1. The Government Incentives Policies for a Higher Education in a Perspective of Economic Growth Reference paper: “Should the Government subsidize supply or demand in the market for scientists and engineers” Romer 2000. Fernando Vendas, Paulo Lopes Instituto Superior Técnico - October 10th, 2003 - MEGT

2. Presentation Structure Vision Statements from the Reference Paper. The Importance of the Educational System. The Role of the Government Incentives in the Educational System. The Portuguese Context / Main Figures. The Portuguese Context / Description. The Portuguese Context/ Tables. Available Options / Strategies. Discussions. Main References.

3. Vision Statements from the Reference Paper USA Private sector demand for scientists and engineers versus the educational system. Main constrains in the USA higher education system. How effective are the government incentives in the R&D policy (E=N*w ???). Specific programs could increase the number of scientists and engineers available to the private sector.

4. The Importance of the Educational System The role of the university in the economic growth. The level of financial resources in R&D. The importance of diversity in the education system.

5. The Role of the Government Incentives in the Educational System HOW? Direct government funding Grants Promoting the balanced development of higher education What? Effectiveness of education (investment) Developing processes for strategic information (Networks) Incentive the growing number of MsC and PhD

6. The Portuguese Context The main figures Between sixties and 1997 the number of students increase from 30.000 to 340.000 (OECD 1998). The number of graduate students are 0.2% of the public employment (OECD 1992). The public spending on education is 5.7 % (GDP) and the public spending on tertiary education is 1.0% (GDP) (OECD 1999). Human capital investment in tertiary education are estimated to be above 20%, much higher for most OECD countries (OECD 1999).

7. The Portuguese Context Description The Government, public universities and society The growing demands from the private sector to the university. The actual Portuguese status.

8. Figure 1. share of Goverment-funded in the higher education sector (%) Figure 2. GERD in higher education sector Portuguese Context Tables

9. Available Options / Strategies Evaluate the universities / institutions. Analyze the market demand. Different funding scenarios / sources. Increase the number of MsC and PhD people in the private sector. Increase the strengths between universities / private sector. See the R&D in the universities as investment not as cost Source: OECD 1998

10. Discussions How Government foster innovation in order to get value add for building economic society based in knowledge creation, in a such highly demand market ? How Government and Universities ensure human capital to choose undertake research careers ? Should the Government give only economic incentives ? What are the challenges of Universities and how they can adapt to society continuously changes ?

11. Main References “Should the Government subsidize supply or demand in the market for scientists and engineers” Romer 2000. OECD committee for Scientific and technological policy report. October 1997. OECD, Education at a glance, 2003. National Assembly by the Portuguese Government, March 1998 – “Education – Changes for the Future”. Heitor M.V.; Conceição P. ; Santos F., “Reflexões sobre o papel da Universidade para a Sociedade do Conhecimento em Portugal”. Heitor M.V. ; Conceição P., “ On the role of the university in knowledge economy, 1999 Heitor M.V. ; Conceição P.; Caraça J., “ A contribution towards a methodology for university public funding, 1998 University Research in Transition, OECD 1998. Applying innovation policy and Innovation theory in small open economies. B-A Lundvall, Gulbenkian Seminar, October 2004.