Constraints Faced by the HEI Sector

Whilst the results of the empirical study, of course, just give an impression (as, being a qualitative study of a small number of universities, the study cannot be representative for all HEIs in Europe), the observation of the interviewees mentioned earlier do match the general tendency towards commodification regarding

HEIs examined generally in Chap. 1 (Sect. 1.3.3) and for the three systems in Chap. 4. This tendency has been reinforced through EU policy on HEIs; especially regarding research policy and since the alignment of Europe 2020 and the Framework Programmes in Horizon 2020.[1] The consequences (aside from potential legal consequences) have been analysed and been regarded critically by many, often in line with what the interviewees expressed. Enders, for example, assumes an increase in productivity (measured in publications and patents). At the same time, he also assumes that the relative homogeneity of (in his analysis German) universities will change towards more differentiation and that there will be a stronger divide or even competition between research and teaching.[2] Jansen also sees the differentiation amongst HEIs, especially the concentration of resources in already strong HEIs as problematic, as these strong HEIs make it increasingly difficult for others to survive and for newcomers to enter the ‘market’. Furthermore, Jansen points to the fact that certain areas of research are more favoured than others and that this will affect the directions of research traditionally decided autonomously by the researchers.[3] Schubert and Schmoch as well as Albrecht fear that while research might become more economically efficient, the market-like structures could lead to subjects regarded as less relevant dying out and a strong tendency towards applied research, which might restrict future long term innovation.[4]

This tendency might actually go so far that basic curiosity driven research becomes a luxury that needs to be earned as advocated by De Fraja[5] who develops a model where HEIs are to receive a governmental block grant for which they need to conduct a certain amount of applied research. Only if funding remains after having done so, they may use the surplus for basic research. If the ‘social value of applied research is sufficiently high’[6] HEIs can receive more funding for additional applied research which will, however, always be provided below full-cost levels and thus require HEIs to match. The latter is to encourage HEIs to also use their ‘savings’ for applied research as that would be co-funded whilst basic research would not. This model seems precarious not only because of the overwhelming limitation of basic research, but also from a competition law perspective as it is generally advocating to ‘“co-fund” [...] in contrast to the “cost-plus” approach’[6] without differentiating between economic and non-economic activities.

Another worrying aspect is the increasing use of targeted calls imposing certain research themes currently deemed relevant, as this seems to infringe the academic freedom. In Germany, where academic freedom is even to be found in the human rights catalogue of the constitution (Article 5 Grundgesetz), one might wonder if such developments might at some point become unconstitutional. Furthermore, one might wonder more generally if such steering policies are steering in the right direction and if short term political goals should be imposed upon academic research which develops over decades rather than until the next election, as this might, again, hinder innovation long-term. After all, as Beech phrases it, ‘scientists throughout European history have traditionally been driven in their work by curiosity [. ] [and] it is this blind and often serendipitous pursuit of knowledge that has been behind many of the greatest scientific breakthroughs of the modern world’.[8] Additionally, the research by Leisyte, Enders and De Boer might question the effectiveness of steering policies, as their empirical research suggests that creative proposal writing allows researchers to do the research they would have done anyway just with a much higher administrative effort.[9]

Some interviewees had also pointed to the negative effects on employment situations and opportunities for early career researchers. Accordingly, it was often easier to hire external companies than employing a research assistant for short term assistance and funding opportunities for post-docs are rare which leads young researchers to leave academia. These concerns link to a general debate on the divide between management and academic staff.[10] In this respect the proposal in the Stern Review that research stays with the university may be noted which is intended to diminish staff poaching before the REF cut off days,[11] but thereby arguably removes ownership of academic staff of their research and thus limits their bargaining power. Furthermore, commercialisation of HEIs can also lead to other issues in the relationship between staff or between staff and students in that unacceptable behaviour might not always lead to appropriate consequences if the individual in question has a good research track record or a large grant income.[12]

