Communication from the Commission - The role of the universities in the Europe of knowledge
Date: 2003-02-05
Institutions: European Commission
Subjects: brain drain, education budget, education policy, organisation of teaching, school-industry relations, university

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 05.02.2003
COM(2003) 58 final

COMMUNICATION FROM THE COMMISSION

The role of the universities in the Europe of knowledge

COMMUNICATION FROM THE COMMISSION

The role of the universities in the Europe of knowledge

1.

SUMMARY

This Communication seeks to start a debate on the role of Universities1 within the
knowledge society and economy in Europe and on the conditions under which they
will be able to effectively play that role. The knowledge society depends for its
growth on the production of new knowledge, its transmission through education and
training, its dissemination through information and communication technologies, and
on its use through new industrial processes or services. Universities are unique, in
that they take part in all these processes, at their core, due to the key role they play in
the three fields of research and exploitation of its results,
thanks to industrial
cooperation and spin-off; education and training, in particular training of researchers;
and regional and local development, to which they can contribute significantly.

The European Union therefore needs a healthy and flourishing university world.
Europe needs excellence in its universities, to optimise the processes which underpin
the knowledge society and meet the target, set out by the European Council in
Lisbon, of becoming the most competitive and dynamic knowledge-based economy in
the world, capable of sustainable economic growth with more and better jobs and
greater social cohesion. The European Council in Barcelona recognised this need for
in its call for European systems of education to become a “world
excellence,
reference” by 20102.

However, the European university world is not
trouble-free, and the European
universities are not at present globally competitive with those of our major partners,
even though they produce high quality scientific publications. The Communication
notes a number of areas within which reflection, and often also action, is needed, and
raises a series of questions such as:

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how to achieve adequate and sustainable incomes for universities, and to
ensure that funds are spent most efficiently;

how to ensure autonomy and professionalism in academic as well as
managerial affairs;

how to concentrate enough resources on excellence, and create the conditions
within which universities can attain and develop excellence;

how to make universities contribute better to local and regional needs and
strategies;

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2

In this Communication, the term "universities" is taken to mean all higher education establishments,
including, for example, the "Fachhochschulen", the "polytechnics" and the "Grandes Ecoles".
Barcelona European Council - Presidency Conclusions.

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How to establish closer co-operation between universities and enterprises to
ensure better dissemination and exploitation of new knowledge in the economy
and society at large

through all of these areas,

the coherent, compatible and
how to foster,
competitive European higher education area called for by the Bologna
Declaration, as well as the European research area set out as an objective for
the Union by the Lisbon European Council, in March 2000.

This Communication, which has been prepared in the context of the 2003 Spring
European Council, invites responses to these questions from all those concerned with
higher education, research and innovation. The Commission will review the state of
the debate in the summer of 2003 and identify suitable initiatives, possibly in a
further Communication for examination by the Education Ministers in the Education
Council and the Research Ministers in the Competitiveness Council, as well as by the
European Summit of Higher Education Ministers scheduled for 18-19 September
2003 in Berlin.

2.

INTRODUCTION

The creation of a Europe of knowledge has been a prime objective for the European
Union since the Lisbon European Council of March 2000. Subsequent European
Councils, particularly Stockholm in March 2001 and Barcelona in March 2002, have
taken the Lisbon objective further forward.

The Lisbon agenda calls for efforts from a wide range of players. These include the
universities, which have a particularly important role to play. This is because of their
twofold traditional vocation of research and teaching, their increasing role in the
complex process of innovation, along with their other contributions to economic
competitiveness and social cohesion, e.g. their role in the life of the community and
in regional development.

Given their central role, the creation of a Europe of knowledge is for the universities
a source of opportunity, but also of major challenges. Indeed universities go about
their business in an increasingly globalised environment which is constantly
changing and is characterised by increasing competition to attract and retain
outstanding talent, and by the emergence of new requirements for which they have to
cater. Yet European universities generally have less to offer and lower financial
resources than their equivalents in the other developed countries, particularly the
USA. Are they in a position to compete with the best universities in the world and
provide a sustainable level of excellence? This question is particularly topical as
enlargement draws nearer, considering the frequently difficult circumstances of
universities in the accession countries as regards human and financial resources.

To implement the Lisbon agenda, the European Union has embarked upon a series of
actions and initiatives in the areas of research and education. One example is the
European area of research and innovation, to achieve which fresh perspectives have

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just been opened up3 and, in this context, the objective to increase the European
research and development drive to 3% of the Union's GDP by 20104.

In the area of education and training, we can mention the achievement of a European
area of lifelong learning5, the implementation of the detailed work programme on the
objectives of education and training systems6, work to strengthen the convergence of
higher education systems, in line with the Bologna process, and vocational training
systems, in line with the Copenhagen declaration.

European universities as such have not recently7 been the focus of reflection and
debate at European Union level. The Commission seeks to contribute to such a
debate, and this Communication accordingly examines the place and role of
European universities in society and in the knowledge economy (Section 3), offers
some ideas on universities in a European perspective (Section 4) and sets out the
main challenges facing the European universities, along with some issues for
consideration (Section 5).

the
The Commission calls upon all players concerned (universities themselves,
rectors' conferences, national and regional public authorities,
the research
community, students, business and the people of Europe) to make known their
comments, suggestions and points of view on the various aspects addressed by this
Communication8. In the light of the contributions the Commission receives from this
consultation, it will determine future action and whether to submit a follow-up
communication for the Education Ministers (in the Education Council) and the
Research Ministers (in the Competitiveness Council), as well as to the European
Summit of Higher Education Ministers scheduled for 18-19 September 2003 in
Berlin as part of the Bologna process.

3.

THE EUROPEAN UNIVERSITIES TODAY

3.1.

The universities at the heart of the Europe of knowledge

The knowledge economy and society stem from the combination of
four
interdependent elements: the production of knowledge, mainly through scientific
research; its transmission through education and training; its dissemination through
the information and communication technologies; its use in technological innovation.
At the same time, new configurations of production, transmission and application of
knowledge are emerging, and their effect is to involve a greater number of players,
typically in an increasingly internationalised network-driven context.

