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SCANDINAVIA: Private funding key to autonomy drive
Will the success of university reforms in Scandinavia depend on how thoroughly university presidents adopt the role of fundraiser, like their counterparts in the United States? University reforms in Denmark, Sweden, Norway and Finland have made mergers of institutions an instrument for greater autonomy, and diversification of the resource base by attracting more private funding has been encouraged to underpin reform strategies.

But the Scandinavian model of higher education as a public good is now under pressure from market-driven higher education and austerity measures brought in to tackle the economic downturn.

In the face of these pressures, can private funding fill the funding gap in the coming years?

Gothenburg University Rector Pam Fredman, chair of Nordic University Cooperation (NUS), recently identified the crucial issue: “Globalisation influences significantly both demand and supply of higher education all over the world. Access to high quality education is a decisive factor in the knowledge economy.

“Today, many higher education institutions have to try to secure quality and effective teaching, at the same time as budgets are decreasing.”

Denmark

In 2007 Denmark undertook thorough reforms, merging 26 higher education institutions to create eight, and another nine university colleges. Denmark now has three universities per million citizens while Sweden has four and Norway 1.5.

The main challenge for higher education in Denmark in 2012 is to retain and build on the level of funding it enjoyed during the intense reform period of the past decade.

Denmark has had placed great emphasis on strengthening external funding. In 2010 a 'Matchfund' was established by the Ministry of Science, Innovation and Higher Education.

The initiative is distributing DKK100 million (US$17 million) in 2011 and 2012, rewarding universities that have obtained the highest proportion of external funding compared to their public funding. Universities decide how to use Matchfunds. In 2001 around DKK93.6 million was distributed, but no decision has been made on Matchfund's future after 2012.

Stina Vang Elias, head of the Danish think-thank DEA, told University World News: “Initiatives to support external funding at universities, such as the Danish Matchfund, are important in relation to engaging businesses and society in general in the research done at universities.”

She said this was crucial to support knowledge dissemination from research to private and public organisations to create knowledge-based innovation. In this way, external funding could contribute to research that is relevant to and applicable in business and society.

But external funding does not in itself strengthen university autonomy, Vang Elias said, since greater dependence on external funding can also reduce universities' long-term strategic maneuvering space.

“Therefore, it is important to ensure that there is public funding to secure long-term research priorities in fields that have no imminent use for businesses or lack appeal to external stakeholders.”

Sweden

In Sweden, Minister of Education Jan Björklund has called for mergers of higher education institutions and has allocated funding for them, stating that they should be the result of a bottom-up process and that the ministry will not interfere.

Tobias Krantz, head of education, research and innovation at the Confederation of Swedish Enterprise (CSE) and former minister of higher education and research (2009-10), told University World News: “Autonomous institutions produce better results both in education and research and also function as better partners to economic life.”

He believes that securing more sources of funding beyond government allocations gives institutions greater autonomy. But Krantz does not think the situation will change overnight.

“Higher education will be publicly funded for a long time to come. Private companies and citizens might contribute some funds, and I am open to tax reductions for such contributions to research, since more sources for funding will contribute to greater autonomy at universities.”

CSE has initiated further discussions about alternative strategies for rewarding institutions. Krantz said a new system should be worked out for rewarding institutions which is not just based on the strict scientific criteria used for gauging research output. This could include the introduction of an 'innovation premium' directed towards higher education.

Norway

In Norway, a government committee appointed in 2010 by Minister of Higher Education, Tora Aasland concluded that the economic downturn had left higher education institutions with little room to manoeuvre.

Therefore, it was a shock for many university leaders when the government budget for 2012 proposed taking away a donation support model introduced in 2006, in which the government tops up donations to universities of at least NOK3 million (US$500,000) from a private person, organisation or a foundation by 25%.

Ole Petter Ottersen, rector of the University of Oslo, wrote in his blog that nobody expected the government to end a budget that over the past five years had “contributed significantly to strengthen basic research across the country”.

The cultural editor of Norway's major newspaper Aftenposten, Knut Olav Åmås, challenged universities to raise NOK1 billion for research from private sources over three years.

But Junior Minister Kyrre Lekve said there was little take-up of topped-up private funding, that the money allocated for 2011 had not been used, and that private sources provide a relatively low level of funding compared to the total research budget in Norway.

A government committee has proposed halting the award of university status to Norwegian colleges. Three such 'upgrades' have taken place since 2005, another 10 to 15 mergers both between colleges and between colleges and universities are under discussion, and further mergers are expected. This is part of a strategy for obtaining university status.

Finland

In Finland, Aalto university was established in July 2010 from a merger between Helsinki University of Technology, the Helsinki School of Economics and the University of Arts and Design in the city. Today, Aalto university has 20,000 students, a EUR400 million (US$509 million) budget and participates in 12 centres of excellence.

Other mergers took place at the same time when the universities of Joensuu and Kuopio merged and established the University of Eastern Finland, and Turku School of Economics merged with Turku University. According to a government plan worked out in 2006, more mergers are needed.

Since 2009 the Finnish government has offered a tax deduction on corporate donations from EUR850 to EUR250,000 until the end of 2012, and has more than matched these donations with 2.5 times the amount donated.

By the end of 2011 such donations had strengthened the budgets at Finnish universities by EUR1.1 billion, with EUR318 million coming from donations, although distribution was heavily skewed towards Aalto university.

Two-thirds of the donated funding went to Aalto, four times more than second-highest recipient Tampere University of Technology and almost 10 times more than Helsinki University. Seven Finnish universities received more EUR10 million in donations.

In addition, higher education institutions will be encouraged to be active and build a major role as education exporters. They are expected to launch and fund the export of programmes in English to companies, organisations and others globally, in the Future Learning Finland programme.

One key change in a proposed new Finnish funding model is greater emphasis on quality, effectiveness and internationalisation. Funding will no longer be allocated on the basis of a target number of degrees, and the relative weight of scientific publications will grow.

The model comprises three main parts: education, research and other education and science policy objectives. It is proposed that a total of 75% of core funding will be allocated using a formula for education and research, of which 41% would be based on educational and 34% on research factors. The remaining 25% of core funding would be based on education and science policy objectives.

Fundraising

Henrik Pompeius, development director at Stockholm University, is looking on fundraising challenges from a practitioner's viewpoint – addressing a needed cultural change in addition to new legislation.

“My perspective, as the fundraiser at a big Swedish university, is that one thing stands out: to get things rolling in my world we need incentives such as matching funding. This is the strongest help I can get, to get the organisation up-and-running, to get the leadership fully on board and also to provide a very strong incentive for potential donors out there.”

He said there were plenty of potential donors, but institutions face tougher local competition and it is growing by the month. “The Karolinska Institutet has taken the lead with its SEK1 billion (US$144 million) campaign, Breakthroughs for Life.”

“So the race in Sweden will be decided on how professional an organisation we can build, given the shortage of experienced higher education fundraisers, and how much the rector and deans at the university are ready to get involved in hands-on relationship building.”

Will the main task for university leaders in Europe become fundraising, as it is in many American universities? asked Pompeius.

In the international competition measured by scientific production and citations, Denmark is leading the Nordic countries, as reported by University World News.

The question is whether this higher efficiency measured by scientific 'production' has been achieved by university reforms, greater university autonomy and greater access to private funding, or by other factors. As higher education in Scandanavia heads into 2012, more analysis of these crucial issues is needed.
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