Romania Ministry of Education Research and Youth Higher

Romania Ministry of Education, Research and Youth Higher Education funding as a strategic tool Sorin Gabriel Popescu General Director responsible for Higher Education Funding Management

MECT Higher Education Presentation objectives Starting from a structured description of the Romanian higher education funding system, the presentation intends to focus on: the role that funding has in the development of higher education and universities’ performance, in the EU and national strategic framework; the Romanian higher education funding dynamic in the last 4 years (2005 -2008); the main domains and directions for strategic interventions connected with the funding of higher education; the already undertaken, current and intended measures of the Romanian Ministry of Education Research and Youth in the mentioned domains and directions; the ways in which this strategic interventions and measures could be sustained by EU structural funds.

MECT Higher Education The industrial and knowledge economy/society Industrial economy / society Capital Labor In the past two centuries, only labor and capital have been considered to be production factors and sources of development.

MECT Higher Education The industrial and knowledge economy/society Knowledge Industrial economy/ /society Capital Knowledge Labor In the past decades, knowledge, associated with technology, has become third, and for the developed economies the main production factor.

MECT Higher Education The industrial and knowledge economy/society Knowledge economy / society Capital Labor Knowledge In the past decades, knowledge, associated with technology, has become third, and for the developed economies the main production factor. In such a society, knowledge – in the form of competence – offers to the individuals access to welfare, and, on the national level, together with technological progress, forms the basis for economical growth.

MECT Higher Education The University in the knowledge-based society In this context: universities, as main sources of knowledge within society, become key factors of its wellbeing; for Romania, as for any modern country, investment in Higher education should ensure maximum benefits in the long term, as it is one of the most efficient mechanisms of sustainability in the global competition for resources and development. The mission statement of universities should be re-written for the knowledge -based society like this: To contribute to the economical development and to the wellbeing of the society by transferring knowledge towards individuals and the socio-economic environment that it serves

MECT Higher Education Relationship between funding and performance There is a proven correlation between the funding and the performances of universities. The Report entitled “An Agenda for Reforming European Universities”, prepared and published in July 2008 by a group of international experts (professors of economics from universities as Harvard, Stanford, Oxford and Université Libre de Bruxelles) for the Bruegel Foundation determines the influencing factors of the research performance of European universities (the Shanghai Index): average level of the expenditure per student; financial autonomy of universities and the entrepreneurial behavior of the universities’ leaders; the methodology for the distribution and allocation of funds: encouraging a minimal standard (equal distribution for all universities) or the orientation towards excellence (preferential financing of universities with relevant potential); international mobility of students, but especially the mobility of teaching and research staff.

MECT Higher Education 250 Relationship between funding and performance Shanghai 500 Index SE SW 200 DE 150 UK BE NE US 100 FI HU 50 IT CZ 0 0 EU FR AU IR GE GR SP 5 Expenditure / student [x 1000 EUR] 10 15 20 25 30 35 40 The average yearly expenditure/student in the EU is 8700 EUR, with most of the countries grouped around the same funding-performance index. The champions are Sweden and Switzerland, while the countries in Eastern Europe have worse positions in this graph. Romania has in 2008 about 4000 EUR as level of expenditure/student from public funds and it is present with any university in the Shanghai 500 ranking.

MECT Higher Education Romania – HE funding framework REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering Documents National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. National Budget Methodology Public funds exp. Instit. capability National SE Env. Individuals-Fees Entrepreneurial skills & behavior of universities’ leaders Direct contract Univ. regulations Processes End beneficiaries National&Europ. Academic Env. Structural Funds Grant/Project EU regulations Products SATISFACTION & EFFICIENCY MEASUREMENT Economic Env. IDENTIFICATION National Regulations & Programs

MECT Higher Education Romania – HE funding framework The individual/end beneficiaries are persons (students) who want to study to gain competences and recognition and their requirements range from the study program characteristics and its international recognition, to the accommodation and transport facilities offered by universities. NEED-REQs. These needs and requirements have to be identified both at the entire HE system level and at the individual components (universities) level. End beneficiaries National&Europ Academic Env. SATISFACTION & EFFICIENCY MEASUREMENT The members of the national and European academic environment express needs/requirements that are specific to their level: from the institutional level (e. g. compatibility) to the individual level (e. g. opportunities and funding of mobilities). National SE environment IDENTIFICATION The national socio-economic environment is the main beneficiary of the HE system: education (bachelor/master/doctoral/life long learning), scientific research results and direct assistance (consultancy and professional services).

