Only a radical overhaul can give universities badly needed entrepreneurial spirit, writes Edward Walsh
The United States, with its leading research universities, is winning the knowledge-economy race, leaving Europe, with its state-dominated universities, well behind. The EU's ambitious strategy to become the "the most competitive and dynamic knowledge-based economy in the world" by 2010, is unlikely to be achieved without significant reform of higher education. Ireland could take the lead.
A surprising proportion of the top universities in the US are private institutions with the freedom and entrepreneurial structures to pursue excellence and respond to opportunities and challenges. These universities include Harvard, Columbia, MIT, Stanford, Cal Tech, Yale and Princeton. Each has become an icon of excellence and achievement. They are "idea factories" that have fuelled the world's economy for the past 20 years.
On the other hand, almost all of Europe's universities, including what were once the world's greatest, are now under state control to varying degrees: as a result they are less flexible and less entrepreneurial in the pursuit of excellence than their US counterparts.
If Europe is to compete with the United States in the knowledge-based economy it must restore the vitality and empower its universities: this should include the option for some public universities to evolve into wholly independent, self-sustaining, private institutions.
Ireland can retain a publicly funded higher educational system without necessarily having all of its institutions publicly operated. Healthy competition for students and resources between institutions, whether private or public, results in more cost-effective and responsive organisations. Excellence can be pursued in private institutions without undue state interference, once basic standards, set down by the State, have been met.
Exploratory moves emerging in countries such as Japan and Germany suggest widespread concern about the economic consequences arising from the failure of their universities to compete with the best in the US. Both the UK and Japan appear to be considering the introduction of the US National Science Foundation model. Ireland is ahead of both: its new Science Foundation Ireland (SFI) is explicitly based on the US model, which focuses on excellence and the achievements of individuals. SFI is performance and talent-driven: individuals rather than institutions are supported.
However, the university system is constrained. At present all universities in Ireland are public and each receives an annual block grant from the State based on the number of students enrolled. This arrangement tends to suppress market forces and effectively prevents the entry of the private sector into higher education.
Were the State to replace the block grant system and fund students directly, either by way of scholarship, or through a voucher or loan system, this would permit students to reimburse the institution of their choice, whether public or private. Universities would compete in a new way and a completely different landscape would emerge. Such a system would permit private institutions to compete with public for student fees and a new competitive, cost-conscious, client-oriented environment would emerge. Other adjustments, related for example to competition for capital grants, would be necessary so as to assure fair competition.
Building Ireland's research capability is quite central to the current National Development Plan. The €2.54 billion strategy addresses the inevitable drift of labour-intensive jobs to low-cost countries and the need to replace them with knowledge-intensive jobs. Ireland's research capability is the key to the strategy.
The universities are spearheading this and until recently the plan has been even more successful than might have been expected. The combined efforts of the new €600 million Science Foundation Ireland and the HEA have managed to boost Ireland's research reputation: world-leading researchers are moving to Ireland and remarkable new research-oriented prospects are developing in the IDA pipeline.
The national strategy depends on a close partnership between two Departments: Education and Enterprise. The prospect that one of the partners, Education, is about to renege on its research-funding commitments potentially places the National Development Plan itself in jeopardy. So serious is the matter that Education's future role in dealing with the universities is now being questioned.
Questions are also raised as to whether the old framework for the universities, that may have sufficed when Ireland was at an unsophisticated phase of development, is now an impediment that must be changed.
The absence of a performance-focused academic system is a deficit with which Science Foundation Ireland is struggling. A university that is performance-focused senses the urgency of competition and the need to support more overtly those faculty members who are successful in attracting competitive funding. Irish universities are finding it difficult to respond adequately: but that has much to do with their limited ability to be entrepreneurial under the constraints of their current Department.
Ireland's deficiencies, as it struggles to move onwards from manufacturing other people's ideas to creating its own, must be addressed with eyes wide open. The responsibility now falls both to the universities and those who guide them in determining Ireland's future prospects in the knowledge-based economy.
Prior to the second World War the US did not have a single leading research university. Today, no other country has a comparable research system to support the knowledge economy: that is why many are now exploring how to emulate the highly successful US system.
Just as it took courage in the Lemass era to move on from a closed, agricultural society to become the world's most global manufacturing economy, so today there is a similar challenge for Ireland, its government and its universities to make the necessary radical changes and grasp the opportunity to spearhead change not only in Ireland, but in Europe.
• Edward M. Walsh is President Emeritus, University of Limerick