Public-private Partnerships in Higher Educationin Higher Education
Transforming Tertiary Education for InnovationTransforming Tertiary Education for Innovation and Competitiveness
World Bank InstituteJune 6-9, 2011Bali, Indonesia
Norman LaRocqueS i Ed ti S i li tSenior Education SpecialistAsian Development Bank
AgendaAgendaAgendaAgenda
Changing context of higher education
Public private partnerships (PPPs) defined Public-private partnerships (PPPs) defined
Potential benefits of PPPs
Classifying PPPs in higher education
Examples of PPPs in higher education
Conclusion
Higher Education: Changing ContextHigher Education: Changing Contextg g gg g g
• Higher Education increasingly seen as important contributor to i th d d l t k l deconomic growth and development - knowledge economy
• Increased diversification of higher education provision: – Specialized institutes universities of technology virtualSpecialized institutes, universities of technology, virtual
universities
– For-profit higher education, public-private hybrid institutions, f hifranchises
– Fee-paying public universities, corporate universities, foreign HEIs
• Private sector is an important part of higher education canvasPrivate sector is an important part of higher education canvas – significant in many Asian and Latin American countries
• Considerable growth in private higher education – developing countries and emerging markets
Private Sector Share of Higher Education Private Sector Share of Higher Education Enrollments, Various CountriesEnrollments, Various Countries
78 7780
90
7578
71 73 7370
77
60
70
80
52
41
31
39
48
40
50
Perc
ent
19
31
17 14
23
20
30
0
10
ppin
esKor
eaon
esia
lombia
Brazil
Chile
Egypt
ezuela
India
entin
aala
ysia
Cypru
sJa
pan
lades
h Per
ukis
tan
Source: PROPHE
Philipp Ko
Indon
Colo B C EgVen
ez IArg
e
Mala Cy JaBan
glad PPak
PublicPublic--Private Partnerships (PPPs):Private Partnerships (PPPs):PublicPublic Private Partnerships (PPPs): Private Partnerships (PPPs): DefinedDefined
• No fixed definition of PPPs• No fixed definition of PPPs• Definitions differ in terms of scope and formality of
arrangements.arrangements. • Various definitions:
– “risk sharing relationship based upon an agreed aspiration between the bl d b b d d bl lpublic and private sectors to bring about a desired public policy
outcome.”– Commission on UK PPPs
– “cooperative venture between the public and private sectors, built on the expertise of each partner, that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards.”
– Canadian Council for PPPs
Why PPPs: Financing vs. Provision
Provision Financing Private PublicFinancing Private Public
Pri ate
Tuition fees, philanthropy, industry
contracts student loans endowmentPrivate contracts, student loans, endowment income
Public Scholarships/ subsidies/voucher type funding
Free public universities
6
Potential Benefits of PPPs in Higher Potential Benefits of PPPs in Higher EducationEducationEducationEducation
• Bring together strengths of public and private sectors
• Potential benefits from PPPs in education including:– Increased financial resources committed to HE
I d ti i ti i HE– Increased participation in HE
– Overcome public service operating restrictions such as obsolete salary scales, restrictive civil service work rules
– Increased relevance of HE programs and research
– Secure new skills that may not exist in the HE sector
– Sustainability of outcomes
• Benefits not guaranteed – need well-designed policy framework and institutional governance to implementframework and institutional governance to implement effectively
Classifying PPPs in Higher EducationClassifying PPPs in Higher EducationClassifying PPPs in Higher EducationClassifying PPPs in Higher Education
• PPPs widely used around the world with a range of• PPPs widely used around the world, with a range of objectives – efficiency, relevance, etc
• PPPs in higher education cover a range of activities –finance/philanthropy, delivery and management
• Many ways of classifying higher education PPPs. One classification is as follows:classification is as follows: – University-industry linkages– Infrastructure PPPs– Financing initiatives– Higher education support services– Service delivery PPPs
Classifying PPPs in Higher Education (Cont’d)Classifying PPPs in Higher Education (Cont’d)
University-Industry Linkages
Infrastructure PPPs Financing Initiatives Higher Education Support Services
• Curriculum/program • Private infrastructure • Public or private • Private quality development
• Student/ ob placements• Staff exchanges• R&D – contract research,
consultancies
initiatives - teaching and research facilities, residences, IT laboratories, etc
• Private leasing of bli hi h
scholarships/vouchers• Student loans• Tuition fees• Private sector incentives:
free land or soft loans
assurance systems• Private sector
university rankings• Private information
and testing servicesconsultancies• Private representation on
governing/advisory boards• Hybrid R&D institutions/
Centers of Excellence
public higher education institutions
• Equipping and maintenance of IT laboratories
free land, or soft loans, operational and research subsidies, tax/customs duty exemptions
• Philanthropy
and testing services• International and
national research network development
• Innovation/commercializa-tion initiatives
• Franchising and affiliations with public universities• Contracting out course/program delivery to private sectorContracting out course/program delivery to private sector• Contracting out non-core services to private sector – eg.
