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Rom a nia Minist ry of Education, Research and Youth

Rom a nia Minist ry of Education, Research and Youth. Higher Education funding as a strategic tool Sorin Gabriel Popescu General Director responsible for Higher Education Funding Management. Presentation objectives.

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Rom a nia Minist ry of Education, Research and Youth

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  1. Romania Ministry of Education, Research and Youth Higher Education fundingas a strategic toolSorin Gabriel PopescuGeneral Director responsible for Higher Education Funding Management

  2. Presentation objectives • Starting from a structured description of the Romanian higher education funding system, the presentation intends to focus on: • the role that funding has in the development of higher education and universities’ performance, in the EU and national strategic framework; • the Romanian higher education funding dynamic in the last 4 years (2005-2008); • the main domains and directions for strategic interventions connected with the funding of higher education; • the already undertaken, current and intended measures of the Romanian Ministry of Education Research and Youth in the mentioned domains and directions; • the ways in which this strategic interventions and measures could be sustained by EU structural funds.

  3. Labor Capital The industrial and knowledge economy/society Industrial economy / society In the past two centuries, only labor and capital have been considered to be production factors and sources of development.

  4. Labor Capital Knowledge The industrial and knowledge economy/society Knowledge economy / society Industrial economy / society In the past decades, knowledge, associated with technology, has become the third, and for the developed economies the main production factor.

  5. Labor Capital Knowledge The industrial and knowledge economy/society Knowledge economy / society In the past decades, knowledge, associated with technology, has become the third, and for the developed economies the main production factor. In such a society, knowledge – in the form of competence – offers to the individuals access to welfare, and, on the national level, together with technological progress, forms the basis for economical growth.

  6. The University in the knowledge-based society • In this context: • universities, as main sources of knowledge within society, become key factors of its wellbeing; • for Romania, as for any modern country, investment in Higher education should ensure maximum benefits in the long term, as it is one of the most efficient mechanisms of sustainability in the global competition for resources and development. • The mission statement of universities should be re-written for the knowledge-based society like this: • To contribute to the economical development and to the wellbeing of the society by transferring knowledge towards individuals and the socio-economic environment that it serves

  7. Relationship between funding and performance • There is a proven correlation between the funding and the performances of universities. • The Report entitled “An Agenda for Reforming European Universities”, prepared and published in July 2008 by a group of international experts (professors of economics from universities as Harvard, Stanford, Oxford and Université Libre de Bruxelles) for the Bruegel Foundation determines the influencing factors of the research performance of European universities (the Shanghai Index): • average level of the expenditure per student; • financial autonomy of universities and the entrepreneurial behavior of the universities’ leaders; • the methodology for the distribution and allocation of funds: encouraging a minimal standard (equal distribution for all universities) or the orientation towards excellence (preferential financing of universities with relevant potential); • international mobility of students, but especially the mobility of teaching and research staff.

  8. Shanghai 500 Index 250 200 150 100 50 HU SP AU GE FI FR BE IR GR CZ DE SE IT NE UK SW US EU Expenditure/ student [x1000EUR] 0 0 5 10 15 20 25 30 35 40 Relationship between funding and performance The average yearly expenditure/student in the EU is 8700 EUR, with most of the countries grouped around the same funding-performance index. The champions are Sweden and Switzerland, while the countries in Eastern Europe have worse positions in this graph. Romania has in 2008 about 4000 EUR as level of expenditure/student from public funds and it is present with any university in the Shanghai 500 ranking.

  9. Romania – HE funding framework REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering Documents National Regulations & Programs National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. IDENTIFICATION National Budget Methodology Public funds exp. Instit. capability National SE Env. Economic Env. Entrepreneurial skills & behavior of universities’ leaders End beneficiaries Individuals-Fees Direct contract Univ. regulations Processes National&Europ. Academic Env. MEASUREMENT Structural Funds Grant/Project EU regulations Products SATISFACTION& EFFICIENCY

  10. Romania – HE funding framework The national socio-economic environmentis the main beneficiary of the HE system: education (bachelor/master/doctoral/life long learning), scientific research results and direct assistance (consultancy and professional services). The individual/end beneficiariesare persons (students) who want to study to gain competences and recognition and their requirements range from the study program characteristics and its international recognition, to the accommodation and transport facilities offered by universities. NEED-REQs. IDENTIFICATION National SE environment The members of the national and European academic environmentexpress needs/requirements that are specific to their level: from the institutional level (e.g. compatibility) to the individual level (e.g. opportunities and funding of mobilities). Endbeneficiaries National&EuropAcademic Env. These needs and requirements have to be identified both at the entire HE system level and at the individual components (universities) level. MEASUREMENT SATISFACTION& EFFICIENCY

