and national needs through the provision of consultancy, training, research and development services and by working closely with major engineering companies and their suppliers, Kumar Bhattacharyya built up one of Europe's largest university centers of Manufacturing Engineering.
In 1983, Professor George Bain was elected Chairman of the Warwick Business School and proceeded to transform an average department into one of the nation's leaders. This was achieved partly by massive expansion, much of which was based upon the provision of consultancy, training and research services to meet the needs of regional and national, private and public sector organizations.
Local and regional needs were also very much in mind with the establishment of the Department of Applied Social Studies and the Department of Postgraduate Medical Education. In both cases the training and updating of professional staff brought the University into a close working relationship with an important local service provider.
In response to the very high unemployment in Coventry, the University Science Park was established in 1983 on the University campus in collaboration with the Coventry City Council, Warwickshire County Council and the West Midlands Enterprise Board. The Science Park now accommodates 65 companies which employ over 1350 staff.
Other developments introduced during the '80s which had a strong regional orientation included the building of three residential training centers, expansion of the Warwick Arts Centre to generate a quarter of a million visitors per year and efforts by the Sports Centre, Library and Language Centre to make their facilities and services available to organizations and members of the public within the region.
Implicit in the strong regional developments just described was a policy of growth. Growth in student numbers, growth in existing activities and growth of new activities were all pursued vigorously and achieved as the figures below demonstrate:
1980 - 1997 Students (heads) 5.250 – 15.630; Postgraduates 550 – 5.769; Overseas students 250 – 2.474 Self-financing course students – 3.396; Research Institutes and Centers 3 – 44; Income L20m - L1.387m
During the same period the staff-student ratio declined by 50 per cent and State funding per student head in excess of that figure. The growth of the University meant that these cuts could be absorbed less painfully whilst at the same time expansion created a feeling of excitement, generated new income streams and generally boosted morale in very considerable contrast to the depressed state of the higher education sector as a whole.
A further factor which contributed to Warwick's transformation was the youthfulness of both its staff and structures. There were no departmental 'baronies', no Deans defending the indefensible and the decision-making structure had not yet reached the sclerotic state exhibited by many older institutions.
This allowed the development of an important feature of the Warwick model. It is the 'progressive taxation' system under which a sizeable proportion of departmental earnings, where they exist, is re-distributed for the benefit of the University as a whole. Youth and related administrative flexibility might also account for the surprising ease with which the Earned Income Group grew from an informal meeting of officers under the Chairmanship of the Registrar to its current position where it monitors or controls over half the University's total budget in a manner which would not have been possible in many older institutions. A central feature of the Earned Income Group policy has been to appoint high quality professional managers with relevant business experience and then provide guidance and support to enable them to survive and prosper within what is still a largely uncomprehending and potentially hostile internal environment. In no area is this support more important than in the need for continuous investment for growth and to remain competitive. For example, a costly refurbishment of a perfectly acceptable residential management centre might appear extravagant and even wasteful when put alongside funding needs for 'core' university activities such as teaching and research. However, such refurbishment has to be seen in the context of the competitive imperative of the industry and the fact that a failure to invest would certainly jeopardize future earnings. Warwick has handled this dilemma well partly through the Earned Income Group structure and partly because the very strong centre (Vice-Chancellor, Pro-Vice-Chancellors, Faculty Board Chairs, senior officers and the three senior lay officers) has been able to set a sensible long term development budget and resist the many and varied short term pleadings. In contrast, the grim and shabby state of many universities at present bears testimony, not just to shortage of funds, but to weak decision-making and a willingness to pass on the consequences of gradual deterioration of plant and buildings to be picked up at some indeterminate point in the future.
In his concluding discussion Burton Clark stresses the incremental and holistic nature of change in universities. He quotes with approval David W Leslie (1996) who states “... change in colleges and universities comes when it happens in the trenches; what faculty and students do is what the institution becomes. It does not happen because a committee or a president asserts a new idea”.[5]
Whilst the change in universities must embrace the wider community, there is little doubt that the process at Warwick would not have started without the prescient and far-sighted recognition of the need for change by the Vice-Chancellor, Jack Butterworth. He reached this conclusion long before his fellow vice-chancellors and outlined his views eloquently to the University Court in his annual report in 1980. He said:
"I began by drawing your attention to the three functions of a university: teaching, research and service to the community. A university which is doing its job in teaching, research and service to the community will inevitably find that it is an agent of change. Universities are frequently criticized for being ivory towers, often by those who have only an imperfect knowledge of what a university is doing. In most university work there is an element of the cloister, and indeed of dedication and retreat, in order that the highest standards can be achieved, whether in research or teaching, but the days of the ivory tower as such are long since over. A new dispensation is now being differently received in different institutions. Some adopt the new order willingly, some, like the University of Warwick, enthusiastically, some cautiously and a few reluctantly, but all admit that universities must come to terms with the community which we serve. For the reasons which I have tried to explain, community service has now gone far beyond extra-mural work. If I may put it shortly, it is a philosophy, a point of view which affects the whole operation and structure of the university. It may be that the old structure has had its day and that those universities will be successful which do not wait for a new model or precedent but are already moving towards a new and different approach."[6]
Jack Butterworth recognized very clearly that the university system could not last and that movement to a mass system of higher education would inevitably lead to a continuation of the cuts introduced by Mrs. Thatcher in 1980. For Warwick to maintain the standard of academic life to which it had been accustomed, it would be imperative to replace the lost Government funding. The course was set by the Vice-Chancellor but it required the prodigious energy, imagination and high level management skills of the Registrar, Michael Shattock, to enroll the active support of the wider University community and to ensure that the pace of change and development did not slacken.
How far the Warwick experience demonstrates either the general validity of Burton Clark's five elements or indeed whether its own experience can provide a template for other institutions is an interesting and important issue. To address this we might ask the question "which of the factors contributing to Warwick's transformation were so fundamental that without them the change would not have occurred?"
Warwick, like other UK universities is a self-governing organization of consent, and as such is constitutionally resistant to change. Without Mrs. Thatcher's sword of Damocles, it is almost certain that the panic-driven instinct for survival would not have been triggered. The fact that other UK universities faced the same problem at the same time but did not respond with the same speed, vigor and opportunism can be attributed to a range of factors, but there can be little doubt that without the far-sighted, energizing leadership of the Vice-Chancellor and Registrar, the Warwick response would also have been slow and feeble. Without an effective and unified management team to introduce and support the implementation of change, it is almost certain that the transformation would not have succeeded.
So we have three ingredients without which the transformation at the University of Warwick would not have taken place. These are incentive, leadership and management.
What then of Burton Clark's three remaining elements of transformation: development at the periphery, increased funding base and the stimulated academic heartland?
In each case they are first a consequence of change instigated by the University and secondly a most important contributor to its growth, development and success. For example, it was a clear intention of the University to become more relevant to the economic and cultural life of the region, which in turn led to growth, new income streams and a much enhanced, positive local and national profile. The additional income from the provision of local services contributed greatly to the University's ability to fund further growth and change. Similarly, the increased and diversified funding base was initially a policy which in time became part of the fabric of successful change (see Box below). The stimulated academic heartland has been a major feature of the Warwick landscape. Without it, the other elements of change could certainly have brought financial and reputational success, but in the absence of 'buy in' from academic departments, Warwick's success would have been a pale shadow of what has been achieved.
