It’s time for business to stop free riding and start engaging with Universities

This is an expanded version of an opinion piece which I have authored in the Irish Times Wednesday 14 August 2013

gdp spend students

Troubles, they tell us, comes in threes. For Irish universities this week shows that in spades. On one day we see a number of threads which taken together should give us some significant concern. These three threads are the proposed new funding model for third level (a classic curates egg), the issue of revenue auditing research and development tax credits and the issue of how much or little businesses worldwide engage with universities.

Before we delve into these its perhaps worth reminding ourselves of a few issues.

First, Ireland has an excellent third and fourth level system, with still surprisingly low levels of graduate unemployment and with significant pockets of world-class research.

Second, we have less state involvement than is commonly thought. Of the 1.5b per annum a large part of this is a subsidy for free fees. There is little appetite in the wider population for this to be abolished.

Third, we spend, over the tertiary sector cycle, less on average than the rest of the OECD (Which includes many countries much less well off than us).

Fourth, we have had no national open debate on what we want from our third and fourth level education system. The changes that are coming are led from the center, reflecting an ongoing tussle between the department of Education and Skills and the HEA. There has been little effort and perhaps exists less appetite to engage a debate amongst all stakeholders on what we want from our higher education sector.

Fifth, there is a genuine confusion in the debates, muted as they are,  about what we want from universities and what they do. Universities coproduce public and private goods. The public good is an educated reflective society and an independent critical thinking academy; the market will not provide this and so it falls to society to fund same. The private goods are the enhanced skills (over non graduates) which graduates attain. These, in principle, should give enhanced earnings which can be taxed and thus defray part of the public good cost as well as attracting some cofunding from the recipient in the form of fees.   This is rarely outlined with state funding seen as wasteful, luxurious, and profligate and tax seen as something intrinsically evil to be avoided at all costs. And therefore the debate revolves around funding – how much to whom how and at what benefit.

Sixth, we are already well on the way to a corporate led university sector – the Irish League of Credit Unions latest survey on third levle suggests that 1/2 of all third level entrants choose a place not based on what they like or feel they are competent to do but instead on the basis of current labour market vacancies. If this is the case then already universities have become training camps for the business sector.

As a state Ireland is broke and every single sector must both contract in terms of state involvement and show value for money. The promised funding model is as I state a curates egg. It suggests a series of key performance indicators that will determine the funding allocation. It is unclear from where these emerged. It is also the case that the more KPI’s one has the less each mean and the less credibility the entire set has.

These are reported to be the following : engagement in regional clusters, co-operation between individual colleges, student retention rates and inclusion of disadvantaged groups, teaching and learning excellence, research and increased commercialization, meeting regional labour market needs and enhanced internationalization, including more non-EU students.

It is not clear how these KPI’s  will be measured or even whether they can be measured. Nor is it clear why these and not others were chosen. What is also startling is the absence whatsoever of the things that students actually need : broad transferable skills. The KPIs are top down dirigisme, institutional focused rather than student focused and in many cases either liable to being gamed or to being irrelevant.

For example, what evidence is there that increased engagement in regional clusters will actually benefit either enhanced student learning or generate greater and more impactful research? Given that we don’t bother to measure research activity how will we measure research impact, or will it be the usual dreary rhetoric of commercialization patents and shortterm jobs created. How will be ensure that we deal with the output of arts, humanities and social science in that model? While it is tempting to call for a research analysis framework like the Research Assessment Exercise (now REF) in the UK, the costs of such a system need to be balanced against its beneficial effects. The REF has many rules, much paperwork and little flexibility to improve the engagement of academics with business. Similarity with cooperation – the KPI reeks of an unwillingness to accept that there will be some good and some less so institutions, departments and faculties and is a mechanism to hide failure under the carpet of excellence by merging strength and weakness to achieve adequacy.

How can we ensure that universities do not increase retention rates by dumbing down, and why is it the fault of universities and institutes of technology if students are ill prepared to cope with the academic and interpersonal demands of students emerging from the sausage factory of the second level? Today the leaving cert results come out ; tomorrow we will see the newspapers filled with adverts for grind and cram schools who will grind and cram young minds to one aim – pass the examination next year. Combined with a strong suspicion and perhaps societal desire for grade inflation in the same examination is it any surprise that even the best students falter when they are asked to engage with unbounded and freeform tasks at a high level in third level?

How does a thrust on Internationalization square with the need to be focused on regional labor market needs? And why is that a proximate and pertinent role for universities in any case? How local is local? How can we attract more non EU Students when the visa regime is archaic and our facilities poor compared to competing countries? Non EU students paying full economic cost cannot simply be lumped into already crowded lecture halls and be expected to act as goodwill ambassadors for Ireland in the future. The days when we could implicitly assume that they were lucky to get into a real university are gone, with world class facilities abounding elsewhere. We can’t charge more to deliver the same in worse conditions.

