The New Public-Private Dynamics in Polish Higher Education

(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

(1) Introduction

European integration in HE goes beyond old EU-15. Changes are different. In Central and Eastern Europe (CEE) HE reforms have led to new public-private dynamics: the change was towards unplanned and unexpected privatization of HE, to expand previously closed and elite systems. Expansion came later, and was based on fees.

Access success-story in Poland was achieved via two forms of privatization (internal and external) – but was accompanied by the emergence of new, intersectoral dynamics: between the old (public) and the new (private) insitutions. This dynamics is still relatively marginal in Western Europe. The phenomenon of P-P Dynamics is relatively non-comparable, and under-researched.

(2) Introduction

Wider context: the need for HE expansion? EC states (2005): EU needs a further 50% increase in HE enrolment level (to close the gap with the US – i.e. from 25% to 38%). General agreement: higher education matters more and more, possibly there is no „crowding out” effect on less educated in the labor market? Furher expansion of HE – or redefinition towards tertiary, postsecondary etc. education?

Aim: improving access and increasing total (public and private) funding for HE – how to achieve both ends in the context of funding problems (financial austerity) for public services in general? Especially in CEEs?

(3) Introduction

Under-researched topic in European HE studies: a social experiment (in Poland and other CEEs) of increasing access to HE via internal and external privatization. Was there any other solution to increase access possible in the first decade after 1989? (other dimensions include: privatization of pension schemes and of healthcare provision, or major public services, in Poland – achieved or planned; an ideology, a public mood, budgetary constraints. Martin Carnoy: finance-driven reforms – rather than equity-driven reforms, UNESCO 2000).

(4) Introduction

Goal of present research: to assess this ongoing large-scale social and economic experiment in which HE expansion was achieved via privatization – and to try to predict future shape (in 2015-25) of Polish HE sector.

Polish private HE (34% of enrolments in 2009): what is its future under unprecedented (in Europe) demographic pressures? (see the graph below – people aged 18-24 in PL, 2020, 60% of 2008!, OECD/GUS projections).

(5) Introduction

 Changing demographics and HE sector: 2008-2035

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(6) Introduction

In Europe, several countries could be used for comparisons with Poland with respect to the growth of the private sector: e.g. 2 CEEs (Bulgaria, Romania) and 3 EU-15 (Spain, Portugal, Italy).

Question: how further necessary (if we view it as necessary) expansion is to be performed in existing organisational, administrative and funding arrangements? And what would „expansion” of HE mean in PL?

Additionally, how the expansion is being translated into matching the labour market needs and expectations?

In PL, the HE market seems to have stabilized at the below 2 M students level: saturated now, strongly decreasing in the future.

(7) Introduction

Question: to what extent matching skills and competences provided by the traditional HE sector (university sector, not VET) with the labor market needs is necessary? To what extent – just a rhetorical device?

In national systems, clear distinctions between the university sector and the VET sector. At the EU level, via ideas of EQF and of learning outcomes – the VET sectors (levels 6-8) viewed as more important as ever before. And – increasingly under the EU competences (not, traditionally, under nation-state competences)!

(8) Expansion and Privatization

Aim of the presentation: to present and assess the change in Polish higher education system in 1990-2010 related to wider processes of P-P dynamics.

On the margins: the issue of external privatisation (growth in the number of private sector providers) and internal privatisation (various finance-driven cost-recovery mechanisms in public sector institutions), of the two previous, Poznan seminar presentations.

(9) Expansion and Privatization

Can privatisation (in both forms) be a remedy to attain still higher attainment levels in those European systems where all traditional, publicly-funded routes seem structurally difficult to achieve? I.e. mostly in CEE countries? It was a remedy from a numerical point of view (numbers! not quality). If the EC is right about the need to increase enrolments in the EU by 50% (!), then privatisation might be an answer in countries with below-average GDP. If there is no need of further expansion in partcular EU nation-states, then privatisation in both forms is not necessary.

But: privatzation, and generally new P-P dynamics in public services, is also heavily ideology-driven.

(10) Expansion and Privatization

If expansion of HE sector is needed, and if privatisation is indeed a remedy, is it the sort of expansion that European labour markets need?

