The Goals of the Structural Reform

Given the rather small higher education sector in Austria in the 1990s, the goal was to establish a non-university post-secondary sector in line with comparable European countries, such as Switzerland or Finland. The development of the FHS sector was spurred by the social promise of equality of opportunities for society, and at the very same time by the major assumption in Europe that economic growth could be reached by investment in education and research through the ‘mobilization’ of talent resources. Moreover, the roots of the new FHS sector are a result of criticism of the given higher education system from three perspectives (Hackl, 2004, p. 40):

• Lack of flexibility and the discipline-oriented focus of study programmes

Given the regulations concerning changes and introduction of new curricula, it took a long time and a tremendous amount ofresources to improve or adapt study programmes at universities.

• Relationship between the state and universities, and the critique of the university as an organisation

Prior to the new Fachhochschulstudiengesetz (University of Applied Sciences Studies Act) (FHStG) and a new Higher Education Act (UOG 1993), university organisation and regulation were rooted in the 1975 Higher Education Act, the major values of which were democratisation and participation. Already in the early 1980s, the relationship between the state and universities was heavily criticized. The discussion about increasing university autonomy in the 1980s and the government’s aspiration to give more freedom and autonomy to the universities led to a new ‘experiment’ with FHS as greenfield developments (which will be explained later) in 1993.

• The existing state funding scheme and budget regulations and their limited efficiency

Experiences with newly established institutions and miscalculation and cost expansion at state level called for a different approach. As the new government plan also focused on austerity, it was clear that new funding mechanisms, including private or mixed funding, could overcome these challenges and support the defined goals, as well as deliver answers to major criticism of the state of higher education in Austria.

When the government of Austria passed the FHStG there were three major, overarching strategic goals of the policy reform, which were clearly formulated at the beginning of the policy process as explicit goals (Wadsack and Kasparovsky, 2004, p. 38; Lassnigg, 2005, pp. 39f; Hackl, 2009, pp. 17f), namely:

• • To implement practices related to vocational education at tertiary education level to diversify and expand the supply of service;
• • To develop study programmes based on the needs of the market and the economy, and communicate the skills needed to undertake the tasks of particular occupational fields;
• • To promote the permeability of the educational system and the flexibility of graduates regarding various occupations.

These key goals, which are often use to underline the need for FHS and their core functions and roots in Austria, have also led to further implicit goals of the policy reform (BMWFW, 2015; Brunner and Georg, 2013; Bundesministerium fur Wissenschaft und Forschung Osterreich, 1992):

• • To enhance capacity and relieve universities by increasing the number of students in FHS;
• • To improve education and continuing education through diversification;
• • To reduce regional disparity by establishing FHS in rural regions to ‘spread out’ higher education across the country;
• • To deregulate and decentralize the system (including new forms of quality assurance and a focus on output);
• • To create a more efficient higher education system by achieving regular completion times and high completion rates and thus increase the system’s performance.

The good reputation of BHS and the rather small investment required to upgrade them (as the institutions were well established) were key reasons to go with this solution. Supporters of the other idea, namely the establishment of new institutions from scratch, claimed it would be quicker, less burdened by the history of BHS and strong stakeholders, and allowing more freedom in terms of institutional implementation (Hollinger, 2013). The experiences of universities, including the complexity of the dependencies between the state and universities (Altbach and Peterson, 2007), underlined the benefits of a fresh start. Furthermore, universities in Austria complained of limited and inadequate autonomy at that time (Pechar, 2004a).

Based on these experiences, it was decided by the new government that the new institutions should operate according to the following basic principles (Hollinger, 2013, p. 47): (1) the new FHS will be autonomous and responsible for their affairs; (2) legal regulations will pertain only to limited and major aspects (FHStG); (3) in contrast to universities, FHS will limit bureaucracy; and finally (4) the Bund (federation) gives up its monopoly on higher education.

In the end, the new policy led to the horizontal differentiation of the education system in Austria (Pechar, 2004a; Unger et al., 2005; Pechar and Pellert, 2005); namely, the clarification between BHS and FHS in line with EEC regulations and the need to create a distinction between FHS and universities, as FHS were not upgrades but newly established organisations with neither tradition (Hollinger, 2013) nor an existing profile (Hackl, 2004), structure and staff (Osterreichischer Wissenschaftsrat, 2012).

There was previously not a tendency in Austria to turn the provider into (private limited) companies. ‘The reason is the liability and the fact that in the Austrian tradition there are no autonomous legal forms for the exercise of functions in the non-profit area’ (Einem, 1998, p. 46). FHS also facilitated the ‘academisation’ of the professions. In 2006, in line with international trends, the government passed the Health Care and Nursing Act (GuKG), the Midwifery Act (HebG) and the Clinical Technical Services Act (MTD), which allowed non-medic healthcare professionals to also be trained at FHS. Many regional governments have exploited this new possibility, replacing the medical-technical academies and midwifery colleges with BA study programmes at FHS. Some of the regional governments have even established new FHS to serve the expansion of higher education into these disciplines, whilst others have integrated these new programmes into the exiting organisations. Funding, as is the case with medical-technical and midwifery colleges, remains in the hands of local governments.

As such, a new funding concept has emerged and been integrated into the system. As mentioned, the abovementioned study programmes are still funded by local governments even though they are now part of the FHS sector. However, in most cases the MA programmes are not funded by local governments. Instead, these new postgraduate programmes rely on study fees to offer second-cycle education. The policy reform, and the associated funding scheme, does not contain plans to introduce other funding models. Thus, the academisation of some professions has led to additional funding mechanisms and the expansion of the sector, including new, specialized FHS.