Renaissance or Decay?

In the Financial Times, Richard Lambert proposes six steps to revitalise Europe’s higher education (thanks to Biz Deans Talk for pointing me to the article). I’m glad that Lambert first of all points to the fact that there are differences within and between countries in Europe on this issue.

Countries such as the Netherlands, Austria and Denmark have in recent years greatly improved the way their universities are run. The UK has some of the best research universities in the world. But European institutions are not well placed to compete in what has become a global competition for talent. In countries such as Italy, France and Germany, there is a kind of drab uniformity across a sector that is struggling.

Higher Education across Europe is crying out for reform. Not surprisingly (from a former FT Editor), these reforms mainly mean a shift away from state control. His six steps, although not revolutionary new, make a lot of sense:

1. Governance. Universities that are an emanation of the state, as is in effect the case in France and Italy, have very little control over their resources and are unable to set relevant academic priorities. The best universities in the world all have the autonomy needed to manage their own affairs in an efficient fashion.

True! But beware that autonomy usually also brings the need for accountability. This is fine. However, governments tend to create a lot of red tape in order to make their universities accountable.

2. Funding. Higher education needs to be properly funded, meaning a figure near to 2% of GDP (while it is around 1.2% now). Lambert claims that public funding in the US is basically the same as in Europe and is appr. 1%.

This is more or less correct, although the percentage in the Scandinavian countries is much higher (see also this graph from my previous post on an OECD report). The big difference is in private funding, which is around 1.4% in the US and around 0.1% in Europe. According to Lambert, “all the big countries in Europe will sooner or later have to introduce tuition fees. The UK has started the process and Germany is moving in the same direction.” In the Netherlands, tuition fees have been introduced in the 1980s and recently also in Austria. However tuition is still very modest compared to the US or UK fees. Lambert concludes that for the introduction of tuition fees “the political challenge in France will be enormous“. I think that’s even an understatement..

I think the US model is not the only model that is worth considering here. High public spending in Denmark, Sweden and Finland have led to high quality and accessible higher education systems in these countries. I think that, if this high public spending is combined with a modest tuition fee (giving students more power to demand quality), the quality of education is or can become on par with many of the prestigious US and UK universities.

Also, US universities operate in a very different tax environment. The US universities are not just dependent on tuition fees but also on the generosity of alumni and of private companies and foundations. Since European taxes are considerably higher than in the US, it remains to be seen whether European professionals and companies (readers of the FT?) will ever be as generous to universities as their American counterparts.

Another issue that can be related to the private funding in education is the income inequality in countries. Due to the high level of income inequality in the US – compared to for instance Scandinavian countries – the return of investment that US students get from their higher education is relatively much higher than in Europe. US students will therefore be more willing to pay for their higher education. Does that mean Europe has to increase its income inequality…?

3. Selectivity. European countries are going to have to become much more selective in the way they allocate resources. There are nearly 2000 universities in the EU, most of which aspire to conduct research and offer postgraduate degrees. By contrast, fewer than 250 US universities award postgraduate degrees and fewer than 100 are recognised as research intensive. No wonder the US dominates the league tables of the world’s best research universities, given this concentration of resources.

I can agree with this to some extent. Lambert’s argument however starts from the assumption that more concentration is better, and I am not sure whether that assumption is necessarily valid. The US might lead the world’s top 200 of Universities but surely, Europe should not base its policies on the basis of league tables. Maybe there are 1500 universities in the top 2000 of the world’s best universities and only 200 American ones? Would that be a bad thing? In general I don’t think so, although there is the risk of Europe losing some of their top brains to the prestigeous institutions in the US.

Even if we want more institutional diversity (in terms of quality), this is not a change that governments or ‘Europe’ will decide upon. They can implement funding schemes that channel the available resources to the best researchers. Actually, they’re already doing that in many/most European countries. What does Lambert want? Considering his ‘liberal’ attitude, I guess he does not want to implement measures for the compulsory relocation of researchers.

