World Economy 16/4/2007

European Universities Should Try to Conquer the World

Universities and colleges have a growing role in contemporary economic systems, because of the growing weight of the knowledge economy on global output. Correspondingly, higher education has turned into a global industry, with competitive processes similar to those operating in other economic sectors. In this context, the capability of a country to foster competitive advantages in its universities, not only provides better education to its younger generation, but it is vital in relation to the development of high-growth research industries which have spillovers on overall competitiveness.

Over the last few decades in advanced economies, university systems have exhibited four evolutionary trends. First of all the democratization or massification of higher education, which has seen the percentage of adults attending college in OECD countries growing from 22% in 1975 to 41% 2000. China and India are also indicative of this trend.

The second tendency, which heightens the role for universities in modern economic systems, is represented by the progressive growth of the knowledge economy and its larger contribution to overall income and wealth over the last twenty years. The third trend, common to other sectors, is relentless globalization. The international mobility of students has increased significantly: according to a recent survey by the Economist, students studying abroad have doubled in OECD countries over the last few years, reaching the number of 2 million. Universities in leading countries of the world are increasingly operating in a global market subject to growing competition: for more brilliant students, for more talented scholars and researchers, for fundraising.

There is no doubt that some university systems are more open, effective and successful, according to the international standards for measuring teaching and research activities (number of scientific citations, Nobel Prizes etc.). The US system, based on a variety of funding sources available to universities, and on light government regulation in terms of programs and access to academic career, has been dominating world rankings and has functioned as a potent magnet for world talent and skills. At the same time, Asian countries are heavily investing resources in expanding the quality of their academic institutions.

European universities stills seem incapable of competing globally. As highlighted by a recent report of the Center for European Economic Reform, few are the European centers of excellence in research, which are able to open themselves and attract the best people in the world in their respective sub disciplines.

There are two major reasons for this. Scarcity of financial resources is one, thereby pushing most promising human resources to migrate toward the US or other countries. The problem is not the overall level of funding going into the university sector, but the fact that European systems seem unable to focus resources on the reduced number of institutions able to carry out research efforts and strive for excellence. In Europe, on paper there are 2,000 universities focusing in theory on research and competing for people and funding. By comparison, in the US there are only 215 universities offering postgraduate programs, and less than a hundred among them are officially considered “research intensive universities”. The second problem has to do with the system of governance and the degree of autonomy in particular. In many European countries, procedures regulating academic programs and careers of faculty are centrally defined and managed, thus leading to a low degree of autonomy and differentiation of universities. The European system needs higher flexibility to enable diverse academic institutions to adopt different models.

Lastly, it is important to note that developing universities of international excellence requires adequate mechanisms of economic support, entirely based on merit, for its most brilliant students, independently from their economic resources. Only in this way excellence can be pursued and be independent from the social background of actors. Excellence should thus be matched by fairness so to contribute to upward social mobility, still too limited in several European countries.

by Andrea Sironi,
Vice Rector to Internationalization, Università Bocconi