Professor Marek Kwiek Center for Public Policy Poznan University, Poznan, Poland kwiekm@amu.pl

1. Higher Education Funding in Poland: Traps of Financial Self-Reliance? (NORPOL Oslo seminar, 20 January, 2010) Professor Marek Kwiek Center for Public Policy Poznan University, Poznan, Poland kwiekm@amu.edu.pl www.cpp.amu.edu.pl

2. (1) Introduction The point of departure: hard data (2008) relevant to the topic: • Total number of students: 1,93 mln (1,27 mln public sector, 0.66 mln private sector) • Total number of fee-paying students 1.1 mln (58%) (0.44 mln public sector, 0.66 mln private sector) • Total number of institutions: 131 public and 325 private (456 total) • 18 universities and 27 polytechnics: employ over 50% of academics, receive 77% of revenues • 53% of students study in 5% of study areas (out of 118 study areas): •  Study areas: “social sciences, commerce and law”: 40% of all (720.000; 34% in pHE (public HE) and 56% in PHE (private HE).

3. (2) Introduction • Revenues from fees: 18% in pHE, 94% in PHE (2008) • Revenues from teaching(fees PHE, fees and subsidies in pHE): 81% for pHE, 94% for PHE (2008) • Share of all revenues from research in HE in PL: 98% pHE (2008), 2% PHE

4. (3) Introduction • Main empirical question: the impact of increasing financial self-reliance on the changing relationships between the three university missions of Polish universities: teaching, research and service to the society. • Why public universities in PL in the last 15 years seem to have been gradually losing their commitment to the research mission and have been becoming increasingly teaching-oriented institutions and what is the (quantifiable?) cost of their increased focus on teaching mission, and their minimal focus on the service to the society mission, if any?

5. (4) Introduction • While (elite) universities in Europe are becoming increasingly research-intensive and ready for their new roles in so-called knowledge-economies, their elite counterparts in Poland risk becoming teaching-oriented and outdated in research performed. • The clash of opposite roles of top universities in the two parts of Europe is severe, is reflected in all international rankings (based mostly on research output - and demands further research with policy implications).

6. (5) Introduction • Complementary questions: What are current consequences for Polish universities’ competitiveness (in the EU systems and in rankings) of this specific Polish organizational and human resources focus on paid teaching, if any? • What exactly happened to public universities in Poland in a financial comparative perspective of financial self-reliance?; how to increase their financial self-reliance, or external revenues, without falling into the trap of becoming academically inferior? (or, in other words: how to focus less on fee-based teaching – and focus more on research activities, which may bring additional revenues? And which counts in all rankings).

7. (6) Introduction • The paper assumes a fundamental role of increasing financial self-reliance of public universities in ongoing transformations of organization, management and governance of European universities. • In various theories of organizational change and public sector reforms, as well as in ongoing reform projects in major EU economies (from Germany to the UK, the Netherlands, and Spain), the role of financial self-reliance seems to be increasing. In theory, and in numbers (share of non-core non-state income increases in the majority of EU-15 systems).

8. (7) Introduction • New public-private dynamics for HE emerges. The key dimensions of the question include elements of this dynamics: the role of academic entrepreneurship, cost-sharing, university-business links (UEPs, as studied in EU GOODUEP project) or the role of what Burton Clark called “third stream revenues”, resulting from consistent, organizational and mission-driven activities, or what the EC and OECD termed “the third mission” of the university, including its regional role.

9. (8) Financial Self-Reliance • Eighteen Polish universities (a special separate institutional category, with no adjectives, public sector) are seemingly following the same European trend of decreasing its financial reliance on state subsidies (in 2008, non-core income, or przychody pozabudżetowe, was about 19% from fees, 4.4% from research grants, and 1.2% from selling research).But:

10. (9) Financial Self-Reliance • But in fact they seem to evolve in exactly the opposite direction to that of top universities in major EU systems. Their overall income from teaching is 83,1% and income from research is 12% (2008). Financial self-reliance in Western European universities derives from the research and the service missions. In Polish universities, it derives from (fee-based) teaching (this is the dimension of new public-private dynamics discussed elsewhere under the term internal privatization). The direction of evolution of funding in Polish HE and major EU systems of HE seems thus divergent (EU: Kaiser et al. 2003, Schwarzenberger 2008, Leyden 2005, OECD 2008a, CHINC 2005).

11. (10) The Three Missions: T, R • The paper follows one of major OECD concerns that while HE in PL has been “squeezed to the point of serious damage” (OECD 2007: 118), institutions do not even consider external sources of funding: “most institutions interpret the advice to become more entrepreneurial as an invitation to sell core educational service to as many students as the law permits, and do not see the need to look for new sources of revenue” (OECD 2007: 57). • This is a strategic issue concerning both streams of funding and relationships between the three university missions. Financial self-reliance of universities is discussed by OECD and EC but the models seem to come from non-European systems, mostly Anglo-Saxon: own revenues(private, non-state) of HEIs highest in Australia (57%), Canada (45%), Korea (42%), UK (39%), USA (33%) and – not surprisingly! – in Poland (26% in 2008, in both sectors). In Europe, the closest – Spain, 20% (Salmi 2009: 272).

12. (11) Public Policy Research • The paper is “public policy research”: “policy research is always dedicated to changing the world ... When no change is sought, say, when no one is concerned with changing the face of the moon, there is no need for policy research in that particular area” (Etzioni 2008: 834).

13. (12) Adverse affects? • It would be interesting to verify a causal claim regarding the three university missions: that national, institutional and departmental policies promoting the teaching mission (in its fee-based part-time form) of Polish public universities adversely affect their research- and service-missions. • In other words, to verify a claim: institutions and departments of public universities most engaged in paid teaching are gradually losing interest in, and potentially access to, external research- and service-related revenues. The intended comparison could be done by institutions and by academic fields, based on yearly financial and academic evaluation data.

