Impact of the Financial Crisis on Tertiary Education
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Impact of the Financial Crisis on Tertiary Education
Jamil Salmi
Budva, Montenegro 28 October 2009
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the future of tertiary education?
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outline of the presentation...
• How bad is it? Impact of the financial crisis
• How desperate is it? The way forward
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key features of this crisis
• deepest post-war recession
• most synchronized recession on record
• manufacturing has been particularly hard hit
• unemployment has risen
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depth and synchronicity
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impact of the crisis on tertiary education
• how resource flows are affected• responses of tertiary education institutions• scenarios for the tertiary education sector
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resources flows
• reduced government funding for teaching, research and student aid
• reduced resources for institutions as demand falls (new domestic and foreign students, dropouts)
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resource flows (II)• fewer resources from private sector
(donations, contracts)
• fall in stock market values reduces value of endowments and pension funds
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differential effects
• scope of crisis– country and type of institution
• business model and financing strategy– how endowment funds are invested– how endowment resources are used– balance among various sources of income
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response of tertiary education institutions
• budget cutting measures
• revenue generation
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budget cutting measures
• employment-related• programs and academic organization• students (number, teacher/student ratio)• efficiency measures
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revenue generation strategies
• demand-linked measures• financial measures
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scenarios for the tertiary education sector
• graduate unemployment• shifting demand (from long to shorter
duration programs, private to public, foreign to domestic)
• increased inequality• deteriorating quality (with fewer resources)
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outline of the presentation...
• impact of the financial crisis• the way forward
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importance of tertiary education
large and often growing earnings differentials
positive effects on health and civic participation
in time of crisis, job prospects for less qualified youths deteriorate further
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implications for governments
• increase scholarships and establish / adjust / strengthen student loan programs
• include tertiary education in economic stimulus plans– R&D– entrepreneurship for innovation– learning opportunities
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opportunities
• efficiency gains and no-frill options• innovations and startups• attracting foreign students• fund-raising
– philanthropy– reaching out
• strategic renewal
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implementing structural reforms
• strategic focus– areas of priority– new academic model– new business model
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strengthening financial planning and management
• information and monitoring
• fund-raising strategy and team
• investment strategy
• contingency planning
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proportion of self-generated income
24520
2533
3942
4557
69101011
1315
1718
2230
3474
0 10 20 30 40 50 60 70 80
TurkeySpain Poland
USAUK
KoreaCanada
Australia
PanamaUruguayMexico
VenezuelaBrazil
Dominican Rep.Costa Rica
ArgentinaBolivia
ColombiaEcuador
PeruChile
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proportion of self-generated income
25
Mexico
Spain
USA
UK
Korea
Canada
Australia
Turkey
Slovenia
Poland
Russia
Kyrgyz Republic
Armenia
Kazakhstan
0 10 20 30 40 50 60 70 80 90
10
20
33
39
42
45
57
5
22
25
40
75
82
84
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conclusion
• differential effects depending on – country context– strategic positioning
• short term reactions vs. long term realignment
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