Comparing national policies on institutional profiling in Germany and the Netherlands

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1 Comparative Education, Comparing national policies on institutional profiling in Germany and the Netherlands Matthias Klumpp a *, Harry de Boer b and Hans Vossensteyn b a Faculty of Economics and Business Administration, University of Duisburg-Essen, Institute for Production and Industrial Information Management, Essen, Germany; b School of Management and Governance, Center for Higher Education Policy Studies, University of Twente, Enschede, The Netherlands The concepts of differentiation and profiling are cornerstones in discussions about the organisation of contemporary higher education systems, following the trends of massification and global competition. This contribution provides a system-level description and comparison of the German and Dutch higher education systems regarding these topics, and points to possible interactions and development concepts connecting differentiation, strategic profiling of universities and excellence. Though both higher education systems started from very different positions and with differing policies towards differentiation, the global trends and national aspirations for the systems, as well as individual universities in Germany and the Netherlands, are comparable. A look into the resulting ranking positions of German and Dutch universities generally shows a more successful development for the Dutch higher education institutions in the last few years which could possibly indicate a crucial time lag in the effects of differentiation policies in higher education as the German excellence and differentiation efforts fundamentally took hold more than 10 years after the Dutch initiatives in this field. 1. Introduction As in many other countries, in Germany and the Netherlands we observe discussions on system diversity and differentiation in higher education and, as the result, government initiatives with respect to institutional profiling (e.g. Beerkens et al. 2010). Profiling, here defined as a process of putting on characteristic features, usually to make (further) distinctions between organisations or to sharpen the contours of institutions, supposes to enhance system diversity and is easily bracketed with excellence, which is only one part of it. Endeavours such as the European U-Map project classify the profiles of universities and discuss the role of profiling in higher education politics and management (van Vught 2009, van Vught et al. 2010). In general, discussions about university rankings and the World Class University (WCU) are shaping the range of national policy actions more and more as well as the strategies and impacts inside individual universities walls (Cheng and Liu 2008; Horstschräer 2012; Marginson 2010; Morris 2011; Saisana, d Hombres, and Saltelli 2011; Shin and Totkoushian 2012). This again is fuelled by the rising importance (at least in policy perceptions) of the higher education and science systems for the general innovation, economic growth and wealth paths of societies (Altbach 2013; Nusche 2008; Teichler 2003). *Corresponding author. matthias.klumpp@pim.uni-due.de 2013 Taylor & Francis

2 2 M. Klumpp et al. Furthermore, policy instruments such as performance-based funding and target agreements try to enhance excellence in university research and teaching and simultaneously promote institutional profiling (Kosmützky 2012). Also, the nexus between research and teaching as well as general quality orientation contribute to the profiling discussion (Amaral, Rosa, and Tavares 2009; Coates 2010; Crozier, Curvale, and Henard 2010; Henard 2010; Skolnik 2010). From the start, differentiation dimensions and policy options have been very similar across all countries (Takayama 2012) and are even more similar in the two countries we analyse here due to the comparable higher education systems of Germany and the Netherlands (binary systems, mixed regional and federal roles and financing, high interaction with the economy and other science institutions in the system); a few cornerstones may highlight the range of possible policy actions regarding profiling in higher education (Lepori, Huisman, and Seeber 2012; Rossi 2009).. General calls for strategy and profiling may work as moral suasion if argued with enough power or facts [e.g. global competition and rankings, as above (Davies and Glaister 1996)]. This may even establish a fashion of university mission and profiling endeavours as a starting point and can be recognised for example in the German accreditation system.. Target agreements may range themselves from very soft, strategic-level instruments to very detailed and hard systems if combined with budget consequences (Johnston 2004; Kaiser and Vossensteyn 2005; Kohtamäki 2011).. Performance-based funding schemes are often seen as powerful tools towards profiling, depending on the performance indicators (Jongbloed and Vossensteyn 2001) though there are also doubts regarding the unifying and streamlining character of such systems with the same indicators for all universities in the system.. Legal frameworks and rule setting on the strategic level (e.g. pro or con a binary system, degree of competitive funding and block grant funding in higher education) as well as the operational level [degree structures, accreditation system, university governance rules or student admission and researcher employment regulations (Shattock 2013)] also have very distinguished impacts on the differentiation effects in higher education.. Finally, the general degree of autonomy of individual universities as well as their funding levels and sources provide for an area of differentiation acknowledged in research and higher education management (Taixeira and Koryakinabc 2013). These policy areas are complemented with many other areas in higher education policy, such as for example the international initiatives like Bologna, the European Qualification Framework (EQF) or the European Skills, Competences and Occupational (ESCO) System. We will illuminate the concepts by presenting both the German and the Dutch cases. In both countries, that have binary systems with blurring boundaries, profiling is very visible on the policy agenda. The interpretations of institutional profiling differ however. In Germany, the Excellence Initiative is regarded as a programme which focuses on excellence as well as institutional profiles. In the Netherlands, a national committee (Veerman) launched its report in 2010 (Veerman et al. 2010) comprising many recommendations that have to stimulate differentiation and profiling initiatives. In describing the policy developments in Germany and the Netherlands, our purpose is