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4

5

6

7

8

European Commission, Communications "Towards a European research area", COM (2000) 6 of
18.1.2000 and "The European research area: providing new momentum", COM (2002) 565 of
16.10.2002.
European Commission, Communication "More research for Europe/towards 3% of GDP", COM (2002)
499 of 11.9.2002.
European Commission, Communication "Making a European area of lifelong learning a reality", COM
(2001) 678 of 21.10.2001.
Detailed work programme on the follow-up of the objectives of education and training systems in
Europe, OJ C 142 of 14.06.2002, p. 1.
European Commission, Memorandum on higher education in the European Community, COM (1991)
349 of 5.11.1991.
See Section 7 "How to make a contribution".

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Given that they are situated at the crossroads of research, education and innovation,
universities in many respects hold the key to the knowledge economy and society.
Indeed, universities employ 34% of the total number of researchers in Europe,
although national figures vary in the ratio of one to three between Member States
(26% in Germany, 55% in Spain and over 70% in Greece). They are also responsible
for 80% of the fundamental research pursued in Europe.

In addition, universities train an ever increasing number of students with increasingly
higher qualifications, and thus contribute to strengthening the competitiveness of the
European economy: one third of Europeans today work in highly knowledge-
intensive sectors (over 40% in countries like Denmark and Sweden), which have on
their own accounted for half the new jobs created between 1999 and 2000).

Universities also contribute to the other objectives of the Lisbon strategy, particularly
employment and social cohesion, and to the improvement of the general level of
education in Europe. Many more young Europeans have a higher education
qualification today than in previous generations. While some 20% of Europeans aged
between 35 and 39 hold such qualifications, this figure is a mere 12.5% for the 55-59
age group. If we look at the total population aged 25-64, the rate of employment of
persons holding higher education qualifications (ISCED 5 and 6) stood at 84% in
2001, i.e. almost 15 points above the average taking all education levels together, and
nearly 30 points more than people having completed only lower secondary level
(ISCED 0 to 2). Finally, the rate of unemployment amongst those holding higher
education qualifications stood at 3.9% in 2001, one third of that of persons with a
low level of qualifications.

3.2.

The European university landscape

There are some 3 300 higher education establishments in the European Union,
approximately 4 000 in Europe as a whole, including the other countries of Western
Europe and the candidate countries9. They take in an increasing number of students,
over 12.5 million in 2000, compared with fewer than 9 million ten years previously.

The European university landscape is primarily organised at national and regional
levels and is characterised by a high degree of heterogeneity which is reflected in
organisation, governance and operating conditions,
including the status and
conditions of employment and recruitment of teaching staff and researchers. This
heterogeneity can be seen between countries, because of cultural and legislative
differences, but also within each country, as not all universities have the same
vocation and do not react in the same way and at the same pace to the changes which
affect them. The structural reforms inspired by the Bologna process constitute an
effort to organise that diversity within a more coherent and compatible European
framework, which is a condition for the readability, and hence the competitiveness,
of European universities both within Europe itself and in the whole world.

European universities have for long modelled themselves along the lines of some
major models, particularly the ideal model of university envisaged nearly two

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By way of comparison, there are over 4 000 higher education establishments in the USA, 550 of them
issuing doctorates, and 125 identified as "research universities". Of these, some 50 account for the lion's
share of American academic research capacity, public funding in support of university research and the
country's Nobel prizes for science.

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centuries ago by Wilhelm von Humboldt in his reform of the German university,
which sets research at the heart of university activity and indeed makes it the basis of
teaching. Today the trend is away from these models, and towards greater
differentiation. This results in the emergence of more specialised institutions
concentrating on a core of specific competences when it comes to research and
teaching and/or on certain dimensions of their activities, e.g. their integration within
a strategy of regional development through adult education/training.

3.3.

The new challenges facing European universities

All over the world, but particularly in Europe, universities face an imperative need to
adapt and adjust to a whole series of profound changes. These changes fall into five
major categories.

Increased demand for higher education

This will continue in the years ahead10, spurred on simultaneously by the objective of
certain countries of increasing the number of students in higher education11 and by
new needs stemming from lifelong learning. This increase, which Europe's low birth
rates are not expected to slow down in any great measure, will further intensify
capacity saturation in the universities.

How can this increasing demand be met, considering the limited human resources
(which can be expected to become a deficit, both as regards teaching staff and as
regards researchers, in the years ahead) and the limited financial capacity (which
does not keep in step with requirements)? How can sustainable funding of
universities, constantly beleaguered as they are by fresh challenges, be ensured? It is
to maintain and strengthen the excellence of teaching and
crucially important
research, without compromising the level of quality offered, while still ensuring
broad, fair and democratic access.

The internationalisation of education and research

The momentum of internationalisation is considerably speeded up by the new
information and communication technologies. The result is increased competition.
Competition between universities and between countries, but also between
universities and other institutions, particularly public research laboratories (where
research staff are not expected to meet simultaneous teaching commitments), or
private teaching institutions, often specialised and sometimes run on a profit-making
basis. An increasing share of the funds allocated to the universities is distributed on a
competitive basis and this means ever keener competition to attract and keep the best
talent.

Be that as it may, European universities are attracting fewer students and in
particular fewer researchers from other countries than their American counterparts.
The former in 2000 attracted some 450 000 students from other countries, while the

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European Commission, Joint Research Centre, Report on "The future of education between now and
2010", June 1999.
Countries such as the United Kingdom and Denmark have set a target of training 50% of a given age
group at university level between now and 2010.

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latter attracted over 540 00012, mostly from Asia13. More significantly, the USA in
proportion attracts many more students from other countries at advanced levels in
engineering, mathematics and informatics, and are successful
in keeping more
persons with doctorate qualifications: some 50% of Europeans who obtained their
qualifications in the USA stay there for several years, and many of them remain
permanently.

