Public / Private Partnership (PPP) Private / Public Competition (PPC) Which will prevail?

1. Public / Private Partnership(PPP)Private / Public Competition (PPC)Which will prevail? v2.0

2. Contemporary universities are pulled in three directions • universities have an innate need to cooperate in an effort to advance knowledge • universities increasingly compete with each other for leading faculty, best students, superior resources etc. • universities are increasingly seen as valuable instruments for furthering the culture, values, languages and broad interests of the nations, religious, cultural & linguistic groups that sponsor them v2.0

3. Public Private Cooperation and Competition • Three themes: • Public / Private cooperation in higher education • Public / Private higher education competition • Universities as increasingly important projectors of soft power v2.0

4. Terms • Competition: “rivalry where more than one party seeks to attain something they cannot all attain” (G. Stigler) • Cooperation: joining together for mutual benefit • Soft Power: a political strategy used to foster an appreciation of a nation’s / organization’s culture and values (J. Nye) v2.0

5. Terms • Privatization: has several meanings: • Transfer of ownership, in whole or part, from state to private hands “denationalization” • Contracting for public services “outsourcing” • Competition between public employees and private contractors for services “managed competition” • J. Lewandowski a Minister of Ownership Transformation in post-communist Poland: “sale of enterprises that no one owns, and whose value no one knows, to people who have no money.” v2.0

6. Terms • Privatization as element of PPP “act of reducing the role of government or increasing the role of private institutions of society in satisfying people’s needs; it means relying more on the private sector and less on government”. (E.S. Savas) v2.0

7. Factors driving PPP globally • Higher education insatiable demand for funds. • Old axiom: universities will spend all the money they can raise and whatever they raise is never enough • Global competition / drive to develop leading international standard research universities is exacerbating the drive for financial support that the state is unwilling or unable to provide. v2.0

8. Higher Ed’s search for third stream funding is pushing PPP globally • Tuition & Fees • State Subsidy • University income producing and cost cutting initiatives v2.0

9. Some sources of third stream funding cont’d • Fee based education programs (e.g., summer & language schools for international students) • Research parks • Incubators • Numerous other initiatives…. v2.0

10. Some sources of third stream funding & partnerships • Grants and Contracts • Corporate Partnerships e.g., R&D • Patenting & Licensing • International Donors • Philanthropists, private foundations & private donors • Trademark (value) v2.0

11. PPP Projects Research Parks & Business Incubators • Spin-off companies with university retaining equity stakes • knowledge and capital intensive endeavors • Assisting low tech entrepeneurs to launch labor – intensive businesses (in developing world) v2.0

12. Typical PPP Projects • Student accommodations: Typical scheme: private partner will finance, design, build, maintain and sometimes manage student housing. • Sports facilities • Cultural centers • Libraries • Academic facilities e.g., conference centers v2.0

13. PPP may undermine Gov’t legitimacy • Using private actors may jeopardize the legitimacy of government action because the public may suspect that private, profit-making, rather than public purposes are being served. v2.0

14. PPP China • Independent Colleges v2.0

15. Chinese Independent Colleges: A Joint-Venture PPP Model • Problem: To achieve the goal of massification of China’s higher education(gross enrollment rate in 2008: 23%, in 2020: 30-40%); • But facing the dilemma: -inadequate public funding for HE -immature Minban HE • Solution: Independent College -guarantee HE quality: involvement of top public universities; -attracting social & corporate investment. Data source: http://news.sohu.com/20070108/n247479706.shtml v2.0

16. Independent CollegeJoint-Venture Model public university (administration) + corporation (investment) + local government • Independent College in Public University is a contract designed by public university and other productive factors owners in order to produce agreeable common educational service. • By carrying the contract the public university and other productive factors owners put their advantageous resource together and share the profit according to the proportion of their resource for the investment. • The distinguishing element between Independent College in Public Universities and other higher educational organizations is the difference of the structure of property rights. v2.0

17. PPP? Universities and their national & international sponsors increasingly compete with each other (locally and globally) for leading faculty, best students, public & private resources etc. v2.0

18. Project 211 – China ―the “first national key project” since the founding of PRC • Full name: “The Project for Creative Talented People with High Level, the Plan for Creating the Most Excellent Universities and Disciplines in the World, Modern Long-Distance Education, and the Project for Industrializing the High Technology in the Universities.” • Goal: In 1995, the Chinese government launched the Project 211. The title refers to the aim of building up 100 top level HEIs and key disciplines in the 21st century. This initiative is built into the ninth Five-Year Plan. Sources: 1. MoE 9th 5-year plan 2007 2. http://www.moe.edu.cn/edoas/website18/info3319.htm v2.0

19. Reasons for selecting these 2+7 universities v2.0 Source: Ranked by Chinese Academy of the Science of Management http://edu.sina.com.cn/gaokao/09utop/