3 Comparative Education 3 to increase the understanding of this important issue. We want to explore whether the different approaches lead to different outcomes. 2. Differentiation and profiling policies in German higher education 2.1. Introduction Germany has a developed higher education system with 418 higher education institutions, including 105 universities, 211 universities of applied sciences (UAS) and 102 other institutions such as art colleges, church and public administration institutions (Destatis 2011). A total of 2,214,112 students are enrolled at those institutions. In 2009 a total of 338,656 students graduated from the university sector. The three largest German states (Länder) in terms of graduates are Nordrhein-Westphalen (73,783 graduates in 2009), Baden-Württemberg (52,620 graduates) and Bayern (46,121 graduates) this shows that these larger subsystems in the states are comparable by size to the Dutch system. The motivation for policy initiatives regarding excellence and profiling is, among others, the assumed economic necessity to become or stay competitive in a globalised knowledge economy. Universities are seen as saviours of the day in higher education teaching, research, knowledge transfer and especially continuing ( quartiary ) education (Gloger 2011, 9; Kerres, Hanft, and Wilkesmann 2010, 186). From a system perspective most researchers and politicians agree that an increasing and diversified student body requires an increased differentiation in higher education itself (Klumpp and Rybnikova 2009). The Wissenschaftsrat sees five advantages of diversification in higher education (WR 2010, 14):a flexible match of higher education with the changing needs of society; a broader offer of study options for students; an increased level of access into higher education and within higher education; an option for universities to focus on specific strengths rather than trying to fulfil all the demands of society as one institution; and an increase in international competitiveness for German universities and the higher education system. In principle, differentiation is set by the German constitution with the definition of education in general being a responsibility solely of the 16 German states ( Länder ). Although the states have developed cooperation mechanisms and overarching institutions, this federalism hinders on the one hand the modernisation and internationalisation of German higher education, but on the other hand also provides a source for differentiation. For example, Rheinland-Pfalz, a rather small German state, allows vocationally trained persons (Meister/Techniker level, German vocational education further education degrees, according to the German Qualifications Framework on the same level as an academic bachelor s degree) to enter a master s study programme directly, whereas most other states require all vocationally trained persons in Germany to enter a bachelor s programme first (with a recognition of prior learning RPL regulation of between about one and three semesters). But with respect to a striving for excellence and the establishment of world class universities, as one aspect of institutional profiling, the autonomy of German states in higher education policies is mainly seen as a hindrance. Only economically and financially strong states, such as Nordrhein-Westfalen, Bayern and Baden-Württemberg, are believed to be able to support strong institutions at a global level. In the context of establishing world class universities developing one or a limited number of federal universities (according to the ETH model in Switzerland) has been suggested.

4 4 M. Klumpp et al. The dual divide between universities and Fachhochschulen /universities of applied sciences (UAS) is still very prominent in Germany. By law PhDs are awarded by universities only. UAS are focused on teaching and applied research (Klumpp and Teichler 2008). In contemporary German higher education about one-third of all students attend the UAS sector. This is less than envisioned for the whole system by the Wissenschaftsrat but still an increasing share. Though the new degree structure, as the result of the Bologna process, has levelled the playing field between universities and UAS to some extent, and as the result of more competition between universities and UAS regarding master s programmes, the roles and expectations following from the state s legal mandate are still in place. The differences between UAS and universities also become visible when rankings are taken into consideration. Since UAS play no role in large-scale fundamental research they are hardly visible in international rankings. Also the national rankings [e.g. by the German CHE (see CHE 2009)] are divided into the categories university and UAS, although they award formally identical bachelor and master level degrees. Regarding UAS research there are several programmes at state (e.g. NRW Geräteprogramm Fachhochschulen) and federal level (e.g. BMBF FH ProfUNT), but these are small in comparison with the main funding programmes for university research (e.g. DFG, BMBF). Thus, there remain substantial differences between the two higher education sectors, although we observe a trend towards increasing cooperation between universities and the traditional research-only institutions (Max-Planck, Fraunhofer, Leibnitz and Helmholtz institutions) as well as with UAS, e.g. for joint PhD programmes Kooperative Promotion as advised by the Wissenschaftsrat. A further element in differentiation concerns private universities. They are allowed to offer all levels of higher education programmes and research after being accredited through an institutional state audit (WR 2011). The student numbers of private universities have increased tenfold in the last five years from about 0.2 to about 2.0% of the total student body, but remain for the moment rather small. As these institutions are largely dependent on student fees in terms of their revenues, they are also mainly affiliated with subjects such as economics and business administration. The student body, especially in the field of business administration, already comprises about 10% of students in private universities. A further source of differentiation is the enhanced autonomy of universities in the context of the Bologna and EQR development in Germany with the emergence of accreditation and accreditation agencies. Although there are critical voices (Klumpp 2011), the institutional autonomy of both universities and UAS regarding the design and content of study programmes has significantly increased lately with the newly introduced system-level accreditation and most HEIs embrace this development. They see it as an important condition for their strategic and especially international profiling Excellence in the making: the German Excellence Initiative The German Excellence Initiative (GEI) began in 2006 and named 37 winning universities in three funding lines, receiving altogether 2 billion Euros in funding (Hornbostel 2008). Only the nine universities in the highest of the three categories ( Zukunftskonzepte with up to 76 million Euros in single-item funding) were called elite universities. Many researchers see the GEI as unique as it distributes extra money compared to other programmes. For example, the British Research Assessment Exercise (RAE) tries to reallocate existing funding for research (Table 1).