The issue on commercialization is one that goes to the second and third threads. It is often touted that we need more university-business engagement and that Irish business also needs to increase its research and development profile. To achieve that businesses have been given increasing tax breaks with long lifespans (on top of an already generous corporate tax regime) for research. In 2010 this amounted to 225m, nearly a quarter of the total state budget for third level. Revenue audits now suggest a high level of suspected abuse of this. And yet, not content with this generous tax break we also find that Irish business is amongst the least likely to engage with the third level. A survey in the times higher education on Monday suggested that Irish business invests only $8300 per annum per scholar in third level on research and innovation. This is less than 1/10 the amount spent by Korean or Singaporean, 1/9th the amount of Dutch and 1/8th the amount south African businesses invest. On the face of it this is startling.

There is an argument of course that this undervalues the amount of money put in by industry, as many courses at postgraduate level contain significant numbers of business executives. This however is also the case for other countries. Its also the case that other critiques can be made of the survey, notably its drawing from a relatively restricted sample (again however this is the case in all countries surveyed). While we might quibble with the exact numbers it would be reasonable to assume that the relative rankings are broadly correct. In any case nothing beats cold hard cash, and this is not and has not been forthcoming from Irish business in anything like the amounts indicated is the case in other jurisdictions. While Irish business persons have been generous (but not nearly as much as is thought and not even in the same dimension as some of the exiles children) when was the last time a corporation endowed a chair or a library or a lecture hall or sports stadium? Where are the corporate sponsored buildings, the corporate sponsored symposia and doctoral programmes? They are as scarce as actual green shoots in the economy.
Look around – how many chairs, centers, institutes have been funded by Irish business? While some exist, they are in fact few and far between. Compare that to even the lower tier universities in the USA or Canada, where there is a palpable engagement of business with academia running both ways to the benefit of both sides.

Lets stand back – Business in South Africa with a GDP per capita 5 times smaller than Ireland invests 8 times more per student per annum in research and development. And somehow this is spun in all the media as “Irish universities fail to engage business” . Israel and the UK, even Hong Kong whose funding models are seen as the exemplars we should aim for, are also very low in terms of business r&d to the third level, and this includes two countries with massive military industrial complexes. It is hard to not conclude from the two issues, business involvement and the R&D tax issue, that Irish business is all too often happy to take from the state and society and is not that keen to give back. For sure universities and IoTs need to engage more with them but it is a two way street. Engagement is not simply giving a few PCs or the odd bit of a chat, it is about business proactively funding PhD and postdoctoral students, about they endowing centers and developing longterm research, about ensuring that thought is put into industrial and commercial issues and that the needs of industry as a stakeholder in society are interwoven with academia. It is not chasing after rapid commercialization of the latest whizzbang nor about accelerating the undergraduate cycle to two years to produce inputs to industry.

We also need to re-evaluate how our MNC sector knits into the Irish economy and society. As the OECD and G8 made clear the friendly, Dublin as a friendly tax port of ease is over.  While much has been made of Apple’s tax arrangements with Ireland, little was discussed of what this meant for how MNCs do business in Ireland. It begs the question, if you are only around for the taxes why get entangled with the locals beyond coffee and sandwiches? For sure you will not be that   interested in fostering longterm intellectual relationships if the main driver is a tax loophole.

We need a debate on universities a and their role in society. They are not businesses. That is not to say that they should not be run in a professional, business like fashion with transparent budgeting and meaningful and appropriate professional management. Universities in particular exist to first and foremost provide educated engaged members of society. They do not exist simply to train people for industry. Industry has been good at outsourcing its basic skills training to the state, in effect free riding. Perhaps its time to think about giving something back?

Ultimately, the THES shows that aping one country will not work. Israel is one of the powerhouses of innovation and academic excellence but does poorly in this survey. Denmark, also a powerhouse of innovation, does well. They both have strong academic, entrepreneurial and innovation backgrounds but have different approaches to how they manage. The risk is that government policy tries to pick a country to follow as a model. Ireland needs to follow a mix of models and accept that these things must progress organically. Organic means bottom up – it does not mean being kept in the dark and fed manure


3 thoughts on “It’s time for business to stop free riding and start engaging with Universities

  1. Pingback: Ninth Level Ireland » Blog Archive » It’s time for business to stop free riding and start engaging with Universities

  2. Pingback: Buzzword Bingo meets Boxticking in the new Funding Compact for Irish Universities | Brian M. Lucey

  3. steve daly (@stevereddaly7)

    During the 5 years that I spent in a large Dublin secondary school, not a single employer came to the school , in order to offer pupils career advice or work experience. The employment notice boards of third level colleges would be empty if it wasn’t for the jobs on offer in the UK.


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