European universities in fact offer
researchers and students a less attractive
environment. This is partly due to the fact that they often do not have the necessary
critical mass, which prompts them to opt for collaborative approaches, e.g. creation
of networks, joint courses or diplomas. But other factors, outside the university, play
also an important
lower
the rigidities of
entrepreneurship entailing fewer employment opportunities in innovative sectors.
This is reflected in lower performances in e.g. research funding, links to industry,
patenting rates and spin-off creating rates than in the USA and Japan14.

the labour market or

role, e.g.

To develop effective and close co-operation between universities and industry

Co-operation between universities and industry needs to be intensified at national
and regional level, as well as geared more effectively towards innovation, the start-
up of new companies and, more generally,
the transfer and dissemination of
knowledge. From a competitiveness perspective it is vital that knowledge flows from
universities into business and society. The two main mechanisms through which the
knowledge and expertise possessed and developed by universities can flow directly
to industry are the licensing of university intellectual property, and spin-off and start-
up companies .

Although little data is currently available in Member States on the extent to which
universities are commercialising their research, so that it is difficult to say how well
universities across the European Union are exploiting research results with the
enterprise sector, some data are available through the “Community Innovation
Survey” (CIS). The CIS asks enterprises, inter alia, about the most important sources
of information for innovation. The results15 show that education-related and public
research sources are ranked very low. Less than 5% of innovative companies
considered information from government or private non-profit research institutes,
and from universities or other higher education establishments, as being a very
important source of information.

It would facilitate the dissemination of knowledge into the EU industrial fabric,
including SMEs in traditional sectors, if universities were actively to pursue the
promotion of effective university-industry relationships, and better to exploit the
results of their knowledge in relationships with industry. Evaluation criteria for the
performance of universities’ could take account of this challenge.

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European Commission, DG RTD, Key Figures 2002 (based on OECD and Eurostat data)
Students from four Asian countries (China, India, Japan and South Korea) on their own accounted for
nearly 40% of the total of foreign students in the USA (Open Doors 2001, IIE, New York).
European Commission, Communications "Towards a European research area", COM (2000) 6 of
18.1.2000 and "The European research area: providing new momentum", COM (2002) 565 of
16.10.2002.
“ Statistics on Innovation in Europe” Data 1996-97, EUROSTAT

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The European Commission will continue to analyse the existing barriers and factors
conducive to this co-operation and will disseminate the results widely to interested
circles.

The proliferation of places where knowledge is produced

This development and the increasing tendency of the business sector to subcontract
their research activities to the best universities mean that universities have to operate
is on top of the
in an increasingly competitive environment. The result
traditional links between the universities of a given region and the businesses in the
surrounding area new relations have appeared in the picture. Geographical proximity
is no longer the main basis for selecting a partner. High-tech businesses, for their
part, tend to set up near the best-performing universities. The shortening of the time
lag between discoveries and their application and marketing raises the question of the
role and the contribution of universities to the process of technological innovation
and the links between them and the business sector.

that

The reorganisation of knowledge

This is to be seen in particular in two trends which pull in opposite directions. On the
one hand, we have the increasing diversification and specialisation of knowledge,
and the emergence of research and teaching specialities which are increasingly
specific and at the cutting edge. On the other, we see the academic world having an
urgent need to adapt to the interdisciplinary character of the fields opened up by
society's major problems such as sustainable development,
the new medical
scourges, risk management, etc. Yet the activities of the universities, particularly
when it comes to teaching, tend to remain organised, and more often than not
compartmentalised, within the traditional disciplinary framework.

The reorganisation of knowledge can also be seen in a certain blurring of the borders
between fundamental research and applied research. This does not go so far as totally
to remove the meaning of the difference between, on the one hand, the pursuit of
knowledge essentially for its own sake, and on the other its development with a view
to specific objectives, particularly the conversion of existing knowledge into
products, processes and technologies.

Fundamental research therefore remains a major area for university research activity.
It is this capacity in the big American research universities that makes them attractive
partners for industry, which in turn provides them with substantial funding for it.
Fundamental research in this context is therefore conducted with its application very
much in mind, but at the same time without losing its fundamental character. In
Europe, universities tend to undertake directly applied research for the business
sector, extending even to the provision of scientific services, which if taken to excess
could endanger their capacity to contribute to the progress of knowledge.

The emergence of new expectations

Alongside its fundamental mission of initial training, universities must cater for new
needs in education and training stemming from the knowledge-based economy and
society. These include an increasing need for scientific and technical education,
horizontal skills, and opportunities for lifelong learning, which require greater
permeability between the components and the levels of the education and training

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systems. European universities are directly concerned by scientific education, in
particular because they train science teachers for secondary education. In addition,
the contribution expected of universities to lifelong learning strategies leads them
gradually to widen the conditions of access to this area of tuition (in particular to
allow access to those not coming through the route of upper secondary education,
through better recognition of skills acquired outside university and outside formal
education); to open up more to industry; to improve student services; and to diversify
their range of training provision in terms of target groups, content and methods16.

The growth of the knowledge economy and society also leaves universities to
become more closely involved in community life. Alongside and as a natural result
of the exercise of its fundamental missions to produce and transmit knowledge, the
university today functions particularly as a major source of expertise in numerous
areas. It can and must increasingly become a forum of reflection on knowledge, as
well as of debate and dialogue between scientists and people.

Given that they live thanks to substantial public and private funding, and that the
knowledge they produce and transmit has a major impact on the economy and
society, universities are also accountable for the way they operate and manage their
activities and budgets to their sponsors and to the public. This leads to increasing
pressure to incorporate representatives of
the non-academic world within
universities’ management and governance structures.

4.

WHAT IS AT STAKE FOR EUROPE

4.1.

Universities and the European dimension

Responsibilities for universities lie essentially in the Member States at national or
regional level. The most important challenges facing the universities, by contrast, are
European, and even international or global. Excellence today is no longer produced
or measured at the national level, even in the biggest European countries, but at the
level of the European or world community of teachers and researchers.