5 Comparative Education 5 Table 1. Criteria comparison of GEI with the UK RAE (Gläser and Weingart 2010, 247) Criteria Research Assessment Exercise (RAE) German Excellence Initiative (GEI) Objectives Selective funding of excellent research; Profiling and differentiation of university sector Selective funding of excellent research; Profiling and differentiation of university sector; [International reputation & visibility of German HE] Evaluation field Historical research achievements Concept-based prospective research Evaluation measurement unit Evaluation method Programme attendance Research in a specific subject at one university (department) Peer review Optional Applications for graduate schools and excellence clusters, co-operative (especially with German nonuniversity research institutions) [International] Peer review Optional The winning institutions in the three different programme lines of the GEI are depicted on a map of Germany in Figure 1 with the interesting detail that in March 2011 selected concepts for the third funding line ( Zukunftskonzepte ) for the second round ( ) of the GEI are located solely within institutions that were successful in one other programme line in the first round of the GEI ( ). But now, more Figure 1. Results of the German Excellence Initiative (DFG 2011, 14, 106).

6 6 M. Klumpp et al. than five years after the first winners appraisals, the critique is still adamant and growing (Pasternack 2008; Sondermann et al. 2008; Strohschneider 2009; Leibfried 2010). Some critical thoughts are reflected here. (a) There are fears about a possible over-specialisation of institutions as well as individual researchers due to such excellence groups (especially regarding the transfer towards teaching which becomes altogether impossible for many research groups and researchers in the respective programmes) as well as a possible uniformity instead of the required and requested diversity in university profiling (Hartmann 2010, 370). (b) There is also a widespread fear that the German higher education system will lose its long-time strength in providing for a large number of (if not all) universities with a high level of quality in research and teaching. This can be seen in the Shanghai Ranking of 2005 with about 40 German universities among the best 500 universities worldwide (SJTU 2011). Critics claim that a possible gain of between two and five world class universities out of this university body does not legitimate (the fear of) the overall quality level reduction of the other universities (Hartmann 2010, 371). (c) A stratification of universities as intended will also lead to a stratification of researchers personally (referring to the suggestion of teaching professors which are new to the German university system) as well as the states responsible for higher education by the German constitution: states such as Saxony, Brandenburg, Thuringia, Mecklenburg and Saxony-Anhalt (eastern Germany) as well as Schleswig-Holstein or Rheinland-Pfalz in western Germany belong to the economically less strong ones and are victims of a sharp redistribution of research funding through the GEI (Hartmann 2010, 375) (Figure 1). (d) This also leads to a general trend in higher education in Germany, highlighted by the GEI: research is gaining even more power, resources, attention, time and reputation compared to teaching. For example, the German initiative on teaching excellence had a budget of 10 million Euros, exactly 0.5% compared to the GEI (Hartmann 2010, 380). This leads to adverse effects in universities, with professors competing for teaching load reductions and universities finding themselves in a special academic arms race with two development circles: one very small group of 4 20 universities is able to increase their research funding, therefore increasing their profile and ability to attract scientists and again their probability of attracting greater research budgets as basic state funding is increasingly parameter-based and one important parameter is the attraction of research funds ( Forschungsdrittmittel ). A second group of universities only have the option of concentrating on teaching (Hartmann 2010, 381), increasing the teaching load of staff and therefore decreasing options for enhancing research and future chances of increased research funding. (e) This again fuels the above-mentioned fear of a general quality downturn in higher education research and teaching as experienced in the UK and the US after increasing amounts of competitive research grants became effective in the respective higher education system (Hartmann 2010, 382). As a consequence of the outcomes of the GEI, several German states (Länder such as Hessia and Saxony) have established additional excellence programmes, in essence to support universities that were unsuccessful in the big GEI programme in most