How graduates from these private, new segments of HE and graduates increasingly paying fees are matched to the labour market, and how employers view them, compared with graduates from traditional public institutions or from full-time, non-fee paying programs in CEEs?

Are there significant differences in skills and competences of graduates according to the employers?

(11) P-P dynamics: consequences?

Are trends affecting public and private higher education institutions isomorphic or divergent today? And how internal privatisation of public institutions (cost-recovery mechanisms including e.g. cost-sharing in teaching; academic entrepreneurialism in research; other third-stream activities; increasing reliance on non-core non-state income etc) - is transforming institutons from the inside? How long would it take to see and properly assess the institutional consequences of these internal transformations?

(12) P-P Dynamics

P-P dynamics: Daniel C. Levy, “it is impossible to understand contemporary expansion, including its size and contours and policy dimensions, without knowledge about both [public and private] sectors. It is also important to analyse dynamics between the sectors. What effects does a kind of access through one sector have on the other sector” (Levy 2008: 13). This idea fits Polish HE perfectly.

Any division of HEIs into merely „good” and „bad” institutions (instead of pHE-PHE) does not make much sense in Poland, despite strong (political) pressures to forget about this fundamental difference. Reason: PHEIs want public funding, and want it now! (demographics, heavy reliance on fees).

(13) Expansion – over-supply?

Stephen Machin and Sandra McNally (in their OECD study of education systems and labour markets): “in no case considered here, can one speak of ‘over-supply’ of tertiary education. The strong, positive and (often) increasing return to tertiary education suggests that ‘under-supply’ is more of an issue and that continued expansion is justified” (Machin and McNally 2007: 3). How does this conclusion refer to Poland, with still much lower needs for highly educated workforce? What are the parameters of „over-supply” of HE graduates (decreasing wage premia on HE? Increasing share unemployed with HE degrees?). And in the EU?

(14) Privatization – a broader trend

Privatization: Guy Neave, “the signs [in Europe] are very clear that what began as individual initiatives is on the way to becoming a broader and more general strategy” (Neave 2008: 32). Poland is one of the best examples, and still under-researched in HE literature.

(15) Three Themes of P-P Dynamics

Theme 1: Internal and external privatisation of higher education (done, 1 slide below)

Theme 2: Public sector and private sector graduates in the labour market (not done, 1 slide below)

Theme 3: The academic profession in the private sector and the teaching-research divide in both sectors of higher education.

– Only Theme 3 developed here below.

(16) Theme 1 - Privatization

Initial hypothesis: internal privatization (fees in Poland, Romania or Bulgaria in the public sector) and external privatisation (PL, RO, BG and I, ES and PT) contribute significantly to the access issue (opening educational institutions to new segments of society which had been previosuly effectively excluded from HE). But their effect on equity (fairness, and equity of outcomes) may be questionable.

Public universities in Poland are receiving the brightest middle classes kids. New students (from lower socio-economic, or disadvantaged, groups) go to (academically inferior) private institutions or to fee-based part-time programs in public ones.

Thus: privatisation in Poland is an access “success story”, accompanied by a possible equity “failure”. The share of students from lower SE groups has not grown proportionally to the total growth of HE in numbers.

(17) Theme 2 - Graduates

Initial hypothesis: the mismatch between skills of private sector graduates and the labour market requirements is smaller than in the case of public sector graduates in the same programs and in the same sector of employment. Reason: more heavily dependent on fees. (BUT: PHE is focused on several areas of studies only!).

Initial hypothesis: the links to the labour market of those few selected (shared by both sectors) study programmes are closer for private institutions in old EU countries and weaker in new-EU countries, owing to the faster growth of the private sector in the latter countries and consequently its smaller degree of competition with the underfunded public sector. In old EU countries, private HE can be heavily elite (Italy, Spain, France, Norway), while in CEEs it is merely „demand-absorbing” (Levy’s classification).

(18) Theme 3 – Academic Profession

Hypothesis: the private-public dynamics in higher education affects academic profession in both sectors. Research into changing academic profession in the private sector is needed.

Hypothesis: there is emergent structural isomorphism of changes in the two sectors, and the increased impact of private sector organisation, management styles and contractual and labour relationships on public sector institutions.