security, parking, hostels• Private management of public universities
Service Delivery PPPs
University-Industry LinkagesUniversity Industry Linkages
• Many ways to strengthen university-industry linkages: Consultancies– Consultancies
– Industry involvement in teaching and in curriculum development
– Staff exchanges– Corporate training
Student work programs and apprenticeships– Student work programs and apprenticeships– R&D activities – contract research, cooperative and
sponsored research, commercialization of university research, business development assistance
– Industry representation on governing boards, academic representation on industry boardsp y
– Joint publications, conferences and seminars
UniversityUniversity--Industry Linkages: Industry Linkages: University of MoratuwaUniversity of MoratuwaUniversity of MoratuwaUniversity of Moratuwa
• University of Moratuwa (UoM) established University Industry Interaction Cell (UIIC) as vehicle for fosteringIndustry Interaction Cell (UIIC) as vehicle for fostering linkages with industry: – Self-financing entity within the Faculty of Engineering
and later expanded across eh entire university– Established with assistance of ADB
• Key objectives of UIIC:• Key objectives of UIIC:– Identify public and private sector organizations willing
to establish links with UoM– Move successful research projects/expertise to industry
through joint R&D, consultancy and technology transferf f– Identify and meet continuous PD needs of the industry
• Staff have set up Uni-Consultancy Services
Affiliation and FranchisingAffiliation and Franchising
• Several countries allow/require private institutions to ffili t ith bli i tit tiaffiliate with public institutions
• Private institutions deliver the education, while public i tit ti id lit t l i linstitutions provide quality control, curriculum assistance and award degrees
Middle road between full ‘public’ and full ‘private’• Middle road between full ‘public’ and full ‘private’ provision and a measure of security/quality assurance in the early years of private educationy y p
• Combines strengths of public and non-state sectors:– Private sector – innovation, efficiency, flexible delivery– Public sector – academic reputation, capacity, staff
Franchising Program Delivery at the Franchising Program Delivery at the University of Moratuwa (Sri Lanka)University of Moratuwa (Sri Lanka)
• University of Moratuwa (UM) uses public• University of Moratuwa (UM) uses public and private providers to deliver 3 year Bachelor of Information Technology (BIT) under franchise agreementunder franchise agreement
• Private providers pay UM a franchisefee in exchange for the BIT program curriculum and program QA
• Franchisees deliver UM BIT program and provide student managementprovide student management
• Managed by CODL• Students graduate with UM degree • Lower tuition fees than similar programs• Providers = ESOFT, Sri Lanka Telecom
Incentives for Private Higher Education Institutions: ThailandInstitutions: Thailand
• Individuals and organizations which establish a school or ginstitution can deduct 30% percent of profits from the operation on a tax free basist b t d ti id d f t ib ti• tax rebates and exemptions are provided for contributions from non-profit organizations
• Revolving Fund for Developing Private Higher EducationRevolving Fund for Developing Private Higher Education Institutions in place since 1999 to provide loans to private institutions for building construction and purchase of education materialseducation materials
• Revolving Fund for Staff Development in Private Higher Education Institutions in place since 1997 to promote staff p pdevelopment in private institutions
Regulating for QualityRegulating for Qualityg g Q yg g Q y
• Government accreditation schemes are an important form of QA – Indonesia, New Zealand, Pakistan, Ghana, etcQ do a, a a d, a a , G a a,
• Private sector also plays important role in regulating quality: – Private accreditation (Philippines, Seventh Day Adventists)– Corporate accreditation (Microsoft)– Foreign HEI affiliations (Pakistan, Sri Lanka)– International accreditation/International standards (businessInternational accreditation/International standards (business
schools, maritime education)– Affiliation requirements (Oman)
ll ( h k )– University college status (Ghana, Pakistan)– Reputation– Chains/networks of private HEIs (AMA Colleges, Laureate)Chains/networks of private HEIs (AMA Colleges, Laureate)– ISO 9000
PrivatePrivate Accreditation in the PhilippinesAccreditation in the PhilippinesPrivate Private Accreditation in the PhilippinesAccreditation in the Philippines
• Philippines operates private voluntary accreditation system i d ti K l tin education. Key elements: – Program-based accreditation
Four levels of accreditation– Four levels of accreditation – Managed and overseen by private accreditation
associations, which are linked to private school associations
– Government recognizes accreditation associations1 523 dit d t did t t t i 240• 1,523 programs accredited or at candidate status in 240 private institutions in 2009/10 (15 percent of institutions)
• Different accreditation levels confer benefits on institutionsDifferent accreditation levels confer benefits on institutions (operational freedom, government assistance)
Private Private Quality Assurance in OmanQuality Assurance in OmanQ yQ y
• Until mid-2000s, private colleges wishing to establish in , p g gOman had to affiliate with an existing foreign institution as a means of assuring quality
• The foreign institution assisted the Omani private college• The foreign institution assisted the Omani private collegein all technical and educational areas, including:– Curriculum developmentp– Follow-up and evaluation of all colleges– Academic performance– Awarding of diplomas or certificates
• Private colleges were affiliated to UK, Australian,American and Jordanian universitiesAmerican and Jordanian universities
• Later replaced by Oman Accreditation Council.