7 Comparative Education 7 cases with the same proposals and only minor revisions due to state priorities. Hessia, for example, spent 150 million Euros on this additional programme (roughly 10% of the GEI volume, accounting for roughly the population and GDP share of Hessia within Germany) Stimulating institutional profiling by means of target agreements In the context of target agreements in the states ( Länder-Zielvereinbarungen ) most of the universities are forced to agree on specific development objectives with the states where they are located. This process has been under development for about 15 years but has produced little results as most objectives are very similar for each institution (e.g. graduation rate versus drop-out rate; gender participation). Again there are 16 different regulations for the single states, and the largest one (Nordrhein-Westfalen) is taken as pars pro toto in order to describe the profiling effects on universities. In exchange for basic funding for the universities (of 3.7 billion annually), five objectives must be included in every target agreement (phase ) between the state and all universities: (i) research focus topics; (ii) number of study places; (iii) gender mainstreaming; (iv) professionalisation of knowledge transfer; and (v) institutional research on graduates labour market success of each university (MIWF 2011). This shows clearly that, at least on the institutional level, there is hardly room for institutional profiling (in the case of Nordrhein-Westfalen only in the focus topics for research) since every institution has to respond to the same issues. Therefore the overall effect of these agreements on system differentiation is likely to be minimal. This (non-) effect is, at the level of the states, further strengthened by the fact that the target agreements are accompanied by performance-related funding, implying that the institutions focus on the same performances. As the 16 states play the leading role in higher education policy making, a clear-cut national picture cannot be given. Each state has a different funding model based on its own political agenda and regional context, which in itself could contribute to a diversified German higher education system. However, individual state criteria were used to support institutional differentiation (e. g. NRW): NRW introduced performance-based funding in 1993 only for universities and this was extended to all higher education institutions in The share of the public grant distributed on the basis of performance rose from 14% in 2004 to 20% in The parameters are weighted differently for universities and UAS. The criteria for UAS include the number of students completing their studies within the regular programme duration ( Regelstudienzeit ), graduates based on number of semesters studied, gender equity, number of professors based on gender equity and third-party funding (European Commission 2009, 273). Altogether these initiatives and criteria-based programmes are of minor size and impact because they are the same for all. Differentiation has, until now, not been enhanced by these systems Overall strategy objectives of differentiation in Germany The Wissenschaftsrat (WR 2010) concluded for the German higher education system the need to increase the level of differentiation and deducted specified strategic objectives of universities as well as higher education policy on federal and state levels as shown in Figure 2.

8 8 M. Klumpp et al. Figure Strategy Guidelines on Differentiation Wissenschaftsrat (WR 2010, 8 10) Strategy hurdles in German higher education In order to promote and facilitate differentiation and profiling in Germany, the options and instruments have been outlined above, but there are also major hurdles and contradictions within the German system to be balanced against this. The most prominent ones are as follows. (a) The differentiation gap between policies fostering profiling in research like the Excellence Initiative and the corresponding Länder programmes and the homogeneity in teaching is widening. Especially through the Bologna process, most programmes are more or less streamlined, especially at the bachelor level. The distinction of university and university of applied sciences programmes has been scrapped. Policy objectives today aim at aligning more differentiated master s programmes with individual research profiles of institutions, at universities and universities of applied sciences alike (Wissenschaftsrat 2013a). (b) The research landscape in Germany is divided between the university sector and the powerful research societies (Max Planck, Fraunhofer, Helmholtz, Leibnitz) with their highly profiled research institutes. As started with the merger towards the Karlsruhe Institute of Technology (KIT) within the Excellence Initiative, many political concepts are calling for an increased collaboration

