Address given by Alexander Rinnooy Kan (Social and Economic Council of the Netherlands), at conference on “Reinventing university education”, 27 September 2011 

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Introduction

It is an honour and a privilege to be here this afternoon, even more so because I have been asked to address a subject that is close to my heart: the competitive university.
What do we mean by “competitive”? Let me give you an example.

Zlata Brouwer is twenty-five years old, a student, and a business woman. She was twenty-two when she combined her talent for music and her head for business and started her own company: Zlata String Instruments. Zlata – who studies the violin and accountancy – has bridged the gap between traditional violin makers and inexpensive web shops: she sells and leases good string instruments and related equipment at an affordable price. In addition to traditional instruments, she also offers innovative ones, such as electric violins, cellos and double basses, special amplifiers, and carbon fibre bows. Her mission is to lower the threshold to playing string instruments and to extend their repertoire beyond classical music, for example to rock, jazz and even heavy metal. Zlata describes competitiveness in a number of key words: innovativeness, risk-taking, freedom and responsibility, excitement and challenge.

Zlata was nominated for the 2010 Student Entrepreneurs Prize.
Zlata Brouwer shows us what it means to be competitive: paying attention to the market, selecting a unique identity, aiming for excellence, taking risks.
These are the same qualities envisaged by a group of academics back in the 1980s who introduced the idea of the competitive university. One of them was Prof. Harry van den Kroonenberg (vice-chancellor between 1979 – 1982 and 1985 – 1988). He is generally acknowledged to be the founding father of the “competitive university”. As he described it in 1985 (artikel uit 1985, opgenomen in de bundel Ondernemen met kennis, 1996), a competitive university is one in which entrepreneurship is exhibited at every level, which operates close to the market, which is prepared to do new, unorthodox things and to bear the associated risks. Van den Kroonenberg was well aware of the social relevance of knowledge generated by the university. He recognised that a university could turn that knowledge into a competitive advantage. Van den Kroonenberg did more than develop the idea of the competitive university; he worked to put his ideas into practice.

Van den Kroonenberg was not the only one back then encouraging universities to be competitive. The same argument was heard elsewhere in the Netherlands. And as Van den Kroonenberg wrote, it was an uncommon idea that led to misunderstanding, irritation, confusion and doubt.

It was not about a university going down on its knees before the business world. That was how critics depicted it, but it was simply a caricature. I should know, because back in 1987, I co-authored a short book entitled Naar een ondernemende universiteit – En route to a competitive university. The authors were a varied group that included Jo Ritzen, then professor of economics at Erasmus University in Rotterdam, Ernst Hirsch Ballin, professor of constitutional law in Tilburg, and Leo Ploeger, CEO of Netherlands Railways.

Today, I would like to take you back about twenty-five years. What were the ideas that we had then about the competitive university, and what ideas do we have now? I see a number of similarities between the two, but I also see differences. I think that some of the differences are an improvement, but I have doubts about others. I would like to share those doubts with you.

The competitive university: 1987 and 2011

I’ll begin by taking you back some twenty-five years.

In our definition, a competitive university was “not a university controlled by business, but a university in which staff and students are encouraged to be enterprising”.

That was 1987. By now, there is considerable consensus regarding what higher education should do, and today’s ideas closely resemble that definition. Indeed, in its Strategic Agenda for Higher Education, Research and Science, the present Government takes the innovative concepts of the late 1980s as self-evident.

Similarities
In our book, we described the university of the future as an institution that puts quality above everything else. In other words, its aim is to deliver excellence in education and research and to turn out outstanding graduates. In order to do this, we argued, the university has to make choices and set priorities concerning the disciplines in which it wishes to excel, the students it wishes to teach, and the methods it will use to teach them. These choices and priorities would give every university a unique identity. The university funding system should offer the necessary incentives for such diversification and promote the efficient expenditure of public funds.

A concern for excellence, a unique identity, a focus on quality, and cooperation with businesses: these are also what the present Government has identified as the crucial features of the university. Today, the focus on quality has become even more urgent, for several reasons. The Netherlands is slipping downwards in a number of international rankings of higher education performance, and that is not a good sign for a country that aims to be one of the top five knowledge economies in the world.