14. (13) Initial Hypothesis • Classifications of which institutions and fields are living on research, and which on (paid) teaching and research can be formed, over time, with a possible (till now largely intuitive) major division between natural sciences and social sciences, and then within social sciences. • The initial hypothesis is: more funding obtained in fees, less research performed (and research funding obtained), by institution, by field. Such correlates as the number of doctorates and habilitation degrees, professorship titles (trends over 10 years), number of outside research grants (national and EU), and the number of internationally recognized publications, research results sold (or patented) can be used, to observe the directions of changes.

15. (14) Initial Hypothesis • The model is:translating the three university missions (teaching, research, and service) of Polish universities into financial terms in order to make valid comparisons over time with their EU counterparts and with their evolution. •  The missions are viewed through state guaranteed subsidies (core funding) and through all other “third stream funding” (non-core: cost-sharing i.e. fees, academic entrepreneurship i.e. all outside research grants, links to the industry i.e. contracts; no philanthropy in PL or EU generally).  

16. (15) Major weakness of HE in PL • While the Polish and EU models seem to show similarities (increasing external funding in general!), they also show a fundamental difference in institutional focus: research-intensivity for top Western universities, and teaching-intensivity for top Polish universities. These divergent models in the context of EHEA and ERA, if treated seriously, reveal major weaknesses of Polish higher education system in general. And make both international cooperation and good visibility via academic rankings – difficult.

17. (16) The OECD Context • The paper reconsiders for Poland the policy conclusion reached by a recent OECD study on Tertiary Education for the Knowledge Society: “most countries are not in a position to raise more revenues to support tertiary education. First, countries might find it difficult to raise extra public taxpayer-based revenue. ... Second, other priorities ... are imposing growing pressure on education budgets” (OECD 2008: 174). This is the Polish case: ability vs. willingness, in 1990s and today. Current reforms (and a new strategy): reforms first, then... rather no increase in funding expected!

18. (17) Poland vs. EU-15 • The model explains different, if not opposite, routes of development of top Polish and top EU universities in the last ten years and shows increasing contrast of Polish institutions to their counterparts in terms of organization, funding, and governance. • What will happen soon? The impact of HE reforms – further differentiation of public HEIs? Further concentration of research funding among public HEIs?

19. (18) Policy research • Policy implications of this research go to the heart of current Polish debates on higher education reforms. The paper follows a simple methodological reservation: “policy research should not be confused with applied research. Applied research presumes that a policy decision has already been made and those responsible are now looking for the most efficient ways to implement it. Policy research helps to determine what the policy decisions ought to be” (Etzioni 2008: 834).

20. (19) Universities: institutions vs. instruments • Theoretical background to is provided by theory of institutional change, in particular by new institutionalism (especially James G. March, Hebert Simon and Johan P. Olsen, with particular reference to educational institutions). New institutionalism studies universities as institutions (relatively enduring collections of rules and organized practices, embedded in structures of meaning and resources that are relatively resilient to changing external circumstances) rather than as instruments (for governments, stakeholders or customers, Maassen and Olsen 2008: 27). New institutionalists’ wider idea is that a new “pact” between public institutions (here: universities) and the state emerges. What „new pact” would be applicable in PL?

21. (20) Concentration in funding • Some emprical evidence: • Four Polish “super-universities” (category: public universities, public polytechnics etc. not included): Warsaw U., Jagiellonian U. in Cracow, Poznan U. and Wroclaw U.). PL – disintegration of HE system into parallel institutions, universities are not comprehensive: polytechnics, U. of economics, of agriculture, od medicine etc). 14 public HEIs in Warsaw, 8 in Poznan etc! • Biggest share of income from research among universities below. • Biggest share of income from fees among universities below. • Concentration in funding • Research – 20 (public) institutions get 80% of funds • Fees – 20 (public) institutions get 60% of funds

22. (21) Concentration: research

23. (22) Concentration: fees

24. (23) Top universities, research

25. (24) Top universities, fees

26. (25) Summary: research vs. fees • Clearly, external funding from fees is much more „egalitarian”: while top 20 public institutions have 80% of all public research funding, 20 public institutions have only about 60% of total revenues from fees, 30 institutions have about 75%, and 40 institutions have about 83%. Funding from fees is much more evenly distributed between public HEIs. Research funding is extremely competitive, and heavily concentrated in elite institutions.

27. (26) Conclusions • Polish (top) universities in the last 10 years have been teaching-intensive – now their share of income from fees is decreasing. Demographic pressures will make income from fees even smaller. Their focus on research and service missions of U. was limited – and will be very difficult to regain. • Relatively easy funding from fees (part-timers) will have to be replaced with relatively difficult, and very competitive, funding from research. • A change of perspective needed after 20 years: renewed focus on research as a survival strategy, available only o few (institutions, departments, teams).

28. (27) Conclusions • As seen from empirical evidence, top universities will find it easier to change perspectives: research funding is already concentrated there. Surprisingly, also funding from fees is concentrated there, although less intensely. • Hypothesis is that in top universities (like the 4 studied), there is clear division of labor: some areas are focused on research (natural sciences), others on paid teaching (social sciences and humanities). Therefore new tensions are expected within institutions, not only between them! The role of research-focused areas is expected to be growing, with SSH areas trying to get back to their research missions! Which will not be easy!

29. (28) Conclusions • If the NS/SSH division in top Polish universities is valid – then further comparison with SSH in Western European systems is needed. How research-intensive SSH areas are? And how their role within institutions is changing, if at all? This is a question for future research. • Thank you very much for your attention!