9 Comparative Education 9 between university structures and these research societies (Wissenschaftsrat 2013b). (c) The core of university research, the research doctorate, is strangely tormented between under- and over-regulation: Germany has not coherently included the PhD phase as the third phase in the Bologna reform, therefore mainly the old model of the single researcher working for a monograph under the supervision and mostly in teaching and project work for one professor is still the dominant model, though there are rising numbers of international graduate schools in the context of research and excellence programmes (Kehm 2007). On the other side of the coin, the regulation regarding payment and working time as well as employment length (legal maximum of six years at the PhD level) is strictly regulated, leading to strange realities such as that the DFG, for example, provides full position funding for PhD researchers in engineering but not in other disciplines (only 0.75 of a full position); just in order to reflect labour market realities and competitive payment from industry corporations in this sector. (d) This is also connected to a further field of conflict between the increasing institutional competition and profiling endeavours and the still powerful German researchers career development policies (de facto), sporting the famous Hausberufungsverbot, prohibiting postdoc and professor positions to be acquired by PhD graduates from the same university. At the individual level it can be argued that this policy may actually enhance differentiation as each researcher is forced to work at least at two different institutions during his/her career. But for the institutional profiling endeavours this is more or less counter-productive as investments in internal PhD researchers never pay off because they have to leave after graduation. (e) Furthermore, the ever-wielding tension and conflict between responsibilities and budgets of the federal and state (Länder) government level in Germany also prohibits a clear framework for innovation and profiling. Innovative models like a federal university are discussed but never touched and then realised abroad as, for example, with the German University in Cairo (GUC) or the Turkish German University in Istanbul (Türkisch Deutsche Universität TDU) with a mixed budget from the federal and state governments in Germany (BMBF 2013). 3. Differentiation and profiling policies in Dutch higher education 3.1. Introduction, the Dutch higher education system The Netherlands has a binary higher education system, comprising 13 research-led universities and 41 universities of applied sciences ( hogescholen ). The UAS-sector takes about two-thirds of the higher education students, which means that in contrast to many other binary systems in Europe it is, in terms of student numbers, much larger than the university sector. The 54 public higher education institutions offer a variety of degree programmes: two-year associate degrees (offered at UAS), four-year bachelor s degrees (UAS), three-year bachelor s degrees (universities), one- and two-year master s degrees (mainly universities, UAS supply marginal ) and PhD degrees (universities). In addition, recently more selective programmes have begun to be offered, such as liberal arts bachelors programmes and honours degree programmes. In this context, the question of the coherence or unity of a common language (Dutch, English) regarding teaching and research in higher education has been discussed in the political arena without a clear decision being reached as yet (Doiz, Lasangabaster, and Sierra 2012).

10 10 M. Klumpp et al. The two types of HE institutions differ in terms of focus and research volume. Universities carry out fundamental and applied research and have the right to grant PhD degrees, whereas UAS conduct (a limited portion of) applied research. Moreover, most UAS have strong regional focus. Next to the range of programmes offered, Dutch HE institutions differ from each other in terms of size, disciplinarity, researchorientation and number of locations, all in a reasonable geographical spread. Besides the public sector, there are private higher education institutions, which offer a limited number of accredited but not publicly funded courses National strategies towards differentiation and profiling Over the last 25 years there has been a desire to develop a more diversified higher education landscape in order to serve student and labour market needs. In several strategic plans 1 in the late 1980s and early 1990s (Ministerie OCW 1988, 1990, 1992), the minister diagnosed that the Dutch higher education landscape was very homogeneous, while as a result of successful policies to widen access ( higher education for all ) the student body had diversified and the labour market needed a more varied output of graduates. Therefore, the minister argued for the establishment of a more diversified programme supply in terms of orientation, study duration and degrees. At the time, the differentiation discussion primarily focused on the binary divide. The government s view was to maintain the binary divide as a threshold to secure a minimum level of institutional variety in the system (Ministerie OCW 1992, 23). Also in the next decade the government voiced its opinion regarding developing a more diversified higher education landscape. Higher education institutions should use their (enhanced) discretion to establish collaborations, to determine their educational concepts and programme supply, and to choose a clear research focus. This was argued against the backdrop of an expected decline in student numbers and of public budgets. However, while public budgets would remain tight, student numbers did not decline. As a result of that the 2000 National Strategic Plan (Ministerie OCW 2000) continued, among other things, to stress the need for institutional profiling. The rationale however had changed. Universities were expected to make strategic choices not only because of a growing student population, but particularly because of high quality service delivery. The assumption is that it is impossible for every institution to excel in each and every teaching and research area. To develop or maintain high quality services, choices at the institutional level should be made, otherwise mediocrity would reign. Institutions were encouraged to develop an institutional profile, for example in terms of international orientation, education philosophy, collaboration with other institutions or research agendas. Differentiation and diversity will be strengthened through institutional profiling (Ministerie OCW 2000, 69). In the strategic plan of 2004 the government announced the advent of a new policy instrument to link institutional profiles, performances and the national policy priorities. In performance agreements between the government and the higher education institutions, the latter should based on their profile develop goals and strategies that would contribute to the national agenda. Such agreements were played down to letters of intent. Although the letters of intent were not effective, in the 2007 strategic agenda (Ministerie OCW 2007) the minister encouraged the institutions once more to offer a larger heterogeneity of programmes for different target groups at different levels, this time under the pretext of being demanding for brilliant students, inspiring for good students, and well-structured for those currently dropping out.

