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What have we learned? What to do now? What to do next? Dirk Van Damme Head of CERI OECD/EDU.

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Presentation on theme: "What have we learned? What to do now? What to do next? Dirk Van Damme Head of CERI OECD/EDU."— Presentation transcript:

1 What have we learned? What to do now? What to do next? Dirk Van Damme Head of CERI OECD/EDU

2 Outline Preliminary remarks Observed impacts: –Budgets –Students –Staff –Institutions What to do now? What to do next? 30 June 2009 2

3 Preliminary remarks Main impact of the crisis on HE still has to come; we are at the very early stages –Budget 2010 will be crucial, but full impact of consolidation expected in the medium term –Steep rise in (youth) unemployment, will take a long time to come back to pre-crisis level –Economic stabilisation and mild recovery will not have major impact, except psychologically Yet, nobody has seen such a crisis before –Need to research this crisis 30 June 2009 3

4 Deteriorating youth unemployment rate 30 June 2009 4

5 Preliminary remarks Very diversified reality… –Effects are/will be manifold and complex –There will be winners and losers –Challenges and opportunities –Straightforward consequences and unexpected effects –Global and local, synchronized but with many differences between countries –Mixing up realities, perceptions and expectations … will enormously defy the individual and collective capacity to change and adapt 30 June 2009 5

6 Preliminary remarks How to look in a more hygienic and scientific way to the crisis: –Distinguish perception and reality –Distinguish observed (what is) and desired/ undesirable (what should) facts and behaviour One thing seems to be sure: it is unlikely that the effects of the crisis will be few and will disappear soon 30 June 2009 6

7 Observed impact: budgets Public resources: Rapidly increasing state deficits and need for consolidation can lead to major cuts in public spending –UK: cuts announced/expected –US: many states cutting on HE spending while impact of federal stimulus package marginal –Unclear picture in most other countries –In some countries budgets increase as part of stimulus packages 30 June 2009 7

8 Observed impact: budgets Increased competition with other major areas of public expenditure –Age-related and health –Environment Demographic decline of young age cohorts may seduce governments to reduce budgets –But participation may not/should not decrease 30 June 2009 8

9 9 Source: CERI/OECD, 2008 Scenario 1 = Status-quo Scenario 2 = Trend

10 Observed impact: budgets Private resources: Private income comes under severe stress, affecting spec. privately funded institutions –Sometimes spectacular drops in endowment income, donations, pension funds and annual giving –Tuition fees hit price ceiling (US) –Decrease in R&D contracts from industries 30 June 2009 10

11 Observed impact: budgets For publicly funded institutions limited space to increase private resources (fees) –Will students invest/indebt with insecure return? –Political resistance to significant increase in tuition fees (Europe) Investment strategies will suffer from more difficult access to credit 30 June 2009 11

12 Observed impact: budgets Diversifying income will be major challenge –International, fee-paying (full cost?) students? –More competition for less research money –Expansion of further education, part-time programmes, non-degree provision and other atypical activities Adverse effects: HEIs capable in diversifying resources may be seen as not needing public support and offer excuse to governments to cut 30 June 2009 12

13 Observed impact: students General expectation that demand will increase –Students postpone entry to labour market Competitive disadvantage of entering labour market in times of crisis –Unemployed seeking to upgrade qualifications –Also employed in vulnerable sectors interested in reskilling in view of mobility –Lifelong learning to cope with innovation (recovery will include major restructuration) –Decreasing opportunity costs, but higher costs for students and households to participate 30 June 2009 13

14 Observed impact: students Yet, some institutions will limit student intake Shifting demand –From private to public –From international to domestic Students expectations with regard to earnings and job prospects to be lowered to realistic levels What is long-term impact of high youth unemployment on motivation and aspirations? 30 June 2009 14

15 Observed impact: staff Serious challenges in staff policies –Senior staff may postpone retirement ( { "@context": "", "@type": "ImageObject", "contentUrl": "", "name": "Observed impact: staff Serious challenges in staff policies –Senior staff may postpone retirement (

