EUROPEAN COMMISSION Strasbourg, 18.1.2022 SWD(2022) 6 final COMMISSION STAFF WORKING DOCUMENT Accompanying the documents Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on a European strategy for universities and the Commission Proposal for a Council Recommendation on building bridges for effective European higher education cooperation {COM(2022) 16 final}



Contents 1. Introduction 2. Making deeper transnational cooperation amongst universities in Europe a reality 2.1. The need for more and deeper transnational cooperation 2.2. State of play: what has been done so far 2.5. What is needed to build bridges for effective transnational cooperation in higher education 3. Funding and investment in higher education 3.1. Investment into the European higher education sector 3.2. Investment needs 3.3. What has been decided/achieved so far? 3.4. What further action is needed? 4. Quality and relevance of higher education 4.1. The context: innovation, skills, societal and labour market needs 4.2. Challenges for innovation ecosystems and higher education 4.3. What has been achieved so far? 4.4. Developments needed to further the quality and relevance 5. Diversity, inclusiveness, and gender equality 5.1. Key guiding principles in inclusiveness, diversity, and gender equality in European higher education 5.2. Further improvements needed on inclusiveness, diversity, and gender equality

5.3. What has been achieved so far at the EU level? 5.4. What is needed to foster inclusiveness, diversity, and gender equality in HEIs 6. European democratic values 6.1. Higher education contributions to democracy 6.2. Values inherent in European higher education 6.3. What is needed to foster and protect academic freedom, institutional autonomy and fundamental rights 7. Skills and competences for the green transition 7.1. Higher education and the green transition 7.2. Challenges relating to higher education’s contribution to the green transition 7.3. What has been achieved so far 7.4. What is needed to support HEIs to be actors of change in the green transition? 8. Skills and competences for the digital transition 8.1. The needs on digitalisation of higher education 8.2. Progress to date 8.3. What is needed to support HEIS to be actors of change in the Digital transition 9. Universities as drivers for Europe’s global role and leadership 9.1. Need to ramp up Europe’s HEIs’ global ambition 9.2. State of play: HEIs and global dimension 9.3. What has been achieved so far 9.4. What is needed: boosting European HEIs influence and impact through a Team Europe approach

10. Data and monitoring 10.1. The need to pool European higher education data expertise 10.2. What has been achieved so far: Existing databases on higher education in Europe 10.3. Potential of an integrated European higher education data platform for the monitoring of the transformation of higher education and HEIs Annex 1: Synopsis of Stakeholder Consultation 1. Introduction 2. Consultation and activities 3. Findings 4. Conclusions



1.Introduction This Staff Working Document provides analysis and evidence for: ·The Communication from the Commission on a European Strategy for Universities. Which aims to support higher education institutions across Europe in fulfilling and advancing their missions, be a source of recovery and resilience for Europe and become strong promoters of our European way of life, actors of change in the twin green and digital transitions and drivers of Europe’s global role and leadership. ·The proposal for a Council Recommendation on building bridges for effective European higher education cooperation. Which aims to enable deeper, sustainable and more effective European institutional transnational cooperation and calls on the Member States and the Commission to set up enabling conditions and new instruments that leverage strength of the higher education sector across Europe. This Staff Working Document is composed of 10 chapters covering the focus areas identified in targeted consultations with stakeholders and Members States. Consultations and work of the Commission services along these building blocks informed the Communication on a European Strategy for Universities and the Recommendation on building bridges for effective European higher education cooperation. Annex 1 provides a synopsis report of stakeholder consultations. 2.Making deeper transnational cooperation amongst universities in Europe a reality 2.1.The need for more and deeper transnational cooperation

Higher education is an inherent feature of our European way of life. It plays a major role in social, cultural, and economic development, and its benefits extend across society. Transnational cooperation in higher education supports European Union values, European identity and democracy and strengthens the European project through high quality and independent academic learning and teaching, research and innovation, and service to society. Democratic societies depend on engaged citizenry, and higher education through transnational collaboration has a key role to play. Achieving the European Education Area by 2025 and the European Research Area will involve deeper transnational cooperation that builds bridges and empowers higher education institutions (HEIs) to collaborate seamlessly with one another, facilitating learners, graduates, academics, researchers, and professional staff free movement across Europe to study, work and conduct research. Deeper cooperation promotes the quality, diversity, inclusiveness, and attractiveness of European higher education and research and innovation, and it contributes to shaping the green and digital societal transformation and building a sustainable future, while reinforcing the role of Europe in the world. Transforming higher education institutions and the higher education system. Extensive transnational cooperation will expand the ability to gain new perspectives, share ideas, build long-lasting institutional relationships to advance knowledge, increase the quality and relevance of education and research, strengthen links between education, research, and innovation, improve employability and skills, make more effective use of digital technologies and open science, and improve transversal and intercultural skills and understanding. Building bridges for deeper, perennial, and effective transnational cooperation at institutional level is instrumental to accelerate the transformation of HEIs across all their missions of education, research, innovation, and service to society, and contribute to overcoming European and global challenges. Cooperation brings important spill-over benefits for sustainable communities, innovation ecosystems, businesses, and civil society, with HEIs acting as anchor institutions in their regions, fostering better circulation of knowledge, ensuring human capital development, and more involvement with local communities. Higher education has positive effects on family life, health, citizenship, civic engagement, social justice, and public discourse. 2.2.State of play: what has been done so far Transnational cooperation has been intrinsic to HEIs in Europe since the foundation of the University of Bologna in 1088. The Erasmus+ programme honours the name of the humanist, priest, and philosopher Erasmus of Rotterdam (1466-1536) who travelled across Europe encouraging mutual understanding among peoples. Higher education has been an inherent component of European project since the early days of the European Coal and Steel Community and the establishment of the European University in Florence in 1955. The Sorbonne Declaration (1998) promoted “a Europe of knowledge”, while the Bologna Declaration (1999) aimed to support the free movement of students, faculty and workers across national boundaries emphasising the need to recognise their achievements. Since then, transnational cooperation has become a salient feature of EU initiatives and higher education systems – “an example for institutions, nations and regions in other parts of the world”. In the 1970s Member States envisaged student mobility to foster European citizenship and to improve knowledge of European history and culture. Since 1987 the Erasmus programme (the European Community Action Scheme for the Mobility of University Students) has supported the mobility of students and staff and helped building bridges for higher education cooperation. More than 10 million people have benefitted from the wide range of Erasmus opportunities over the past almost 35 years, enhancing their awareness of European values and the advantages of diversity and multiculturalism. Transnational cooperation in higher education has been an intrinsic part of the Erasmus+ programme and thousands of projects have become stepping-stones, going beyond individual short-term collaborations towards institutionalised, more perennial cooperation, enabling higher education institutions to build upon their results for their deep transformation. Under Erasmus+, and complemented by Horizon 2020 for their research dimension, the European Universities Initiative has established inter-institutional alliances as key actors for systemic, structural, and sustainable cooperation and global competitiveness. Conjoining education and research and innovation to help solve societal challenges, the European Universities alliances are active contributors to their innovation ecosystems. They integrate online and physical resources, courses, knowledge and expertise, data, and infrastructure, boost the capacity and capability of their members. The alliances also offer important lessons on the benefits of transnational cooperation as well as on opportunities for improvement. The Council Conclusions of 17 May 2021 on the European Universities initiative invited Member States to jointly work towards closer and more strategic alliances of higher education institutions, to identify and remove any remaining barriers to such closer cooperation, and to promote the use of common and shared infrastructures, equipment, and facilities. The COVID-19 pandemic has highlighted the importance of deeper cooperation across borders, peoples, and cultures to tackle European and global societal challenges. A survey conducted by the Commission addressing more than 110 HEIs engaged in the first 17 Erasmus+ European Universities shows that all of them feel that they would have been better prepared to face the COVID-19 pandemic if their European University had already been fully operational. More than 60% of them are already well advanced and consider that being part of a European University has already been helpful in addressing the challenges of COVID-19. Member States confirmed their support for deepening institutional transnational cooperation and to balance excellence, diversity and inclusion in the February 2021 Council Resolution on a “Strategic framework for European cooperation in education and training towards the European Education Area and beyond (2021-2030)” and in the Council Recommendation on a Pact for Research and Innovation in Europe. HEIs anticipate significant benefits through participation to European Universities alliances. In 2000, the European Research Area was launched to create a European single market for research, scientific knowledge and technology, and to encourage cooperation among research institutions in Europe. It then found place in the EU Treaties with the entry into force of the Treaty of Lisbon in 2009. Since their inception 25 years ago, the Marie Skłodowska Curie Actions (MSCA) have had as a primary objective to achieve deeper, more sustainable, and more structural transnational cooperation among participating HEIs. Since their initiation in 2014, MSCA Joint Doctorate programmes are taking this endeavour to a higher level by providing formal recognition (in the form of joint, double or multiple doctorates) for transnational cooperation making it more attractive to doctoral candidates, universities, and employers. Since its establishment in 2008, the European Institute of Innovation and Technology (EIT) and its Knowledge and Innovation Communities have developed their own education programmes that have a very strong focus on the delivery of entrepreneurship and innovation skills and are tailored to the needs of the European innovation system. The hallmark of EIT educational programmes is to not only educate students to know, but also to know what to do and how to solve real life problems, all framed within an entrepreneurial mindset. The EIT KICs higher education partners focus on developing innovative curricula that provide students, entrepreneurs and business innovators with the knowledge and skills necessary for a knowledge and entrepreneurial society. These innovative programmes are based on partnerships between different universities, companies and research centres that collaborate closely and offer double degrees, international and cross-sectorial mobility experiences, as well as applied innovation and entrepreneurship education. At the EU level, tools for building transparency to underpin and recognise mobility include the Erasmus Charter for Higher Education (ECHE), which provides a quality framework for European and international cooperation activities that a HEI needs to carry out as a prerequisite to receive funding within Erasmus+. Bologna transparency tools facilitate fair recognition of foreign qualifications and/or study periods. Supporting tools also include overarching and national qualifications frameworks (QFs), the European Standards and Guidelines for Quality Assurance of Higher Education (ESG), and the Database of External Quality Assurance Results (DEQAR). Other EU transparency tools - including the European Qualifications Framework , the Europass Platform, the Diploma Supplement, the European Credit Transfer and Accumulation Systems (ECTS) - advance the work towards qualifications frameworks, recognition and learning outcomes, facilitate student-centred learning and teaching, and make studies and courses more transparent. Europass and the European Digital Credentials Infrastructure facilitate issuing and verifying the authenticity of qualifications. In 2018 the Council had emphasised the need for “automated mutual recognition” of qualifications, requiring that Member States not to setup separate recognition procedures for holders of foreign qualifications from other EU Member States for the purpose of further learning. The UNESCO Global Convention on the Recognition of Qualifications Concerning Higher Education (2019) aims to facilitate international academic mobility and promote the right of individuals to have their higher education qualifications evaluated through fair, transparent, and non-discriminatory manner. 2.3 Benefits of transnational cooperation Transnational cooperation makes it possible for knowledge and innovation processes to be more widely disseminated and more openly accessible. HEIs are an integral part of the transnational movement of people and ideas, forming the vital knowledge value chains that have become indispensable to our European way of life. Transnational cooperation is a key enabler for achieving mutual understanding and shared goals that serve the whole of society and create public value, bringing wide-ranging economic and non-economic benefits at national, regional, institutional and individual levels.

