Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: This article addresses the issue of how and why European universities are learning to compete, in a situation where the national institutional context and sectoral conditions are undergoing transformation. European universities – from top leaders, faculties, research groups and individual employees – are increasingly forced to explain to many stakeholders about how, whether, and why their scientific knowledge and educational programmes are relevant to society or not. For example, if universities are not contributing to public and private goods, why should society continue providing resources? Why should students pay for education, if the individual returns are too low? Why should companies and private foundations pay for research, if the results are not directly relevant to their goals? How can the efficiency and productivity of the university be improved – and which metrics can be used to demonstrate that those goals have been met? What are the dilemmas and trade-offs that this new competitive regime imposes on the functioning of universities and of society? These are the types of questions currently raised within universities in Continental Europe and Nordic countries, and ones that university leaders, faculty and staff will have to answer. Or else, they should raise new types of questions and perspectives about the role of the university in society.universities now face clear demands of producing immediately usefulness knowledge to students, businesses and society (enhanced amongst other by the Bologna process). The pressures on the university to quickly respond to societal and industrial demands have been more forcefully articulated in recent years. If these organizations wish to retain the traditional values of scholarship, they will need to do so, in parallel with understanding – and changing – their selection environment in the future. We focus upon the competition aspect from a Schumpeterian view, in order to draw out the logical conclusions but we do not focus upon whether those outcomes are desirable or negative. We choose this focus because we know that universities play major roles in the knowledge society, and current debates within the EU indicate that we will see additional major changes in the national institutional context and global markets. The article turns to more abstract questions, such as whether competition exists amongst universities and if so, what are the major trends and future outcomes of this shift from a social institution to a knowledge business. Thus, do universities really compete? And if so, how do they compete? And over what?

Keywords: universities; competition

JEL-codes: I21; I23

37 pages, September 9, 2008

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