16 Observed impact: institutions Institutional missions –Balance between research and teaching –Third mission under pressure? But also opportunities to support local economy, innovative start-up business, technology transfer Social mission and impact on society will become more important –Increasing demand to focus and prioritise institutional missions 30 June 2009 16

17 What to do now? What not to do: –Because of its severity, speed and impact this crisis will not be surmounted by continuing business as usual, lets buy time or wait and see approaches –Risks of overly defensive reactions and protectionist behaviour –Risk of being focused exclusively to short-term coping strategies –Risk of being misguided by false rumours, premature expectations etc. that may lead to inadequate behaviour 30 June 2009 17

18 What to do now? One thing is certain: HEIs dont want to be the passively impacted or the mere addressees of strategies and policies, but want to have an active role and voice –No top-down policies, but negotiated policies –Mutual trust in HE systems is essential Need for a collective sense of urgency, moving beyond individual coping strategies to be hided from outside (competitors) view 30 June 2009 18

19 What to do now? Information and knowledge will be crucial –Speed of the crisis asks for rapid exchange of information –Institutional need for intelligence on what governments and competitors are planning OECD response: educationtoday lighthouse 30 June 2009 19

20 What to do now? Institutional strategies –Business models, financing strategies and investment strategies should be looked at carefully –Contingency planning –Income diversification –Cost-saving measures Impact on quality of raising staff/student ratio? –Public/private partnerships 30 June 2009 20

21 What to do now? Institutional strategies –Attracting foreign students –Develop knowledge cities/regions –Efficiency gains in mergers?, economies of scale? Or engaging in alliances, synergies –But institutions are rather conservative, not well tuned to change 30 June 2009 21

22 What to do now? Governmental policies –Increase scholarship and income-contingent student loan and grant programmes –Governments should stimulate participation in HE (better to have students than to have unemployed people); marginal cost limited –Include knowledge & innovation investment in stimulus packages –More regulation can be expected, but institutions dont want to return to regulation jeopardizing institutional autonomy 30 June 2009 22

23 What to do now? Governmental and institutional: opportunities for efficiency gains and structural reforms –Efficiency in teaching and learning can be enhanced by innovative and more sophisticated arrangements, including use of technology (cfr distance education) –More cost-effective business models for undergraduate education? –Move towards more vocational programmes (flexibility, practical, but less apprenticeships) –New skills (financial education) 30 June 2009 23

24 What to do next? Crisis and recovery are an opportunity… –To transform coping strategies in long-term strategic management –To enhance transformative capacity of institutions and HE systems …but also a responsibility –Did universities fail in developing the right knowledge and skills? –To promote an economy not driven by greed but by social and ecological responsibility 30 June 2009 24

25 What to do next? Crisis probably will increase awareness to invest in the knowledge economy –Changing minds from coping with crisis to preparing the post-crisis recovery which will a more innovative and knowledge-based economy –Countries will invest more during the crisis will gain a competitive advantage in the post-crisis recovery 30 June 2009 25

26 What to do next? Crisis will amplify the call for accountability –Institutions to demonstrate what not only their output but also their outcomes and real impact are –And to demonstrate their added-value Are current quality assurance arrangements capable of providing real transparency? –Need to strengthen legitimacy of HEIs 30 June 2009 26

27 What to do next? Long-term effects and impacts –Will private and social return be impacted by the crisis? –Will HE still be the motor of social mobility and meritocracy? –Which types of skills will be needed and rewarded in the post-crisis knowledge economy? 21 st skills? 30 June 2009 27

28 Concluding Once again universities will have to show their capacity for change in an increasingly demanding and competitive environment: The longevity of the university is not a result of never changing – but rather a credit to its ability to evolve, adapt, and change over time (Clark Kerr) 30 June 2009 28

29 THANK YOU ! 30 June 2009 29

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