All this is shows that commodification of HEIs is problematic as HEIs as institutions are fundamentally different in nature to businesses. It is difficult for them to rationalise in the same way private companies could and to remain true to their mission and history. Increasingly commercialised research might also be questionable as it might hinder free, unbiased innovation. An example would be the increasing focus on generating intellectual property when the use of patent law as an incentive to innovate has generally been questioned.[13] As regards non-public funding there is, additionally, the concern about conflict of interest. Friedman and Richter,[14] for example, found a strong correlation between conflict of interest (i.e. financial relationships with companies)[15] and publication of findings in favour of said companies in their study on medical research and Lemmens and Dupont have pointed to the questionability of commercial cooperation in the alcohol or illegal drug business.[16]

Whilst the above was focussed on constraints regarding research in HEIs, as this aspect was the focus of this book, there are also questionable points in the commercialisation of the education aspect of HEIs, some of which have been discussed in Chap. 1 (Sect. 1.3.3). As with research, the commodification of the educational aspect of HEIs is taken especially far in England. Here the debate if the customer-provider relationship is suitable for higher education has already been raised in the popular debate after earlier policy changes.[17] We have also seen that in this country the tensions with competition law may be particularly strong (Chap. 3 Sects. 3.3.2-3.3.4) which seems verified by the fact that the competition authorities have already shown an interest for the sector.[18] In the competition authorities’ reports it has, for example, been raised that there should be a baseline level of quality for all providers which should be kept to a minimum (including mainly information requirements to inform the student consumer) to allow entry of new competitors and create a level playing. It has further been recommended that there should be risk based review (thereby de-regulating the system), equal sanctions for all providers and an exit regime since exit has to be an option in a competitive market.[19]

In addition to general policy ambitions existing in that direction anyway, the assessments of the competition authorities now played a role in the new legislative proposals where many of the recommendations seem to have been included[20] and which will take the HEI system even further in the direction of commodification;

exemplifying the circle of commodification in national policy, application of and therefore spill-over from (EU) economic law and more commodification as a result. That many stakeholders have voiced negative opinions during the consultation on the Green Paper, especially on the market based approach including, for example, the negative academic consequences of letting non-teaching bodies validate as suggested,[21] seems to have been widely ignored.[22] Instead, the new White Paper makes clear reference to HEIs as part of the economy and students as future workforce and sees any problems in the system as due to insufficient competition and choice, inter alia, referring to the CMA report.[23] Furthermore, it aims to introduce a similar competitive generic funding allocation system as the REF for teaching (Teaching and Excellence Framework, TEF) which will be based, to a large extent, on metrics such as student surveys, proportion in employment and high skilled employment.[24] These rather drastic changes (on top of previous ones) have been considered ‘a major assault on’[25] or a ‘degeneration of’[26] the idea of the university due to the vast commodification envisaged, the arbitrary metrics considered for the TEF (e.g. graduate employment has also to do with factors as gender and ethnicity leaving HEIs with a more diverse student body potentially with less funding), the precarious situations which students may face in cases of market exit of an HEI, the resulting inequality, high levels of debt through the loan system, the power shift from academics to management and the fact that the role HEIs traditionally pay in a local community cannot be fulfilled by private providers.[27]

Whilst the tendency towards commodification is especially pronounced in England, measurability, standardisation, homogenisation and commodification of higher education have been recognised as general global trends.[28] In Europe after the financial crisis there has, in addition, been criticism of reductions in public investment into education, especially as regards tertiary education, and a limited interest/not sufficient attention for the subject matter at the EU level.[29]

The legal constraint arising from directly applicable EU economic law discussed previously in this book for both aspects (research and education) might reinforce the commodification tendencies, something that, as just observed, seems to have already taken place in England.[30] This tendency can go beyond European or national economic law. Education already falls under the General Agreement on Trade in Services[31] and might be affected by other international trade laws which, again, might have unforeseen consequences and could further commodification. In this respect, concerns have especially been raised with regards to the Transatlantic Trade and Investment Partnership which has been described as a ‘profound threat to public services in general, including education, leaving them wide open not only to greater privatisation but making it harder for any future government to reg- ulate’.[32] Arguably the new discourse around free trade as a result of the BREXIT decision in the UK will also open up a new discussion on the role of education as a service.[33]