Take the Netherlands as an example. The 14 Dutch universities are generally seen as equal in quality. Students make their choices on the bases of the programmes these universities offer, and then probably on the basis of the attractiveness or vicinity of the city in which the university is located. Not so much on institutional quality or prestige! Much of the research funding is on a competitive basis, but – to my knowledge – there are no specific winner or loser institutions in this resource allocation process. That’s simply because most of the ‘top’-academics (as well as the mediocre ones) are dispersed over the 14 universities as well. Who then is going to make the selection of universities and on the basis of what? If ‘the market’ needs to do this, it won’t happen overnight!

Lambert then continues on the issue of student selection. “Selectivity is also important when it comes to accepting students. World-class universities have to be free to pick their own talent rather than to take what comes – as happens now in large parts of Europe.

For continental Europe we need to ask ourselves again: who are these world-class universities? In principle I see no wrong in selection. Although I think that the greatest quality of the world’s most prestigious institutions (the Harvards, MITs, and the Oxbridges) is not so much that a student benefits from their quality of teaching (since the first-class teachers usually will have their minds elsewhere than on undergraduate teaching), but that they benefit from the challenging interaction with their fellow students.

On the other hand, selection in European universities is not something you can just implement overnight, as was experienced by Leiden University. They experimented with selection on the basis of high school grades. After a year they concluded that this would exclude too many students that turned out to perform very well in university (even though they might have had low grades in high school).

I think selection is simply not as easy as it sounds. First of all, students have to be able to choose (see step 4, below). Second, it brings along a culture of competition which might not (yet) be fully compatible with the European higher education ‘culture’. What is also often overlooked here is that a lot of selection does take place within Europe, but usually in the earlier phases, through a differentiation in high schools.

4. Diversity. Europe needs to develop a much more diverse system of higher education. Rather than attempting to make them all equal, the aim should be to create a rich mix of institutions – some offering world-class teaching and research, others concentrating on regional or local needs. Germany recognises this challenge with its plans to fund a small group of elite institutions.

This of course relates to the issue of selectivity again. Again, my question to Lambert would be: how can we achieve this? I don’t know about the Germany initiative that he writes about, but how does that work? If they are already elite institutions, the diversity does already exist. If they become elite because of the selective government funding, on the basis of what were they chosen and more important, by whom? Most of Lamberts suggestions start from a market prespective. Closing down universities or privileging some universities over others does not really fit within this framework.

5. Curriculum reform. This is already under way in more than 40 countries across the Continent, through what is known as the Bologna process. It is essential that universities manage this change efficiently – and that employers recognise the value of bachelor degrees, rather than insisting that recruits should spend five or six years in higher education.

I think Lambert touches upon an important issue here: how will the labour market value the European bachelor degrees. My impression is that many students and many employers will see the former degrees (such as Licentiate, Doctorandus degree, Magister degree, and what have you) as roughly equivalent to the new Master degree. I think universities really need to design the BA/BSc in such a way that it does respond to the demands of the labour markets and that they need to convince students and future employers of this. On the other hand, universities probably want to retain their BA/BSc students and try to convince them to do a postgraduate degree. After all: more students = more money…

6. Avoid top-down initiatives. Europe needs to avoid the temptation of top-down initiatives, which invariably turn out to be expensive distractions. The European Institute of Technology proposed by José Manuel Barroso, European Commission president, is a classic of this type. Much better to devote any extra funding to the new European Research Council, which will allocate its money solely on the basis of peer-reviewed excellence.

I tend to agree with this. Central planning simply does not mix very well with innovation. But the same goes for the selection of elite universities which is necessary for a more diversified system (step 4 and 5). Institutional diversity from the bottum-up is something that gradually needs to evolve out of competitive selection. This however is a process that will take a long time and needs more than just a change in funding mechanisms. It also requires a cultural switch in the mindset of many universities and education ministries, and also in the mindsets of students and employers.

Higher Education in Europe is changing. In some countries these changes have been more radical than in others. Some countries – in their desire to create their own Harvards or MITs – follow blindly what the ‘experts’ say. In other countries, minor changes cause major disturbances, paralysing their higher education systems. Reforms are necessary, but these reforms need to be compatible with the wider political, cultural and economic environment in Europe. Creating a European MIT sounds flashy, but starting from your own strengths sounds more realistic.

The article in the FT was based on a report of the Centre for European Reform, co-authored by Richard Lambert: The Future of European Universities: Renaissance or decay?