It may be concluded that whilst Warwick's growth and development since 1980 most certainly incorporated the five elements of transformation identified by Professor Burton Clark, these were not in themselves a sufficient condition of change. Several other factors were important but without the external stimulus of Government policy, the far-sighted and dynamic leadership of Jack Butterworth and the high level management skills of Michael Shattock, it is most unlikely that Warwick would have become what Lucy Hodges described as “... the success story of the university world”.[7]
-- Based on an article published in "The State of UK Higher Education", editors David Warner and David Palfreyman, SRHE and Open University Press, 2001 --
[1] Burton R Clark (1998) Creating Entrepreneurial Universities - Organizational Pathways of Transformation. UK: Pergamon Press
[2] Ibid., pp. 131, 132
[3] Ibid., p. xiv
[4] Ibid., p. 7
[5] D W Leslie (1996) Strategic governance: the wrong questions?, The Review of Higher Education, 20(1): 101-112
[6] J B Butterworth, Annual Report, 1980-81, University of Warwick
[7] Lucy Hodges (2000) Fear not... the Professor has a cunning plan, The Independent, Education Section, 2 March, p. 2
Source: See Jim Rushton, “Warwick 1980 to the Present: A transformation that others could follow?” Romanian Higher Education and the EUNET Project
http://www.britishcouncil.ro/eunet/romania-support-eunet-en-11-warwick-university.htm
When Sir Brian Follett, Warwick’s Vice-Chancellor (1992–2000), spoke at the OECD-IMHE Conference in Paris on the element of diversified funding base, he began by likening the ‘traditional statist model’ to ‘a monopoly purchaser interacting with a cartel’ – a very different view of the state–university relationship than the one offered by a continental minister of education who confidently claimed that ‘the state was the university’s best friend’. Sir Brian then succinctly pointed out that the British government had began to pull back from university support in the early 1980s and then continued to do so in all the years up to the present. State funding increased twofold during those two decades, but state-led expanded student intake increased threefold, changing student–teacher ratios on the average, we may note, from 10/12:1 to 15/18:1. Institutions varied from 10:1 to 30:1, and over thirty universities out of a hundred now shouldered a 20:1 ratio or more. So much for equity in general university support.
Follett noted further that the national Research Assessment Exercise (RAE) begun in 1986 and repeated in 1989, 1992, 1996 and 2000 had increasingly focused infrastructure research funds on a subset of universities – those with high scores received much more money. The state also had ceased to put up money for capital development, leaving it to the universities to borrow money from banks for this purpose. The government had opened several doors to tuition income by allowing universities to charge graduate students as well as overseas students ‘at market rates,’ that is, at full cost recovery if possible. Year-by-year cutting in core per-unit support – cuts the government liked to define as ‘efficiency gains’ – brought the UK university system down, by 2000, to approximately 60 per cent dependence upon basic funding from its main government sponsor.
Warwick was ‘in the vanguard’ in reducing this dependence. Its income from the core governmental allocation for teaching and research that had been 70 per cent of total income in the 1970s had fallen to 38 per cent in 1995 and then further to 27 per cent in 2000. A core allocation of 90 million euros was far surpassed by a non-core sum of 160 million euros. ‘Non-government earnings’ had become the financial underpinning for all that Warwick had become and for all that it wanted to be. As Follett explained further at the Paris conference:
Without any doubt it is this stream of funding – and its associated ‘profit’ – which has allowed Warwick to invest in more and better staff and to build a campus infrastructure that is internationally competitive.
In terms of the UK ‘league tables’ then the strategy has been academically successful with the entrance requirements of students ranking amongst the highest in the land and the university regularly being rated in the top six or eight of the 100 UK universities for research, teaching, and overall. In other words the end points seem to have justified the more entrepreneurial approaches adopted; we have not sacrificed the core academic values, indeed the opposite would appear to have occurred.
So much for those fretting about ‘losing the soul of the university’ if they actively sought out non-government income. Of course, the diversification of income did not lead to such favorable outcomes without deliberate development of other organizational features. Follett briefly pointed to the central role played by stimulated heartland departments, the linking of new outreach units to the departments, the importance of certain kinds of managerial mechanisms, and the accumulation of a supporting culture. In very untraditional terms – particularly so for European universities – the Vice-Chancellor stressed that:
The strategy is relatively simple. Encourage all sectors of the university to look outwards at possible opportunities, establish profit sharing arrangements that stimulate each sector to maximize their turnovers/ bottom-lines, put in place managerial mechanisms which do not confound the academic virtues with the financial virtues . . . and put in place mechanisms that can take risks. The end result is a suite of ‘businesses,’ most of which are based within the academic departments. The provision of graduate training, short courses for the commercial sector, recruitment of overseas students and the research grant/contract income raises three-quarters of the E160 million each year. Without doubt much of this enterprise is focused within a small number of large players – the Warwick Business School, Warwick Manufacturing Group, Economics and Law – but virtually all academic units are involved. Some of the science departments have focused part of their overall activity upon commercial linkages for research and development, others in the humanities and social sciences have focused upon recruiting overseas students. It has become part of the culture and the financial flows are critical to the survival of many of the academic units. Quite separately, the university has developed many of its facilities for use outside the immediate undergraduate teaching year. Warwick Conferences attracts over 100,000 visitors and has a turnover of E20 million. It not only raised the quality of the 4,000 student bedrooms (a high proportion of which are now ‘en suite’) but we have built three Management Training Centers which operate as four-star hotels and are used for short course work. Retail services have erected a supermarket, bookshops, and various other retail outlets whilst there are a couple of growing dot-com businesses.
Sir Brian concluded:
Not everything works every year but that would hardly come as a surprise to any business person. Overall though the growth rate has exceeded 10% per annum and has proved remarkably robust. The surpluses generated are spent in a host of ways. More faculty than would otherwise be possible, and importantly better paid. A building program . . . which will exceed E150 million over six years, funded 50% from the surpluses and an ability to maintain the infrastructure in good condition (from libraries to landscaping). Will the geese continue to lay their golden eggs? I think so not because each business is secure but because the university is prepared to change rapidly as outside pressures occur. For instance, the distance learning MBA programs have to alter rapidly to become company oriented and use electronic means of dissemination. The management structure plus the culture suggest such changes will occur, not without some pain but without the need for radical change . . . The objectives are also crystal clear: to be a leading teaching and research university. The evidence and the benchmarks against which we operate suggest these academic priorities are working. I can only end by saying that the system also operates collegially and the student–staff ratio, for instance, is remarkably constant across the university so [the] funds are clearly being shifted around to maximize the whole. Finally, a good example of spending money for the public good might come from the Warwick Arts Centre which each year attracts 250,000 visitors (mostly from the community, not from the university) to its 1,100 events. It is the largest such complex outside London and requires a subsidy from us of around E1 million annually.
At several points in his presentation, the Vice-Chancellor spoke about management: e.g., ‘the importance of certain kinds of managerial mechanisms’; the need to ‘put in place managerial mechanisms which do not confound the academic virtues with the financial virtues’. Warwick functions by means of an extremely flat structure, one shorn of organized faculties and deans – the common middle level found in most European and American universities – with the center and the departments relating directly to each other. This minimization of vertical organization puts a premium on department responsibility and especially on a well-administered center. In its transition, the university early set its face against ‘full blooded financial devolution to departments’, in order to ‘retain a distinct measure of financial control in the centre’, control that is spread among a small set of interlocked central committees composed of senior faculty, senior central administrators, and some members of the lay-dominated Court. One committee closely monitors the earned-income portfolio. Another approves the filling of all staff vacancies and decides each year on an allocation of resources to departments, including the creation of new posts and the maintenance or reallocation of old ones. It also interviews the chairs of departments on annual budgeting proposals. Still another seeks to integrate academic, financial and physical plant planning. The structure of central committees put in place during the 1980s remained much the same at the end of the 1990s. Change had clearly acquired a ‘steady state’ with observable vested interests and standard operating procedures of its own.