  11. Romania – HE funding framework REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering documents National Regulations & Programs National Strategic & Steering documents • The regulatory, strategic and steering framework: • assembles the regulations, strategies, and plans both at the EU and National levels and • provides the reference framework for the HE system and for its funding. • Its functionsare: • system planning: establishing policies, priorities, objectives, measures, resources, responsibilities for medium and long term; • system control:regulations that have as aim to put in practice these instruments at different action levels. NEED-REQs. IDENTIFICATION National SE environment End beneficiaries National&Europ. Academic Env. MEASUREMENT SATISFACTION& EFFICIENCY

  12. Romania – HE funding framework • The State budgetprovidestwo main components: • Basic funding:current expenditure (staff and operating costs) - 70% provided according to the equivalent number of students and 30% based on the quality indicators (2008); • Complementary funding:investments and repairs, students’ scholarhsips, eating/accomodation/transport subsidies, special programs, cultural and scientific events, scientific research (by competition). Funds from private organisations and persons comingmainlyin return for services such as: training, consultancy or research. These funds are based on service or study contracts with economic agents or institutions. A very small percentage is constituted in present from sponsorships, donations and private scholarships. SOURCES ALLOCATION National Budget Methodology Economic Env. Entrepreneurship Individuals-Fees Direct contract European and international funds allocated as grants for projects obtained through competition in accordance with strategic priorities. Structural Funds Grant/Project The entrepreneurial skills and behaviour of universities’ leaders are key elements in identifying and attracting extrabudgetary funds.

  13. Romania – HE funding framework • Universities are autonomous in deciding how they manage and spend funds; • Autonomy has to be integrated to the national and European legal and regulatory framework; • Universities may also add internal regulations; • The leadership’ s entrepreneurial skills and behaviour plays an important role in motivating people andin the efficient spending of funds and the generation of performances according to the spent resources. SOURCES ALLOCATION MANAGEMENT PERFORMANCE National Budget Methodology Public funds exp. Instit. capability Economic Env. Entrepreneurial skills & behavior of universities’ leaders Individuals-Fees Direct contract Univ. regulations Processes Structural Funds Grant/Project EU regulations Products

  14. Data regarding HE financing dynamics in Romania 2008 compared to 2000 7.2 times increase 2008 compared to 2004 cca. 3.5 times increase

  15. Data regarding HE financing dynamics in Romania 2008 compared to 2000 - 7.2 times increase 2008 compared to 2004 - 2.3 times increase

  16. Data regarding HE financing dynamics in Romania 2008 compared to 2000-2004 average - 23 times increase

  17. Data regarding HE financing dynamics in Romania

  18. Data regarding HE financing dynamics in Romania

  19. Systemic overview of the national HE system PROCESSES Develop processes needed by the generation of educationalproducts Main: education, research, consultancy Managerial: strategic/quality/ human resource/financial/management Support: maintenance, investment, procurement etc. NEEDS-REQUIREMENTS The leading axis, defining the independent variable of the entire academic demarche Needs for knowledge: competence, innovation, assistance in solving problems of the socio-economic environment SYSTEM AND INSTITUTIONAL COMPONENTS Institutional capability for answering to the need-requirements Structure, rules, managerial paradigm, human resources/ infrastructure/financial resources etc. PRODUCTS Develop products in accordance with the needs-requirements Study programs, Research projects, Assistance contracts DEVELOP EVALUATE Quality is resulting from the measure in which theentire system and its institutional entities(universities, Ministry, national agencies / councils etc.) answer to specific needs/requirements.

  20. Romanian HE system – Vision building Two possible visions, that must be merged Satisfy the need for education of people and for competent specialists of the socio-economic environment. The overall performance of the HE system is given by the sum of the performances of individual universities and the quality orientation is to assure the minimal standard for each of these institutions. NEED FOR EDUCATION Orientation towards minimal standards Generate new knowledge through research and innovation, pertaining to top technologies, and develop international prestige. The overall performance of the HE system is given mainly by the top results of some universities, with focus on excellence. NEED FOR RESEARCH AND INNOVATION Orientation towards excellence

  21. Romanian HE system – Vision building A possible vision for the Romanian HE system • Competitive and capable to contribute to the economical growth and country’s welfare, generating and transferring knowledge towards the socio-economic environment; • Socially equitable, offering accessibility to everyone who wishes to study, independent of background; • Presents an attractive and diversified educational offer oriented towards the medium and long term needs of the country; • Participant in the European HE Area reform process and an integral part of the HE internationalisation process; • Accountable to the citizen (tax-payer), ensuring a transparent and justified usage of funds. ■Strategic project Quality and leadership in Romanian Higher Education - 2025 Vision and strategic recommendations for 2009-2013 . International partners: Fraunhofer Inst. for Systems and Innovation Research, Institute for prospective Technological Studies, UNESCO- European Centre for High. Educ., EUA.