PPPs for InfrastructurePPPs for Infrastructure
• Increasingly common form of infrastructure procurement in the education sectoreducation sector
• Key characteristics: – Private sector finances, designs, constructs and maintains
educational infrastructure– Government retains responsibility for delivering teaching
and researchand research– Government/private sector arrangements governed by long-
term contracts (25-30 years)C if h i h i h– Contracts specify the services the private sector has to deliver and standards to be met
– Government pays private sector for servicesp y p– Payments are contingent upon the private operator
delivering services to an agreed performance standard
Swinburne University of TechnologySwinburne University of Technology
• Swinburne University of Technology (SUT) PPP involves:(SUT) PPP involves:– accommodation for 300 students– school of Information Technology– redevelopment of the northern
part of the campus• SUT located in the State of Victoria. • First infrastructure PPP by an
Australian university• Development financed by Rothschild p y
on university-owned land. • Rothschild assumed ownership and
development risk and receives a prental payment in return
National Maritime College, IrelandNational Maritime College, Ireland
• National Maritime College, County Cork:Cork: – €58 Million capital value– designed, built, financed and
operated by Focus Educationoperated by Focus Education– 25 year contract– facilities for 750 full-time
equivalent studentsequivalent students• Infrastructure includes classroom,
laboratory and workshop facilities and specialised simulationand specialised simulation equipment
• Operational from 2003Thi d d i j i l d d i• Third education project included in Irish government’s PPP pilot project
Reform of Private Higher Education: Reform of Private Higher Education: PakistanPakistanPakistanPakistan
• Broad reform program since early 2000s has included f t i t hi h d ti li f kreforms to private higher education policy framework: – Unified QA system for public and private HEIs– Scholarships for students and staff of private HEIs– Scholarships for students and staff of private HEIs– Incentives for private HEIs: free land and grants,
matching grants for digital library access and hiring foreign faculty, financial assistance for researchers
– Information to students –rankings, advertising, etcP i t t i l d d i li di i– Private sector included in policy discussions
• Private HEIs must be high quality, not-for-profit and meet infrastructure, staffing and other requirementsmeet infrastructure, staffing and other requirements
Guidelines for RegulatorsGuidelines for Regulators
Provide a Sound Policy Provide a Sound Policy Framework for the Framework for the O ti f th P i tO ti f th P i t
Promote and Facilitate Promote and Facilitate Foreign Direct Investment Foreign Direct Investment in the Education Sectorin the Education Sector
Operation of the Private Operation of the Private Education SectorEducation Sector
Introduce Clear, Objective Introduce Clear, Objective
Incentives Incentives and Support for and Support for the Private Sectorthe Private Sector
ProvideProvide Parents andParents andjj
and Streamlined Criteria and Streamlined Criteria and Processes for and Processes for Establishing and Regulating Establishing and Regulating
Provide Provide Parents and Parents and Students with Information Students with Information to Help Them Select to Help Them Select Q lit P i t Ed tiQ lit P i t Ed ti
g g gg g gPrivate Education Private Education InstitutionsInstitutions
Allow ForAllow For--Profit Schools andProfit Schools and
Quality Private EducationQuality Private Education Establish Quality Establish Quality
Assurance/ Monitoring Assurance/ Monitoring Allow ForAllow For Profit Schools and Profit Schools and
HEIs to OperateHEIs to Operate Allow Private Schools and Allow Private Schools and
HEI t S t Th i OHEI t S t Th i O
ProcessesProcesses Develop Government Develop Government
Regulatory and OversightRegulatory and OversightHEIs to Set Their Own HEIs to Set Their Own Tuition FeesTuition Fees
Regulatory and Oversight Regulatory and Oversight CapacityCapacity
C C iti i f PPPC C iti i f PPPCommon Criticisms of PPPsCommon Criticisms of PPPs
PPP th i ti ti• PPPs are the same as privatization• By entering into a PPP, the public sector
loses control over service provision• PPPs apply only to infrastructure projectspp y y p j• The main reason for government
entering into PPPs is to avoid debtentering into PPPs is to avoid debt• The quality of service will fall under PPPs
C C iti i f PPP (C t’d)C C iti i f PPP (C t’d)Common Criticisms of PPPs (Cont’d)Common Criticisms of PPPs (Cont’d)
• Public sector employees will lose under PPPs
• The cost of service will increase to pay for the private partner’s profitfor the private partner s profit
• There are only two partners in a PPP
For More InformationFor More Information
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