11 Comparative Education 11 With respect to research excellence the discourse unfolded in a slightly different way. In the midst of the 1990s selection of strategic research areas became a key objective. After the turn of the millennium, the rise of global rankings fuelled discussions about world class universities (Altbach 2011), and the concept of excellence gained further prominence and was linked to institutional profiling. In a series of conferences on the future of Dutch higher education, organised by the Dutch ministry, it was suggested that the Dutch should aim to maintain their world class system instead of actively promoting the establishment of one or two world class institutions. In 2009, the Committee on the Future Sustainability of the Dutch Higher Education was established with the assignment to develop a long-term strategy for Dutch higher education. This national committee ( the Veerman Committee ) emphasised that differentiation and profiling are the cornerstones for a high quality mass higher education system that addresses the needs of a knowledge society. The main message was that the ministry should stimulate institutions to differentiate and that the institutions should profile themselves ( ) and to make clear choices regarding their missions ( ). Binarity remains an important fact but with room for new developments at the interface of the two sectors so that the system can become more flexible and more differentiated in numerous aspects (Veerman et al. 2010). Ten recommendations were put forward to make Dutch higher education sustainable for the future : seven called for government action and three for institutional action (see Figure 3). Most higher education stakeholders adhered to the committee s recommendations, but opinions differed about their implementation. Many stakeholders argued that they would require substantial extra financial investments. In addition, discussions started about who should be in control of the differentiation and profiling strategy: the higher education institutions themselves, disciplinary sectors or the ministry. In response to the Veerman process, the ministry developed a new strategic document (Ministerie OCW, 2011) in which policy measures were proposed to further stimulate Figure 3. The 10 recommendations of Veerman et al. (2010, 38 51).

12 12 M. Klumpp et al. differentiation and profiling. One of these measures concerned the introduction of bilateral performance agreements between the government and the individual institutions that focus on a fixed set of teaching-related indicators on which the institutions have to define their own ambitions for the next three years and a number of specific profile indicators chosen by each individual institution. In total about 7% of the teaching budget will depend on the agreed performances and is envisaged to be increased to 20% in The bilateral performance agreements were signed in October 2012, based on the advice of an independent Review Committee Policy instruments to stimulate differentiation and profiling Through legislation a government can prescribe in detail the kind of institutions or educational activities it wants to support. A government can also grant the institutions autonomy that enables them to develop their profiles in response to market and societal demands and expectations. The Dutch legislator has opted for a midway position, which in the past has been labelled as an intriguing Janus head (Maassen and van Vught 1988). On the one hand, the government sets the legal boundaries within which the institutions have to define their activities. The most obvious example is that the government by law prescribes a binary system, regardless of the blurring boundaries between universities and UAS over the past few decades. On the other hand, institutional autonomy has been increased substantially, e.g. in terms of governance structures, financial autonomy and freedom to establish new study programmes. The assumption that more autonomy is a condition for institutional profiling and as such can enhance a more diversified higher education system has played an important role in Dutch higher education reform. The autonomy agenda, gradually implemented since 1985, aims to strengthen HE institutions as strategic actors, i.e. empowering institutions to take strategic decisions, to be more responsive to the needs of society and the economy, and to increase their competitive edge in a globalising world (Ministerie OCW 1985). In this context, policy experiments that allow institutions to offer programmes in a different format are worth mentioning. In 1999 the first university college (at Utrecht University) opened its doors. A university college offers liberal arts programmes at the bachelor s level and can select students itself (who have to pay extra fees for extra services). Currently about half of the Dutch universities are offering such a programme. Since 2002 institutions have also been able to offer selective honours programmes at bachelor s level to serve and challenge their best students. Nearly all institutions have established such programmes. At the master s level the equivalent of honours programmes are the top (research) masters. These developments have been strengthened by government initiatives such as the Sirius Programme. This programme, introduced in 2008, invites HE institutions to experiment with excellence in education. HE institutions can submit proposals for projects that aim to challenge the most gifted students. For the period the government s programme budget is 60 million whereby each project needs to be matched by the institution. A variety of initiatives has been accepted, many of them related to pre-university colleges, honours programmes and university colleges. The UAS were enabled to offer professional master s programmes in a number of limited areas, depending on the market. Since 2006, the UAS has been able to offer associate degrees, which are short cycle professional programmes for a specific student target group. In 2006, the government started a limited number of small experiments to investigate the possibilities and consequences of opening up the higher education landscape,