Key benefits include but also go far beyond improving the quality of education and research, enhancing opportunities, and preparing learners and researchers to live and work in a globalised world. Transnational cooperation is seen by HEIs, their learners, researchers and staff as indispensable for building trust between nations, peoples, and cultures across Europe and around the world, including promoting positive attitudes towards democracy. European HEIs cooperate more intensively in comparison to other world regions, especially in the areas of teaching and learning, research, knowledge exchange and internationalisation. HEIs that work together with other institutions, businesses and industries, governments, regional bodies or across borders generally perform better than those less focused on cooperation. The benefits of transnational cooperation (Table 1.1) are reflected in the Co-operation Index developed by U-Multirank noting that positive effects of cooperation are related to the specific profiles of the institutions, demonstrating that they tend to strategically seek out cooperation in the areas they value most, and generally perform better than universities that do not. Table 1.1 Benefits of transnational collaborative partnerships (benefits for which causal relationship has been empirically proven are bolded) Macro Meso Micro Economic §Improve the efficiency and effectiveness of the higher education system §Contribute to the economic development of the community §Alleviate scarcity of workforce in strategic sectors §Improve the quality of human capital §Increase rate of technological innovation and use §Economic growth §Brain gain §More and better patents §Economies of scale §Increase institutional revenue: more and better patents, fees from international students and scholars, research grants, access to/exchange of financial resources §Increase efficiency in using time and resources §Enhance competitiveness on the global/national educational market §International scholarships and grants §Improve labour market outcomes (higher employment rates, lower unemployment rates, higher earnings) §Higher likelihood of employment at home and abroad Non-economic §Improve and diversify knowledge §Promote the reputation of the higher education system abroad §Increase the quality of education §Improved higher education standards §Contribute to the country’s influence on the international scene §Improve country image §Improve diplomatic relations, foreign policy, national security, peace and democracy §Increase linguistic diversity §Increase access to education §Positive attitudes towards open borders and democracy §Provide additional uses for educational content §Develop and/or internationalise the curriculum §Enhance the diversity of programmes/expand educational offerings §Offer mobility opportunities to students, faculty and staff §Enrich library holdings and e-learning platforms §Diversify faculty, staff and student body §Increase research output and quality §Reach and recruit more and better international students §Develop/strengthen institutional capacity §Advance campus internationalisation §Improve standing in global rankings §Knowledge about operating in foreign jurisdictions §Consolidate partnerships, academic research collaborations and alliances §Gain prestige and reputation §Strengthened research and teaching capacity §More and better scientific output §Attractiveness to foreign academics §Improve the efficiency and effectiveness of the higher education system §Contribute to the economic development of the community §Access a wide range of online & offline academic resources §Enable faculty to improve their teaching and research skills §Exposure to world-class facilities, faculty and staff §Increase research productivity §Mobility capital §Developing international cooperation and collaboration skills §Enhance intercultural experience, awareness and understanding §Better foreign language proficiency §Increased mobility §More and better publications Transnational cooperation and partnerships bring benefits to the entire higher education institution across all the four missions, focusing primarily on “enhanced international cooperation and capacity building” (36%), “improved quality of teaching and learning” (17%), and more and better scientific output, and facilitated the mobility of students and staff. Learners and staff benefit from improved employment or career opportunities at home or abroad, better language proficiency, and authoring more and better publications. Graduates see the advantages that derive from transnational partnerships: approximately 90% of young Europeans believe it is important to have an experience abroad. In addition, 91% agree automatic recognition of academic qualifications and learning periods abroad is important, and 93% think it is a good idea to create a European degree delivered by alliances of HEIs, offering students the chance to study in different EU countries, with a flexible choice of courses or modules offered within the alliances. Over half of those surveyed had improved their language skills and benefitted from discovering other cultures and habits. Increasing the involvement of professional staff in transnational cooperation should be equally important, for instance for peer-learning and career enhancement. A survey found that 83% of the respondents consider that collaborations add value to "mobility of both students and staff" and are beneficial for "attracting foreign students" (~80%), since HEIs with better reputation attract higher shares of mobile students, while research excellence is highly relevant for mobile doctoral students. The pursuit of research excellence needs to be underpinned by a system where universities are seen as attractive employers, providing rewards and incentives, clear career paths and the opportunities for collaboration and mobility. Strategic transnational partnerships are boosting scientific capacity, inclusion and research outcomes. They can help to provide access to infrastructure and key equipment, expand research opportunities, and boost interdisciplinary research and research intensity, while increasing both opportunities to exploit intellectual property and the viability of spin-offs and start-ups. HEIs need to provide outstanding research infrastructure and rationalisation of the R&I landscape in Member States to make the local R&I systems and ecosystems more efficient and effective. Transnational research collaboration is an important indicator of research excellence, overtaking single-author or intra-institutional collaboration, and in turn improves reputation. Research also shows that HEIs involved in transnational networks are more likely to be high in global rankings. Inclusiveness is key to boosting the excellence of all HEIs, while reducing fragmentation of the higher education sector. Deep, geographically balanced and inclusive transnational cooperation such as the one developed under the European Universities Initiative can raise excellence levels for all participating institutions, by enabling knowledge and best practices flows between institutions and between high and less performing regions. Inclusive cooperation mainstreams excellence in science and creates value. The pursuit of excellence, in line with the Pact for Research and Innovation in Europe, will enable more of Europe’s HEIs to become world leading in delivering excellent challenged-based and applied research and providing cutting-edge research-led education. It will allow to overturn concentration of the top 200 institutions in mostly western and northern Member States, and to ensure that excellence-based funding is better distributed. HEIs contribute to their cities and regions by offering a range of services to society, contributing to cultural activities, and helping make cities more attractive places to live and socialise. Transnational activities and partnerships activate economic activity in the region, attract learners and retain talent, thus boosting their industrial and local innovation ecosystems. Proactive societal engagement and European solidarity are fundamental values of HEIs. 2.4 Structural and operational issues to address for enabling deeper and more effective institutional transnational cooperation Seamless and more effective cooperation between HEIs is required to address all-encompassing challenges related to: sharing and pooling joint resources among HEIs (such as financial, human, digital and physical resources, technology transfer and services), the effective delivery of joint educational activities and programmes including the design and award of joint degrees, more embedded mobility opportunities within the curricula, sustainable long-term funding (at EU, national and regional levels), effective quality assurance and recognition of joint programmes and activities, digital infrastructure interoperability supporting joint digital and blended activities, the development of interdisciplinary modules, notably in the context of joint work through challenge-based approaches, effective governance arrangements enabling deep and ambitious transnational cooperation. Administrative and legal issues were identified in a survey as amongst the top perceived barriers to transnational cooperation. HEIs are bound by their national frameworks for financing, infrastructure, accreditation, quality assurance and employment aspects. Transnational cooperation arrangements are still firmly embedded within a country’s policies and legislation, often causing difficulties when it comes to organising joint educational programmes, joint curricula and study credits, issuing joint degrees, including a joint European degree. Notwithstanding progress in this area, for example through the Bologna Process and the European Universities initiative, according to a survey by the European University Association (EUA), 68% of HEIs perceive legal obstacles as a challenge to deeper cooperation in the European Universities initiative, specifically with regards to the accreditation of joint programmes, and 59% cite administrative obstacles to deeper cooperation, due to different institutional structures and processes. Difficulties with pooling and sharing infrastructure, staff and resources. An EUA survey reports that partners share their assets in only 8% of transnational partnerships. This is corroborated by the European Universities alliances implementation that reported difficulties with pooling and sharing resources prevented them from deepening their cooperation: for example through joint recruitment of staff and staff secondment within the members of the alliance; transnational mobility embedded in the curricula of students; joint infrastructure management, including digital infrastructure and services; and, the joint management of funding from different EU and national sources. Existing models to establish a legal statute enabling seamless pooling of resources, offer only partial answers to the needs to share seamlessly financial, human, digital and physical resources, infrastructure and services, as well as to enable the effective implementation of joint educational and research activities. The award and delivery of joint programmes and degrees are not possible everywhere in the EU mainly due to national legislation and administrative practices hampering for example the accreditation of joint programmes, quality assurance, language requirements, and formal requirements for diplomas issued (e.g. paper to be used for the diploma, its size, the logo(s) that can be printed on it, the use of languages, who can/should sign the diploma). Operational and legal barriers identified by the implementation of the European Universities alliances corroborate these messages and echo difficulties related to quality assurance and recognition of the programmes offered jointly by the alliances, hampering the design and setup of joint degrees, including a joint European degree. This means that a single country can limit progress among participating higher education institutions in an alliance by making it very challenging to award a joint degree at all levels (Bachelor, Master, Doctorate) or to set up a joint programme. Degree mobility remains limited and is often not structurally embedded in students’ curricula, even though learning mobility remains an important objective of transnational cooperation. According to Eurostat, only 1.3 million