Mario Calderini, Politecnico di Torino

1. Strasbourg, 21° november 2007 The university between humanism and market: redifining its values and functions for the 21st century • Mario Calderini, • Politecnico di Torino Reinventing European Higher Education in Light of Technological Change . HE, Higher Education or Hidden Engine?

2. Good news and bad news (at the macro level) • Real GDP Growth (EU-27), absolute and relative • Filling the Innovation Gap • Universities and Higher Education core ingredients for structural change. • Larger market, larger technological variance, high expectations.

3. Decomposing the EU-25 Innovation Gap with US Source: EIS 2006

4. Technological change: scenario • Increasing pace of technological change • Systemic knowledge • Major technological breakthrough • Digitalization (infosciences) • Miniaturization (nanosciensces) • Techno-Bio Convergence (biosciences) • Accessibility of knowledge • Multiple sources of technological progress • New models of innovation and technology management • Non linear • User driven • Open innovation, R&C instead of R&D • Larger critical mass • Commoditization of technology • No identity between industries, technologies and science domains • Intangible assets

5. Technology as a commodity? Three technological success stories: which higher education enables these innovations?

6. The emerging EC’s vision • Communication on the role of the Universities in the Europe of knowledge (February 2003). • Identified the university as the institution most suitable for meeting Europe’s critical needs in the epoch of “knowledge driveneconomic growth”; • Viewed the universities, grandes ecoles, polytechnics, and fachoschulen collectively as having the potential to be more effective than European industry at the business of technologically-driven innovation; • Pointed to institutional reforms -- patterned on the U.S.’s “Bayh-Dole experiment” – aimed at promoting greater direct participation of Europe’s universities in commercializing faculty research findings; • Intimated that such reforms could simultaneously meet the rising costs of public tertiarty education and research, and raise the share of the share of EU gross domestic product that is investedin R&D.

7. A general critique of the EC diagnosis • The EC’s assessment and proposals, and related national policy initiatives, proceed from an inadequate assessment of the system of which the universities form one part, and of some basic structural weaknesses and unmet challenges confronting the European Research Area. • Emphasis on university-based innovation reflects an un-substantiated causal reading of the concurrence of two developments in the U.S. since the mid-1990’s: • a remarkable increase in “university patenting” and “academic entrepreneurship” • an acceleration of macroeconomic growth featuring the revival of rapid gains in measured total factor productivity • Enthusiasm for a “Bayh-Dole solution” ignores available evidence from U.S. Experience, indicating that for most of the EU university sector this “remedy” would be (at best) ineffectual and wasteful, or (at worst) destructive of a vital part of the institutional infrastructure of Europeanscience and culture.

8. As a matter of fact, at the member states level…. • Overwhelming rethoric of entrepreneurial Academia • “Supply side – only” economics of knowledge • Oblivious of market failure based policy analysis • Poor integration of education & research policies and funding schemes (any success story of integrated programs using both ESF and ERDF?) • Connectionist approach to technology transfer (vs TT by head), no role for higher education in TT (TT by students)

9. Entrepreneurial Academia? • More precisely, a multi-tasking University: • Education • Research • Technology transfer • Technology services • Innovation policy • Technological prospection and absorption presidium • Unintended consequences? • Crowd-out effect • Complex design of incentives and funding schemes, act of balance more and more fragile • Social accountability? • Increasing returns and learning effect, towards heterogeneity of institutions? • Boils down to the investment ve exploitation (short vs long term) trade off?

10. Meeting Lisbon Agenda, supply side only? • A long way from incentives to R&D investment. • How to get back to spontaneous private incentives to investing in the creation of knowledge? • Leveraging on students is by far and large the higher return policy (e.g. 4 teaching hours of IPR management in a medium sized technical university would increase the propension to patenting by a rate of 30% in 1.000 companies per year. • Systemic approach: increase average level of education. • Incubators, science parks, bricks and walls: proximity counts, where is teaching?

11. The quintessential demand-side ingredients: PhD and mobility • More PhD only if a land of opportunity is created around the Academia and within the industry (endogenous) • Hands-on program • Life long learning • Open-gates university

12. Another way to look to demand side: educating for a more technology concious context • Pace of diffusion of technology linked to conciousness of adopters • User generated innovation • Technological risk assessment • Financing technology

13. Improving EU’s innovative capacity:a systemic policy approach • Stimulating Capacity building • Public knowledge infrastructure • Education in general and Higher Education in particular (S&E researchers) • Stimulating Private R&D expenditures by investment in education • Framework conditions to improve incentives for innovation, especially • clear IPR regimes, regulations and standards; • Large integrated product markets (single market • Well functioning product markets (competition and ease of entry), labour markets (labour mobility), (venture) capital markets • Improving Technology Transfer/Diffusion ( Eg clear property rights, ISL mechanisms, absorptive capacity of users, investment in complementary assets),

14. The need for reforms: key challenges faced • Increasing demand for HE (increasing returns from education) • Improving access to HE (upper-secundary education) • Governance problem in supplying HE services (too small, insufficient focus, bureaucracy, over-regulation, lack of autonomy) • Increasing international competition Taken from Rehinilde Veugelers at EPC

15. Reforming HE in Europe • More performance based funding • More concentration of funding on excellence • More private funding • Better fee and subsidy structure • Addressing “access” through income-contingent loans • More competition among universities • Better internal governance of universities Taken from Rehinilde Veugelers at EPC

16. Scope for EU in HE policy • EU scale capacity building (Phd, specific special areas..) eg EIT, EUI • Facilitator of intra-EU cooperation: eg European courses offered jointly by consortia and leading to joint degrees • EU as facilitator of global coordination in education policy and global mobility • Migration visa packages for researchers to enhance international mobility • Erasmus Mundus… Taken from Rehinilde Veugelers at EPC

17. Conclusion: HE: Higher Education or Hidden Engine • HE at the very centre of the whole technological progress process • HE is an efficient substitute for a wide range of unsuccesful R&D and TT policies • HE models deeply affected by evolving Technological Regimes • The EC 2007-2013 structural funds: more money than good ideas and opportunities. • Supply of Higher Education bound to co-evolve with technology-based labour market