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Funding and resources: Doing more for less

Trends in the financing of higher education are placing research at risk, even though research spending has grown enormously and research has become increasingly important for the Knowledge Economy, for the preservation of cultures and for tackling social and political problems. Institutions must support both their instructional and research missions - especially research that is basic or risky or likely to suffer if left solely to the commercial market.

Globally, there has been a move away from near-total public funding to heavier reliance on private funding and the principle of user pays, write Lynn Meek and Dianne Davies in a chapter, "Policy Dynamics in Higher Education and Research: Concepts and observations", of the UNESCO Forum on Higher Education, Research and Knowledge's Research Report.

In the financial caldron of growing austerity - partly due to the dramatically rising costs of 'massification', increasing per-student costs, and the inability or unwillingness of states to meet those costs - the public and governments have come to think of universities mainly as places of instruction.

As a result, the research missions of universities may drop in priority or become distorted by rising student-faculty ratios and the need to spend more time teaching or searching for entrepreneurial revenue or both - to the detriment of both teaching and research.

"Such scenarios carry serious implications for the role of research at non-elite universities (indeed to the very missions of such institutions), to the already heightened economic and cultural - and now the academic and scientific - hegemony of the wealthy nations, and to the balance between research that is applied and is more commercially supportable and research that is more basic and curiosity-driven," write Meet and Davies.

Research spending is rising constantly, with many countries trying to devote between 1% and 3% of Gross Domestic Product to it. "But for small economies, even this level of investment is not enough for some forms of research, particularly in the physical sciences and some of the health-related fields," the authors point out.

Growth in research funding is currently most rapid in Asia, and in most OECD member states it is gradually increasing as a share of GDP - although GDP itself is growing. In many Europe and North Asia countries, even publicly-funded research and development (R&D) is approaching 1% of GDP and is in some cases more.

However, research is expensive and often carries hidden financial burdens for institutions. One big debate is the extent to which research should be fully funded, covering not only direct costs but also contributing to overheads and infrastructure. Often, universities must provide matching funding when bidding for research grants. Professor Sverker Sörlin of the Royal Institute of Technology in Stockholm, points out:

"Looked at from the institutional level, this enormous growth may seem less encouraging. It is often felt that, although budgets are constantly growing, they tend to be much harder to get and they come with more demands on performance. Also, a closer look at gross R&D figures reveals that it is privately funded, and privately performed, R&D that grows at the fastest rate. The funds that go to universities and research institutes, and that these receive directly as block grants, have for a long time stagnated in most countries."

The result, he argues, is that institutions have to do more and more work for less funding 'per unit' regardless of whether the unit is a student trained for three years or a scientific paper. "In other words, productivity is going up in the research and higher education sectors."

While maintaining adequate public funding of higher education is a worldwide problem, it is most pronounced in developing countries, where the challenge is not merely creating and maintaining an adequate higher education system but also allowing countries to participate fully in the global Knowledge Economy, write Meek and Davies.

The amount of money devoted to General Expenditure on Research and Development, or GERD, is far higher in developed than in developing countries. The effects of such funding gaps are felt strongly in areas like health. For instance, in 1986 only about 5% of resources for health research were spent on health problems in developing countries, which constituted 90% of the world's health problems. "The current situation has only marginally improved."

Growing demands on higher education

For a university to be an effective institution in a complex environment, it not only needs to generate sufficient income to stay in 'business' but must also prove its relevance to society. Higher education has many stakeholders, in and outside institutions, and the interests of some may be in competition with others. The interaction between stakeholders and institutions has a direct impact on knowledge production.

So too does the demand for universities to contribute to regional, economic, social and cultural development. In a number of ways, global competition has led higher education institutions to discover or re-discover the importance for their survival of local support and engagement, write Meek and Davies.

More and more, institutions are expected to play a key role as agents of development - in an environment of limited resources, increased scrutiny, and demands for transparency and accountability from internal and external stakeholders. To be globally competitive, regional innovation systems need to be strengthened and cooperation between higher education institutions, public authorities and the business sector is vital to achieve this.

But while universities are often highly active in regional development, their actions are rarely coherent and there are no proper incentives, indicators or monitoring of outcomes. A cultural change within universities is necessary as regional engagement, academic excellence and research are often not seen as complementary activities.

"This complex environment confronts institutional decision-makers with recurrent dilemmas," the authors point out. An example is when a university must search for common ground between its research agenda, the needs of surrounding industry, the priorities of external funding agencies, and the personal agendas of researchers. They continue:

"Decision-makers face the need to ensure that their institutions become nationally and internationally competitive, while struggling to address the needs of the region in which they are located." This often compels institutions to favour fields close to market needs, as do calls by employers to develop flexible, market-oriented academic programmes.

The engagement of universities in their 'third mission' are multi-dimensional and include: human resource provision via the transfer of knowledge to graduates; intellectual property production and management; spin-offs from knowledge transferred through entrepreneurship; knowledge produced for industry; the 'public service' dimension of research; expertise that informs policy-making; involvement in social and cultural life; and improving public understanding of science through interaction with society.

The importance of research and the training of a highly-skilled workforce in positioning nations in the Knowledge Economy both elevates the importance of universities and threatens many of their traditional values, and is tied to economic ideology and the 'commodification' (the trading of non-material activities for money) of knowledge.

Much debate over higher education and research funding has been driven by neo-liberal ideology. The policies of the World Bank, World Trade Organisation and others have been based on open market principles and free market competition. This has been particularly apparent, and contested, regarding the General Agreement on Trade in Services (GATS) and its impact on the provision of cross-border higher education.

Jane Knight has argued that lack of public sector capacity to satisfy growing demand for higher education has spawned a globally-expanding private higher education sector featuring new types of providers such as multinationals, for-profit institutions, corporate universities, and IT and media companies. Public and private, new and traditional providers are also delivering education across borders to meet the demand in other countries, via alternative types of delivery such as branch campuses, franchises and twinning. "As a result, a rather complex picture of higher education provision is emerging."

Knight describes four controversial higher education trends or 'isations' - commercialisation (buying and selling education including commodification); privatisation (private ownership and-or funding); marketisation (the market determines supply and demand); and liberalisation (removing trade barriers and education as a tradable service). "Some would even add a fifth - globalisation - and point to it as an underpinning cause for the other 'isations'," she writes.

Higher education's operation in a globally competitive market and the wish of governments to maximise their universities' contribution to the Knowledge Economy has given rise to the notion of the 'world-class' university. "Global university rankings and the emphasis on creating world-class universities are part and parcel of globalisation," write Meek and Davies.

The global higher education market is structured in two tiers - a super-league of global research universities, driven more by prestige and power than by economic revenues, and a larger group of institutions of lesser status involved in the commercial export of higher education, where the mode of development is that of an expansionary capitalism. This global market is mediated by 'league tables' of research performance or university status.

"As the Knowledge Society continues to develop, market relations based on knowledge production increasingly permeate all aspects and institutions of society, and the university is faced with a growing number of competitors in both research and training. Universities are having to bid competitively against each other for increasing amounts of their funding. Also, the commodification of knowledge is impacting heavily on the internal social structure of the scientific community," Meek and Davies conclude:

"What is remarkable is the continuing importance and centrality of the university as knowledge is increasingly brought within market and political exchanges."

* Professor Lynn Meek is Director of the LH Martin Institute for Educational Management at the University of Melbourne.

* Dianne Davies is a freelance researcher and editor in Australia.

Click here to download the Unesco Forum Research Report.
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