For Warwick, this assemblage of related committees is an operational definition of a ‘partnership’ between senior academics and senior administrators – the latter hired to be an unusually strong group. The proven success of this feature of management structure is the center’s regularized capacity to top slice income from various sources and then cross-subsidize with funds thus set aside to come to the aid of academic departments weakly positioned to generate income. The ‘university’ simply says this is accepted – and it has been – because ‘we’ use academic criteria and so build the university as a whole. Such capacity is an important foundation for building encompassing interests and integrating institutional identity. Such outcomes are not achieved by ‘talking the talk’. A university needs sturdy mechanisms, albeit difficult to build but invaluable when once in place.
Source: Burton Clark, “Sustainability at Warwick: a paradigmatic case”. In B. R. Clark, Sustaining Change in Universities. Mc Graw Hill – Open University Press, 2004
http://www.mcgraw-hill.co.uk/openup/chapters/0335215904.pdf
The University of Strathclyde is used to illustrate translating institutional objectives into action because the processes are well documented for a recent Continuation (second round) Quality Audit and in the study by Burton Clark (1998).
The University of Strathclyde aims to be a place of useful learning. It is structured into five Faculties (Science, Engineering, Business, Arts and Social Sciences, Education) with the equivalent of more than 15,000 full time students (of whom some 2000 are postgraduates). Some two thirds of the UK students live in the commuting catchment region of the University. In its mission the University emphasizes the development of students and staff. It also stresses the importance of research activity which combines excellence with relevance.
For the purposes of academic and financial management the University operates a devolved system through the five Faculties, with Central and Academic Services representing the sixth major budgetary grouping.
At each level, executive functions are carried out by designated officers, with academic decisions being the responsibility of formally constituted committees, sub-committees and working groups.
In the Strategic Plan 1997-2001, six challenges facing the University were highlighted:
§ students will pay more and expect more
§ demand will grow for learning through life
§ Information Technology will expand educational opportunities
§ investment in research will be more selective
§ public funding will be further reduced
§ there will be more collaboration among universities.
Five strategic priorities were set:
§ provide a first-rate undergraduate education
§ introduce new learning methods and study modes
§ build on research strengths
§ invest in human resources
§ develop beneficial strategic alliances.
Each priority translates into several detailed objectives. For example, in support of the intention of providing a first-rate undergraduate education the University made a commitment to:
§ "continuously reviewing course content;
§ continuously improving the physical learning environment;
§ responding positively to student feedback and external assessment;
§ improving course completion rates; and
§ reviewing and improving our student support services."
The remainder of this section focuses upon the work that has occurred to translate the teaching and learning and the human resource priorities into action. Increasingly these are being recognized as inter-related, crucial and central to the intention of the institution to seek greater alignment of individual, department and institutional talents, aspirations and endeavours.
In the Analytical Account submitted to QAA for the Quality Audit conducted in March 1998, the University stated:
"The aim .... is to ensure that staff in all areas and at all levels take responsibility for their own effectiveness and share fully in the University's commitment to the continuing improvement of the quality of teaching and learning"
In the recent Quality Audit, Strathclyde was expected to illustrate enhancements implemented since the original Academic Audit and two more recent audits of overseas collaborations. The Analytical Account had to be structured to cover: the Context of the Institution (mission, strategies, issues, etc); the Quality Strategy (including strengths and limitations); the Assurance of the Academic Standards of Programmes and Awards; the Learning Infrastructure; and Internal and External Communications.
In response to the report of the first Academic Audit the University established the Academic Quality Assurance Group. That Group has: facilitated the developments of codes of practice for various aspects of quality management; overseen the preparation for, and, follow up actions arising from, quality assessment; and contributed to various activities directed towards quality enhancement.
Each Faculty has committees dealing with the approval and review of educational programs and with the enhancement of teaching and learning.
The University is committed to a devolved structure, to enhancement and to the active involvement of staff in developing academic policies and practices. Yet external processes such as Quality Audit and Assessment expect explicit systems that are monitored effectively.
To accommodate these requirements a great deal of time and effort has been devoted to consultative development and to sharing and building upon effective practices operating within Faculties. Part of the central role of the Academic Quality Assurance Group has been to negotiate University-wide Codes of Practice based upon those experiences and, most recently, to compile a University Policies and Procedures Guide for Academic Structures and Processes related to Teaching and Learning.
The University has invested significantly in support activities such as the Careers Service, Centre for Academic Practice, and Student Counseling and Advisory Service. These activities have attracted favorable comment in the Teaching Quality Assessments undertaken by SHEFC.
Recent enhancement activities have included:
Attention is also being paid to enhancing the coherence of offerings and the integration of policies and practices. The aim is to work towards more coherent choices for teaching, learning, assessment, the provision of learning environments, support systems and staff development and of the whole range of recognition, recording and reward structures (for staff and students).
In preparation for the recent Quality Audit, the Academic Quality Assurance Group met with groups of heads of department, senior officers and student representatives from each of the Faculties to check for lacunae, to clarify understandings and to address any departures from agreed policies and practices. Similarly before each Quality Assessment the members of AQAG meet with the relevant head of department and Vice-Dean to discuss the content of the draft self-assessment document. About six months after the publication of the Assessment Report each department is required to report upon the actions that are being taken to address the recommendations made in the Assessment Report. Dialogue is sometimes required before AQAG can report to the Senate that it is satisfied with the proposed enhancement strategy.
At Strathclyde there is a considerable degree of devolution to the five Faculties and a substantial measure of academic autonomy, certainly ownership, at the program level. The central steering is guided by the widespread culture of 'a light touch' and the avoidance of unnecessary layers of management, intrusive management or burdensome bureaucracy. Such a philosophy is fundamental to our ethos and to the ways we want to do things. We do face a challenge ensuring that we can communicate this effectively and demonstrate to external assessors and auditors that the University operates thorough and effective procedures for quality assurance and enhancement. The task is demanding but the outcomes of quality assessment and audit indicate that, in most instances, the University and its departments have proved equal to the challenge.
In relation to human resources, the Strategic Plan states that "The University's principal resources are financial, physical and human. All three require careful management if we are to deliver our plans for the next four years. .... Above all, the University's staff must maintain high standards, while being responsive to new opportunities and ready to implement change. The effective encouragement and development of staff is a priority."
As part of the strategic thrust in relation to human resources the University is working towards recognition by Investors in People (IiP), a National Standard in the UK. IiP is based on four key principles:
The attainment, or demonstration, of these four principles is measured via 23 indicators. In essence the standard:
The University started this journey nearly four years ago with the formation of a Steering Group chaired by a senior Professor. The other members include a Senior Officer, a Dean, the Heads of two Academic Departments, the Directors of Personnel, Academic Practice, Planning, Careers Service and External Affairs, and a senior Personnel Officer.
An attitudinal survey was conducted in 1994. That survey provided a great deal of valuable information, including important lessons about sensitivities surrounding the appropriateness of IiP for a research university. Since then a great deal of work and discussion has taken place. In 1996/97 the Staff Development Policy was revised and a Staff Development Strategy formulated and approved. Appraisal is being extended to cover all categories of staff.
During 1998 there has been a structured program of departmental involvement, particularly focused upon strengthening the links between the institutional strategic plan and departmental plans and between the latter and individual development plans. In the pilot phases of the departmental program staff of the Centre for Academic Practice have functioned as an internal consultancy team supporting the process of development and adaptation. Now the focus shifts to the Faculties to complete the roll-out process with staff from CAP available to provide support as, and where, it is requested.