out of a total 17.5 million tertiary students in the EU are undertaking their studies in a Member State other than the country where they had completed their secondary education, and among those, there were 0.6 million students from Europe studying in the EU at tertiary level. According to another survey, around 65% of the partnerships do not offer any mobility schemes at Bachelor level, while embedded mobility is mainly offered at Master level. Short term mobility is the most commonly offered scheme for researchers and teaching staff (offered in 51% and 61% of the partnerships respectively).Obstacles arise inter alia through the ways that educational programmes and other opportunities may be organised or recognised. The lack of sustainable funding and the complexity of EU and national funding instruments was identified as a barrier to transnational cooperation. In most EU-27 Member States, government funding for higher education is more than half of total funding for the higher education sector. Over the last decade, there has been an uplift and stabilisation of public funding with variations across Member States. However, the COVID-19 pandemic exposed what stakeholders call a “chronic underfunding of HEIs” across many European higher education systems, revealing structural weaknesses and competitive gaps. Ineffective implementation or lack of European tools and instruments Deeper cooperation models such as the European Universities initiative have shown the limits of the current quality assurance systems that are often not adaptable or flexible enough for deeper transnational operation. Work has already started and progress has been made at European and Member States level to strengthen mutual trust in higher education systems for example through the implementation of the Council Recommendation on Automatic Mutual Recognition, as well as the transparency and quality assurance tools for higher education developed in European and Bologna Process, but legal conditions and practical implementation remain uneven both across countries and across institutions. HEIs engaged in transnational partnerships often mention the lack of common accreditation standards as a serious issue, requiring further actions at EU and national level. Internal and external quality assurance of multinational consortia bringing together HEIs with very different legal and economic constraints, educational environments and quality assurance cultures can show substantial differences in terms of practices and standards. The European Approach to the Quality Assurance of Joint Programmes provides a single integrated procedure in accrediting joint programmes, and thus removes the burden of multiple accreditations. However, since the European Approach is not a legally binding, it requires implementation at national level, and quality assurance/accreditation arrangements still vary from one country to another. Hence, the validity of accreditation for joint programmes is subject to different processes and requirements with regards to (re-) accreditation procedures. External quality assurance issues are an emergent and increasingly important barrier also for digitally enhanced learning and teaching, even more so in the context of changes to the learning environment due to the pandemic.

Different degree structures and ECTS requirements pose obstacles. National restrictions, such as the prescription of a minimum amount of ECTS to be reached by the end of the second cycle, have been introduced in some countries, despite not being required by the Overarching Framework of Qualifications of the European Higher Education Area (QF-EHEA). This hampers the establishment of joint programmes and the award of joint degrees, including a joint European degree, as different partner HEIs may have to conform to different and incompatible national legal requirements on programme duration. Requirements to obtain a certain amount of ECTS credits in a specific way (abroad, or at the home country, for example), or incompatible requirements for the number of ECTS credits allocated are recurrent obstacles encountered by the European Universities and other higher education institution alliances. Untapped potential for effective higher education cooperation The seamless implementation of interdisciplinary programmes is hampered by specific restrictions for example on the language of instruction, on the online elements embedded in the study programme, national requirements for internships, required procedures for assessment of students, requirements related to employment and working conditions for teaching staff, or regulations on recognition of prior learning. Partnerships tend to focus on specific topics, are setup for relatively short duration, and rarely cover all four university missions: education, research and innovation and service to society (38%). The need for increased synergies between education and research, along with long-term strategies covering the four missions, was confirmed during stakeholder meetings and interactions with Member States. A survey reported that only 38% of partnerships cover the education, research and innovation mission of higher education institutions in an integrated way. This suggests there are insufficient multi-disciplinary collaborations occurring. Cooperation is mostly dependent upon individuals in teaching or research, it largely occurs occur at department or faculty level, thus lacking appropriate institutional level sustainability. Cooperation has been predominantly built bottom-up based on common topics and interests (95%) and existing contacts between staff members (88%). While partnerships should involve “general institutional collaboration”, meaning “several levels and different parts of the institution”, the majority of cooperation tends to occur at department or faculty level (59%). Progress is still to be made on designing effective governance arrangements for deep and ambitious transnational cooperation. The expansion of higher education across Europe, the diversification of provision, new modes of delivery, and heterogeneity of learners, the importance of higher education and research for knowledge and innovation along with increasing levels of investment (public and private) have focused increased attention on the governance of higher education institutions – at the system and institutional level. Issues of accountability and transparency, effectiveness and efficiency, performance and quality are matters of concern that extend beyond the institution itself. European and national competitiveness are strongly aligned with HEI quality, and vice versa. Student participation in higher education governance is considered one of the foundation values of European higher education. Students have played a key role in the conception and implementation of Bologna Process goals, and are been essential partners in the quality assurance processes, both internal and external. Likewise, representatives of business/employers, and civil society are considered key stakeholders – all of which strengthen higher education’s role in/for society and the economy. In this context, higher education institutional governance structures and management practices for transnational alliances could benefit from more active involvement of learners, academics, researchers and professional staff. Increasingly, strategies for equity, diversity, and inclusion guide governance practices. The EUA notes that many HEIs make an explicit link between equity, diversity and inclusion on one side and excellence in teaching and learning and research on the other side. Nevertheless, often governance arrangements insufficiently mirror society and diversity of experiences and ideas, while innovative practices insufficiently diffuse within the institution, negatively impacting the decisions concerning the learning and working environment as well as institutional reputation, and creating challenges for developing transnational cooperation. This pertains to both institutional governance as well as system governance. 2.3.What is needed to build bridges for effective transnational cooperation in higher education Transnational cooperation is a lever for the deep transformation of higher education institutions across all their missions, for the benefit of the entire higher education community and the society, empowering learners, staff and researchers alike. For Europe to tackle common challenges, notably the twin digital and green transitions and to build a resilient future, while remaining globally attractive and competitive, it is necessary to join forces, harness the potential of all available resources and foster the complementary education and research capacities and strengths through deeper cooperation. Through a step-by-step approach, it is proposed to support Member States in setting a strategic course for creating optimum conditions for seamless transnational cooperation between HEIs in Europe, and addressing the major challenges through new instruments and facilitated implementation of joint transnational educational programmes, when sharing resources, or when embedding mobility modules for students and staff, while enabling a more systematic application of existing and new tools available at EU level, such as those available under the Bologna Process. While stakeholders acknowledge steps have been taken to overcome existing challenges at the EU, national and institutional level, stronger enabling operational and legislative frameworks and support are needed to ensure legal certainty and a level playing field between HEIs established in different Member States and willing to cooperate, and enable European Universities alliances and similar cooperation models to flourish. Deeper, sustainable and more effective transnational cooperation will depend upon an enabling environment and the knowledge and trust developed and nurtured over time. To overcome challenges and enable transnational cooperation to deeply transform HEIs across all their missions, stakeholders and Members States called for enabling operational and legal conditions at all levels, from institutional and national to European, taking into consideration the concrete needs of HEIs. Key factors for success that support research excellence are funding frameworks at the various levels (local, regional, national, European) protecting institutional autonomy and academic freedom, removing obstacles to collaboration, and strong, inclusive and effective leadership at the institutional level. Member States and stakeholders make it clear that a common vision to make the higher education sector fully fit for the future should build on the experience of the European Universities and enable all willing HEIs to cooperate transnationally in a flexible and sustainable way. It is necessary to broaden and deepen opportunities for collaboration, modernise regulatory frameworks and innovate educational and research cooperation models for the benefit of the entire higher education community, learners, researchers and staff, and society. HEIs should be empowered to work collectively step-by-step towards this long-term vision, with the support of the various complementary EU and national instruments. Incentivising closer integration fosters deeper and long-term partnerships, the European Universities Initiative being a testbed for this. This vision, and the tools and measures associated with it should enable institutions to accelerate their transformation, while incentivising Member States to take action in support of the vision. Through deep and geographically balanced transnational cooperation as triggered by the European Universities Initiative, it is anticipated that excellence levels can be raised for all participating institutions. Deeper cooperation links with asset sharing among European HEIs allowing to maximise access to and the utilisation of available resources and infrastructure, as well as to increase efficiency and effectiveness. HEIs ask for deeper transnational cooperation to be recognised also from a legal perspective to facilitate both cooperation in all relevant areas of education, research and innovation and common strategic decisions such as the award of joint European degrees and the pooling of resources and activities. Deeper transnational cooperation, with the support of a legal statute for alliances of HEIs willing to join forces, can help to build capacity, facilitate