The question arises in this context as to the compatibility and the transparency of the
systems whereby qualifications are recognised (which lies at the core of the Bologna
process of convergence), and that of the obstacles to the mobility of teachers and
researchers17 in Europe. Student mobility, for instance, is still marginal in Europe. In
2000, a mere 2.3% of European students were pursuing their studies in another
European country18 and while the mobility of researchers is higher than that of the
average of the population concerned, it is still lower than it is in the USA. The
divergence between the organisation of universities at Member State level and the
emergence of challenges which go beyond national frontiers has grown over the past
few years and will continue to do so, as a result of a combination of factors:

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European Commission, Communication "Making a European area of lifelong learning a reality", COM
(2001) 678 of 21.10.2001.
Strategies in favour of Mobility within the European Research Area, Communication from the
Commission, COM(2001) 331 final of 26 June 2001.
This low average masks substantial disparity across the Member States. For instance, 68% of
Luxemburgish students, 10% of Greek students and 9% of Irish students were studying outside their
own country. Conversely, only 0.7% of UK students and 1.2% of Spanish students went to study
beyond their own borders.

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the emergence of a true European labour market in which the people of Europe
must be free to move around as they wish19 and in which problems concerning
the recognition of qualifications become a thing of the past;

the expectations with regard to recognition which have been created by action
taken by the European Union itself to encourage mobility, particularly through
the ERASMUS initiative;

the emergence of a globalised provision of a wide range of university courses,
the continuing brain drain leading to the loss of top-level students and
researchers, and a continuing comparatively low level of activity by European
universities at the international level;

the worsening of these factors which will come with the enlargement of the
Union, owing to the greater level of heterogeneity of the European university
landscape which will ensue.

The nature and scale of the challenges linked to the future of the universities mean
that these issues have to be addressed at European level. More specifically, they
require a joint and coordinated endeavour by the Member States and the candidate
countries, backed up and supported by the European Union, in order to help to move
towards a genuine Europe of knowledge.

4.2.

European Union action for the universities

Support is available to universities from a variety of Community initiatives in the
areas of research and education. On the research front, they receive around one third
of the funding under the framework programme for technological research and
development, and particularly the support actions for research training and mobility
(Marie Curie actions).

The advantages of the Framework Programme for the universities should further
increase with the Sixth Framework Programme20 with the stepping up of training and
mobility support actions, the introduction of a support structure for the creation of
young teams with a potential for excellence, and the increased focus that will be
placed on fundamental research within “networks of excellence” or “integrated
projects”21, and particularly as part of action to promote research “at the frontiers of
knowledge” (NEST action).

The universities also have a major role to play in initiatives under the “Science and
Society” action plan22, designed to foster the development and improve the
coordination of national activities and policies in areas such as scientific opinion and
dialogue with the people, ethics, science education, and “women and science”.

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In this connection, the European Commission has submitted an action plan on skills and mobility,
COM(2002)72 of 13.2.2002.
Decision of the Council and of the European Parliament 1513/2002 in OJ L 232 of 29.8.2002, p. 1.
The “networks of excellence” are an instrument of integration of European research capacity designed
to further knowledge, the “integrated projects” a tool for conducting research targeting a specific
objective. Both are designed to gather a critical mass of resources and are used in the seven “priority
thematic areas” under the sixth Framework Programme.
European Commission, Communication “Science and Society Action Plan”, COM (2001) 714 of
4.12.2001.

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Universities are also involved in certain of the actions pursued by the Union relating
the support actions for utilising R&D results
to technological
achieved by science parks, through the Framework Programme or with the support of
the Structural Funds or the European Investment Bank (EIB).

innovation, e.g.

As far as education and training are concerned, universities are very much involved
in all the actions of the SOCRATES programme, particularly the ERASMUS action.
Since it was launched, over a million students have benefited from this action and
every year some 12 000 teachers opt for ERASMUS mobility. Many thematic inter-
university networks also contribute to strengthen cooperation at European level,
acting as a think tank for the future or the development of their subject area. The
Community has provided support for the European course credit transfer system
(ECTS) for the recognition of periods of study. The LEONARDO programme
provides support for mobility projects between universities and the business sector,
involving 40 000 people between 1995 and 1999. Universities are also involved in
the eEurope initiative and its eEurope 2005 Action Plan, which encourages all
universities
students and
researchers23.

to develop on-line access

("virtual campus")

for

This cooperation also extends to other regions of the world. Most of the Community
research Framework Programme is open to every country in the world and in
particular provides support for cooperation with the countries with the Mediterranean
region, Russia and the Newly Independent States, as well as developing countries.
Through the TEMPUS programme the Union supports university cooperation with
the countries of the former Soviet Union, southeast Europe and, since its extension in
2002, the Mediterranean region. There are also initiatives covering relations with
other geographical areas, e.g. ALFA and Asia-Link. All these activities help to
project
is also worth
mentioning the proposal for the “Erasmus World” programme, which will enable the
Union to support “European masters” in order to attract to Europe some of the
world’s best students for studies pursued in at least two European countries.

the European academic universe around the world.

It

Lastly, the Commission supports and helps to foster the Bologna process which is
designed to create between now and 2010 a European higher education area which is
consistent, compatible and competitive, through reforms which converge around
certain defining objectives.

5.

MAKING EUROPEAN UNIVERSITIES A WORLD REFERENCE

If they are to play their full role in the creation of a Europe of knowledge, European
universities must, with the help of the Member States and in a European context, rise
to a number of challenges. They can only release their potential by undergoing the
radical changes needed to make the European system a genuine world reference.
There are three objectives to be pursued simultaneously:

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ensuring that European universities have sufficient and sustainable resources
and use them efficiently;

23

The eEurope Action Plan - Designing tomorrow's education, Communication from the Commission,
COM(2001)172 final, 28 March 2001.

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consolidating their excellence in research and in teaching, particularly through
networking;

opening up universities to a greater extent to the outside and increasing their
international attractiveness.

5.1.