Differences
But beyond the similarities between past and present ideas, there are also differences. I would like to discuss three of them briefly. To begin with:

Cooperation
A competitive university, as we envisaged it, would be well acquainted with its own strengths and weaknesses and with those of its competitors. Based on that analysis, every university would choose its priorities in research and education. That means choosing not only to concentrate resources and energy on certain disciplines, but also to drop others. In that way, every university would develop its own identity and compete with other universities on that basis. “Competition naturally does not exclude the possibility of prudent coordination for the benefit of all the parties involved,” we wrote.

Today, two decades later, coordination and cooperation between universities is no longer seen as a mere possibility but instead as a necessity. It is a necessity because we cannot afford to lose the competition for top academic talent, either within Europe or on a world scale, if we aim to be among the world’s best in specific areas of research.

It was recently announced that three universities are following your example of cooperation: Leiden University, Erasmus University and Delft University of Technology. In fact, they intend to go a step further and set up a single management structure that will enable them to move to the top of the world rankings in terms of performance and prestige. I am enthusiastic about this initiative. If the Netherlands is to realise its ambitions as a knowledge economy, then it is vital – and I cannot emphasise this enough – for Dutch education and research to claim a good, and preferably an excellent, position in the international rankings.

For a partnership to be effective in this respect, it must satisfy one very important requirement. The sum of its financial resources must be distributed so that the best programmes of study and the best research receive the largest share. That means reallocating funds across the boundaries of the three universities. I realise that it will take quite a few years before this particular aspect of the competitive university can be put into practice.

A second difference between past and present notions of the competitive university is the

Concern for valorisation
Back in 1987, we wrote that a competitive university must be able to accommodate applied research and play an advisory role within society. It should take seriously any requests for assistance in research from local businesses or local authorities. In the vocabulary of the 1980s, the relationship between scientific research and society was described mainly in terms of “community service”.

Today, twenty-five years later, we are well aware that the economy cannot grow without research findings. There has been a shift in the relationship between science and society from “service” to “necessity”. Valorisation – in other words, effectively converting acquired knowledge into economic or socially relevant activity – became one of the core responsibilities of universities in 2004. Starting in 2016, the Dutch Government wishes to earmark 2.5 per cent of public research funding for knowledge valorisation.

Valorisation is a trend that the Social and Economic Council supports in its advisory report. It is indispensable for the Netherlands’ position as a knowledge economy, for innovation, and for the competitiveness of our country. Valorisation also requires sound and successful cooperation between businesses and knowledge institutions, according to the Council. Such cooperation can improve the quality not only of the businesses involved, but also of the relevant research.

Young scientists can also have a good head for business. Indeed, in its advisory report the Social and Economic Council argues that young entrepreneurs and students may be even better than more experienced business people at making innovative use of existing knowledge and at efficiently producing and marketing radical innovations. The Council therefore recommends encouraging entrepreneurship of this kind.

The third and final difference between our notion of the competitive university in 1987 and the ideas that prevail today concerns the position of

Fundamental research
In 1987, we considered fundamental research one of the university’s core responsibilities. Applied research also merited a place – and I quote – “as a source of inspiration and a test of fundamental theory” (p. 18). In addition, the university could use applied research to acquire extra research funding.

What is the current position of fundamental research?
“Fundamental research should be aligned with the economy,” wrote the Minister of Economic Affairs, Agriculture and Innovation in June in national newspaper de Volkskrant. If Dutch fundamental research is to distinguish itself in the world market and improve the Dutch economy, alignment is absolutely vital. The Government is therefore keen for fundamental research to correspond more closely with the priorities set in the nine key economic sectors in which the Netherlands has a solid scientific and economic position, such as horticulture, agro-food, high-tech, water, and logistics. At the same time, wrote the Minister, there must be scope for research in other academic disciplines and for unexpected discoveries.

Setting priorities in scientific research: I supported it then and I continue to support it now. At the same time, however, I am concerned about a number of things.

In its advisory report, the Social and Economic Council agrees that the key economic sectors offer an effective framework for research. However, the Council also emphasises that science and research cover a broader field than these sectors alone, and that the level of innovation and competitiveness is also determined by results in the humanities and social sciences. That is the first point of concern.