access to sustainable modern infrastructure and shared common resources (financial, human, digital and physical resources) and services, and develop joint educational and research activities. Such new legal solutions for cooperation should also allow for agile and flexible governance structures, without additional burden to the existing governance system of individual institutions. They can facilitate transnational cooperation through for example joint resources management, simplified accreditation of joint programmes, leading to the design and award of joint degrees, simplified internal and external quality assurance processes, pooling IT infrastructure that enhances students and researchers learning by sharing online environments and activities (for example, learning management systems, digital libraries or MOOC platforms). The efforts to establish a sustainable long-term legal cooperation mechanism for the transnational cooperation of HEIs can benefit from the experience of existing legal instruments at the European level, such as the European Regulation on the European Grouping of Territorial Cooperation (EGTC) and the European Research Infrastructure Consortium (ERIC). Even though these instruments were created for different sectors and purposes, they could provide inspiration for a future solution for higher education cooperation. The EGTC as a legal entity is designed to facilitate and promote cross-border, transnational and interregional cooperation, and is currently already used in Europe within the higher education sector. The ERIC regulation facilitates the establishment and the operation of research infrastructures with European interest among several EU countries and associated countries and foresees a process for the establishment of the legal entity which could be applied mutatis mutandis to a platform for cooperation between universities. Other European initiatives such as Europe’s Strategy Forum on Research Infrastructures (ESFRI) and the European Open Science Cloud also facilitate deeper integration of digital and physical assets. In this context, the EU can support the Member States and HEIs to pilot the use of existing European instruments as a step towards the potential development of a legal statute for alliances of higher education institutions to facilitate deeper, long-term and flexible transnational cooperation.

The added value of a higher education experience needs to be reflected and recognisable in the qualification the students obtain. Quality education for all, freedom for the learner and for the educator to move in Europe and the freedom for institutions to associate are among the main principles of the European Education Area. Legal and administrative framework should remove red tape for the delivery of joint programmes and joint degrees, with a view to making them automatically recognised among participating institutions and everywhere in the EU. Achieving seamless transnational cooperation is first and foremost for the students: developing transnational campuses, enabling students to begin their curriculum in one institution and to follow on smoothly in another country, as well as making mobility easier and more flexible for example by mainstreaming the use of the European Student Card initiative. A joint European degree would stand for the ability to create knowledge and innovation across borders and disciplines, to increase the visibility and reputation of the HEIs in Europe and beyond, and to bring benefits to the students with a qualification that would be recognised as excellent, international and innovative by employers across the EU. A joint European degree, to be delivered at national level, would attest learning outcomes achieved as part of transnational cooperation among several institutions, offered for example within European Universities alliances. It will be important to examine feasibility and what would be the concrete steps, for institutions and for national systems. The EU can facilitate this process and point to where key steps need to be taken by the different actors, for instance through piloting the first steps towards a joint European degree. Transnational cooperation in higher education needs to be enabled to cater for more innovative ways to embed and stimulate mobility for both students and staff , accounting of the needs of different learners and circumstances. Clear perspectives for adequate, consistent, and sustainable investment in higher education offer the necessary continuity and stability to achieve deeper and more effective cooperation. Investment in higher education and research is essential and of great public value. Sustained investment is particularly relevant in the context of the European Universities initiative. It is equally important to ensure resources are managed well and used effectively, equitably, and efficiently. Synergies between European programmes and funds (such as Erasmus+, Horizon Europe, Digital Europe, the Cohesion Policy funds, and InvestEU), and with national funds enable better funding allocation, accounting for regional or national context. For instance, Initiatives for excellence under Horizon Europe will empower European HEIs to actively shape and amplify the transformation of the European R&I ecosystem by mapping and modelling national excellence initiatives and providing best practices and mutual learning, supporting Member States to setup their own excellence initiatives and join forces for further cooperation. The initiatives for excellence will also aim at deepening the models of integrated and inclusive cooperation piloted by the European Universities Initiative, supporting quality, further cooperation with surrounding ecosystems, and mainstreaming a culture of excellence in research and value creation. Trust in each other’s education system is indispensable, building on transparent quality assurance systems and automatic recognition of qualifications and learning periods abroad. Trust should encompass all forms and modes of education: from physical to online, on campus and in work-based and other situations, from full degrees to micro-credentials, and accounting for changing needs and situations (such as online learning or happening outside of the country of residence). External quality assurance safeguards the autonomy of higher education institutions and maintains public trust for automatic recognition within and across Member States, through action at system and institutional levels. It helps link education with the world of work and involve students to ensure high quality learning provision goes together with inclusiveness. The most recent developments in higher education, notably the European Universities Initiative and the boost in upskilling and reskilling needs, makes it clear that there is a need to strengthen the link between internal and external quality assurance and recognition processes. Building on national legislation and EU level policy framework as powerful instruments, national authorities should continue building transparent education systems to foster recognition, and promote deeper interaction with ENIC/NARIC network of academic recognition centres, higher education institutions, quality assurance agencies, students, and other relevant organisations. Higher education institutions need to integrate recognition processes (for full qualifications, study periods and prior learning, including micro-credentials) in their internal quality assurance systems, ensuring that recognition practices facilitate mobility and cooperation, and improve flexibility of the study processes. The ENIC-NARIC information centres should also help supporting transparent and fair recognition of third country qualifications, including those of refugees. Inter-disciplinary and cross-sectoral approaches enable student-centred learning, with more personalised content, based on innovative pedagogies, enabling the development of forward-looking skills and competences, making best use of digital technologies, blended learning and work-based learning. Challenge-based approaches combining shared education, teaching and learning, pedagogical innovation, research and innovation allow involved parties to work jointly and across disciplines through investigation and invention, thus reinforcing excellence in education and research and engagement with citizens. To deliver on their missions, higher education institutions must develop innovative governance arrangements that reflect the diversity of the staff and learners, and the community in which the institution is based, and that foster meaningful contribution from higher education to regional growth and sustainability. Innovative governance models should respond to challenges for transnational cooperation, as well as accommodate the evolving needs and dynamics of inter-institutional collaboration. They should be developed as a natural expansion of the joint efforts towards intra-university collaboration. Success stories of projects making deeper transnational cooperation amongst universities in Europe a reality Young Universities of the Future (YUFE) is a European Universities Alliance funded through Erasmus+ and Horizon 2020 and involves ten dynamic, young, student-centred research-based universities and four non-academic partners from the non-governmental and private sectors, aiming to establish a true European University. YUFE promotes active European citizenship within a shared European environment, where teams of students, staff, citizens, businesses and policy makers collaborate to address European and global challenges. Eucor-The European Campus is funded by the European Regional Development Fund (ERDF). It is a trinational alliance of five universities in the Upper Rhine, a border region between Germany, France and Switzerland. In 2015, the five universities created a dedicated legal entity in the form of a European Grouping of Territorial Cooperation (EGTC), solidifying cooperation that dates back to 1989. The universities retain their autonomy, but act together in a targeted way in order to strengthen their cooperation in the fields of teaching, research and innovation and boost cross-border mobility. The INnovative Verona University Inter-disciplinary, Inter-sectoral and International Training Experience (INVITE) is funded through the Horizon 2020 Marie Skłodowska-Curie COFUND Action. The project is co-financed by the Regione del Veneto and involves 17 universities and research centres in Europe and beyond, 13 enterprises and organisations from the economic sector, 3 public organisations and 1 network. It has a strong inter-sectoral, interdisciplinary and international research and training dimension. It offers 14 doctoral positions to train early-stage researchers in multiple scientific disciplines. Open EURAXESS is funded by Horizon 2020. It aims to strengthen the effectiveness and optimize the services of all EURAXESS partners in an innovative and open EURAXESS network to facilitate researchers' mobility through free of charge assistance, including support for career development. The project ensures collaboration among member countries and institutions to improve access to jobs and better working and employment conditions for researchers across Europe and beyond. Over 70% of EURAXESS service centres for researchers are universities, across 42 countries coverage. 3.Funding and investment in higher education Achieving inclusion and excellence in the transformation of European HEIs, taking transnational cooperation among European HEIs to the next level, engaging in unfolding green and digital transitions, and equipping learners with transversal skills needed in innovation ecosystems, require both funding resources and effective monitoring. 3.1.Investment into the European higher education sector As European society confronts the challenges noted above, expectations about the contribution of higher education and research to overcoming them have grown. In monetary terms, evidence shows high returns on investment (ROI) into higher education for individuals, sectors, and countries. The net public return on tertiary education investment is estimated between two and three times the amount of public investment. As for the research and innovation mission of HEIs, ROI on research has an even greater positive effect, with every €1 invested by Framework Programme generating, on average, added value of € 13 to the business sector.