  • [1] See, for example, Communication from the Commission to the European Parliament, theCouncil, the European Economic and Social Committee and the Committee of the Regions‘Research and innovation as sources of renewed growth’ COM/2014/0339 final. See also Chap. 2Sect. 2.2. above. Similar also Garben 2012, pp. 6, 20 seq; Beech 2013; Ulnicane 2016, pp. 331,334, 336 seq.
  • [2] Enders 2007, p. 27 with further references, similar Holmwood et al. 2016 p. 26 seq.
  • [3] Jansen 2010, p. 45 seq; similar Holmwood et al. 2016, p. 26 seq.
  • [4] Albrecht 2009, p. 8 seq; Schubert and Schmoch 2010, p. 252 seq; similar Holmwood et al.2016, p. 26 seq.
  • [5] De Fraja 2011.
  • [6] Ibid p. 4.
  • [7] Ibid p. 4.
  • [8] Beech 2013.
  • [9] Leisyte et al. 2008. See with respect to the REF in England similar Holmwood et al. 2016, p.31 seq.
  • [10] Catcheside K, ‘The growing divide between academic, administrative and management staff’ (23 June 2011) Accessed 11 July 2011.
  • [11] Stern 2016, p. 34.
  • [12] Weale S and Batty D (2016) Sexual harassment of students by university staff hidden bynon-disclosure agreements. The Guardian, 26 August 2016 Accessed 15 September 2016.
  • [13] Thambisetty 2013.
  • [14] Friedmann and Richter 2004.
  • [15] For the exact definition used see ibid p. 52.
  • [16] Lemmens and Dupont 2012.
  • [17] See, for example, Coughlan S, ‘Is the student customer always right?’ BBC News (28 June2011) Accessed 11 July 2011.
  • [18] OFT 2014; CMA 2015.
  • [19] OFT 2014, p. 72 seq; CMA 2015 para 5.24 seq.
  • [20] BIS 2015, p. 42 seq; BIS 2016b, p. 21 seq.
  • [21] BIS 2016a, pp. 5, 31, 34, 39, as regards research see pp. 51, 53 seq. It is also interestingto note that, while responses could be sent by anybody, the focus groups do not seem to haveincluded students or academics (ibid p. 4).
  • [22] The White Paper seems to have largely taken over the proposals in the Green Paper (see BIS2015, p. 42 seq; BIS 2016b, p. 21 seq).
  • [23] BIS 2016b, p. 7 seq, 15, 23.
  • [24] BIS 2016b, p. 40 seq.
  • [25] Holmwood J (2016) HE White Paper plans place the market, not students, at the heart of theUK HE. THE, 20 May 2016 Accessed 23 May 2016.
  • [26] Holmwood et al. 2016, p. 22.
  • [27] Boxall M (2016) Higher education white paper: the big changes. The Guardian, 16 May 2016 Accessed 23 May 2016, Holmwood (n 53), Holmwood et al. 2016.
  • [28] Kamola and Noori 2014, p. 600 seq.
  • [29] Vandenbroucke and Vanhercke 2014, pp. 9, 11, 22, 102.
  • [30] The national competition authorities appear to have considered the situation generally undercompetition law not making a specific difference between national and EU law since they essential prohibit the same kind of practices (anticompetitive collusion and unilateral conduct) andnational competition authorities are also responsible for the enforcement of EU competition lawas we have seen in Chap. 3 Sect. 3.3.2 above.
  • [31] Kamola and Noori 2014, p. 599.
  • [32] UCU (2016) Fighting privatisation in tertiary education. Accessed 11 March 2016.
  • [33] However, this may not be a clear cut approach, since it is goes alongside discussions to limitthe number of non-EU (possibly in the future non-UK) students admitted to UK universities.
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