The discussions over IiP have not been problem-free, yet it is telling that several heads of department in the pilot phases have acknowledged, sometimes almost reluctantly, that beneath the largely unwelcome language of IiP there lies the important issues of the alignment and development of individual members of staff and a welcome, even overdue, inclusive ethos.
Of course, there are colleagues in the University who are opposed to the initiative, or doubt the relevance of it, but that is part of the very nature of universities and university folk, above all they are trained to question things.
Ten years ago the British Universities were obliged to introduce formal systems of appraisal/career review of academic and related staff. Those systems, designed by the institutions in accord with national guidelines, placed a strong emphasis upon personal development planning. From the outset at Strathclyde the focus was placed on constructive dialogue and the link was made with departmental strategies and goals. Continuing pressure upon institutions and resources has served to sharpen the importance of achieving effective linkages between individual, departmental and institutional development. In essence, experience at Strathclyde echoes the findings of a study by UCoSDA (1997) which concluded that institutions may need to revise their appraisal schemes to match changed requirements and expectations and to benefit from the lessons that have emerged from operating such systems for several years.
The challenge facing universities throughout the world is one of adjusting prevailing cultures to secure closer alignment of individual and collective goals, so that the sum of individual performance is accurately reflected in aggregate performance. In my view, that is more likely to be achieved through effective accessing of Bergquist's four cultures of the academy (collegial, managerial, negotiating and developmental) than by centralist attempts at micro-management. As part of the strategy we need to sharpen the articulation of the concept and definition of professionalism in universities. We also need to cultivate a climate of individual responsibility within a clearly understood and shared set of institutional policies and strategies that form a coherent framework or ethos.
No lofty claims are being made for Strathclyde University, other than it is paying, and continues to pay, attention to ways of effectively translating institutional objectives into action, as, of course, in their own distinctive ways, are all institutions of higher education. Burton Clark (1998) concluded that:
"The ideas of useful learning, strategic research, and knowledge transfer, at Strathclyde, came to imply one another. They came together as a belief system that has become an all university culture. They are expressed in outreach willingness on the part of faculty and entrepreneurial initiative on the part of central administration. They stress that a place of useful learning must be a "well-administered place"." (p80)
Experience from quality audit and quality assessment indicates that every institution has distinguishable, and distinguishing, ways of "doing things". Whether these constitute a belief system in Clark's terminology may be a crucial component in determining the effectiveness of the institution in translating objectives into action, a task that both transcends and transgresses different levels of the organization. The search for ways of achieving that task more effectively merits serious attention from institutional managers, organizational researchers in higher education and indeed, the whole academic community.
Source: George Gordon, Director of Academic Practice, “University of Strathclyde, Translating Institutional Objectives into Action”
http://www.aau.ac.nz/goodpractice/quality/sharing/Examples1/Examples2/GeorgeGordon.rtf
The University of Twente, with its strong interest in its region, as well as its record of excellent (strategic) research, is a good case to study the potential of a university in a small regional innovation system in the age of Strategic Science. We will focus on its institutional development and its role in the region, but our discussion is informed by our knowledge of ongoing research and its links with innovation and policy.
The University of Twente is a leading member of the European Consortium of Innovative Universities (ECIU), a voluntary association of ten universities established in 1996, and united by their “commitment to regionalism and academic excellence” (Segal 1998, p. 8; see also ECIU, 1997) – the establishment of ECIU is itself an indicator of the advent of the regime of Strategic Science. Part of their institutional dynamics derives from their being young universities, struggling to create a niche. Projecting themselves as entrepreneurial or innovative universities is a useful strategy. Burton Clark (1998, p. 43) suggests that it is their “systemic marginality” plus a drive to overcome it which explains their choice of strategy and their success.
In the case of Twente, this is coupled with the marginality of the region itself, which faced a loss of a large part of its industry in the 1960s, and wanted to attract new industry and services. There are now many links between the University of Twente and regional business and government actors, and the Business and Science Park, coupled with special support schemes for beginning entrepreneurs, are well-known internationally as an example of a successful approach (Van der Sijde and Van Alsté 1998; Van der Sijde and Van Driem 1999; Van der Sijde and Van Tilburg 2000).
The University of Twente has a regional orientation, but also an international reputation for advanced technology. The University started, in 1964, as a technological university, and has since added applied social science (it calls itself, in its letterhead, “university for technical and social sciences,” and now also “the entrepreneurial university”). It is primarily because of its advanced work in some key technology areas, including materials, micro-systems, and information and communication technology that big firms are now interested in strategic links (for example, Lucent Technologies), or even in locating R&D departments near the campus. Ericsson Research, with more than 200 employees, was an “anchor tenant” of the Business and Science Park for some time.
A variety of spin-off firms have been established, building on university research or sometimes just on the entrepreneurship of graduates. Between 1976 and 1997, close to 300 firms have been started as spin-offs from the University. The special TOP scheme (Temporary Entrepreneurial Positions) started in 1984, and supported about 75% of the firms established in the period 1984-1997, with a five-year survival rate of 89% and generating a total of 1,400 jobs (Van der Sijde and Van Tilburg 2000).
The region of Twente, for a long time recipient of EU Structural Funds, is now strong in industry and services (especially information and (tele)communication technologies). As an innovation system it is still somewhat limited in its knowledge infrastructure, depending heavily on the University.
How has the University been able to manage the tensions between relevance, in particular regional orientation, and academic excellence? We will (critically) use Burton Clark’s (1998) analysis of the University of Twente’s development and the “secrets of its success”, to sketch an overall picture.
The terminology used by Burton Clark, an academic core (or “heartland”) and a developmental periphery, is tendentious, in that it uncritically accepts a traditional academic ideology of disciplines and faculties being the basis of a university, and thus reinforces the hold of what Gibbons et al. (1994) call Mode 1 of knowledge production. On the other hand, it is common terminology, and when actors draw on it, it is actually part of the dynamics of ongoing developments. With these qualifications, I present the two forms of the developmental periphery identified by Burton Clark:
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A “true” periphery of outreach units, industrial liaison offices and the TOP scheme. University officials are active here, and the Board of the University presents it as an important part of the profile of the University. The glossy folders and brochures that are prepared by the liaison office are often unknown to the academics. |
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A semi-periphery of outward-looking, problem-solving research centers (in materials, lasers and ICT high tech, biomedical technology, but also in applied social science) which reflect faculty interests even if the centers sprung up outside departments. By now, these centers have evolved into key components of the profile of the university, and recently, the organization of the university has been adapted so that the major centers are now on the same administrative and governance level as the faculties. |
The two activities tended, and tend, to be carried by different people, which implied certain limitations on the effectiveness of technology transfer (Kaghan, 2000). As Krücken (2003a, p. 30; 2003b, p. 328) emphasizes, liaison offices are often unable to push for initiatives and advise only those with little experience, while the active professors and industries linked with academic research would see liaison offices as distant from actual, ongoing interactions. This is an instance of the general “loose coupling between the formal structure and the activity structure of an organization” (Krücken 2003b, p. 322).
The distance between the activities is now less pronounced, however. One example is the Centre for Entrepreneurship in the Faculty of Business Studies, with (also) a strong regional orientation. Another example is the willingness of academics to enter into public-private ventures (not limited to the University of Twente), as in the case of Avantium, a national-level R&D company working on process technologies, catalysis research and nanotechnology, established in 1999.
In general, one can argue that early stage transfer and business development around a university needs direct strategic involvement of key people, being the entrepreneur, the researcher and the financer. For the same reason, the informal, bottom-up “coffee table and lab floor” type of process to catalyze business propositions and excite the people that should carry it is important. Thus, business catalysis and early development leans heavily on the research centers. At the same time, certain elements, such as fiscal and legal aspects, management of participations, etc., can be supported from a central liaison office. Since these elements are present in every case and since they have a generic nature, the research centers in the University of Twente support having the responsibility of those elements carried by a central liaison office. This allows a kind of duality (assertive business development models are balanced with “corporate” support on legal, fiscal and governance issues).
