Higher Education and the Crisis

Yesterday, on the way into town from the airport in Seville, where I am giving a series of talks, my university host and I were talking about the state of higher education and the economic crisis.  He was bracing for another round of pay cuts he and his colleagues fear are in the works on top of the 5-10% they took as the slowdown in the economy started.

Higher education in Southern Europe is an area ripe for reform.  University systems in the region tend to be inefficient, highly politicized and bureaucratic.  At the same time, the differences between the north and the south in terms of the relationship between unemployment and underemployment, and educational attainment are illuminating. A recent study by Gallup shows that at the highest levels of education, the same lower levels of unemployment characterize the citizens of both Northern and Southern Europe - about 5% - in both regions. It is at the lower levels of educational attainment (that describes a larger percentage of southern Europeans) where the big gaps exist.  Here, although those with lower educational levels have higher unemployment rates in both the north and south, unemployment rates of this group are roughly twice as high in the south as the north. The report concludes that in Southern Europe “there is an oversupply of labor for low-skill jobs, and a shortage of highly skilled workers …that limits their potential growth.”

This is related to the S&P’s conclusions in its latest round of downgrading the debt of many European countries that “problems are as much a consequence of rising external imbalances and divergences in competitiveness between the EMU’s core and the so-called ‘periphery’.” Reforming and investing in better higher education would be one way to help close the gap by raising the skill level and productivity in Southern Europe.

How likely is reform to happen? As Rahm Emanuel so famously said, ‘never waste a good crisis’ and some see in the current one a silver lining. In some ways, it may provide opportunities for reform that did not exist previously.  This month, Science published an article on the state of Greek higher education. It describes the precarious state of universities in a country where few institutions are internationally competitive. The crisis has caused the reduction in salaries by 20% and budgets halved.  However, it also has led to the passage of a new law restructuring the system, which is plagued by highly politicized university administrations that have always blocked reforms.  While university rectors have gone to the Supreme Court to block the law, it has wide backing in Parliament and a new law governing research is expected to have an easy passage next month.

It is also possible that just as we hear that ‘more Europe’ is the solution to Europe’s financial woes, ‘more Europe’ may become part of the debate about investments in the area of higher education and research. A very recent paper by Jo Ritzen and Luc Soete for the EU think tank, Notre Europe, notes that European institutions have existed along side national ones for a while now to help promote research and that they had already begun to overshadow them before the crisis hit.  The authors view the crisis as a way to further the process and move more authority to European funding institutions. One change they call for is the transfer of public funding in basic and applied research from the national research councils of the member states to the European Research Council. They view the national organization of research as inefficient and stifling of innovation.  

Whether member states would willingly cede their funds to a European agency remains to be seen. I think it is clear, however, that with the crisis in many countries, scientific research will need to rely more heavily on European funds; Greece, for example, is already almost entirely dependent on European structural funds for its research budget. So, whether we or national governments who have strongly held the view that higher education is their, not Europe’s domain, see this shift as a good or bad thing, I think there is likely to be some momentum toward more Europe and more coordination in research investments.