Dutch Universities of Applied Sciences towards diversified income: Saxion UAS caseSiep Littooij1Paper presented at the International Conference 2010 on Decentralization in Higher Educationfrom a Global Perspective: Implications for Vietnam and the Region; Sub-theme Diversificationof Resources,Ho Chi Minh City, 29, 30 July 2010ABSTRACTThe profile of Saxion University of Applied Sciences is representative of many other Dutch Universities ofApplied Sciences. Saxion UAS is a large multidisciplinary university, located in the East of theNetherlands, predominantly teaching for Bachelor degrees in the professions. Saxion, when contrastedinternationally on diversity of funding sources, displays a high dependency on teaching income. Emergingand stated categorical policies drive change in the Dutch higher education landscape, drive towardsenhanced applied research, more outward orientation all the time while enhancing educational quality.Funding opportunities challenge the development towards external benefits of research, rather thaneducation enhancing knowledge generation, which is the natural propensity of staff. Saxion learns to dealwith research and acquiring research funding through the national RAAK programme, of which thelessons learned include the need to pick a position on the knowledge value chain, to aim for state of theart knowledge as a means towards success and to look at external demand articulation in a responsibleway. Moving towards diversified funding, the organization model adapts so that the Board remains incharge of strategy and research finds strength in distinct organizational units. The university providescentralized services to support diverse funding models, while culture changes are supported toaccommodate acceptance of funding diversity.Dutch Universities of Applied Sciences towards diversified income:Saxion University of Applied Sciences as case studyDutch Universities of Applied Sciences (UAS) are defined by law as institutions of highereducation. Established mostly in the middle of the last century, some go back to teachinginstitutions with over a century of history, while all have a history of mergers to grow to thecurrent sizes. The Netherlands now has 39 of these universities, out of a total of 53 universities.The other universities are research or academic oriented universities. The Dutch universities ofapplied sciences employ about 38000 staff and faculty and teach approximately 400000 students,approximately 2/3 of Dutch higher education students.Predominantly, students acquire Bachelor degrees in 4 years, including approximately 1 year ofpractice. The universities take part in national experiments to develop and teach undergraduate 2-year programs at the level of ‘Associate Degree’. A limited number of students continue on tograduate with a professional Master. The UAS are either large multidisciplinary institutions withregional coverage, alternatively are highly sector specific institutions that draw students intospecialist programs. The UAS teach for the professions and are engaged with the professionthrough a host of mutual ties, for example with professional associations or economic sectorrepresentations.1 Manager International Project Desk, Saxion University of Applied Sciences, The Netherlands
The combined annual budgets (2005) amounted to approximately 2.7 billion euro, consisting formore than 2/3 of state budget contribution, earmarked for teaching. The underexplored strengthyet of the UAS is the potential for applied research, a function that is only realized through non-state funding. The budget contribution, provided as a lump sum, is calculated using a formulaithat includes student numbers and study performanceii. The remaining budget is generated astuition fees paid by students and third party incomes. The annual available budget amounts to7.647 Euro per student.2Total funding for UAS 2005Fund type UAS NL 2005iii Saxion UAS 2009iv Euro Share 2009 Share (million)Budgets 1851 68,2% 108234 68,0%Tuition Fees 483 17,8% 31423 19,7%3rd Party 201 7,4% 9252 5,8%Other 180 6,6% 10272 6,5%Grand Total 2715 159181Saxion UAS, a product of the 90’s institutional mergers, is now operating across several cities inthe east of the Netherlands, with 13 schools. It teaches more 22.000 students (2009-2010) in morethan 55 Bachelor programs, 7 Associate Degrees and 15 Masters.3 With 6 research centers amultidisciplinary research capacity has been established over the last decade.The revenue in the year 2009 was a little over 159 Million Euro. The division over differentincome sources follows the national UAS pattern, with slightly more income from tuition and lessincome from 3rd party income.Higher education policy in the Netherlands, part inspired by European policies, is slowly drivingchange, and subsequently diversification, of universities. Most relevant driver of this change isthe impending change in the law on higher education, which will lead to a change in fundingregime. It is also expected that the law will redraw the boundaries of the binary system ofuniversities of applied sciences and research universities. The law is in draft form, has beendiscussed since 2005, but has not passed parliament as of mid-2010. The Ministry of EducationCulture & Science (OCW) has issued two policy statements, driving towards applied research ofUAS and enhanced international linkages for all higher education. The applied research functionof UAS is to be realised in collaboration with (regional) employers and aims to strengthen therole of UAS for regional knowledge contributions. The association of UAS, in the meantime, hascalled for a higher education quality ambition. The national innovation system has a large numberof funds and programmes available with specific goals and procedures, to which all universitiesare invited to contribute. This is collectively labelled here as the National InnovationProgrammes. By and large, European policies drive in the same direction, providing funding forR&D and regional policies.2 The annual available budget for Dutch research universities is approximately 23.085 per student, arrived at througha different funding formula for students and different earning opportunities, for a much larger part spend on research.3 The number of Bachelor programs as counted for full time four year students. Optional and partial offers increasethe number Bachelor programs.