There are also important spill-over contributions from higher education, such as intergenerational benefits and attitudes to science and technology as evidenced in response to COVID-19 restrictions and vaccine take-up, and support for democratic values. These intangible benefits can be difficult to estimate. Thus, a “long-term horizon is the best comprehensive benchmark for judging value” and what is being measured by society and different stakeholders at different times. Consequently, the funding of higher education needs to take both short-term and long-term perspectives. However, trends in public expenditure for higher education show fluctuation over time due to circumstances in the global or national economies, stage of development and relative wealth, and priorities. Demographic, economic and labour market factors, as well as the education system and network of HEIs within a given country (such as their location, size, mission, research intensity) also influence how resources are allocated and deployed. In most EU-27 Member States, government funding for higher education accounts for more than half of total funding for the higher education sector. The remaining sources include non-education private sector (mostly tuition fees from households), other non-education private entities (contracts with business and industry), and international organisations (mostly EU funding). National public investment does not, however, provide a complete picture of resources invested in higher education. For example, countries in which R&D is conducted in HEIs tend to report higher levels of expenditure per student than those where R&D is conducted in public institutions or industry. Some Member States rely on private investment (e.g. Netherlands, Ireland). Among OECD members, only countries with a high level of private spending can boast higher education expenditure beyond 2% of GDP (e.g., Canada, Australia, the United States, and Chile). Conversely, of countries that rely on private funding for more than 50% of expenditure, only Japan has a share of GDP spent on higher education that is below the OECD average. Following the global financial crisis in 2008, public funding generally rebounded and stabilized, but progress towards full recovery has been frustrated by the COVID-19 pandemic, exposing variations between countries in tertiary education spending. The EU 27 overall invested in 2019 0.8% of GDP, and the Euro area level was 0.7%. For EU member states the range goes from 0.3% in Italy, 0.4% in Luxembourg, to 1.6% in Denmark and 1.7% in Finland. 3.2.Investment needs The pandemic has renewed concerns about what some stakeholders call a “chronic underfunding of universities” across many European higher education systems, thereby exposing structural weaknesses and competitive gaps. Pandemic lockdowns have impacted broad areas of higher education activities, as well as “other” sources of HEI income, such as the provision of services (e.g., accommodation), contract research (income from the private sector), tuition fees from international students and philanthropic funding. Europe’s performance in the Innovation Scorecard or in global university rankings is often pointed to as an indication of a growing gap between European higher education performance and that of the US and more recently Asia. A recent sample survey of HEIs has echoed these concerns, highlighting the need for investment in digital infrastructure (86%), staff training (62%), and physical infrastructure (17%) with an emphasis on technology-enhanced learning and teaching methods as well as virtual mobility. With reference to research funding, there is a recognition that significant barriers persist in obtaining funding for interdisciplinary and transdisciplinary research in the current discipline-oriented competitive climate. The most critical topics identified through a survey of universities , where HEIs anticipate both increased need of investments and lack of funding are the following: renovation and modernisation of HEIs building, including the “greening of the HEIs”; digitalisation of HEIs: infrastructure, equipment, and use; research and innovation infrastructures and equipment; career development and opportunities for academic and administrative staff; technology transfer from HEIs into industries; Lifelong learning training and Skills for the Future curricula ; sustainability of European Alliances and cross-university collaboration. There is considerable concern that the COVID-19 pandemic has aggravated social inequalities and regional and institutional disparities across the EU. A gap is most evident between those in better funded western and northern European system, and in underfunded higher education systems in southern, central and eastern Europe – a gap that also mirrors disparities in higher education attainment and outcomes. This picture replicates the inter-EU investment gap evident in the aftermath of the 2008 financial crisis, with countries like Luxembourg, Germany, Switzerland, Norway, Austria and Denmark significantly increasing funding compared to their GDP growth, and countries such as the Czech Republic, Romania, Slovakia and Ireland experiencing reduced funding. Going forward there is a need to ensure a more adequate and consistent level of investment in higher education. GDP provides an important international reference point and target for government expenditure, but it does not measure health, education, equality of opportunity, the state of the environment or many other indicators of the quality of life and sustainability. The concept of “investment” suggests spending is purposive, essential and of public value. To meet rising demand from learners, society and the economy, investment in public infrastructure and services (which includes higher education and research) is more vital than ever. At the same time, it is vital to ensure all resources (financial, capital, human and natural) are managed well and used effectively, equitably, and efficiently. 3.3.What has been decided/achieved so far? The following important policy statements and actions have focused on quality investment in education and training, including higher education: ·Council Resolution of 27 February 2020 on education and training “… the most powerful investment that can be made in people and in the future and its social and economic returns for individuals, employers and society as a whole”. ·Commission Communication of 30 September 2020 on achieving the European Education Area by 2025 notes the intensification of work on investment, including establishment of an expert group on quality investment in education and training. ·Council Resolution of 18 February 2021 on a strategic framework for European cooperation in education and training towards the European Education Area and beyond (2021- 2030) agrees “achievement of the European Education Area … calls for an increased focus on investment in education.” Several EU programmes and funding are vital for supporting higher education in the EU: ·Erasmus+ and Horizon Europe: Authorities in Member States remain responsible for the way higher education is organised and delivered in their countries. EU activities are designed to bring an additional international dimension to studying, teaching, researching or making policy in higher education. Through its Erasmus+ and Horizon Europe programmes, the EU supports international exchanges for students, academic staff and researchers, as well as structured cooperation between higher education institutions and public authorities in different countries. The objective is to create new opportunities for people in higher education to learn from one another across national borders and to work together on joint projects to develop good learning and teaching, undertake excellent research and promote innovation. ·Digital Europe Programme aims to build the strategic digital capacities of the EU and facilitate the wide deployment of digital technologies for the use of Europe’s citizens, businesses, and public administration. A share of its budget will support the design and delivery of specialised programmes and traineeships for future experts or entrepreneurs in the key strategic areas, and upskilling people through short-term training and courses.