Burton Clark is concerned about the balance between the periphery and the “heartland”, and suggests that a level of 30% research income from external sponsors (which is the figure for the University of Twente as a whole) is about right. If higher (and he frowns on Warwick University with 50% external research income), there will be too much “sticky” knowledge in the University (cf. Asheim and Isaksen 2002). It is not clear what the arguments are for the one or the other figure, though. In the field of chemistry, with its long tradition of working with external sponsors of academic research, the percentage goes up (in the University of Twente) to as high as 80% -- apparently without ill effects. (External funding here comes from the whole range of funding agencies and sponsors, with more or less emphasis on relevance.) The nature of the networks, the mode of knowledge production, and the appropriability regime, are more important than a funding percentage.
In addition to existing and emerging structures (core/periphery, and new combinations), ongoing processes must be traced. Burton Clark emphasizes a strengthened (although not necessarily more centralized) administrative core -- part of the transition to a “modern” university --, and the role of champions, slogans and symbols. Both are clearly visible in the University of Twente. We will not go into the (local and contingent) details of attempts to strengthen the administrative core. The slogan of “the entrepreneurial university” was pushed, in the mid-1980s, by the then Rector, and is now part of the profile of the University. This in spite of soul-searching and critical discussion about how such a label might prejudice prospective students. Recently, other slogans have been pushed: “UT goes medical”, “major-minor curricula to broaden education”. Their implementation is taken up seriously, but little can yet be said about the effects.
What should also be taken into account (and what is not discussed by Clark) is the ongoing circulation of students and graduates and the patterns in the circulation. They are trained in the new centers of excellence and relevance, and they remain part of networks when they start out on their jobs, or perhaps start up a business of their own. At various stages in their careers, they will use their ties with the University to link up. Thus, they contribute to the embedment of the University in the world of Strategic Science, and this is more important than further strengthening of the administrative core.
The net effect of liaison activities, centers of excellence and relevance, new alliances, and graduate networks, is a university with permeable boundaries. This may lead to fragmentation, and one can see brave attempts of the “administrative core” to create directions and be selective. While important, such activities must be informed by an understanding of ongoing dynamics to be more than empty, and potentially counterproductive, bravado. The balance depends on the situation, and sometimes also on individuals in key positions. The recent history of the University of Twente has a number of examples of such contingencies. In the longer-term development, however, one sees continuities.
The University of Twente has a strong regional orientation, but its spin-offs strengthen the economy, not necessarily the regional innovation system, which still has a limited mix of institutions anyway. The capture of a Technological Top Institute (of national scope, but housed in the region) and activities in European Framework (Research) Programs help, but are not oriented to the region, even if they happen to be located in it. The increasing links with the polytechnic, Saxion Hogeschool, with its strong regional orientation, are important. The University is also prominent in selected areas, in particular nanotechnology, at the international research frontier. Promising options are a key feature of strategic science, but their ‘promise’ most often is not defined in regional terms, but in relation to a global scientific and technological frontier.
Centers of Excellence and Relevance are of various kinds. The focus here is on those which emerge within universities (with some internal and/or external stimulation). MESA+ is an interesting case to analyze (even if to understand its success, one has to factor in present and fashionable interest in nanotechnology).
MESA+ has its origins the late 70’s, when new ways were explored to use deposition, lithography and etching to create structures for other information domains (mechanical, acoustical, chemical, etc.), and when links were made with materials science, in particular supramolecular chemistry. Since these areas of research demanded new expensive equipment, a small central lab and a Sensors and Actuators Workgroup, combining four existing professorial chairs, were established in 1981. During the 80’s, the success of this approach and the external interest in the research field led to considerable growth of the research and facilities. In 1990, the Sensors and Actuators Workgroup consisted of six large professorial chairs, which merged with three professorial chairs in IC electronics to form the MESA institute for Micro Electronics, Materials Engineering, Sensors and Actuators. The fields of research could be located in the overall area of MicroSystems. Important for MESA were the “technology platforms” supporting their research and allowing further exploration as well as exploitation. The advent of nanotechnology, combined with existing strong collaborations, eventually led to a merger between MESA and eight research groups of the Center for Materials Research at the university, leading to the current MESA+ Institute for Nanotechnology in 1999, at the time when interest in nanotechnology internationally emerged (as in the German nanotechnology centers).
The Board of the University supported the formation of MESA+ with considerable extra funds of almost M€ 15 for a period of 5 years, because it wanted to have something like a top institute (having lost in the official competition for getting a Top Institute and willing to invest in reclaiming a national position). Thus, MESA+ started with a mission, and the culture within MESA+ has been colored strongly by the perceived importance of that mission and the fact that the extra funds represented a considerable sacrifice of the university as a whole.
The main route was a strategy to support disciplinary excellence (basically making use of the strong peer pressure within disciplines towards scientific excellence) and multidiciplinarity (increasingly important, also for scientific excellence).
Peer pressure on scientists towards excellence is perhaps the most important factor in decisions taken. At least, that is what can be observed: Not being able to score in STW or NWO, not being able to get high grades in peer reviews (“visitaties”), not being able to get papers published in the leading journals, is absolutely killing for one’s reputation, for his/her funding and for attracting the much needed talent. From a management point of view, this is an “anchor”, and having this anchor allows moves in the direction of multidisciplinary research and relevance, without breaking away from the quest for excellence.
Internally, the organization promotes multidisciplinary strength through a number of “central programs” or strategic orientations that are coordinated by young ambitious scientists. These programs, covering 70% of the research volume, form the basis for common focus and identity, for fruitful external collaborations and for most of the national and international strategies. Attracting key researchers is crucial. This is supported by the institute’s scientific reputation, challenging career paths and a state-of-the-art infrastructure. MESA+ now has 35 full-time equivalent tenured staff, 62 full-time equivalent non-tenured staff (post-docs and other temporary scientists), and about 200 PhD students. The total number of persons amounts to 450, including some 110 most technical support staff.
All other activities should (and most often do) directly or indirectly support the “core business” of excellent research. For instance, business development should lead to interesting academic questions, new horizons in applied research, more funds, a wider equipment base in the region, etc., without compromising the scientific excitement and quality of a group. If such positive effects are absent, the initiative will not actively be supported by MESA+.
Having noted this basic positioning of MESA+, it is striking how active a commercialization policy the institute has. Next to the more traditional cooperation projects with large industry, the institute has an active program of initiating spin-outs (start-up companies with a business plan in which technology developed at MESA+ plays a crucial role) and cooperating with spin-offs (defined as companies that have settled in the region and depend strongly on the presence of MESA+). The current number of spin-outs amounts to 13, while the total number of start-ups is 26. The total number of direct jobs is just above 150. Cooperation encompasses IPR-deals, shares in spin-offs, active business development, a venture capital network and facilities such as standard contracts for lab use and labs and offices especially designed and built for start-ups.
The commercialization program is additionally interesting in that it uses informal frequent contacts and an entrepreneurial attitude and culture as the backbone for all initiatives. Relations with spin-offs are business-like: market-conformal deals form the basis for every relation. This approach works well in an environment where the science and technology tends to be further from the market. In such an environment, spin-offs often have the role of taking care of the process of further maturing a technology platform as a basis for commercial exploitation. In that sense, the model is quite different from institutes which operate closer to market, such as IMEC in Leuven, otherwise a natural partner of MESA+ in many projects .