MECT Higher Education Romania – HE funding framework REGULATORY, STRATEGIC AND STEERING FRAMEWORK National Strategic & Steering documents The regulatory, strategic and steering framework: NEED-REQs. • assembles the regulations, strategies, and plans both at the EU and National levels and National SE environment • provides the reference framework for the HE system and for its funding. Its functions are: • system planning: establishing policies, priorities, objectives, measures, resources, responsibilities for medium and long term; • system control: regulations that have as aim to put in practice these instruments at different action levels. End beneficiaries National&Europ. Academic Env. SATISFACTION & EFFICIENCY MEASUREMENT National Regulations & Programs EU Strategic and Steering documents IDENTIFICATION EU regulations

MECT Higher Education Romania – HE funding framework The State budget provides two main components: • Basic funding: current expenditure (staff and operating costs) - 70% provided according to the equivalent number of students and 30% based on the quality indicators (2008); • Complementary funding: investments and repairs, students’ scholarhsips, eating/accomodation/transport subsidies, special programs, cultural and scientific events, scientific research (by competition). Funds from private organisations and persons SOURCES ALLOCATION coming mainly in return for services such as: training, consultancy or research. These funds National Budget Methodology are based on service or study contracts with economic agents or institutions. A very small percentage is constituted in present from Economic Env. Entrepreneurship sponsorships, donations and private scholarships. Individuals-Fees Direct contract European and international funds allocated as grants for projects obtained through competition in accordance with strategic Structural Funds Grant/Project priorities. The entrepreneurial skills and behaviour of universities’ leaders are key elements in identifying and attracting extrabudgetary funds.

MECT Higher Education Romania – HE funding framework • Universities are autonomous in deciding how they manage and spend funds; • Autonomy has to be integrated to the national and European legal and regulatory framework; • Universities may also add internal regulations; SOURCES ALLOCATION MANAGEMENT PERFORMANCE National Budget Methodology Public funds exp. Instit. capability Economic Env. Entrepreneurial skills & behavior of universities’ leaders Individuals-Fees Direct contract Univ. regulations Processes Structural Funds Grant/Project EU regulations Products • The leadership’ s entrepreneurial skills and behaviour plays an important role in motivating people and in the efficient spending of funds and the generation of performances according to the spent resources.

MECT Higher Education Data regarding HE financing dynamics in Romania 2008 compared to 2000 7. 2 times increase 2008 compared to 2004 cca. 3. 5 times increase

MECT Higher Education Data regarding HE financing dynamics in Romania 2008 compared to 2000 - 7. 2 times increase 2008 compared to 2004 - 2. 3 times increase

MECT Higher Education Data regarding HE financing dynamics in Romania 2008 compared to 2000 -2004 average - 23 times increase

MECT Higher Education Data regarding HE financing dynamics in Romania

MECT Higher Education Data regarding HE financing dynamics in Romania

MECT Higher Education Systemic overview of the national HE system PROCESSES Develop processes needed by the generation of educational products Main: education, research, consultancy Managerial: strategic/quality/ human resource/financial/ management Support: maintenance, investment, procurement etc. PRODUCTS Develop products in accordance with the needsrequirements Study programs, Research projects, Assistance contracts NEEDS-REQUIREMENTS The leading axis, defining the independent variable of the entire academic demarche Needs for knowledge: competence, innovation, assistance in solving problems of the socio-economic environment SYSTEM AND INSTITUTIONAL COMPONENTS Institutional capability for answering to the needrequirements Structure, rules, managerial paradigm, human resources/ infrastructure/financial resources etc. Quality is resulting from the measure in which the entire system and its institutional entities (universities, Ministry, national agencies / councils etc. ) answer to specific needs/requirements.