Ensuring that
resources

the European universities have sufficient and sustainable

Insufficient means

On average the Member States spend 5% of their GDP on public expenditure for
education in general. This figure is comparable to that of the USA and higher than
Japan’s (3.5%). Public expenditure, however, has not increased with GDP in recent
years in Europe, and has even dropped in the past decade. Total expenditure on
higher education alone has not in any member state increased in proportion to the
growth in the number of students. A substantial gap has opened up with the USA:
1.1% of GDP for the Union compared with 2.3%, i.e. more than double, for the USA.
This gap stems primarily from the low level of private funding of higher education in
Europe. This stands at a meagre 0.2% of European GDP compared with 0.6% in
Japan and 1.2% in the USA.

American universities have far more substantial means than those of European
universities — on average, two to five times higher per student. The resources
brought by the students themselves, including by the many foreign students, partly
explain this gap. But American universities benefit both from a high level of public
funding, including through research and defence credits, and from substantial private
funding, particularly for fundamental research, provided by the business sector and
foundations. The big private research universities also often have considerable
wealth, built up over time through private donations, particularly those from graduate
associations.

The worsening under-funding of European universities jeopardises their capacity to
keep and attract the best talent, and to strengthen the excellence of their research and
teaching activities24. Given that it is highly unlikely that additional public funding
can alone make up the growing shortfall, ways have to be found of increasing and
diversifying universities’ income. The Commission plans to conduct a study on the
funding of European universities, in order to examine the main trends in this area and
identify examples of best practice.

At the March 2002 Barcelona European Council, the Union set as its target to
increase Europe's research effort to 3% of its GDP25. This implies a special effort as
regards human resources for research.

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25

The Commission sets out ideas for consideration and discussion on the matter of university funding in
its Communications “Investing efficiently in education and training: an imperative for Europe”
towards 3% of GDP”
(COM(2002)779 of 10 January 2003) and “More research for Europe:
(COM(2002) 499 of 11.9.2002).
European Commission, Communication “More research for Europe: towards 3% of GDP”, COM
(2002) 499 of 11.9.2002.

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5.1.1.

Increasing and diversifying universities’ income

Four main sources of university income can be identified:

–

–

–

–

Public funding for
including research
research and teaching in general,
contracts awarded on a competitive basis: this is traditionally the main source
of funding for European universities. However, given the budgetary situation in
the Member States and the candidate countries, there is a limited margin of
manoeuvre for increasing public support. And while the Member States did in
Lisbon in March 2000 give a commitment to substantially increase human
resource investment, it is highly unlikely that this effort alone can cover the
anticipated increase in the number of students or make it possible to catch up
with the USA.

As is the case in the USA, private donations can prove a substantial source of
income for universities. However, this solution comes up against a whole range
of problems in Europe, particularly the low fiscal attractiveness of private
donations, and the status of the universities, which does not always allow them
to amass private funds and wealth. These problems also explain, at least in part,
the absence of a philanthropic tradition on the scale of that to be found in the
USA, where former students often remain linked to their universities long after
they have qualified.

The universities can also generate income by selling services (including
research services and flexible lifelong learning possibilities), particularly to the
business sector, and from using research results. But these sources do not today
contribute in any substantial way to the funding of European universities,
partly because of a regulatory framework which does not allow them to really
take advantage of their research activities, or does not encourage them to do so,
e.g. because the royalties are paid to the state and not to the university or the
researchers themselves.

Lastly, contributions from students, in the form of tuition and enrolment fees.
In Europe, these contributions are generally limited or even prohibited, in order
to allow democratic access to higher education.

Questions for the debate

–

–

–

How can adequate public funding of universities be secured, given the
budgetary constraints and the need to ensure democratic access?

How can private donations be made more attractive, particularly from a tax and
legal point of view?

How can universities be given the necessary flexibility to allow them to take
greater advantage of the booming market in services?

5.1.2. Using the available financial resources more effectively

Universities must use the limited financial resources they have as efficiently as
possible. They have a duty to their “stakeholders”: the students they train, the public
authorities that provide their funding, the labour market which uses the qualifications

13

and skills they transmit and society as a whole, for whom they fulfil important
functions related to economic and social life. The objective must be to maximise the
social return of the investment represented by this funding. There are many signs26
which show that it is not currently used in the most efficient way.

–

–

–

–

A high dropout rate among students, standing at an average of around 40% in
the Union. The “education for everybody” approach in higher education has
resulted in huge expansion of the student population, with no fundamental
change in university structures and living conditions. In most Member States, a
successful secondary school career gives automatic right of access to university
studies with no additional selection. This right is considered as an essential
element of democracy to guarantee equality for all citizens. Many students thus
embark upon higher education without any real academic vocation and do not
get what they need from university training. In certain Member States, the
universities themselves apply selection systems, in particular certain subject
areas27 sometimes apply additional selection criteria.

A mismatch between the supply of qualifications (which is shaped by a
medium-term perspective, as a result of the duration of studies) and the
demand (which often reflects very short term needs and is more volatile) for
qualified people, which may result in particular lasting deficits in certain broad
types of qualifications, especially in the area of science and technology.
University training in fact does not only affect the people who benefit from it:
society at large must endeavour to optimise the social return on the investment
represented by the studies it pays for. A mismatch between the qualifications
offered and those requested is thus an illustration of non-optimum use of
resources.

The duration of studies for a specific qualification can vary in the ratio of one
to two in Europe. This explains the huge disparities in the total cost of a student
calculated on the basis of an average number of years of study. In Germany, for
instance, it usually takes five to six years to train a civil engineer and this
training is totally funded from the public purse. In the United Kingdom, it takes
up only three years of university studies paid for from public funds, followed
by three to five years of training in a company, this training attested to by a
state-recognised exam — all paid by the employer, and backed up by on-the-
job experience. These differences in duration, even between countries which
mutually recognise their qualifications, are striking when one considers that
there is widespread support for the Bologna process which is designed to create
a European area of higher education by 2010. The difference in cost for the
public purse prompts scrutiny of what constitutes optimum use of resources.

In the same line of thinking,
the disparity of status and conditions of
recruitment and work for researchers at the pre and post-doctoral levels in
Europe is not conducive to the best allocation possible of the means granted to
them.

