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EUEREK Report Summary

Project ID: 506051
Funded under: FP6-CITIZENS
Country: United Kingdom

Final Report Summary - EUEREK (European Universities for Entrepreneurship - their Role in the Europe of Knowledge)

The project examined the internal workings of universities, and how they are affected by their respective national planning and funding arrangements. It identified steps that could be taken to improve their effectiveness as knowledge producers and transmitters in Europe.

The main measurable and verifiable outcomes which EUEREK delivered are:
- an improved theoretical understanding of the ways in which European universities are contributing to the knowledge-based society, set out in a published report;
- a detailed analysis of national policies in the countries represented in the consortium, as they affect the entrepreneurial roles of universities, set out in a published report;
- a state-of-the-art report, analysing the relevant literatures and presenting a map of European research competencies in this field;
- a set of case studies of higher education institutions, policies or processes on higher education, and other organisations contributing to the knowledge society, analysing important aspects of their operation;
- a comprehensive report drawing on the work noted above, making recommendations for national and institutional policymakers;
- a defined set of dissemination activities, and an ongoing consultancy process operated by the project partners, which would widen and deepen the understandings created by the project.

The European Union (EU) adopted the goal of becoming the most competitive and dynamic knowledge-based society in the world because it sees knowledge production and diffusion as the engine of economic and social progress. Universities are regarded as having a profound influence on the realisation of this goal.

Universities, endowed as they are, with a long history, and important as they have been in the production of scholarship and new ideas, and for the training of elites, have not been always seen as such positive vehicles of economic progress.

Entrepreneurialism is fundamentally about innovation and risk taking in the anticipation of subsequent benefits. Neither the innovations and risks nor the expected benefits need necessarily be financial but it is rare for them to have no economic dimension. Finance is a key indicator and an important driver of entrepreneurial activity.

In broad terms most European higher education institutions now receive their income via three main routes:
- regular core income from government for teaching and (in most countries) basic research;
- additional research funds mainly from government that are earned, at least in part, competitively;
- 'third stream' or 'third mission' income earned on a quasi commercial basis for contract research and teaching and use of university facilities by outsiders.

The key financial indicators of the potential for entrepreneurial activity by higher education institutions are:
- sources of income;
- mechanisms through which income is received by universities and colleges;
- resource allocation procedures within the institution.

As a general rule institutions that receive all, or most, of their income in the form of line item budgets that must be strictly adhered to, are unlikely to have the incentive or the opportunity to generate additional income through entrepreneurial initiatives. At the other extreme, universities that receive generous public funding with little accountability over how it is used, have little incentive to attempt to make the services they can provide widely available outside academia.

Five different categories of entrepreneurial behaviour can be observed in the case studies:
- new private higher education institutions;
- new developments in public universities stimulated by government;
- major institution wide initiatives by public universities;
- smaller scale departmental, faculty and centre ventures;
- freelance teaching, research and consultancy.

The case studies suggest that institutional entrepreneurial activities are encouraged when:
- core income from government is tight but not inadequate for some new initiatives;
- governments promote and support third mission activities;
- a significant part of any income earned from new initiatives goes directly or indirectly to the groups and individuals that have the ideas, take the risks and do the work;
- a commercial culture is acceptable to a significant number of the academic staff;
- unofficial individual private entrepreneurial or freelance ventures are regulated;
- the university is active in subject areas where continued professional development and research findings are commercially or socially valuable.

Conversely, entrepreneurial activity may be discouraged if:
- core income from government is too generous;
- core income is inadequate for investment and risk taking;
- financial regulations are too burdensome;
- the traditional academic culture that became dominant in much of the twentieth century remains in place.

However, it was also pointed out that sometimes the regulatory demands of other financing bodies are more demanding than national governments and there is considerable uncertainty about too great a dependence on external income.

In the data set of universities drawn from seven countries three of them transition countries, four major categories of universities can be identified:
- comprehensive, some of which are research intensive;
- regional;
- specialist, some of which are research intensive;
- private.

It was observed that international activities may lead to more entrepreneurialism but the reasons for this may be different. In general, two approaches in internationalisation can be discerned; one places internationalisation activities in a market competition framework, the other in the more traditional framework of networking and collaboration. The case studies show that a competitive approach in the internationalisation of higher education is emerging, and acknowledge the changing landscape.

The trend towards more economically oriented rationales for internationalisation is continuing. The United Kingdom (UK) case studies appear to be the leading model of this category. For the UK universities foreign students, foreign campuses, and distance learning programmes (broadly revenue-generating programmes) are mainly a matter of income-generation to recruit fee-paying students. It is not the case of Scandinavian universities which are still guided by altruistic motives believing in the intrinsic and traditional international nature of scholarship. This model allows and encourages staff, students, and programme mobility through partnerships between institutions to create networks of excellence. Nevertheless, the two models develop an expansionist viewpoint and represent a top reference within the international higher education landscape. Internationalisation is necessary to secure their position in the international landscape and to remain competitive whatever is the final objective. Universities are, thus, taking risks in developing challenging international activities such as offshore campuses and distance learning programmes in the face of new challengers entering the field.

The UK model of expanding international activities as a means of extra income for universities is increasingly gaining ground in Russia, Poland and Moldova which have a great exposure to potential higher education markets in foreign countries. Nevertheless, quality education remains one of the main challenges for these universities.

Internationalisation is generally considered as a means to enhance the quality of the higher education sector and then indirectly to raise the national profile and attractiveness. International elements are introduced to contribute to the quality and the competitiveness of the national system or to the university itself by increasing efficiency in teaching as well as in research through shared efforts mainly supported by western institutions, governments and agencies. For instance, when looking at the source of funding, it is obvious that an important element is provided by foreign governments, or by the European Union.

With the transition country case studies, we progressively shift from the notion of internationalisation motivated by economic or altruistic drivers to the notion of internationalisation to assist in the development of countries' capacity. Indeed, in these universities, internationalisation is considered more as a way to build or strengthen internal capacities, to find new ways to manage higher education, to establish new practices in teaching or research. Twinning arrangements and partnerships with local providers (Russia, for example) are encouraged in order to facilitate knowledge transfer between foreign and local institutions, and in the end, to modernize and enrich the country. Encouraged by the Lisbon Strategy, these universities receive a benefit from internationalisation or more accurately from European cooperation. Benefiting from international and pan-European trends and activities may be viewed as a sign of entrepreneurialism. These gains may create larger disparities between universities and within universities (i.e. winners and losers).

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