By now, MESA+ has built up its role as national leader in the field of nanotechnology. A number of its members have received prestigious awards, including major personal funding (with no ties attached) from funding agencies. An interesting further indication of quality is that an important group in optics from the University of Amsterdam moved to Twente. MESA+, in particular its director, was responsible for the initiation and coordination of the national nanotechnology initiative in The Netherlands. In the international arena, the institute has built a strong position of quality and leadership It has several formal cooperations with internationally leading research institutes, is part of a number of high-level benchmarks and coordinates a European Network of Excellence in Nanotechnology. The intellectual part of the business model is in place.
While MESA+ is achieving the mission that was set for it in 1999 (and in a sense and embraces it), its very success creates tensions. The heavy infrastructure (equipment and technical staff) needed for this area of science and technology needs to be funded, and can be funded almost only through (external) project funding. External financers of research only accept part (~50%) of the integral cost of a program, which leads to a need for matching funds from the university. (Matching funds requirements are increasingly part of national and international (EU) funding independent of the need to finance infrastructure, and imply an additional burden.) The university-internal allocation model offers a “premium” on acquired external projects, which can be used for infrastructure and matching. But the premiums are too low for the area of research that MESA+ is working in, and as a result there is increasing hunger for more external projects, also because larger numbers will increase overall efficiency. This, in turn, results in very high numbers of Ph.D. students per professor (on average close to 15 for the technology-intensive groups), and pressure on individuals to score more projects. The net effect, however, is a spiral down: the total amount available within the university for premiums on externally funded projects is a limited sum, so increasing numbers of projects decrease the amount of the premium for each of them.
This is not just a problem for MESA+, it is also a dilemma for the University of Twente. How to maintain a very productive institute within its boundaries, while the institute’s business model forces it to go in a direction which dilutes the premiums further. One way out is to have premiums at a stable level and sufficient to supporting this type of research; this would take away the survival-reflex of attracting more and more external projects. If this were manageable financially for MESA+ (doubtful given other problems of the University), there would still be a problem in that it could not be extended to all the other centers.
In other words, the strong position of the institute demands continued strong decision-making in the institute itself and in the university. The initiatives taken by MESA+ are sizable and often relevant, which then force the University into a reactive position. Within the institute the perception is that the hard work and risks taken are paying off for the university, since the institute achieves its original mission. While this is true, it also indicates that MESA+ is becoming a Centre in its own right, somewhat independent from regular university structures, and requiring special treatment. In the longer term, this raises a question of governance, for MESA+ and for the University. Can they continue to live happily together?
As one of us has emphasized earlier, for research universities, the key challenge is to diversify and recombine its components, both cognitively and institutionally, into what was called a post-modern university (Rip 2004). Such a university will include overlaps and alliances with Centers (of excellence and relevance), public laboratories of various kinds (which are themselves on the move!) and various private organizations managing and performing research. The boundaries between the university and the outside world are porous, and such ‘porosity’ is sought explicitly (De Boer et al. 2002). Partial examples are visible already, as in the close collaboration with public research organizations of some universities in France and South-Africa, or even a merger, as in Wageningen University and Research Centre.
In such a “postmodern” university, individual departments (faculties, institutes) are relatively independent and can follow own trajectories, and emphasize certain areas in response to external developments, develop new combinations of research and training, etc. In other words, in the strategically important middle layer in the university, now occupied by departments and faculties competing amongst each other for resources and favors from the top, an entrepreneurial element is introduced which increases the flexibility of the institution as a whole. Up to preparing for partial privatization, making deals with other universities, etc.
Traditional disciplinary departments and Fakultäten may well disappear in the end, but that is not necessary. They can remain one part of the heterogeneous set-up. Rip (2004) suggests that Centres for Excellence and Relevance are well suited to offer packages of research training (and certify them), whether they are part of a university or not. It would be a way of accommodating research training more rapidly to changes in the research landscape.
Source: Arie Rip and Kees J.M. Eijkel, “Tensions in Universities: Having to Accommodate”. International Conference: “Regional Innovation Systems and Science and Technology Policies in Emerging Economies: Experiences from China and the World”, Guangzhou, China, 19-21 April 2004.
http://www.utwente.nl/cheps/documenten/susu2004/readingriptensions.doc/
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The Center for International Higher Education sees as its mission advancing knowledge about the complex realities of higher education in the contemporary world. It publishes International Higher Education, quarterly publication featuring analysis and reports about key issues in higher education worldwide. The Center is supported by core grants from the Ford Foundation and by the Lynch School of Education and the Monan Chair at Boston College. Additional funding has come from the Toyota Foundation, the MacArthur Foundation, the Rockefeller Foundation, the Carnegie Corporation of New York, the Council for the International Exchange of Scholars (Fulbright Program), and anonymous funders.
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CHEPS is an interdisciplinary research-institute located at the faculty of Public Administration and Public Policy of the Universiteit Twente, the Netherlands. Since 1984, CHEPS has undertaken and published a considerable amount of research on higher education especially at system and institutional levels. CHEPS seeks to increase our understanding of institutional, national and international issues that bear upon Higher Education
The Centre for Higher Education Transformation (CHET) is a non-governmental organization that strives to develop transformation management capacity and skills throughout the higher education system, by integrating skill development training processes with new knowledge production, debates and information dissemination. CHET pursues its aims within a framework of co-operative governance, the promotion of institutional, regional, national and international co-operation and the flexible mobilization of expertise.
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The Center for Studies in Higher Education is a research and policy center on higher education oriented to California, the nation, and comparative international issues. It promotes discussion among university leaders, government officials, academics and all those interested in higher education policy. It assists policy making by providing a neutral forum for airing contentious issues and by keeping the higher education world informed of new initiatives and proposals. Likewise, the research conducted at the Center aims to inform current debate about higher education policy and practice. Founded in 1956 it was the first higher education center of this kind in the United States.
Center for the Study of Higher Education, Centre for the Study of Higher Education at the University of Melbourne
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Center for the Study of Higher Education, College of Education, Penn State University
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CSHE research informs a broad range of current challenges facing higher education: Governance, organization, and administration; Teaching, learning, and curricula; Finance and economics; Student access and success; Legal, ethical, and historical implications of current issues; Education for professionals such as law, medicine, and engineering; Comparative and international education; Student affairs administration
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CHEMS was initiated in 1993 as part of the Commonwealth Higher Education Support Scheme (CHESS) through the Commonwealth Secretariat. Throughout that period of time, CHEMS has been supported by the Association of Commonwealth Universities (ACU) and has received pump-priming funds from the Commonwealth Fund for Technical Co-operation (CFTC), from UNESCO and the UK's Overseas Development Administration. Between 1994 and 2001, CHEMS undertook some 70 consultancies, advising and helping universities, governments and higher education agencies world-wide to tackle and solve their management problems. CHEMS ceased operating as a consultancy service in January 2001.
Through the financial support of the CFTC, an extensive series of publications on management issues in higher education have been developed during the years of CHEMS operation. These publications are produced in hard copy, with the majority also available electronically.
http://columbus.universia.net/
Columbus y Universia desean acompañar a los directivos universitarios en sus funciones, en particular a los de reciente designación. Lo hace poniendo a su alcance una serie de entrevistas a rectores, directivos y expertos sobre aspectos relevantes de la gestión institucional con el fin de contribuir a su mejora. Todas las personas entrevistadas son o han sido recientemente protagonistas de la educación superior en sus países. Para dar la posibilidad de trasmitir una visión lo más concreta posible, cada entrevista se focaliza sobre una problemática más o menos circunscripta.