26

27

These are analysed in detail in the Communication “Investing efficiently in education and training: an
imperative for Europe”.
Particularly medicine and veterinary science.

14

–

Europe also suffers from the lack of a transparent system for calculating the
cost of research in European universities. This is because of the disparity, the
opacity and complexity of the accounting systems used. This prompted the
high level group of Commission advisers on research (EURAB, European
the development of a simple and
Research Advisory Board) to suggest
transparent accounting system to calculate the real cost of research and to allow
comparisons.

Questions for the debate:

–

–

–

–

How can the maintenance of democratic access to higher education be
combined with a reduction in failure and dropout rates among students?

How can a better match be achieved between supply of and demand for
university qualifications on the labour market, through better guidance?

Is there a case for
qualifications?

levelling out

the duration of courses for

identical

How can the transparency of research costs in the universities be enhanced?

5.1.3.

Applying scientific research results more effectively

Application of research and insufficient creation of spin-off companies

The universities are one of the primary sources of new knowledge and as such play
an ever stronger part in the process of technological innovation. But they do not do
so in Europe to the extent they could and should. Since the mid-1990s, the number of
young technological (“spin-off”) companies created by universities has been on the
rise in Europe, particularly around certain of
them. Their average density
nevertheless is far smaller
is around the American campuses. Fewer
companies are set up in Europe by researchers or in association with them, and those
created in Europe tend to grow less quickly and not to last as long.

than it

A major obstacle to better application of university research results is the way
intellectual property issues are handled in Europe. In the USA, the “Bayh-Dole” Law
has given organisations in which research is conducted using federal
funds,
particularly the universities, ownership of their results in order to encourage
application of academic research results. In recent years, in Europe, several national
legislation have converged towards solutions of the Bayh-Dole Act type, and other
Member States where provisions of this type have not yet been adopted are about to
do so. The actual effect of these measures cannot yet be evaluated. However, the
divergences which continue in relation to the provisions enforced in certain Member
States, and the national nature of the regulations concerned, have in Europe
complicated and limited the transfer of technology and transnational cooperation.
More broadly, while the Community patent opens up opportunities for European
scale application, it is a matter which is still under discussion.

In addition, European universities do not have well-developed structures for
managing research results. They are less well developed, for instance, than those of
public research bodies. Another contributory factor is the lack of familiarity of many
university staff with the economic realities of research, particularly the managerial

15

aspects and issues regarding intellectual property. The idea of applying research
results is moreover still looked upon with distrust by many researchers and university
leaders, particularly because of the delicate balance to be struck between the
requirements of economic use on the one hand, and on the other the need to preserve,
in the common interest, the autonomy of universities and freedom of access to
knowledge.

Questions for the debate:

–

–

How could it be made easier for universities and researchers to set up
companies to apply the results of their research and to reap the benefits?

Is there a way of encouraging the universities and researchers to identify,
manage and make best use of the commercial potential of their research?

– What are the obstacles which today limit the realisation of this potential,
whether legislative in nature or as regards intellectual property rights? How can
they be overcome, particularly in countries where the university is funded
almost exclusively from the public purse?

5.2.

Consolidating the excellence of European universities

5.2.1. Creating the right conditions for achieving excellence

for

the debate. As with many other

If Europe is to have and to develop real excellence within its universities, a number
of conditions need to be in place. Some of these exist already in some Member
States; and the list itself does not claim to be all-inclusive. Nonetheless, it sets out a
areas mentioned in this
reference
Communication,
these issues need to be tackled within the structures of the
universities themselves, as well as within the structure of regulation within which
they operate. However, if this is not done in a convergent and coherent manner
across Europe these efforts will lose much of their value. The aim must be to bring
all universities to the peak of their potential, not to leave some behind; and piecemeal
implementation of these issues will reduce the momentum of the university world in
Europe generally. Such a convergent process would also, as with the structural
reforms that have followed the Bologna Declaration, provide a supporting context
within which Member States could achieve such change.

Need for long term planning and financing.

The precondition for the development and support of excellence is a context in which
long-term planning is possible. Excellence does not grow overnight. Building up a
reputation for excellence in any discipline (or sub-discipline) takes years, and is
dependent on the critical attitude of peers, measured not country-wide, but Europe-
wide and indeed world-wide. Accumulating the intellectual capital represented by
effective and world-class teams of researchers, led by the best combination of vision
and doggedness, and operated by individuals whose contributions complement each
other in the best way, takes a long time and requires that worldwide recruitment to
teams be possible.

And yet governments, which are still the major paymasters of universities, budget on
an annual basis, and have difficulties in looking beyond a limited number of years.

16

Although a number of Member States have moved to multi-annual contracts with
universities, the time period involved rarely exceeds 4 years. Equally, at the end of
the four-year period elections may have intervened, the position of the government
may have changed,
the objectives sought previously may have diminished in
importance or, in extreme cases, been discarded.

Member States thus need a general consensus within political and civil society as to
the contribution which excellence in research and in universities makes, and the need
to enable it. Such consensus should seek in part to insulate the research sector from
the hazards of changing financial circumstances, insofar as this is possible. The
period within which universities should be enabled to plan, to develop their own
strategies, and to exercise the autonomy suggested in Section 5.1 above, could rise to
6 or even 8 years where possible.

Need for efficient management structures and practices.

A second condition is that the governing structures of a university must respond both
to the varied needs of that institution and to the expectations of society - those who
provide its core funding. That implies that they should have an effective decision-
making process, a developed administrative and financial management capacity, and
the ability to match rewards to performance. Equally, the system should be designed
with issues of accountability clearly in mind. Managing a modern university is a
complex business, and one which should be open to professionals from outside the
purely academic tradition, provided that confidence in the university’s management
remains strong. It should also be said that freedom of funding will of itself change
the financial culture of a university; but it will not by itself increase the quality of
that management.

Need to develop interdisciplinary capability.