13 Comparative Education 13 particularly with respect to market entry and exit barriers, student selection and tuition fees. In essence, an open system concerns the establishment of a level playing field that might trigger private providers to enter higher education (and to qualify for public funding). The entry of new providers is assumed to contribute to a more diversified higher education system (a different profile and modus operandi, new programmes, new methods or new student target groups). It is supposed to have a positive effect on access, efficiency and quality. In 2015 the effects of the experiments will be evaluated. In the autonomy agenda, the government provided the higher education institutions with more financial autonomy, which could enable institutional profiling. Another financial incentive mentioned to support differentiation and institutional profiling is tuition fee differentiation, but although debated several times, uniform tuition fees have remained in place (university colleges, as an exception, can only charge extra fees that are related to the extra costs of a residential college). So, for teaching, the institutions cannot profile themselves via price differentiation. The above-mentioned bilateral performance agreements will be related to the public funds for teaching: 5% of the teaching budget will be allocated to the institutions if they define and meet their own ambitions regarding some general performance standards and 2% of their teaching funds will depend on profile indicators proposed by the individual institutions. These proportions are envisaged to increase to 20% in total in The volume of this financial inventive is small, but its psychological impact could be much bigger. In research policy, there have been several financial initiatives to stimulate differentiation and profiling. In the early 1980s, a substantial part of the research funds was defined conditional funding (Jongbloed 2009), envisaged to enhance the quality, coherence (creating mass) and relevance of university research. Research programmes, to be established by university faculties, were peer-reviewed and differences in quality should lead to differences in research budgets. While the effectiveness of these instruments is disputable, it has had a lasting effect by paving the way for a research evaluation system and the growing institutional awareness of the importance of research quality and research management. In 1993, a more performance-based funding system was introduced which largely still exists. Next to the number of PhD degrees becoming part of the funding formula, the larger part of research funding is the so-called strategic component. This component seeks to award high quality and relevance, but due to resistance of the universities it by-and-large remains allocated on the basis of historical grounds. As such, the effects of performance elements in the lump sum on excellence and profiling are hardly visible. Through the years the Dutch government has tried to promote research excellence by shifting parts of the basic research budget to competitive-based funding allocated by the research council (Ministerie OCW 2006). More competition for funding is supposed to result in better research quality. Such proposals, however, have met substantial opposition and have only materialised to a limited extent. The Economic Reinforcement Fund (ICES/KIS set up in 1994 and in 2003 renamed BSIK) has been a more successful financial incentive in the area of research. It is a four-year competitive-based programme to strengthen research in selected priority areas: genomics and life sciences, ICT, nanotechnology and micro systems, spatial planning and sustainable system innovations. It aimed to establish centres of excellence and relevance by means of public private partnership constructions between

14 14 M. Klumpp et al. universities, other knowledge providers, business and industry, and the government. In 1997, the ministry announced the so-called depth strategy, 2 providing competitive financial support ( 50 million) for the establishment of a limited number of excellent research schools. The national research council selected six top research schools, all in natural sciences. Shortly after its introduction, part of the budget was re-allocated to the so-called Innovational Research Incentives Scheme ( Vernieuwingsimpuls ). This research council scheme started in 2000 and aims to provide innovative talented researchers with the opportunity to pursue their research agenda. Another policy initiative that intends to combine excellence and relevance is the establishment of Leading Technological Institutes (TTIs). These TTIs are networkbased organisations, funded by government and industry, that aim to align excellent research and business demands: the public research infrastructure is used for strategic business research interests. In 2007, the so-called smart mix was implemented, which aims to promote excellent research groups ( focus and mass ) and to create societal and economic value ( valorisation to break out of the knowledge paradox ). Again the research council assessed the research proposals to allocate 100 million. Altogether, these initiatives of competition-based funding make clear that times have changed. More often and more explicitly, excellence became the talk of the town and the government made its presence felt. The title of the Science Budget 2004 clearly underlines this development: Focus on excellence and greater value. Not only has enhanced institutional autonomy apparently affected institutional profiling but so too has the accompanying emphasis on stricter accountability measures. On the one hand, the introduction and elaboration of sophisticated quality assurance systems for teaching and research have had homogenising and standardisation effects. Programmes are assessed by the same criteria that are likely to produce the same repertoire of outcomes. The fact that they are peer-review based also does not usually encourage outliers. Only if these systems allow for deviations may heterogeneity arise. On the other hand, quality assurance systems have also created more awareness of being better and making a difference. With relation to research, the implementation of quality assessment schemes for research can be regarded as incentives to scientific excellence and as instruments for strategic choices on the part of (institutional) policy makers. Jongbloed (2009, 7) argues that through the national research assessments, it is believed, academics and academic departments will become more sensitive to the effect of research ratings on their reputation and university leaders will be encouraged to reallocate resources. Clear methods of accountability, quality assurance schemes and science system assessments should visualise performance that encourages universities to improve their research quality. It builds on the notion that naming and shaming will elicit behaviour directed towards excellence. Within the Dutch universities research management has indeed gained increased attention. The strategies developed by institutional leadership to some extent mirror the government s strategy of selectivity and concentration in order to compete successfully on a European and global stage because it is simply too expensive to excel in each and every area. To achieve a critical mass of researchers working in a selected number of strategic research areas, many universities have restructured departments and constructed larger research units that have the best chance of performing high-quality research and/or have a large income generating potential. (Jongbloed 2010, 327)