Columbus and Universia wish to support university leaders in their work, particularly those recently appointed. This is done by offering a series of interviews with rectors, directors and experts about relevant management issues with the purpose of improving performance. All those interviewed are or have been protagonists in their country’s higher education. In order to provide a practical point of view, the interviews are limited to one issue.
European Network of Information Centres (ENIC) - National Academic Recognition Information Centres (NARIC)
http://www.enic-naric.net/index.asp?display=About#About
The enic-naric.net website is a joint initiative of the European Commission, the Council of Europe and UNESCO/CEPES, has been created primarily as a tool to assist the ENIC-NARIC Networks in carrying out the tasks they have been mandated to accomplish within their own jurisdiction, by directing them to up-to-date information supplied and maintained by the competent bodies in each member country and by each member organization.
ENIC is made up of the national information centers of the States party to the European Cultural Convention or the UNESCO Europe Region. It provides information on the recognition of foreign diplomas, degrees and other qualifications; education systems in both foreign countries and the ENIC’s own country; opportunities for studying abroad, including information on loans and scholarships, as well as advice on practical questions related to mobility and equivalence. The NARIC network aims at improving academic recognition of diplomas and periods of study in the Member States of the EU, the EEA countries and the associated countries in Central and Eastern Europe and Cyprus.
http://www.enqa.net/
ENQA, the European Association for Quality Assurance in Higher Education, disseminates information, experiences and good practices in the field of quality assurance (QA) in higher education to European QA agencies, public authorities and higher education institutions. The Website functions as an information forum for ENQA member agencies, stakeholders and those interested in the developments, actors and expertise in the European QA in higher education. It contains latest ENQA publications and news as well as information on the current transnational European projects and upcoming events.
http://europa.eu.int/pol/educ/index_en.htm
Gateway to the European Union in matters related to education, training, and youth.
http://www.eua.be/eua/index.jsp
The European University Association, as the representative organisation of both the European universities and the national rectors' conferences, is the main voice of the higher education community in Europe. EUA's mission is to promote the development of a coherent system of European higher education and research. EUA aims to achieve this through active support and guidance to its members as autonomous institutions in enhancing the quality of their teaching, learning and research as well as their contributions to society.
Publications
Working in partnership, the Higher Education Funding Council for England (HEFCE) promotes and funds high-quality, cost-effective teaching and research, meeting the diverse needs of students, the economy and society. Thorugh its work, HECFE also supports the further enhancement of leadership, governance and management (LGM) within the higher education sector.
Higher Education at the Faculty for Interdisciplinary Studies of the University of Klagenfurt, Vienna
http://www.iff.ac.at/hofo/publications/publications.html
The Department for Research in Higher Education at the IFF investigates the economic, social and political framework conditions for research and education at all kinds of higher education institutions. The main goal is to contribute to the modernization of the Austrian Higher Education System and to improve the competitiveness of higher education institutions in an international environment. The Department for Research in Higher Education at the IFF is one of the largest organizational entities for research in higher education in Austria.
http://www.gseis.ucla.edu/heri/heri.html
The Higher Education Research Institute is based in the Graduate School of Education & Information Studies at the University of California, Los Angeles. The Institute serves as an interdisciplinary center for research, evaluation, information, policy studies, and research training in postsecondary education. HERI's research program covers a variety of topics including the outcomes of postsecondary education, leadership development, faculty performance, federal and state policy, and educational equity
Research
http://www.inpuma.net/research.htm
The mission of the International Public Management Network (IPMN) is to provide a forum for sharing ideas, concepts and results of research and practice in the field of public management, and to stimulate critical thinking about alternative approaches to problem solving and decision making in the public sector.
http://www.highereducation.org/
The National Center for Public Policy and Higher Education promotes public policies that enhance Americans' opportunities to pursue and achieve high-quality education and training beyond high school. As an independent, nonprofit, nonpartisan organization, the National Center prepares action-oriented analyses of pressing policy issues facing the states and the nation regarding opportunity and achievement in higher education-including two- and four-year, public and private, for-profit and nonprofit institutions.
(i) Directorate for Education
http://www.oecd.org/department/0,2688,en_2649_33723_1_1_1_1_1,00.html
OECD's work on education is relevant, not only for government and local authorities, but also for civil society: researchers, professional practitioners and an informed lay audience, in many cases beyond the 30 Member countries. The extent of the audience is evident in the public discussion and debate that OECD's publications on education often generate.
(ii) Tertiary education
http://www.oecd.org/department/0,2688,en_2649_34859749_1_1_1_1_1,00.html
The OECD is studying the impact of changed funding systems on institutions, following work on policies for improving institutional financial sustainability. A comparative review of tertiary education will contribute, especially on approaches to governance of tertiary institutions and the impact on efficiency and quality of service. Current work also focuses on human resource development, research management and internationalization. The OECD also develops statistics and indicators for tertiary education on access and participation, finance and investment, and labor force attainment and rewards.
(iii) Public Governance and Management
http://www.oecd.org/topic/0,2686,en_2649_37405_1_1_1_1_37405,00.html
The OECD seeks to analyze and develop solutions to the common challenges and needs of governments, and to promote good practices that enhance the effectiveness of democratic institutions. Work on public governance includes activities on e-government, regulatory reform, public sector budgeting and management, sustainable development, citizen participation in policymaking, and fighting corruption. Trough its extensive outreach program, OECD shares experience and knowledge on public governance with non-members throughout the world.
(iv) Emerging and Transition Economies
http://www.oecd.org/topic/0,2686,en_2649_37445_1_1_1_1_37445,00.html
The Centre for Co-operation with non-Members promotes and co-ordinates the OECD's dialogue with non-member economies. This dialogue is based on mutual interest and the sharing of policy experiences contributing to economic growth, social development and good governance. The CCNM's programmes - OECD Global Forums, Regional/Country programmes - cover the major policy areas of OECD expertise of mutual interest to Members and non-Members: economic policy, trade, fiscal policy, international investment, financial sector reform, structural adjustment through sectoral policies, environment, agriculture, labour, education, social, innovation and technological policy.
(v) Emerging and Transition Economies: Information by Country
http://www.oecd.org/infobycountry/0,2646,en_2649_37445_1_1_1_1_37445,00.html
Publications
http://www.albany.edu/dept/eaps/prophe/publication/publication.html
PROPHE is a global network dedicated to building knowledge about the development of private sectors in higher education around the world. PROPHE neither represents nor promotes private higher education. The core activity is scholarship, which, in turn, aims to inform public discussion and policymaking. PROPHE is headquartered at the University at Albany. PROPHE's funding comes principally from the Ford Foundation, assisted by the University at Albany.
Publications
http://siher.stanford.edu/publicationsalphabytitle.html
The Stanford Institute for Higher Education Research (SIHER) is home to sponsored research projects that examine contemporary higher education planning and policy issues from a wide range of analytical perspectives, including those of social scientists and policy audiences in the United States and abroad.
http://www.futuresproject.org/
The Futures Project was founded in 1999: (i) to stimulate an informed debate about the role of higher education in our new global society, and the opportunities and dangers presented by a global market for higher education; (ii) to develop policies that ensure a skilled use of market forces to maximize the opportunities while minimizing the dangers. The Futures Project closed down on March 31, 2005. The site is no longer actively maintained. All the material on this site will be available until August 1, 2006.
http://www.williams.edu/wpehe/publications.html
The Williams Project began in the summer of 1989 with a grant from the Andrew W. Mellon Foundation. The aim of the Project is to do studies of the economics of colleges and universities that meet high analytical standards while staying close to the institutional realities and policy concerns that motivate interest in this sector.
http://www1.worldbank.org/education/tertiary/
The World Bank is working to encourage not only better-quality outcomes from tertiary education worldwide, but also to promote more efficient tertiary education institutions that innovate and respond positively to meaningful performance-based allocation of resources and accountability systems. Such improvements can stimulate economic growth and help to stem the outward flow of highly skilled human capital by supporting cultures of quality and productivity.