MECT Higher Education Romanian HE system – Vision building Two possible visions, that must be merged NEED FOR EDUCATION Orientation towards minimal standards NEED FOR RESEARCH AND INNOVATION Orientation towards excellence Satisfy the need for education of people and for competent specialists of the socio-economic environment. The overall performance of the HE system is given by the sum of the performances of individual universities and the quality orientation is to assure the minimal standard for each of these institutions. Generate new knowledge through research and innovation, pertaining to top technologies, and develop international prestige. The overall performance of the HE system is given mainly by the top results of some universities, with focus on excellence.

MECT Higher Education Romanian HE system – Vision building A possible vision for the Romanian HE system • Competitive and capable to contribute to the economical growth and country’s welfare, generating and transferring knowledge towards the socioeconomic environment; • Socially equitable, offering accessibility to everyone who wishes to study, independent of background; • Presents an attractive and diversified educational offer oriented towards the medium and long term needs of the country; • Participant in the European HE Area reform process and an integral part of the HE internationalisation process; • Accountable to the citizen (tax-payer), ensuring a transparent and justified usage of funds. ■ Strategic project Quality and leadership in Romanian Higher Education - 2025 Vision and strategic recommendations for 2009 -2013. International partners: Fraunhofer Inst. for Systems and Innovation Research, Institute for prospective Technological Studies, UNESCO- European Centre for High. Educ. , EUA.

MECT Higher Education Romania – HE funding framework REGULATORY, STRATEGIC AND STEERING FRAMEWORK EU regulations EU Strategic and Steering Documents National Strategic & Steering Documents SOURCES ALLOCATION MANAGEMENT PERFORMANCE NEED-REQs. National Budget Methodology Public funds exp. Instit. capability National SE Env. Individuals-Fees Entrepreneurial skills & behavior of universities’ leaders Direct contract Univ. regulations Processes End beneficiaries National&Europ. Academic Env. Structural Funds Grant/Project EU regulations Products SATISFACTION & EFFICIENCY MEASUREMENT Economic Env. IDENTIFICATION National Regulations & Programs

MECT Higher Education Directions for strategic intervention – Sources Objective: Increase Romanian HE financing towards levels comparable to the European average of 8700 EUR/student Budgetary financing In 2008, the total budget for education has reached 6% of GDP, with HE financing arround 4000 EUR/student. In the context of the current economic crisis, a slower rate of GDP increase is to be expected. National Budget Possible future measures for increasing the budgetary component: • The restructuring of the budget for education, allocating a larger part for HE; • The increase of the research budget up to 1% from GDP by 2010 from 0, 7% in 2008.

MECT Higher Education Directions for strategic intervention – Sources Objective: Attraction of private capital in HE institutions (from individual participants and companies) Current and evisioned measures: • Improving the antreprenorial abilities and behavior of the universities’ leadership; • Creating financial attractiveness for investments in HE within public-private partnerships; • Encouraging organizations to invest in the development of their own human resources (1. 5% of the total salaries invested in training or collected as tax); Economic Env. • Increasing the revenues from individual fees by attracting international students outside the EU. Individuals-Fees ■ Current ESF strategic project Improving universities management – managerial training of the universities’ leadership in partnership with Institute of Education – London Univ. ■ Set-up of the Agency for Internationalization of HE (working group created in June 2008 aimed to develop the strategic and regulatory framework, a strategic project for financing intended to be launched in 2009, International partners: ACA and British Council).

MECT Higher Education Directions for strategic intervention – Expenditure Objective: Encouraging performance of universities Current and evisioned measures: • Introduction within the funding framework of new fund for institutional development, addressed to a reduced number of universities, that can prove relevant academic and research performances, according to international ranking systems • Encouraging concentration of resources within consortiums of universities, student campuses and common research units; National Budget Public funds exp. • Improving financing framework based on existing quality criteria and indicators (30% of base financing); • Improving the quality of education provided by universities within all Bologna cycles. Current strategic projects: ■ Quality assurance in higher education in Romania ■ Structuring of doctoral schools ■ Doctorates in excellence schools - evaluating quality of research ■ Doctoral scholarships