·European Social Fund Plus (ESF+) is the main funding instrument to implement the European Pillar of Social Rights. It aims to achieve high employment levels, fair social protection and a skilled and resilient workforce. ESF+ covers all stages of education, from early childhood education and care to adult education. ·European Regional and Development Fund (ERDF) aims to strengthen economic, social and territorial cohesion in the European Union by redressing the main regional imbalances in the EU. In close coordination with ESF+, it supports investment to improve access to inclusive and quality services in all stages of education, training, and lifelong learning, through developing infrastructure and relevant equipment. This support also includes the provision of conditions for digital education, accessible remote learning possibilities and skills development in smart specialisation and cross-border projects. ·Technical Support Instrument assists national authorities to improve their capacity to design, develop and implement reforms. Education and training are key policy areas covered by the Technical Support Instrument. ·InvestEU brings together existing EU financial instruments. It includes the InvestEU Fund, which mobilises public and private investment using guarantees from the EU budget; the InvestEU Advisory Hub, providing technical assistance to project promoters seeking financing; and the InvestEU Portal, bringing together projects and investors. HEIs could benefit from the financial products and advisory services available under the Social Investment and Skills Window and the Research, Innovation and Digitisation Window. ·The Recovery and Resilience Facility (RRF) aims to support public investments and structural reforms to improve economic and social resilience of Member States and support the green and digital transitions. Investment and reforms in areas such as social, employment, skills, education, research and innovation and health, business, environment (including public administration and the financial sector) are prioritised. Based on current RRP plans, €9 billion will be targeted on higher education (16% of the budget allocated to education and skills), with a substantial focus on digitisation (digital infrastructure, digital skills for students and academics). In the context of RRF, Member states have indicated plans to support widespread transformation, improving access to higher education, and digital transition of higher education. 3.4.What further action is needed? A mobilisation of all potential EU sources of funding to support the higher education sector in its transformation is of major importance. The new MFF and RRF provide significant opportunities for HEIs. The overall estimated budget available to universities and other types of HEIs across the new MFF (2021-2027) and NextGenerationEU amounts to around EUR 80 billion, and unfolds as follows: ·Higher education: around EUR 25 billion, with the support of Erasmus+, the European Social Fund Plus, the European Regional Development Fund, Digital Europe, Invest EU and the Recovery and Resilience Facility. ·Research and innovation: around EUR 54 billion, with the support of for example Horizon Europe, Invest EU and the Recovery and Resilience Facility. Higher education stakeholders have expressed concerns about funding cuts across key EU-wide programmes and at national level and call for increased investment. At the same time, they view the current environment as an opportunity to further modernise and achieve efficiencies by transforming modes of delivery via digitalisation (14% respondents), through internationalisation (6%), strengthen collaboration (4%), and sharing resources (2%). They also call for a better balance between trust and control, thereby granting sufficient autonomy to develop their own financial allocation mechanisms, adapt strategies and streamline and use resources as appropriate to their mission, as well as a shift from compliance to performance orientation. This would involve, for example, wider acceptance of nationally recognised practices in terms of audit, accounting, and management practices. Collaboration and resource sharing between HEIs, including different types of institutions, is seen as one of the best ways to improve efficiency, enhance quality and bring wider benefits to learners and society. Pooling/sharing facilities provides opportunity to build capacity and capability and increase efficiency and breadth of service across “back office” or support functions. Collaboration for library and information resources, technology transfer offices (TTO), doctoral education and training, and internationalisation are areas which could benefit from collaboration. Digitalisation of operations can enable HEIs to provide high quality services across multi/virtual campuses which would be difficult to do as individual or smaller institutions or institutions with geographical disparate facilities. Collaboration can extend to the regional, national, or transnational level, providing a wider range of education and research provision, thereby making more efficient and effective use of resources (financial, capital, human and natural). To achieve this, efficiency should be integrated more holistically into the goals of cross-institutional partnerships, in terms of good practice dissemination, knowledge exchange as well as sharing of tangible and intangible resources. There could be better use of peer-learning to share knowledge and hands on knowledge between practitioners and policymakers. The formation of Civic and Regional Alliances between different HEIs and with other educational providers, business and employers, and civil society can support stronger and sustainable regional innovation ecosystems by boosting capacity and capability. They can develop a collective vision for the region based on an analysis of local needs and opportunities and provide an educational bridge and opportunities for learners throughout their lives. Higher education financing models are evolving in many European countries as policy responses to the need for greater efficiency and effective use of public resources and for quality and return-on-investment. Different issues arise with respect to the system, sector or institutional level, and the dimension of operation, such as operational efficiency, academic efficiency and efficiency through strategic governance. Increasing focus and emphasis on these matters raises concerns about the (negative) impact on quality. A range of accountability and transparency instruments has responded to dissatisfaction with the level of transparency and accountability traditionally associated with HEIs. Performance-based funding systems (PBF) have become a common feature in many European higher education systems. They are currently in use in 15 out of 22 European systems. The link between investment and quality is complex and indirect. Accordingly, stakeholders warn that PBF should represent additional funding rather than taking away basic or core funding to universities. It is argued that ill-designed competitive schemes bear the risk of an increase in homogenization or isomorphism, and a decrease in quality of teaching and research, e.g., by lowering standards to increase graduation rates, or name dropping to increase the number of publications and citations. The OECD has been to the forefront of advising that while resources are important, they are only part of a more complex picture about what makes the difference in quality. This depends more crucially upon policy choices and how resources are used. It is possible to design PBF systems that reward rather than punish institutions, using performance compacts/contracts as a way of building consensus and trust between HEIs and governments. To better understand the link between funding and quality, the Expert Group on Quality Investment in Education and Training is conducting an in-depth analysis of potential and alternative approaches and policy options most likely to boost education outcomes and inclusiveness while improving the efficiency of spending. DG EAC is supporting a study of performance-based funding mechanisms, mapping their usage and effectiveness. It also aims to examine national financial support to the European Universities Initiative.

There is potential in creating synergies between EU policy initiatives. Their range, focus and complexity can potentially hinder active participation and success. Overlapping or poorly aligned policies and initiatives is frequently noted by stakeholders. Better synergies would help reduce overlap and inefficiencies in the system. These could include alignment of policy priorities and programme objectives, alignment of funding rules and implementation modalities, and linkages between research- and teaching-focused programmes. In addition, further simplification of application and management procedures could achieve lower entry barriers to programmes (thus improving participation throughout Europe) and maximising the impact of EU funds overall. Introducing a funding action line in the Bologna Process or the EHEA/EEA could also help. InvestEU aims to bring together all existing EU financial instruments under a single umbrella. Further work should be undertaken to see how to establish a coordinated system that is more user-friendly to/for all stakeholders. In the area of transnational cooperation stakeholders particularly report that more sustainable funding resources are urgently needed. This is especially true for the European universities. Stakeholders, alliances, and organisations representing the European Universities Alliances highlight that funding resources are crucial for delivering ambitious new activities and transnational cooperation. Coordinators highlight a need to ensure bridge funding for the European Universities, before more holistic and integrated funding perspective is developed in the future. The 2020 EUA survey on international strategic partnerships also clearly underlined that the lack of funding had been one of the main reasons (along with the timeframe) for institutions not participating in the European Universities initiatives (84%). Strategic capacity was not the issue, and only 19% of respondents cite lack of strategic as a reason for not participating. More generally, because of the level of demand on the Erasmus+ budget, many promising cooperation projects to develop innovative practices for the transformation of European higher education are not funded. This represents both an individual missing return on investment for HEIs who submitted the project, after often dedicated considerable internal resources to the application, and a collective shortfall for the transformative ambition for HEIs. There is a need to recognise and valorise the good quality of projects proposals under Erasmus+ that could not be funded. This would help HEIs in their search for alternative financing for these projects at national level, including through the European Regional Development Fund and the European Social Fund+. In a first step, a certificate from the Commission could be delivered to the HEIs involved in good quality proposals that could not be funded at EU level. These HEIs could use it to facilitate their access to national funding for these projects. Each individual HEI involved in a multi-beneficiary alliance would need to seek for alternative funding individually in their national context. This approach could be tested for the Call for Proposals on the European Universities initiative in 2022. Communication and involvement of Member States is key, and the Commission would need to raise awareness about a certificate among Members states and higher education national funding agencies, and obtain the commitment of Members States to facilitate such an approach, encourage them to share good practices on national co-funding of transnational cooperation projects. In a second step, the existing Seal of Excellence tool, a quality label awarded to project proposals to help them find alternative funding via ERDF/ESF+, could be operationalised under Erasmus+, building on what is done under Horizon Europe. Higher education in Europe is dependent on public expenditure but public funding for European Higher education institutions (HEIs) has declined or stagnated in most higher education systems over the last decade. Financial revenue from private sources other than households (e.g., tuition fees) has traditionally represented a small share of institutional budgets across OECD countries. However, research suggests that higher education systems that can mobilize both public and private resources, are able to achieve higher levels of spending than those that rely only upon public resources. This can lead to improvements in equality (as more study places are made available), and quality (as improved human and physical resources are provided to learners). Examples of such initiatives include: ·An EU guarantee for borrowing, such as the Erasmus+ Master Loan, and through Invest EU, can incentivise additional private and public investment and create leverage on EU investments. ·A “Skills & Education” pilot scheme (launched in 2020 under EFSI) has shown great interest from financial intermediaries and higher education stakeholders for such a new financial instrument, targeting individual students & learners (different lending models) as well as institutions (universities and SMEs). ·As part of the new MFF (2021-2027), the Commission has negotiated with the European Investment Bank (EIB) Group that this pilot scheme is integrated under the “Social Investment and Skills” window of the InvestEU programme. Consideration should be given to achieving a better balance between public and private actors in the investment needs of the higher education sector, on the grounds of necessity and equity. Notably, this should be considered in the context of the European Strategy for Universities. DG RTD is supporting a study of Knowledge Ecosystems in the new ERA including development of an investment agenda for the European Strategy for Universities. Regarding the access to EU funding sources and the alignment with national public funding sources, it is difficult for universities and other higher education institutions, to obtain a comprehensive overview of the support available to implement their training, research and innovation agenda. This complexity can even deter stakeholders and policymakers from envisaging, developing and implementing synergies of funding. This leads to a knowledge gap in the HEIs on how to use alternative funding sources. As noted above, a lack of information, pathways and/or synergy between EU programmes and initiatives is a constant point of criticism by stakeholders. The programmes above can help create a more balanced approach to make more dynamic, sustainable, and competitive HEIs across the diversity of the EU. Better access to information on these programs and better synergies between their funding instruments is necessary would be a first step towards a future (long term budget after 2027) capability to support universities holistically, and in particular develop for ambitious initiatives of transnational cooperation, such as the European universities and other types of alliances, a more integrated system blending different funding levels and programs. 4.Quality and relevance of higher education 4.1.The context: innovation, skills, societal and labour market needs Higher Education Institutions (HEIs) impart knowledge and equip young people with skills and competences. A key question is to what extent HEIs provide learning outcomes of high quality. There are different ways to define and measure “quality”, but there is no doubt that Europe depends on excellence. The quality of learning outcomes is a defining factor for Europe’s international competitiveness as well as its attractiveness in the global race for talent. Quality is linked to the requirement to provide skills and competences that are relevant in a context of a quickly evolving labour market. 80 million workers in Europe are affected by mismatched skills with respect to the demands of employers, which hinders Europe’s recovery and sustainable development, as well as profound structural change in markets and technologies.