Santiago, Chile, August 2005
* Prepared by José Joaquín Brunner and Anthony Tillett within the framework of FONDECYT Project N°1050138
[i] The texts were downloaded from the Internet between the 15 and 30 July, 2005.
[ii] See Harry de Boer et al., “An analysis of trends and perspectives in higher education and research”, 2002. http://www.awt.nl/uploads/files/as28.pdf
[iii] Stéphan Vincent-Lancrin, “Building Futures Scenarios for Universities and Higher Education: an international approach”. Policy Futures in Education, Volume 2, Number 2, 2004
[iv] Christopher Hood, “Paradoxes Of Public-Sector Managerialism, Old Public Management And Public Service Bargains”. Paper prepared for IPMN Conference, Macquarie University, Sydney, 4-6 March 2000
http://www.inpuma.net/research/papers/sydney/christopherhood.html
[v] “All approaches to public management reform (Peters and Savoie 1998; Dixon 1996; Dixon, Kouzmin, and Korac-Kakabadse 1997; Kouzmin, Dixon, and Korac-Kakabadse 2001) have their origins in conflicting and competing values, beliefs, and attitudes on what constitutes good public management, which are, in turn, a product of perceptions about how the world works and how other people behave. Underpinning these competing world-views are competing philosophical predispositions about what constitutes valid knowledge (true beliefs) and what gives rise to human actions. Public management involves addressing knowledge problems (related to, for example, understanding problem causation and the likely consequences of problem solutions), which is an epistemological issue; capability problems (related to, for example, designing problem solutions), which is an ontological issue; decision-making problems (related to, for example, choosing among competing problem solutions), which is a rationality issue; implementation problems (related to, for example, organizing and coordinating resources to solve identified problems), which is also an ontological issue; and motivation problems (related to, for example, the management of employee performance), which is a nomological issue”. John Dixon And Rhys Dogan, “The Contending Perspectives on Public Management: A Philosophical Investigation”. International Public Management Journal, Volume 8, Number 1, 2005
http://www.infoagepub.com/www/products/product3/journals/IPMJ8-1.pdf
[vi] Ari Salminen, “New Public Management and Finnish Public Sector Organizations: the Case of Universities”. In A. Amaral, V. Lynn Meek and I. M. Larsen (Eds.) The Higher Education Managerial Revolution?. Dordrecht, Boston, London: Kluwer Academic Publishers, 2003
[vii] Joshua K.H. Mok and Eric H.C. Lo, “Marketization and the Changing Governance in Higher Education: A Comparative Study”. OECD, Higher Education Management and Policy, Vol. 14, No. 1, 2002
[viii] On the relation between marketization and privatization see Geoff Whitty, “Privatization and Marketization In Education Policy”
http://k1.ioe.ac.uk/directorate/NUTPres%20web%20version%20(2%2001).doc
[ix] For more information see for example, Voldemar Tomusk, Market as Metaphor in Central and East European Higher Education. International Studies in Sociology of Education, Vol. 8, No. 2, 1998
http://www.triangle.co.uk/pdf/viewpdf.asp?j=iss&vol=8&issue=2&year=1998&article=tomusk&id=200.74.6.137 . and Marek Kwiek, “The Emergent European Educational Policies under Scrutiny: the Bologna Process from a Central European perspective”. European Educational Research Journal, Volume 3, Number 4, 2004
[x] Dr. N.V. Varghese and Dr. P. Suwanawongse, “Institutional Restructuring in Higher Education in Asia” http://www.rihed.seameo.org/NewsandEvents/Instructuring.pdf
[xi] Este mismo argumento ha sido retomado ahora, entre otros, por el Banco Mundial. Ver David De Ferranti et al., Closing the Gap in Education and Technology, 2003
http://lnweb18.worldbank.org/External/lac/lac.nsf/0/CA690C199E3E051985256C4D006C3043?OpenDocument
[xii] Cameron, K. (1984). “Organizational adaptation and higher education”. Journal of Higher Education 55(2), p. 123
[xiii] See Patricia Gumport and Barbara Sporn, “Institutional Adaptation: Demands for Management Reform and University Administration”
http://www.stanford.edu/group/ncpi/documents/pdfs/1-07_adaptation.pdf
[xiv] See Barbara Sporn, “Convergence or Divergence in International Higher Education Policies. Lessons from Europe”, from which the above paragraphs are taken.
[xv] This and the following two sections - “Conditions for financial sustainability” and “Leadership and management”— are taken from the OECD study On the Edge. Securing a Sustainable Future for Higher Education
[xvi] For example, public funding has been declining as a proportion of institutions’ budgets in a number of major US state universities so that, for example, it currently represented only 10% of the budget at the University of Michigan, 13% at the University of Virginia, 22% at the University of Texas and 25% at the University of Wisconsin.
Report on the Seminar on “External Funding and University Autonomy”. Organized by The Nordic University Association (NUS), The Nordic Association of University Administrators (NUAS), and
The OECD Program on Institutional Management in Higher Education (IMHE), 2003
[xvii] From Ministry of Education, Department for Education and Science Policy “Management and Steering of Higher Education in Finland”, 2004
http://www.minedu.fi/julkaisut/koulutus/2004/opm20/opm20.pdf
[xviii] KOTA is a statistical database maintained by the Finnish Ministry of Education. It contains data describing university performance by institutions and by fields of study from 1981 onwards. More detailed national data are available at Statistics Finland and more detailed institution-specific data in the information system of each university. The name "KOTA" is an acronym of the name of a committee on whose findings the database was based. The KOTA database has been designed as a tool for the Ministry of Education and the universities. It gives them access to the basic data needed for annual planning, monitoring and evaluation.
[xix] The aim of the Open University is to promote educational and regional equality. The Open Universities form part of the adult education available in Finland. It is provided by 19 Finnish universities. The university programs for the third age are a special form of Open University.
[xx] From the transcript of the Video Conference “Plenary Address to the Valencia Seminar on the Enterprising University”, Center for the Study of Higher Education Management, Technical University of Valencia, June 8-9, 2005.
http://porterow.cfp.upv.es/cambioestrategico/ponencias2/Burtton_Clarck.pdf
For another presentation of the main elements of Clark’s theory see also, http://www.isikun.edu.tr/~vardar/Brc.rtf
[xxi] See Jim Rushton, “Warwick 1980 to the Present: a transformation that others could follow?”
http://www.britishcouncil.ro/eunet/romania-support-eunet-en-11-warwick-university.htm
[xxii] See Burton Clark, “Sustainability at Warwick: a paradigmatic case”. In B. R. Clark, Sustaining Change in Universities. McGraw Hill – Open University Press, 2004
http://198.45.24.84:2000/openup/chapters/0335215912.pdf
See also David VandeLinde, Vice Chancellor University of Warwick, United Kingdom, “The University of Warwick 40 years of Innovation” http://www2.warwick.ac.uk/about/management/vc/speeches/chinanew3.pdf
[xxiii] Source: George Gordon, “University of Strathclyde, Translating Institutional Objectives into Action” http://www.aau.ac.nz/goodpractice/quality/sharing/Examples1/Examples2/GeorgeGordon.rtf
[xxiv] Arie Rip and Kees J.M. Eijkel “Tensions in Universities: Having to Accommodate”, 2004.
http://www.utwente.nl/cheps/documenten/susu2004/readingriptensions.doc/