Academic Entrepreneurialism and Private Higher Education (in a Comparative Perspective)

CHEPS, 12 October, 2006

Professor Marek Kwiek

Center for Public Policy

Poznan University, Poznan, Poland

kwiekm@amu.edu.pl

www.cpp.amu.edu.pl

Overview

• EUEREK – European Universities for Entrepreneurship (2004-2007), 6 FP– 25 universities across Europe

• Entrepreneurialism as a conceptual framework to analyze PHE?

• Clark’s five elements of an entrepren. University• Today: „the diversified funding base” in detail• And conclusions about all five elements in PHE

EUEREK case studies

• The University of Buckingham (UK)

• Jönköping University (Sweden)

• TCUM – Trade Cooperative University of Moldova (Moldova)

• UCH – the Cardenal Herrera University (Spain)

• Academy of Hotel Management (Poland)

• University of Pereslavl (Russia)

• 25 European universities in total, 7 countries

Introduction (1)

Private higher education is one of the most dynamic and fastest-growing segments of postsecondary education at the turn of the 21st century. A combination of unprecedented demand for access to higher education and the inability or unwillingness of governments to provide the necessary support has brought private higher education to the forefront

(Altbach 1998: 1)

Introduction (2)

The demographics of private higher education:• The major center: East Asia, about 80 percent of all

students in: Japan, South Korea, Taiwan, and the Philippines

• The USA (surprisingly) – only 20 percent• Western Europe – 10 percent or less• Latin America – over 50 percent in Brazil, Mexico,

Colombia, Peru, and Venezuela• Central and Eastern Europe, post-Soviet republics – the

most rapid growth after 1989 (a table on changing enrolments and the share of the private sector - below)

• Table 1: Higher education enrolments in Central and Eastern Europe (gross rates, percent of 19-24 population). Source: A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Centre, 2001

1989 1994 1999

Poland 16,0 24,0 42,8

Hungary 12,2 15,8 28,9

Bulgaria 22,0 30,3 34,7

Romania 7,2 13,5 23,4

Estonia 36,1 28,9 45,5

Latvia 20,5 18,3 46,5

Lithuania 27,8 21,2 39,2

Belarus 22,9 21,9 30,0

Russia 24,8 21,6 31,4

Ukraine 22,3 20,3 29,7

Georgia 19,1 28,6 29,0

Table 2: Private higher education enrolments as the share of the total enrolments in Central and Eastern Europe

1999 2000 2001 2002

Albania 0,0 0,0 0,0 0,2

Belarus 14,9 13,0 14,0 17,3

Bulgaria 11,5 11,5 12,6 13,4

Croatia 1,4 1,4 2,3 2,7

Czech R. 0,3 1,0 1,5 3,2

Estonia 25,2 25,2 22,0 20,3

Hungary 14,1 14,3 14,0 14,2

Latvia 12,7 12,7 18,8 22,9

Table 2: Private higher education enrolments as the share of the total enrolments in Central and Eastern Europe (source: UNESCO-CEPES website)

1999 2000 2001 2002

Lithuania 1,4 ... 2,4 4,5

Macedonia 0,0 2,3 0,0 3,5

Moldova 13,1 22,6 25,0 20,0

Poland 28,4 29,9 29,4 29,4

Romania 29,6 28,9 25,2 23,3

Russia 7,0 10,0 14,5 12,1

Slovak R. ... 0,7 0,7 0,4

Introduction (4)

• The private sector as the educational phenomenon of (selected) transition countries

• The conceptual framework of entrepreneurialism today restricted to public institutions

• Concepts derived from analytical work on the public sector (especially Anglophone): entrepreneurial, proactive, self-reliant, enterprising, adaptive (Clark, Shattock, Williams, Sporn)

Introduction (5)

• Fundamental reliance on tuition fees (70 – 100 percent)

• Interviews: to survive, survival• Do PHE institutions view themselves as

entrepreneurial?• Small in size, often new, vocationally-oriented• Minimal research ambitions (and opportunities)• Mostly teaching institutions

Clarks’ Five Elements of an Entrepreneurial University

An irreducible minimum of:A strengthened steering coreAn expanded development peripheryA diversified funding baseThe stimulated academic heartlandThe integrated entrepreneurial culture (1988)

In more detail – only 3, the fundig base (plus conclusions about 1-5)

The Diversified Funding Base

• Three streams of income– Mainline support from government– Funds from governmental research councils– All other sources – lumped together as „third

stream income”, of greatest interest to us – Research money = state money = beyond reach

of PHEIs– „It is bestter to have more money than less”

(Clark)

The Diversified Funding Base

• Non-core sources often feed and encourage one another

• Third source of income– Other governmental sources– Private organized sources– University-generated income– All academic units involved in entrepreneurialims?– Rewarding and punishing– Underpricing and undercharging for services – not PHE– Shattock’s principles of income generation

The Diversified Funding Base

• Key principles of income generation (adapted from Shattock):

● A university’s business is to be academically successful, not to run a successful business.

● The test is whether the university can generate a surplus or “profit” on the income, either a monetary profit or some real and tangible academic gain.

● The non-state income must contain a surplus element for re-investement in reinforcing existing academic activities or pump priming new ones.

● Income streams must be clearly identified and managed as if they are independent “businesses”.

The Diversified Funding Base

• Income and surpluses, or “profits”, need to be shared between the center and the departments – there need to be incentives and the benefits should be shared.

● If`the university outsources its “profitable” activities it will lose a large element of the surpluses.

● Resources need to be invested to achieve a financial return.● Charging policies should be an important element of the “business” strategy

(universities have a strong tendency to undercharge).• ● Internal privatization – turning heavily subsidized services into

“profit” centers.• ● Recognizing the importance of process over unstructured

entrepreneurialism in managing identified income streams.• ● Generating income is 90 percent “perspiration” and 10 percent

inspiration: individual academic entrepreneurs are high risk.• (Adapted from Shattock 2004b: 228-232)

Conclusions

• Clark’s Five Elements of the Entrepreneurial University and PHEIs studied