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

Overview EUEREK – European Universities for Entrepreneurship ( ), 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 21 st 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 population). Source: A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Centre, Poland16,024,042,8 Hungary12,215,828,9 Bulgaria22,030,334,7 Romania7,213,523,4 Estonia36,128,945,5 Latvia20,518,346,5 Lithuania27,821,239,2 Belarus22,921,930,0 Russia24,821,631,4 Ukraine22,320,329,7 Georgia19,128,629,0

Table 2: Private higher education enrolments as the share of the total enrolments in Central and Eastern Europe Albania0,0 0,2 Belarus14,913,014,017,3 Bulgaria11,5 12,613,4 Croatia1,4 2,32,7 Czech R.0,31,01,53,2 Estonia25,2 22,020,3 Hungary14,114,314,014,2 Latvia12,7 18,822,9

Table 2: Private higher education enrolments as the share of the total enrolments in Central and Eastern Europe (source: UNESCO-CEPES website) Lithuania1,4...2,44,5 Macedonia0,02,30,03,5 Moldova13,122,625,020,0 Poland28,429,929,4 Romania29,628,925,223,3 Russia7,010,014,512,1 Slovak R....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 core An expanded development periphery A diversified funding base The stimulated academic heartland The 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: )

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