New university system is a first step towards better research

The last month has been an exceptional one for the higher education sector in Saudi Arabia. It was marked by government approval for three Saudi universities to implement “the new university system”. The three universities are: King Saud University or KSU, King Abdulaziz University or KAU and Imam Abdulrahman bin Faisal University or IAU.

The new system aims to promote greater university independence academically, administratively and financially.

The announcement came from the Minister of Education, Dr Hamad Al Sheikh, via his Twitter account. He pointed out that the three universities were selected as a first-phase project to implement the new system.

The University Affairs Council will observe and determine the degree of readiness of the institutions based on a number of indicators and standards. A committee of experts and specialists from different fields will review and inspect reports received from the universities. The minister added that other universities will join the new system in the future to achieve the government's strategic 2030 vision.

The new system aims to promote greater university independence and reduce universities' over-reliance on government spending. The system will provide full autonomy over academic and financial operations. In other words, the universities will be able to approve their fields of specialisation and programmes according to development needs and job opportunities in the regions they serve. In addition, they can also charge for postgraduate programmes they offer.

This is a transformative and historical step for higher education in Saudi Arabia. Previously free education was perceived to be the norm and tuition fees the exception. With the new system in place, universities can charge for postgraduate programmes or diplomas or other academic services. However, undergraduate degrees are still free – paid by the government – at this stage.

Financial uncertainty

The overall goal of the new system is to diversify university income and reduce government spending. However, it is unclear at this stage how much government spending is going to be allocated for the selected universities. Is it going to be half of last year's budget, or 70%?

Diversifying income is one thing and financial sustainability is another. It is uncertain how universities can be financially sustainable given the proposed business model. For example, the fiscal budget for King Saudi University is approximately 10 billion Saudi riyals (US$2.66 billion) and the number of postgraduate students is about 3,800, so the amount of money generated from tuition fees is going to account for only about 10% of the university's budget.

Over-reliance on tuition fees and international students alone is not going to guarantee financial sustainability, as observed in other countries such as Australia and the United Kingdom. Given the current unknowns, universities may respond to this financial uncertainty with severe measures such as salary cuts or halting construction plans.

These reductions or measures might help solve some financial issues, but they are unlikely to be sufficient and might create managerial tensions which is not preferable at this stage.

Innovative activities and commercial applications may be another long-term financial growth channel for the selected universities. However, this requires a strong commitment to research and a commercialising arm for disseminating university-developed intellectual properties.

For example, a study conducted by the Center for Research and Studies at the Chamber of Commerce and Industry in Riyadh in 2007 found that 72% of enterprises in Saudi Arabia do not benefit at all from the research and development (R&D) capabilities available at Saudi universities.

Building a R&D base

Current government spending on R&D is about 0.8% – according to 2017 figures, including a broad mix of stakeholders: universities, the private sector and independent research centres. However, the aim is to increase the current GDP spending on multiple strategic and research programmes to 2% by 2030.

This means that universities need to re-establish links with the private sector and local economy they serve. These are the seed for creating knowledge that fosters scientific and technology-based economic development.

In fact, the three universities taking part in the new university system do have university-owned organisations focusing on knowledge-based investments, such as Riyadh Techno Valley at KSU and Wadi Jeddah (Jeddah’s valley) at KAU.

There are a number of key elements required to promote success in commercialising research output. First of all, universities need to invest in training the human capital that industry requires. In addition, they need to commercialise their research output by converting it to industrial applications or social benefits, such as start-ups or patents and licensing income.

Concluding thoughts

Saudi Arabia’s new university system represents an ambitious and bold move. The biggest advantage it offers is probably the move away from government bureaucracy for administrative work and the setting of academic standards.

However, it is still unclear how financial stability and sustainability will be achieved under this plan. In addition, universities need to launch a number of initiatives and activities that support a positive trend towards building a scientific research system in the region or society they serve and operate so they can achieve economic growth and development.

Ruwayshid Alruwaili is head of the English and linguistic department at Northern Borders University, Saudi Arabia.