Another worry, and one that I share with the Royal Netherlands Academy of Arts and Sciences, the Netherlands Organisation for Scientific Research or NWO, and the Association of Universities in the Netherlands or VSNU – is whether there will be enough scope left for unfettered fundamental research. That is certainly doubtful, given the budget that will be available in the years ahead for research in general and unfettered fundamental research in particular.

…budget cuts mean less money
To begin with, no extra funding has been earmarked for research, contrary to what the Social and Economic Council and the Knowledge and Innovation Platform have advised. Indeed, government will be cutting back on its investment in R&D: according to the Rathenau Institute, from 0.84 per cent of GDP in 2009 to 0.68 per cent in 2015 (Feiten en cijfers: overzicht Totale Onderzoek Financiering 2009 – 2015, tabel 3, p. 5). That puts the Netherlands behind a considerable number of other EU and OECD countries, including Finland, Austria, the USA, and Korea (KIA, Kennis- en innovatiefoto 2011, p. 35).

Far from there being more money for research in the years ahead, then, there will in fact be less. Starting in 2015, the Netherlands’ natural gas revenues, funding allocated from the FES or Economic Structure Enhancement Fund, and innovation funding provided through the Ministry of Economic Affairs, Agriculture and Innovation will no longer be available for Dutch scientific research. That means that between 2011 and 2015, research funding will drop by approximately 500 million euros a year. Most of this money has been used to create research places for PhD candidates, post-docs and young scientists. According to the VSNU, thirty per cent of these positions will therefore disappear by 2015.

The NWO and the Royal Academy will also be facing an efficiency cut. The size of the cut has not yet been settled, but it will come to around 27 million euros for the NWO. In addition, the universities are looking at a further drop in funding by 363 million euros, owing to a penalty on long-term students and an efficiency cut.

… and reallocation of funding to key economic sectors
In addition to these economy measures, existing research funding will also be reallocated. The research universities and universities of applied sciences will have to relinquish 70 million euros of their research funding; on top of that, a further 20 million euros received through the indirect funding mechanism will be reallocated. The 90 million euros that is freed up as a result is to be used to support the knowledge and research agendas of the key economic sectors. In addition, the Strategic Agenda requires the Royal Academy and the NWO to align their plans as closely as possible with the agendas of the key economic sectors. They must devote 350 million euros of their research funding to these sectors. In other words: a considerable share of the funding that was formerly available for open-ended research has now been reallocated to priorities designated by the Government.

Fortunately, representatives of the nine key economic sectors have made it clear in a letter to the Minister of Economic Affairs, Agriculture and Innovation that they too recognise the importance of fundamental, curiosity-driven, unfettered research. But the question is: at what point will the budget for unfettered fundamental research reach a critical level? What amount is enough to support the “accidental discoveries” that propel science and society forward?

The Dutch physicist André Geim is one of those who has made such a discovery. Last year, he and his British colleague Konstantin Novoselov won the Nobel Prize in Physics for their discovery of graphene. In 2004, they conducted one of the open-ended experiments to which they believe researchers should devote at least ten per cent of their time. They extracted a super-thin sliver of graphite from the tip of a pencil with a piece of tape. The result was graphene, a kind of atomic-scale chicken wire made of carbon atoms. It is an excellent conductor of electricity and heat, malleable, almost transparent, and at the same time exceptionally dense. The potential applications are endless: in transistors, touchscreens, solar cells, cars, and aircraft.

So a bit of “messing about” in the laboratory can lead to amazing things.

Voucher system
The final difference between our ideals in 1987 and the competitive university of today concerns education. In 1987, we proposed that government vary public funding as a means of exercising control. More public funding would be made available to educational programmes that government had designated as a priority. A voucher system could be introduced for this purpose, with the value of the vouchers varying according to the relevant programme. Unfortunately, this proposal never made it off the drawing board. That is unfortunate, because it would have been an excellent way for government to encourage science programmes – and what modern government does not want to do that? Perhaps it would be a good idea to reconsider this proposal, given the Netherlands’ ambitions as a knowledge economy.

Conclusion
Have we almost reached our destination, the competitive university? That is probably overly optimistic. The travel budget is tight, after all, and there is less leeway to travel simply for the sake of travel. Reaching a destination has become a whole enterprise in itself, one that demands inventiveness, courage and perseverance. You have another full academic year ahead of you to get down to work. I hope your efforts bring you success.