Hypothesis: while in the private sector, the teaching-research divide is already achieved (i.e. private sector in PL and most EU systems is a teaching sector), the contrast of private sector with the public sector may be weakening, following trends to increasingly locate and fund research outside of higher education. And to increase the concentration of research funding in top-tier public institutions. New divide: top public research-intensive institutions vs. second rank public and (almost all) private HEIs?

(19) Theme 3 – Academic Profession

Hypothesis: growing isomorphism between public and private sectors, or public sector becoming structurally more similar to private sector, and both sectors becoming significantly more involved in the third, regional mission (service to the society), for mostly financial reasons.

Hypothesis: EC „university modernization agenda” heavily involved in removing traditional differences between the university sector and the VET sector (economic agenda of post-Lisbon new „Agenda 2020”; better opportunities to implement EU-wide policies in education if referred to more vocational education than to university HE).

(20) Theme 3 – Academic Profession

Change of mood is expressed in an EU communication on “Mobilising the Brainpower of Europe”: “If universities are to become more attractive locally and globally, profound curricular revision is required – not just to ensure the highest level of academic content, but also to respond to the changing needs of labour markets. The integration of graduates into professional life, and hence into society, is a major social responsibility of higher education” (EC 2005c: 5).

Change of major parameters of operation of universities suggested by the EC: closer to the mission of VET institutions? What would be the intersectoral difference: traditional universities vs. traditional VET institutions?

(21) Theme 3 – Academic Profession

Following transformations of all public sector institutions, universities in Europe – traditionally publicly-funded and traditionally specializing in both teaching and research – are under powerful pressures to review their missions and to compete for financial resources with other public services heavily reliant on the public purse.

The consequences for the teaching/research agenda are far-reaching: policymakers are (traditionally) more interested in instruction at HEIs, rather than in research. Except for institutions of special status (in Poland: towards KNOWs, Leading National Scientific Centers, within institutions, in selected areas only).

(22) Theme 3 – Academic Profession

The trend of disconnecting teaching and research in higher education has already started: as Stephan Vincent-Lancrin (2006: 12) summarizes his analyses of OECD datasets, “academic research might just become concentrated in a relatively small share of the system while the largest number of institutions will carry out little research, if any”.

In Poland, heavy concentration of research funding has already been achieved: see the graph below: 1 HEI – 10%, 10 HEIs – 60%, 20 HEIs – 80%, 30 HEIs – 90% of research funding (out of ca. 100 public and ca. 320 private!). Consequently – academic profession involved in research (on average) in 4,7-7,0% all institutionsm, or 20-30% public institutions only (no research without funding, in general).

(23) Theme 3 – Academic Profession

Concentration of public research funds in Poland, 2008

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0,0097 9,7087 19,417 29,126 38,835 48,544 58,252 67,961 77,67 87,379 97,087 100

% of HEIs in all HEIs, ordered by decreasing income from research

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(24) Conclusions

The reason for the renewed (10 years!) EU interest in higher education is clearly stated by the EC: while responsibilities for universities lie essentially at national (or regional) level, the most important challenges are “European, and even international or global” (EC 2003a: 9). Higher education, left at the disposal of particular nation-states in recent decades in Europe, returns now to the forefront in discussions about the future economic competitiveness of the EU as a whole. And the economic perspective is dominant among policymakers.

EC is certainly interested in having substantially more impact on policies in HE, especially in formulating and implementing EU-wide policies (via e.g. OMC, EQF etc).

(25) Conclusions

New P-P dynamics is appearing mostly in CEEs, especially in the context of HE expansion achieved with limited public funding.

The public sector/private sector divide in HE leads to new relationships with the labor market. And it leads to the differentation of the academic profession itself: much fewer academics are potentially involved in research. MK: new study on Polish academic profession (EUROHESC EUROAC for ESF, with DA).

The concentration of research, and research funding, is bigger than ever before (no research in the private sector, major research in 20% of public institutions).

(26) Conclusions

Various forms of public-private dynamics are not theoretical concepts but labels of ongoing real transformations which (especially in CEE) had been mostly unplanned and unexpected. These transformations make today a difference between educational systems in older and newer EU member states.

Understanding these differences is critical in planning the expansion of EHEA and ERA to both parts of Europe.

Thank you very much for your attention!