A third condition needed for excellence is that universities be enabled, and
encouraged, to develop more work falling between the disciplines. As has been noted
above (Section 3.3), advanced research increasingly falls outside the confines of
single disciplines, partly because problems may be more complex, more because our
the different
perception of them has advanced, and we are more aware of
specialisations required to examine different facets of the same problem.

Organising work on an inter-disciplinary basis requires that universities have
flexibility in their organisation, so that individuals from different departments can
share their knowledge and work together, including through the use of ICT. It also
requires flexibility in the way careers are evaluated and rewarded, so that inter-
disciplinary work is not penalised for being outside normal departmental frames.
Finally, it requires that departments themselves should accept “cross-border” work as
contributing to faculty-wide objectives.

17

Questions for the debate:

–

–

How can the consensus be strengthened around the need to promote excellence
in the universities in conditions which make it possible to combine autonomy
and management efficiency?

Is there a way of encouraging the universities to manage themselves as
efficiently as possible while taking due account simultaneously of their own
requirements and the legitimate expectations of society in their regard?

– What are the steps which would make it possible to encourage an
interdisciplinary approach in university work, and who should take them?

5.2.2. Developing European centres and networks of excellence

A combination of the absolute need for excellence, the effects of the precariousness
of resources and the pressure of competition, forces universities and Member States
to make choices. They need to identify the areas in which different universities have
attained, or can reasonably be expected to attain, the excellence judged to be
essential at European or at international level – and to focus on them funds to support
academic research. This type of policy would make it possible to obtain appropriate
quality at national level in certain areas, while ensuring excellence at the European
level, as no Member State is capable of achieving excellence in all areas.

As to which areas should be given preference, this should be based on an evaluation
within each university system. If it is to be objective and reflect the perception of the
European and international scientific and academic community,
this evaluation
should be carried out by panels including people from outside the national system
concerned. The academic excellence to be evaluated could in fact include that of
other universities with which the institutions examined are associated through
transnational cooperation arrangements. The choice of areas and institutions should
be reviewed regularly, in order to ensure that excellence is maintained and to allow
new teams of researchers to show their potential.

The concentration of research funding on a smaller number of areas and institutions
should lead to increased specialisation of the universities, in line with the move
currently observed towards a European university area which is more differentiated
and in which the universities tend to focus on the aspects situated at the core of their
research and/or teaching skills. While the link between research and teaching
naturally continues to define the ethos of the university as an institution and while
training through research must remain an essential aspect of its activity, this link is
nevertheless not the same in all institutions, for all programmes or for all levels.

The support for excellence and its dissemination, particularly academic excellence is
a key principle of the Sixth Community Framework Research Programme. Through
this programme's "networks of excellence" the Union is endeavouring to foster the
building up of "virtual" capacity for excellence which has the critical mass needed
and is, whenever possible, multi-disciplinary.

18

Questions for the debate:

–

–

–

How can providers of university funds be encouraged to concentrate their
efforts on excellence, particularly in the area of research, so as to attain a
European critical mass which can remain competitive in the international
league?

How should this excellence be organised and disseminated, whilst managing
the impact of the steps taken on all institutions and research teams?

How can the European Union contribute more and better to the development
and maintenance of academic excellence in Europe?

5.2.3.

Excellence in human resources

In order to maintain its position and strengthen its role internationally, the Union
needs a pool of top-level researchers/teachers, engineers and technicians. The
university remains the focal point for training such people. In terms of quantity, the
Union is in the paradoxical situation of producing slightly more scientific and
technical graduates than the USA, while having fewer researchers than the other
major technological powers. The explanation for this apparent paradox lies in the
smaller number of research posts open to scientific graduates in Europe, particularly
in the private sector: 50% only of European researchers work in the business sector,
compared with 83% of American researchers and 66% of Japanese researchers.

The situation in Europe could well get worse in the years ahead. The absence of
career prospects will alienate young people from scientific and technical studies,
while science graduates will look to other more lucrative careers. Furthermore,
around one third of the current European researchers will retire over the next 10
years. As the situation is similar in the United States, the competition between
universities internationally is set to become even keener.

One way of stemming this trend would be to increase the number of women in
scientific and technical careers, where they are substantially under-represented,
particularly at the top end of the ladder. On average, in the countries of the Union,
there are two to four times more men than women graduates in the sciences. Also,
women represent only a quarter to a third of laboratory research personnel in Europe.
Action is being taken under the "women and science" initiative28, to encourage
women to participate in the European research drive, by pinpointing the obstacles to
their presence and generally applying the most effective steps taken by Member
States to remove these obstacles.

Another solution would be to enhance the pool of resources by strengthening not
only intra-European academic mobility, but also mobility between university and

28

ETAN working party report "Science policies in the European Union: promoting excellence through
mainstreaming gender equality", 1999; Resolution of the European Parliament on Women and Science
of 3 February 2000 (EP 284.656); Commission working document "Women and science: the gender
dimension as a leverage for reforming science" SEC (2001) 771 of 15 May 2001; Council Resolution
on science and society and on women in science of 26 June 2001; OJ C 199, p.1 of 14.7.2001; Report
by the Helsinki Group on Women and Science "National policies on women and science in Europe" –
March 2002.

19

industry. In this context virtual mobility based on the use of ICT has also an
important role to play.

Although the situation has improved slightly in the wake of initiatives taken in a
number of Member States, European universities continue essentially to recruit
people from the country or region in which they are established, or even within the
institution itself. Furthermore, the evaluation of researchers is based on criteria which
neither stress the advantages of nor encourage periods in other European universities.