15 Comparative Education Comparison and conclusion Both the German and Dutch government have taken and implemented several initiatives with respect to institutional profiling to establish a more diversified higher education system. In comparing the initiatives in the two countries, several observations can be made. A first observation is that the context differs within which profilingoriented policies have been established. One of the relevant issues here with respect to the different paths and approaches concerns a different timing in modernising their higher education systems. The Netherlands embraced the NPM agenda much earlier than Germany did (Kehm and Lanzendorf 2006). In the Netherlands, public sector reform, including higher education, started in the middle of the 1980s and, in retrospect, followed a path of gradual change. These reform processes stressed the virtues of enhanced institutional autonomy and marketisation, which apart from other reasons such as massification, have contributed to a growing awareness to differentiate (groups of) higher education institutions. Germany started to implement a NPM agenda at a later time (since the mid- to late-1990s) and as a consequence institutional profiling entered the policy domain later. A second observation is that the German policies had a much more revolutionary character compared to the Dutch approach. The Excellence Initiative serves as an example. The scope and depth of this policy has no Dutch counterpart. Instead of such a comprehensive approach, the Dutch have taken a more mixed approach of policies that concern changes in the law, financial incentives and communication. These differences in policy context, timing and approach to institutional profiling are likely to affect the higher education institutions differently. Strategic management and awareness of the need for profiling seem to have a longer history at Dutch universities and through learning by doing have established a more sophisticated strategic planning behaviour, at least for the time being. This does not imply that this greater awareness has automatically led to a more diversified higher education system in the Netherlands. While on the one hand the introduction of new degree programmes (such as associate degrees, honours degrees, professional master s and university college degrees) has increased the diversity of programme supply in the Netherlands, there are, on the other hand, observers that see tendencies of isomorphism. In this view Dutch institutions use the increased possibilities to set their course to mimic successful choices of others. In other words, they make the same kind of choices. This process is further strengthened by uniform government rules (e.g. in the area of accountability) and uniform parameters in funding formulas. In Germany, we also see homogenising effects of a policy instrument that was, at least in part, meant to encourage institutional profiling. The target agreements between the government and the institutions did not have this intended consequence. In both countries an important aspect of the policies concerning institutional profiling concerns high-level quality and excellence. If we witness different strategies and policies in Germany and the Netherlands, then does this show in terms of excellence? Leaving the pitfalls and criticisms of global rankings aside here, it is interesting to see that the positions of German and Dutch universities are significantly different. Based on the ARWU ranking, the following observations can be made from the comparative analysis of the listed rankings of Dutch and German universities in 2012 and 2005:. Dutch universities are represented with a constant number of 13 universities in the ARWU ranking, two of which reached the Top 100 of the Shanghai listing (Leiden University and Utrecht University). Both universities are comprehensive

16 16 M. Klumpp et al. universities, founded in the sixteenth and seventeenth century, and are, by Dutch standards, relatively large.. There are four German universities in the Top 100 of the ARWU ranking in 2012 compared to five in German universities have gone from 40 to 37 in the Top 500 universities worldwide between 2005 and Relative to country population, the success of the Dutch higher education system is also obvious: whereas Germany [population: 81.8 million in 2010 (Eurostat 2011)] has one university among the Top 500 in the ARWU ranking per 2.21 million inhabitants, the Netherlands [16.6 million in 2010 (Eurostat 2011)] has one university among the world leading universities per 1.28 million inhabitants. Taking the Top 100 universities into consideration, the quota would be one university (among the Top 100) per million inhabitants for Germany and per 8.3 million inhabitants for the Netherlands.. Compared to other nations, the Netherlands is, after China, the most successful higher education system in a dynamic ARWU ranking perspective between 2005 and Looking at the positions in the ARWU ranking, we find a limited number of very highly ranked Dutch and German universities. At the same time, the Dutch higher education system as a whole appears to perform well. If other global rankings were taken into account, the outcome of the comparison of German and Dutch universities would be by-and-large the same. At this stage it would be misleading to explain the success of the Dutch in terms of their policy approach and measures with respect to institutional profiling, nor would it be fair to explain the less cheerful position of German universities here as being because of policy failure. However, for the sake of public debate and future research we cannot resist the temptation to put forward a number of factors that might explain the ranking differences of the German and the Dutch universities. (1) Germany has (lately) opted for a targeted approach in terms of differentiation and excellence in higher education, whereas the Dutch used an array of incentives over a longer period. The German Excellence Initiative is also a narrower perspective: teaching excellence is not included, it is focused on basic research, a one-dimensional understanding of research interdisciplinary and international/cooperative. Nevertheless there are voices arguing that the Excellence Initiative has triggered institutions to consider their position strategically. It has contributed to a growing awareness, also for those not selected for the Excellence Initiative (WR 2010). However, at least for the moment this does not show in the global rankings. The Dutch have also opted for a strategy of picking winners (as the German Excellence Initiative does) but in a far less radical way. This particularly was done by a number of smaller stimulation funds to increase university society partnerships in carefully chosen research areas. (2) Second we see a very formal (and not content) diversity due to complex administration processes in the German Excellence Initiative (e.g. the three funding lines) compared to a very open and content-wise diverse Dutch approach. In the federal German system, all decisions are taken and fixed in a rather bureaucratic and authoritative way (DFG/WR selection commission in the GEI; federal state agreements on funding the GEI). The German approach of a top-down research management and steering may be less effective to