MECT Higher Education Description of the strategic projects ■ Quality assurance in Higher Education in Romania Envisioned results: Improvement of the ARACIS (Agency for Quality Assurance in HE) evaluation methodology; Institutional evaluation of 45 universities; Transversal evaluation of bachelor programs. International partners: EUA. ■ Doctoral studies in Romania – Structuring of doctoral schools Envisioned results: Recommendations for establishing doctoral schools; Indicators for evaluating the quality of doctoral programs; Procedures for the accreditation of doctoral schools. International partners: UNESCO- European Centre for High. Educ. , EUA. ■ Doctorates in schools of excellence – evaluating quality of research Envisioned results: Methodology for international evaluation of the quality of scientific research in Romanian universities; A program entitled Universities of Excellence in Romania; 30 new ISI indexed journals. International partners: UNESCO- European Centre for High. Educ. ■ Doctoral scholarships (26 projects in 2008, 23 universities) Envisioned results: 2312 Ph. D. students with scholarships of 500 EUR/month while in Romania, and 1000 EUR/month for 8 months while at a university within the EU.

MECT Higher Education Directions for strategic intervention – Methodology Obiective: Equal opportunities to access higher education Current measures: • Increasing the amount of funds and the program attractiveness for facilitating the access to HE of disadvantaged categories of young people (e. g. rroma minority, scholarships for students from rural areas); • Set-up of an Agency for students’ loans (World Bank Experts have developed possible scenarios and the Agency has been initiated through an emergency Ordinance that is awaiting approval); Methodology Public funds exp. Envisioned measures: • Improvement of the legal framework in order to encourage the students’ financial support by private funding (private scholarships, private loans, summer employment). Strategic project ■ Set-up of the Agency for students’ loans with assistance from the World Bank. In 2009, the Agency will be launched and, for becoming operational, another year will be needed.

MECT Higher Education Directions for strategic intervention – Management Objective: Improving the entrepreneurial competences, skills and behavior of universities’ leaders and the development of ICT infrastructure for managerial support. Current and evisioned measures: • Training of the universities leaders in the next 2 years within 6 centers with assistance from the Institute for Education – London University. In these centers, there will be set up master programs in university management, in order to train the future leaders of Romanian universities; Methodology Public funds exp. Entrepreneurial skills & behavior of universities’ leaders • Encouraging universities to develop their own solution of computerized management; • Creation of the ICT infrastructure/facilities for managing the educational system at national level. Strategic project launched in May 2008 ■ „Improving universities management” ■ „Students’ Register”

MECT Higher Education Directions for strategic intervention – Ident. & meas. • A possible method for measuring the efficiency of the investment in higher education is to track graduates and to gather feedback from hiring organisations from different fields. Strategic projects ■ PHARE project finalized in October 2008, assisted by German experts from University of Kassel, has developed institutional and system wide methodologies, as well as the needed instruments, for tracking graduates and feedback. ■ ESF project to be forwarded for financing in November 2008 by CNFIS in order to apply these instruments within a pilot study for validation at national level and for 20 universities. MEASUREMENT • In present, the identification of the number of specialists needed by the national socio-economic environment is difficult and costly, with low relevance (very few companies use a strategic planning of their human resources); IDENTIFICATION Obiectiv: Development of methods and tools for the identification of society’s needs and requirements and for the measurement of the efficiency of investments in education

MECT Higher Education Conclusions 1. HE is a strategic priority in a knowledge based economy and between quality and funding there is a proven correlation. 2. Funding is the main tool of the Ministry of Education for managing the strategic development of the HE system. Thereby, it has to be correlated with the national development strategic plans and with the domain specific vision. 3. HE funding improvement has to be focused on its final aim: answering to the society’s needs and requirements. A structured approach addresses: the funding sources (public and private), their allocation and distribution as well as their management and expenditure. A measurement of the investment efficiency is needed. 4. Although they cannot replace other funding sources, coherent usage of EU structural funds within the Ministry’s vision and strategy could bring a relevant contribution to the improvement the HE structure and capability and finally to the entire system performance.