In this context there is also the core issue of recognition of studies and qualifications
at European level. Not having a quick, simple system of recognition for academic or
professional purposes is today a major obstacle to research and mobility — and
therefore to a greater cross-fertilisation of ideas and research between European
universities, and to their wider influence. Specific instruments (such as ECTS, the
Diploma Supplement, NARICs, Community directives) have been developed and
almost all Member States and candidate countries have invested in quality assurance
systems which are networked within the ENQA (European Network for Quality
Assurance). It is urgent to examine whether and how a solution could be found
(within the framework of
transparency and
compatibility) to the problem of recognition, which is currently preventing the
universities from using their potential and resources efficiently and limiting their
wider audience.

the Bologna process for greater

In qualitative terms, excellence in human resources depends largely on available
financial resources, but is also affected by working conditions and career prospects.
Generally speaking, career prospects in European universities, characterised by the
multiplicity of configurations, are limited and shrouded in uncertainty. The
Commission supports the Bologna process, including its extension to doctorate level
training, and is interested to note the experiments in progress on dual doctorates or
doctorates under joint supervision. It also stresses the need to train prospective
doctorate candidates to a greater extent in an interdisciplinary work perspective.

European universities also offer fewer possibilities at post-doctorate level than their
American counterparts. There would be a case for expanding the range of
opportunities for holders of doctorates outside research careers.

The Union has pursued a number of initiatives to encourage and facilitate research
and mobility in Europe. Under the project on the European Research Area, it has
defined a strategy to foster research and mobility through a range of tangible
measures. Moreover, the Commission will shortly submit a Communication on the
matter of scientific careers.

Questions for the debate:

– What steps could be taken to make scientific and technical studies and careers

more attractive, and to strengthen the presence of women in research?

–

How — and by whom— should the lack of career development opportunities
following doctoral studies be addressed in Europe, and how could the
independence of researchers in carrying out their tasks be fostered? What
efforts could universities make in this regard, taking particular account of the
needs of Europe as a whole?

20

– What ways are there of helping European universities to gain access to a pool
of resources (students, teachers and researchers) having a European dimension,
by removing obstacles to mobility?

5.3.

Broadening the perspective of European universities

5.3.1.

A broader international perspective

European universities are functioning in an increasingly “globalised” environment
and find themselves competing with universities of the other continents, particularly
American universities, when it comes to attracting and keeping the best talent from
all over the world. While European universities host only slightly fewer foreign
in proportion they attract fewer top-level
students than American universities,
students and a smaller proportion of researchers.

All in all, the environment offered by the European universities is less attractive.
Financial, material and working conditions are not as good; the financial benefits of
the use of research results are smaller and career prospects are poorer29; there is also
the inappropriate and poorly harmonised nature of arrangements with regard to visas
and residence permits for students, teachers and researchers from other countries —
be they from the Union or from other countries in the world. Several Member States
have recently taken steps to enhance the attraction of their universities,
their
laboratories and their businesses for top-level researchers and students and qualified
workers from third countries, e.g. through “scientific visas”.

Similarly, the Commission has submitted a proposal for a Council directive on the
conditions of entry and residence of students from third countries. A parallel
initiative for researchers from these countries is expected in 2003. The Union will
also step up support to enhance the attractiveness of European universities through
action to support mobility under the Sixth Framework Programme, which will enable
over 400 researchers and doctoral students from third countries to come to European
universities between 2003 and 2006, and under the “Erasmus World” initiative.

Questions for the debate:

–

–

How can European universities be made more attractive to the best students
and researchers from all over the world?

In a context of increasing internationalisation of teaching and research, and of
accreditation for professional purposes, how should the structures, study
programmes and management methods of European universities be changed to
help them retain or recover their competitiveness?

5.3.2.

Local and regional development

There are universities throughout the Union's regions. Their activities often permeate
the local economic, social and cultural environment. This helps to make them an
instrument of regional development and of strengthening European cohesion. The
development of technology centres and science parks, the proliferation of regional

29

See also Section 5.1.3 on the management of intellectual property.

21

cooperation structures between the business sector and the universities, the expansion
regional networking of
of university regional development
universities, are all illustrations of this dimension of university activity.

strategies,

the

The regional dimension of the university activity is thus set to get stronger, given its
essential role in achieving the Europe of knowledge, particularly looking ahead to
enlargement. The European Union supports these developments, particularly through
the Structural Funds and the Sixth Framework Programme.

In addition, the role played by the universities as a source of expertise and a catalyst
for multiple partnerships between economic and social players within a range of
networks is very relevant at the regional and local levels.

The increased involvement of the universities locally and regionally should not,
however, overshadow a more outward-looking international perspective and a
constant endeavour to improve their excellence in research and education. These
remain essential and will indeed enable the universities to make a more effective
contribution to the development of their local and regional environment.

Questions for the debate:

–

In what areas and how could the universities contribute more to local and
regional development?

– What ways are there of strengthening the development of centres of knowledge
bringing together at
the various players involved in the
level
production and transfer of knowledge?

regional

–

How can greater account be taken of the regional dimension in European
research, education and training projects and programmes?

6.

CONCLUSION

This Communication makes a number of points which reflect the profound changes
taking place in the European university world. After remaining a comparatively
isolated universe for a very long period, both in relation to society and to the rest of
the world, with funding guaranteed and a status protected by respect for their
autonomy, European universities have gone through the second half of the 20th-
century without really calling into question the role or the nature of what they should
be contributing to society.

The changes they are undergoing today and which have intensified over the past ten
years prompt the fundamental question: can the European universities, as they are
and are organised now, hope in the future to retain their place in society and in the
world?

If it is to achieve its ambition of becoming the world's most competitive and dynamic
knowledge-based economy and society, Europe simply must have a first-class
university system -- with universities recognised internationally as the best in the
various fields of activities and areas in which they are involved.

22

The questions raised in this document are intended to help in determining what
action should be taken for a move in this direction within the enlarged EU.

All interested parties -- institutions, public authorities, individuals or representative
associations -- are therefore urged to give their points of view on this subject, and
describe their experiences and their "best practices".

7.

HOW TO CONTRIBUTE?

The Commission intends to review the contributions it has received up to the end of
May 2003.

These contributions can be sent to either of the following two dedicated e-mail
addresses:

– eac-consult-univ@cec.eu.int

– rtd-consult-univ@cec.eu.int

They can also be sent by physical mail to:

European Commission
EAC A1 (Consult-Univ)
(B7 – 9/58)
B - 1049 BRUXELLES

23