The quality and relevance of HEIs is therefore reflected in the part they play in their local industrial and innovation ecosystems. They interact with business and civil society and intersectoral exchanges take place, which is essential to adapt higher education to labour market needs and overcome skills mismatches. Intersectoral also means transnational, as the societal relevance of higher education is boosted by transnational exchanges, mobility across ecosystems, and partnerships between them. Innovative pedagogies To achieve inclusive and excellent education, and increase the diversity of students, support is needed to stimulate pedagogical innovation, including technology-enabled, digital, and blended approaches. New approaches promoting interdisciplinary and challenge-based pedagogies should be stimulated, such as through the STEAM approach to STEM education. The creation of ‘living labs’ is one example. It helps students’ critical thinking, creative and entrepreneurial skills by having them work on complex societal challenges together across disciplines and countries, and with academics, researchers, entrepreneurs, companies, cities, and regions. This intersectoral and challenged-based approach is key to provide future generations with the knowledge, skills and attitudes that are relevant in a context of quickly evolving labour market needs, as well as profound structural changes in markets and technologies. Challenge-based learning has a strong connection to student-centred learning and teaching, which is crucial to ensure quality and relevance of higher education. Students should be encouraged to take responsibility for their own learning, to enable them to actively participate in the construction of knowledge, and to develop their autonomy as learners through self-reflection, research-based activities, and improved learning skills. The application of student-centred learning and teaching within higher education requires shifting focus from what teachers teach to what learners learn so that students can experience a transformative learning experience and thus achieve deeper learning outcomes. For HEIs to fully and successfully implement student-centred learning and teaching, 10 mutually reinforcing elements were identified: Policies, rules and regulations enabling student-centred learning and teaching; Student-centred curriculum and pedagogy; Student-centred assessment; Flexible learning pathways; Learner support; Teaching support; Active learning spaces and academic libraries; Learning technologies infrastructure; Community learning connections and partnerships; Quality assurance supporting student-centred learning and teaching Innovation Ultimately, pedagogical innovation ensures that students, academics and researchers are equipped with the relevant knowledge, skills and attitudes that will help spurring innovation. Europe’s innovation performance has been improving, but it varies across EU member states. The Regional Innovation Scoreboard shows the most innovative regions are located primarily in Northern and Western Europe, while innovation capacity in Eastern and Southern regions is considerably lower, although convergence is continuing. Increasing innovation capacity in less innovative regions is the necessary precondition for better cooperation, growth, and success. Europe’s capacity to accelerate its innovation performance relies on harnessing the full potential of all its HEIs, strengthening human capital and talent development, investing in research and innovation, and translating knowledge and research into new products and services. HEIs need to support both research and innovation in products, services and solutions, as well as ensure that their education programmes provide graduates with the skills and competences required by the dynamically changing labour market. The geographical distribution of HEIs has implications for innovation and competitiveness, especially for peripheral regions where there is a need for both human capital and RDI. Areas in the south and east of Europe, and in parts of France or Germany have low density of HEIs. In 20% of NUTS-3 regions, a majority of the population cannot reach a university within 45 minutes, and these regions represent 14% of the EU plus EFTA’s population. Future sustainable social and economic development will need innovation hubs/regional clusters in all areas providing frameworks and support to sustain innovation ecosystems and ensure social cohesion. Skills development Innovation in technology with the green and digital transitions are shaping future labour markets and innovation ecosystems. A key objective is to ensure that people of all abilities and circumstances can easily use the new technologies to help solve problems in their daily lives, to access business and public services, and social and cultural activities –no one can be left behind. Most new employment opportunities in industrial and innovation ecosystems will require higher-order cognitive, communication and interpersonal skills, complex problem solving, creativity, fluency of ideas and active learning, requiring people to have broad-based skills alongside specialist knowledge. Cedefop reported in 2018 that 43% of workers in the EU had seen the technologies they work with change, while 47% have experienced changes in their working methods or practices. At the same time, 53% of EU companies had difficulties filling vacancies for ICT specialists in 2018. Cedefop forecasts that by 2030 around 41% of all jobs will require higher level qualifications, and 45% medium qualifications. Digital, innovative, and creative skills will be essential to enable people to take advantage of new employment opportunities within a global talent pool in an inter-connected world. There is room for further improvement in the development of student and researchers entrepreneurial mindsets. The results of the survey conducted by the European University Association reveal that universities contribute to the development of student entrepreneurial skills in various ways, but currently relatively few students benefit from entrepreneurship training. Furthermore, the degree with which HEIs measure their success as innovators in terms of nurturing the start-up sector is limited. Only 52% of universities use it to a large or moderate extent. Equipping students and researchers with entrepreneurial skills represents a very important element to foster not only more attractive and effective careers, but also an enhanced circle of knowledge production, circulation and valorisation. The concept of “labour mismatch” covers complex and multifaceted divergences between qualifications and skills needs. To improve the balance between skill supply and labour market demand requires sustained dialogue and partnership within a local ecosystem between different policy areas (e.g., education, industry, labour, and regions) and between HEIs, business and civil society, and is intertwined with knowledge development and innovation policies. Ensuring that students have appropriate knowledge, skills, and competences requires innovative work-based learning initiatives and entrepreneurship programmes to promote links between SMEs and education as well as giving learners the appropriate skills to start their own business. Lifelong learning has to be a career-long priority to update knowledge and skills of graduates. Local impact The HE landscape is heterogeneous. Even in the case of elite HEIs, the concept of boosting their excellence would fall short in an ecosystem where non-HEI research centres, academy of science institutes, polytechnic universities, universities of applied science and specialised laboratories are all potential agents of excellence in a fragmented set-up. Hence, inclusiveness is key. ﻿HEIs contribute to knowledge spill-over within their ecosystems. They provide entrepreneurship training and opportunities, equipping graduates with the skills necessary to start businesses. They can encourage spin-offs and provide access to multidisciplinary research environments. They support new businesses by offering incubation service, including supporting the development of business ideas (business plan competitions, support from technology transfer office), offering physical space (accommodation, research facilities), support services, networking opportunities, mentoring staff and funding opportunities. However, while Europe generates excellent new knowledge, its research intensity is weaker than some global competitors, and conversion into successful products or services less frequent. Too few start-up companies in Europe have become global innovation leaders in the past two decades, due to a weaker system of scientific research, connectivity between HEIs and business, too little intersectoral mobility of researchers, and a lower capacity of EU innovative companies and fewer entrepreneurs/intrapreneurs. There can also be an expectations mismatch regarding the roles of different actor in Smart Specialisation Strategies (RIS3) implementation and actual practice with implications for the regional innovation ecosystem.