20. Project 211 (ctd.) • The project aims at: “training high-level professional manpower to implement the national strategy for social and economic development, the project has great significance in improving higher education, accelerating the national economic progress, pushing forward the development of science, technology and culture, enhancing China's overall capacity and international competitiveness, and laying the foundation of training high-level professional manpower mainly within the educational institutions at home.”(CERNET 2007a ) • It’s generally regarded as the “first national key project that’s has been funded intensively in higher education by the government since the establishment of the PRC in 1949”. Source: www.vhjm.com/link/211.htm v2.0

21. Project 211 (ctd.) • Strengthen about 100 institutions of higher education and key disciplinary areas during the “Ninth Five-Year Plan” period to meet the challenges of the 21st century • Cultivate mainly at home high-level innovative talents to meet the needs of economic construction & social development • Projects fall into 3 categories: • Development of key academic programs • Development of public service systems of higher education • Improvement of overall institutional capacity • Improvement of overall institutional capacity • Up to 2008, 107 universities are in Project 211. They account for only 6% of all Chinese public universities, but enrolled 1/3 of all undergraduate students, 2/3 Master Degree candidates, 4/5 doctoral students and 1/2 foreign students. State key disciplines and laboratories. Source: MOE of PRC: http://www.moe.edu.cn/edoas/website18/level3.jsp?tablename=1811&infoid=1206495345257370 v2.0

22. Project 985 • May 4, 1998, President Jiang Zemin declared at the Peking University Centennial Celebrations that: ‘China must have a few world-class & a number of world renowned advanced universities’ • Accordingly, the MOE launched the “Educational Action Plan toward the 21st Century” which explicitly stressed the development of World-Class Universities and Internationally Renowned High-Level Research Universities (MOE 2007). v2.0

23. Project 985 (ctd.) Phase 1 – 1999 • Making few universities world-class by combination/adjustment of academic disciplines & special support for strategic fields • Selected universities to nurture talent & engage in high-level research http://www.moe.edu.cn/edoas/website18/level3.jsp?tablename=684&infoid=5120 v2.0

24. Two Phases Phase 1 – 1999 • “2 + 7” universities • “2”: Initially, only Peking U and Tsinghua U were selected to be funded intensively by the central government. • “7”: From July 1999, the MOE decided to add 7 more universities and fund them JOINTLY in cooperation with local authorities (Nanjing U, Fudan U, Shanghai Jiaotong U, Zhejiang U, Xi’an Jiaotong U, U of S&T of China, Harbin Institute of Technology) v2.0

25. Project 985 (ctd.) Phase 2 (2004-2007) • Establish modern university system -structure & management • Enhance capabilities in cultivating elite professionals & creative academic teams • Establish national platforms for scientific innovation & research bases for humanities & social sciences • 84 key technology innovation platforms on cross-disciplinary researches & in areas of national development priorities • 168 technology innovation platforms • Presently 38 universities in ‘985 Project’ • http://www.moe.edu.cn/edoas/website18/level3.jsp?tablename=684&infoid=5120 v2.0

26. The strategic significance of Projects 211 and 985 • The development of Institutions of Higher Education is strategically connected to the development of a country; therefore, building world-class university is the common goal of many nations. • Countries such as Japan and Russia have collected, in different ways, the limited resources in ensuring the rapid development of the universities with the utmost growing potential so as to enter the rank of world class. The favorable support to several institutions will help them become world class or advanced level universities in the shortest possible time. Only in this way, can we see the development of all the institutions of higher education. • The financial resources of China’s leading universities measured in either relative or absolute numbers is still rather low. The institutions of higher education as individual entities are not comparable with world class universities in funding since the difference is too great. http://www.moe.edu.cn/edoas/website18/level3.jsp?tablename=1009&infoid=11133 v2.0

27. Universities as instruments of national, religious and cultural interests • universities are increasingly seen as valuable instruments for furthering the culture, values, languages and broad interests of the nations, religious, cultural & linguistic groups that sponsor them v2.0

28. Kyrgyzstan: Private-Private Competition • In Kyrgyzstan universities are often used to project soft power: • Network of madrassas provide the foundation for the 7 Islamic universities which are strong competitors with the secular private universities e.g., Kyrgyz-Turkey Manas U., Kyrgyz –Russian Slavonic U & American U of Central Asia. v2.0

29. Brand Extension: a form of competition • NYU, Cornell, Carnegie Mellon have branch campuses in Qatar and compete with local as well as universities from many other countries. • UK, Canada, Australia, USA etc, universities, acting like it is a gold rush, are competing to establish campuses / programs in China. v2.0

30. Conclusion PPP endeavors are mushrooming in higher education globally: • China, applying its joint venture model to higher ed., is pursuing PPP’s aggressively • PPC in higher ed. is also expanding, fueled by need for resources & the rankings arms race • nations, cultural / linguistic groups and religions are using universities to project their values. v2.0

31. Thank You Joseph Stetar Seton Hall University South Orange, New Jersey <stetarjo@shu.edu> v2.0