  22. Romania – HE funding framework REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering Documents National Regulations & Programs National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. IDENTIFICATION National Budget Methodology Public funds exp. Instit. capability National SE Env. Economic Env. Entrepreneurial skills & behavior of universities’ leaders End beneficiaries Individuals-Fees Direct contract Univ. regulations Processes National&Europ. Academic Env. MEASUREMENT Structural Funds Grant/Project EU regulations Products SATISFACTION& EFFICIENCY

  23. Directions for strategic intervention – Sources REGULATORY, STRATEGIC AND STEERING FRAMEWORK • Objective:Increase Romanian HE financing towards levels comparable • to the European average of 8700 EUR/student • Budgetary financing • In 2008, the total budget for education has reached 6% of GDP, with HE financing arround 4000 EUR/student. In the context of the current economic crisis, a slower rate of GDP increase is to be expected. • Possible future measures for increasing the budgetary component: • The restructuring of the budget for education, allocating a larger part for HE; • The increase of the research budget up to 1% from GDP by 2010 from 0,7% in 2008. EU regulations EU Strategic and Steering Documents National Regulations & Programs National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. IDENTIFICATION National Budget Methodology Public funds exp. Instit. capability National SE Env. Economic Env. Entrepreneurial skills & behavior of universities’ leaders End beneficiaries Individuals-Fees Direct contract Univ. regulations Processes National&Europ. Academic Env. MEASUREMENT Structural Funds Grant/Project EU regulations Products SATISFACTION& EFFICIENCY

  24. Directions for strategic intervention – Sources • Objective: Attraction of private capital in HE institutions (from individual participants and companies) • Current and evisioned measures: • Improving the antreprenorial abilities and behavior of the universities’ leadership; • Creating financial attractiveness for investments in HE within public-private partnerships; • Encouraging organizations to invest in the development of their own human resources (1.5% of the total salaries invested in training or collected as tax); REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering Documents National Regulations & Programs National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. IDENTIFICATION National Budget Methodology Public funds exp. Instit. capability National SE Env. • Increasing the revenues from individual fees by attracting international students outside the EU. Economic Env. Entrepreneurial skills & behavior of universities’ leaders End beneficiaries Individuals-Fees Direct contract Univ. regulations Processes National&Europ. Academic Env. ■ Current ESF strategic project Improving universities management – managerial training of the universities’ leadership in partnership with Institute of Education – London Univ. ■Set-up of the Agency for Internationalization of HE (working group created in June 2008 aimed to develop the strategic and regulatory framework, a strategic project for financing intended to be launched in 2009, International partners: ACA and British Council). MEASUREMENT Structural Funds Grant/Project EU regulations Products SATISFACTION& EFFICIENCY

  25. Directions for strategic intervention – Expenditure • Objective: Encouraging performance of universities • Current and evisioned measures: • Introduction within the funding framework of new fund for institutional development, addressed to a reduced number of universities, that can prove relevant academic and research performances, according to international ranking systems • Encouraging concentration of resources within consortiums of universities, student campuses and common research units; • Improving financing framework based on existing quality criteria and indicators (30% of base financing); • Improving the quality of education provided by universities within all Bologna cycles. REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering Documents National Regulations & Programs National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. IDENTIFICATION National Budget Methodology Public funds exp. Instit. capability National SE Env. Economic Env. Entrepreneurial skills & behavior of universities’ leaders End beneficiaries Individuals-Fees Direct contract Univ. regulations Processes National&Europ. Academic Env. MEASUREMENT Current strategic projects: ■Quality assurance in higher education in Romania ■Structuring of doctoral schools ■Doctorates in excellence schools - evaluating quality of research■Doctoral scholarships Structural Funds Grant/Project EU regulations Products SATISFACTION& EFFICIENCY

  26. Description of the strategic projects ■Quality assurance in Higher Education in Romania Envisioned results:Improvement of the ARACIS (Agency for Quality Assurance in HE) evaluation methodology; Institutional evaluation of 45 universities;Transversal evaluation of bachelor programs. International partners: EUA. ■Doctoral studies in Romania – Structuring of doctoral schools Envisioned results:Recommendations for establishing doctoral schools; Indicators for evaluating the quality of doctoral programs; Procedures for the accreditation of doctoral schools. International partners: UNESCO- European Centre for High. Educ., EUA. ■ Doctorates in schools of excellence – evaluating quality of research Envisioned results:Methodology for international evaluation of the quality of scientific research in Romanian universities; A program entitled Universities of Excellence in Romania; 30 new ISI indexed journals. International partners: UNESCO- European Centre for High. Educ. ■Doctoral scholarships (26 projects in 2008, 23 universities) Envisioned results: 2312 PhD. students with scholarships of 500 EUR/monthwhile in Romania, and 1000 EUR/monthfor 8 months while at a university within the EU.