4.2.Challenges for innovation ecosystems and higher education HEIs increasingly prioritise their wider responsibilities within the development of their local ecosystems. HEIs are active co-creators of knowledge, addressing societal challenges in the research they conduct. This is reflected in the education offered, so that graduates become well suited to labour market needs and acquire entrepreneurial skills, facilitating the creation of innovative new businesses, products and services. Promoting exchanges in different fields, HEIs thus serve as “anchor institutions” within their cities and regions. The local ecosystem is a “quintuple helix”, embracing HEIs, business, government and public authorities other educational providers, citizens and civil society organisations, in highly collaborative, open, flexible, sustainable, and ecologically sensitive ways. HEIs are major local employers, purchasing goods and services, supporting cultural activities and acting as global gateways for attracting both investment and mobile talent. A close relationship with all stakeholders can ensure that educational and research programmes remain relevant to local as well as broader societal needs through providing on-going educational and training opportunities. Shaping the climate, social and economic transitions, and responding to health and socio-economic emergencies such as the COVID-19 crisis, require that excellent research results and innovation are efficiently valorised, and are transformed into sustainable solutions with economic and social value across the EU. A policy review shows that valorisation of research results and innovation occurs through various intertwined channels through which actors including academia, industry, private investors, public authorities and civil society interact. There is increasing evidence of the need to redefine the tools that lead to knowledge valorisation and adapt them to new ecosystem based approaches. The 2020 Science, Research and Innovation Performance Report underlined the need to maximise the value of the higher education sector Research and Innovation results and improve the management of research-based knowledge to keep up its competitiveness, while an OECD report on university–industry cooperation directly addresses decreasing levels of cooperation. Balancing priorities at local, national and EU levels can present HEIs with significant barriers to cooperation within their local ecosystems. Teaching programmes often regard societal innovation and entrepreneurship as “add-ons” and not a core part of curricula. Exploitation of innovations arising from academic research can be hampered by uneven regulatory frameworks for intellectual property rights, and by institutional bureaucratic inertia. Knowledge about innovation capital or start-ups, essential for scaling-up innovation from the research level, can be difficult to access, especially if scaling-up takes place across different countries. There are also different practices and experiences across sectors and disciplines, between staff and students, and between HEIs. Researchers attempting to start a spin-off often face bureaucracy at their institution, including being asked for a large equity share of the spin-off. Limited access to finance is also mentioned as a main challenge for new firms. Technology transfer offices liaise between HEIs and the private sector, providing access to knowledge and expertise, services, consultancy and can identify and license new technologies and intellectual property, and offer facilities and equipment. However, most start-ups in Europe are created directly in the marketplace, bypassing institutional support mechanisms: of 116 venture capital-backed European unicorns, only 4 were university spin-offs. Intersectoral mobility is a form of indirect cooperation between HEIs and businesses. However, practice varies across Member States. This results in challenges for businesses, restricting exchanges with HEIs. There are insufficient incentives and resources at the policy or institutional level to support collaboration, patent valorisation arising from publicly funded research, or incentives for knowledge transfer. There are significant cultural differences and ways of working between higher education and business with different motivations and different approaches to time management. Too few employers know how to engage, resulting in fewer links with a university to serve on a committee or advise on course design – and vice versa. SMEs refer to insufficient knowledge about support programmes or how to access such programmes. Promotion of and support for boundary-spanning functions and people who engage regularly, and often informally, can have a positive impact. Intersectoral exchanges thrive in combination with interdisciplinary pedagogies. However, the structures of many study programmes are based on defined disciplines, rather than fully integrated interdisciplinary and transdisciplinary offers. Interdisciplinary teaching is more common in final year undergraduate or postgraduate study, or is associated with research projects that are more oriented towards solving challenges. Interdisciplinary and intersectoral approaches can be strengthened by collaboration between HEIs on a transnational level, requiring a European space of learning and research based on a high degree of transnational cooperation and mobility between education, training and research institutions, business and civil society organisations. The importance of balanced brain circulation has been increasingly emphasised in policy discussions in recent years. In the context of the Croatian Presidency of the Council of the EU (January-June 2020), the Zagreb Call for Action on Brain Circulation (2020) implied a strong call on EU Member States to jointly address unbalanced mobility of researchers in Europe. Each country has its historical and geographical background, culture, governance, and level of funding, which determine the factors leading to brain drain. Problems at country level tend to be characterised by a low capacity to consolidate young researchers in the system; a low capacity to attract and retain foreign researchers to the system and the need to foster reforms at system-level. Lastly, researchers, lecturers and all others aspiring an academic career face a lot of challenges to their personal career development. Research activities are often fragmented, determined by publications and citations, and being competitive rather than collaborative. Researchers’ careers still face many challenges, including precarious working conditions, unbalanced geographical mobility, trainings too much focused on careers in academia and insufficient intersectoral mobility between academia and business, or the lack of adequate recognition at societal level. There are also insufficient actions supporting females in technology and innovation, blocking the expansion of the share of female academics in STEM-fields. 4.3.What has been achieved so far? To maximise impact, HEIs need to be more fully engaged, open, collaborative, and networked, building innovative, transformative hybrid structures that combine physical and virtual places which build bridges across sectors and borders. The renewed EU Agenda for Higher Education identified building inclusive and connected HEIs as one of its four priorities. In addition to the EU Green Deal and the significant investments into higher education through the Recovery and Resilience Package, a range of EU initiatives support better alignment between HEIs with their ecosystems. In the context of innovation, innovative practices are boosted in many ways. The European Institute of Innovation and Technology (EIT) has launched the Higher Education Initiative which focuses specifically on HEIs in areas of lagging research and innovation capacities. Building bridges with more advanced institutions it “will improve their entrepreneurial and innovation capacity across all institutional levels”. The EIT Label offers a quality seal for education programmes focussing specifically on innovation, and entrepreneurship, leadership, and creativity. The Widening Participation and Spreading Excellence action targets resources on countries with lagging research and innovation capacities. Responsible research and innovation (RRI) is an inclusive approach, ensuring societal actors work together across the research and innovation process, and that account is taken of the effects and potential impacts on the environment and society. Inno-EUt+ is a pilot initiative to support innovation capacity building for higher education. Erasmus+ Alliances for Innovation strengthen Europe’s innovation capacity by boosting innovation through cooperation and flows of knowledge between higher education, VET, research, and the broader socio-economic environment. The EU Knowledge Valorisation Platform provides an interactive forum to stimulate cooperation across borders and improve the broad uptake of research results in society and the economy. It enables the sharing of best practice, knowledge and expertise, thereby improving policies and investments and enhancing capacities and skills related to knowledge valorisation. In the context of HEI-industry cooperation, European Regional Development Funds (ERDF) strengthen economic, social, and territorial cohesion in the European Union. Its funding helps to “modernise education and training systems” by supporting infrastructure and equipment for inclusive and quality education. ERDF now facilitates investment into building human capital and modern skills in smart specialisation priority areas identified in the process of entrepreneurial discovery. Like ERDF, other initiatives address university-industry cooperation. The European Battery Alliance (EBA) brings together EU national authorities, regions, industry research institutes, HEIs and other stakeholders in the battery value chain. Interreg also positions university-industry collaboration as a critical component of the innovation process. InnoCentive is an open innovation marketplace which connects “Seekers” (companies and Start-ups) with Solvers (experts “from within and outside industry who offer perspective and free insights”). HEInnovate is a flagship initiative with OECD to provide guidance and self-assessment for HEIs to become more innovative and entrepreneurial, being used since 2013 by 1,300 HEIs. Added to this, there are a couple of initiatives addressing the gaps between academia and civil society and business. Smart Specialisation Strategies (RIS3) help HEIs to connect different actors and fuel innovation, as shown by evidence from Lithuania, Portugal, northeast Romania, and northern Netherlands. Higher Education for Smart Specialisation (HESS) explores how HEIs contribute to smart specialisation knowledge production as well as human capital development, knowledge dissemination and transfer, and supporting entrepreneurship.

The European Research Area actions include Guiding Principles for knowledge valorisation and a Code of Practice for the smart use of intellectual property, by the end of 2022. The Council Proposal for a Pact for Research and Innovation in Europe identified “value creation” as a key principle underpinning European research and innovation, and highlighted “knowledge valorisation” as a priority area for joint action by Member States. Skills In line with the European Skills Agenda, a feasibility study tested a new concept to promote demand-driven industry-academia knowledge exchange and uptake in European-wide setting. International teams of students, researchers and enterprise representatives explored companies’ business challenges and produced concrete scenarios for product and service to help participating companies to successfully develop their business and overcome their challenges. Good practice at the national level includes Spain and the Netherlands, which emphasise HEIs engagement with the society. In Ireland, engagement is a component of performance agreements between HEIs and the Government. Regional Skills Fora provide a structure at NUTS 3 level for employers and HEIs to meet the skills needs of their regions. For research, engagement and societal benefit are both underpinning principles and indicators for research, for example the Swedish Research and Innovation Bill 2021. Intersectoral mobility schemes are prevalent in countries with a longstanding tradition of HEI-business collaboration (e.g., Belgium, Luxembourg, Denmark, Sweden, and Norway), but are less evident in Central and Eastern Europe where the innovation capacity of these countries is lower. Such schemes are usually supported and implemented with support of European Structural Investment Funds. To facilitate and support the development and cross-border networking of national knowledge transfer office networks and the work of existing pan-European networks, the Commission’s Joint Research Centre has launched an i