Germany's two leading industrial federations have jointly issued four demands to promote "modern and competitive higher education institutions". They stress that there has to be a steady increase in the number of academics over the coming years for the country to maintain a successful position in the world economy.

The demands, formulated at the recent Joint Presidium of the BDA (Confederation of German Employers) and the BDI (Federation of German Industry), focus on the key issues of institutional autonomy, raising graduate numbers, increasing opportunities to enter higher education without a corresponding formal certificate of secondary education being required, boosting postgraduate further education programmes at institutions, and orienting higher education funding towards investment.

The leitmotif of the statement echoes concern in Germany over economic prospects and widespread opinion that it will only be possible to maintain the country's leading role in exports if cutting-edge research and development is secured and promoted. The two organisations welcomed the federal government's package of measures to mitigate the impact of the financial crisis by spending on infrastructure in the higher education sector, although they would like to see new funding regimes installed.

Having more autonomy granted to institutions by state governments in staff recruitment, funding issues and management has long been a hotly discussed topic although little progress has been made so far. Industry wants to see higher education institutions choose their own students according to transparent criteria, with vocational qualifications already obtained being rewarded by shorter study time where appropriate. On the other hand, universities themselves ought to be accredited in terms of whether their study courses are relevant to the labour market.

The BDI and the BDA present a catalogue of detailed demands and measures to raise institutional output. By 2015, they want the graduation rate (graduate percentage per age cohort) increased from 24% to 35%, the first-year student share grow from 39% to 45% (also per age cohort) and the dropout rate fall from 21% to 10% (as compared with the original cohort of first-year students).

With the OECD average standing at 37%, industry is particularly concerned about the present poor graduation rate. The BDI and the BDA are also worried by the dropout rate, especially in the all-important mathematics, informatics, natural sciences and technology areas where it reaches 34% of the beginners' cohort in some subjects.

Here, the BDI and the BDA see the need for significant improvements in teaching and study quality and argue that student-teacher ratios ought to be lowered by a third. The catalogue of demands stresses the need for teachers to be available to students outside lectures and seminars as well.

Just 1% of all first-year students are vocationally qualified without a formal certificate of higher secondary education - the Abitur or Fachabitur. Industry would like to see the share of this group rise to 5%. Also, the percentage of study courses that can be completed alongside a career should be increased from 2% to 12%.

The BDI and the BDA have called on the government to introduce national legislation on standard admission requirements for graduates from vocational and further vocational training. This would overcome what they regard as a "dangerous" separation of academic and vocational education. In their further education programmes for postgraduates, institutions should cater more for the demands of businesses and employees.

Higher education is set to benefit from funding earmarked for construction measures as part of an attempt by the government to mitigate a looming recession. The BDI and the BDA believe that such steps could enhance higher education standards in Germany but they would like to see institutions given more incentives to boost their programmes and tailor them more to demand.

Here, a nationwide funding pool is suggested. As things are, institutions are funded mainly by state governments (but supported by special federal programmes as well), with each state acting in isolation. Under the new scheme, institutions would receive a share of their funding from the federal government via the principle that "money follows students": the more students enrolling and completing their course in a state, the more money would be available for that state's higher education.

This proposal is also being backed by the Stifterverband, Germany's highly influential association of donors to sciences and the humanities, and the Cologne Institute for Economic Research. The scheme would gear higher education spending at the state level more towards what the BDA-BDI refer to as an "investment-oriented" funding system, with the states, and hence their institutions, rewarded with more money for good results - in terms of graduate numbers - that they would then reinvest "in a competitive environment".

michael.gardner@uw-news.com

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