  27. Directions for strategic intervention – Methodology • Obiective: Equal opportunities to access higher education • Current measures: • Increasing the amount of funds and the program attractiveness for facilitating the access to HE of disadvantaged categories of young people (e.g. rroma minority, scholarships for students from rural areas); • Set-up of an Agency for students’ loans (World Bank Experts have developed possible scenarios and the Agency has been initiated through an emergency Ordinance that is awaiting approval); • Envisioned measures: • Improvement of the legal framework in order to encourage the students’ financial support by private funding (private scholarships, private loans, summer employment). REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering Documents National Regulations & Programs National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. IDENTIFICATION National Budget Methodology Public funds exp. Instit. capability National SE Env. Economic Env. Entrepreneurial skills & behavior of universities’ leaders End beneficiaries Individuals-Fees Direct contract Univ. regulations Processes National&Europ. Academic Env. Strategic project ■Set-up of the Agency for students’ loans with assistance from the World Bank. In 2009, the Agency will be launched and, for becoming operational, another year will be needed. MEASUREMENT Grant/Project EU regulations Products SATISFACTION& EFFICIENCY

  28. Directions for strategic intervention – Management • Objective: Improving the entrepreneurial competences, skills and behavior of universities’ leaders and the development of ICT infrastructure for managerial support. • Current and evisioned measures: • Training of the universities leaders in the next 2 years within 6 centers with assistance from the Institute for Education – London University. In these centers, there will be set up master programs in university management, in order to train the future leaders of Romanian universities; • Encouraging universities to develop their own solution of computerized management; • Creation of the ICT infrastructure/facilities for managing the educational system at national level. REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering Documents National Regulations & Programs National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. IDENTIFICATION National Budget Instit. capability National SE Env. Methodology Public funds exp. Economic Env. Entrepreneurial skills & behavior of universities’ leaders End beneficiaries Individuals-Fees Direct contract Univ. regulations Processes National&Europ. Academic Env. MEASUREMENT Structural Funds Grant/Project EU regulations Products SATISFACTION& EFFICIENCY Strategic project launched in May 2008 ■ „Improving universities management” ■ „Students’ Register”

  29. Directions for strategic intervention – Ident. & meas. • Obiectiv: Development of methods and tools for the identification of society’s needs and requirements and for the measurement of the efficiency of investments in education • In present, the identification of the number of specialists needed by the national socio-economic environment is difficult and costly, with low relevance (very few companies use a strategic planning of their human resources); • A possible method for measuring the efficiency of the investment in higher education is to track graduates and to gather feedback from hiring organisations from different fields. REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering Documents National Regulations & Programs National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. IDENTIFICATION National Budget Methodology Public funds exp. Instit. capability National SE Env. Economic Env. Entrepreneurial skills & behavior of universities’ leaders End beneficiaries Strategic projects ■ PHARE project finalized in October 2008, assisted by German experts from University of Kassel, has developed institutional and system wide methodologies, as well as the needed instruments, for tracking graduates and feedback. ■ ESF project to be forwarded for financing in November 2008 by CNFIS in order to apply these instruments within a pilot study for validation at national level and for 20 universities. Individuals-Fees Direct contract Univ. regulations Processes National&Europ. Academic Env. MEASUREMENT Structural Funds Grant/Project EU regulations Products SATISFACTION& EFFICIENCY

  30. Conclusions 1. HE is a strategic priority in a knowledge based economy and between quality and funding there is a proven correlation. 2. Funding is the main tool of the Ministry of Education for managing the strategic development of the HE system. Thereby, it has to be correlated with the national development strategic plans and with the domain specific vision. 3. HE funding improvement has to be focused on its final aim: answering to the society’s needs and requirements. A structured approach addresses: the funding sources (public and private), their allocation and distribution as well as their management and expenditure. A measurement of the investment efficiency is needed. 4. Although they cannot replace other funding sources, coherent usage of EU structural funds within the Ministry’s vision and strategy could bring a relevant contribution to the improvement the HE structure and capability and finally to the entire system performance.

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