To obtain an international perspective of funding diversity, it is useful to compare the fundingsources of Dutch UAS with (brief) data collected from European peersv, with a focus especiallyon the research function, such as funded by either government grants or business contracts.Standards and Poor’s assessment of total UK institutional income (2006) shows a 25% incomefrom government funding for education. With another 25% generated in tuition fees, the teachingrevenue amounts to just over half the budget. Roughly 28% is derived from funding for research,sourced from a range of funding sources. Uniformly understanding the figures is difficult, givendifferent reporting statistics. Saxion UAS reports a figure of 7.105.000 Euro of research, bothgrants and contracts in 2009, or 3.9% of the total budget. Leporivi shows that, comparingaggregated and somewhat old data, Dutch University income from grants and contract is relativeto Europe a small proportion of income. Saxion then earns a very small part of its income thisway.Lepori surveyed in 2007 the funding situation for European UAS, in order to formulate a fundingpolicy for Swiss UAS. Recommendations for the future funding of this type of institution buildon the binary divide underlying the mission and role the UAS in the national higher educationsystems. He then challenges the research mandate and the shape of research activities, that is herefurther paraphrased as:“The ‘Lepori challenge’ to UAS grant funding strategy”The challenge becomes clear by exploring the dilemma of the two research orientations known inHigher education that emerge from the mission that knowledge is to be simultaneously developedánd taught. With UAS in binary national systems are predominantly operating as teachinguniversities, they suppose their knowledge delivery to society is realized through the pathway of Development / the environment Enhancement of teaching • Customer demand driven: Customer • ‘supply’ driven for students : Generic funded funding • Focused on key (national) theme’s • Dispersed over all programmes • Institutional co-funding in relation to • Institutional funding towards excellent economic partners professionals • Technology transfer to meet immediate • Technology development to meet customer demands human capital demands in society
training students that enter the workforce upon graduation. Naturally such UAS are moreinterested in the enhancing their teaching. Research universities find their pathway throughpublications.Surveying the Dutch funding landscape we can distinguish the different funding categoriesembedded in the funding policies, aiming for specific funding targets. The table below lists,without exhaustion, funding agencies or clusters of targeted funding programmes. The list on theright is not only short, the funding programmes are relatively small; the spending categories arecomparatively narrowly defined.Trends and opportunities for UAS, Targeted fundingKnowledge & Research for the economic Knowledge & Research for enhancement ofenvironment teachingKNAW Platform BetatechniekZonNW SKEFP7 EU RAAKInnovation Platforms EVDDelta’s & Valley programs NUFFICIndustry & BusinessLocal governmentEDF e.g. Interreg, EFROGiven the policy environment that drives universities towards more applied research, coupledwith funding diversification and the search for autonomy, the Lepori challenge for UAS thenbecomes clear. While the great majority of available funds drive the knowledge development forthe economic environment, universities that stick to their teaching mission have only a limitedchance to diversify their funding. The continuing dependence on teaching, with its associatedfunding model, deprives then UAS from autonomous choices.Universities that wish to escape this dependency are faced with a learning curve, not so muchbecause of their lack of research experience but from their engrained historic thinking mode thatsupposes the benefit of research takes the student-oriented pathway of delivering knowledge tosociety.In the dialogue about the developing role and function of UAS in the Netherlands, OCW hasestablished a research fund designated only for UAS. This RAAK programme ‘RegionalAttention and Action for Knowledge circulation’ enables the UAS to gather learning experienceabout the various issues that need to be addressed in research. The association of UAS hasestablished an intermediary foundation with employer organisation and research institutes also inthe board, to dispense the fund in a competitive allocation model. Funded since 2005, the amountrecently announced for 2010-1013 just surpasses 67 Million Euro.The main ambition of the RAAK programme is to strengthen the UAS research capacity. Thougharticulated somewhat concealed, the set of documentation lists goals that could be interpreted as adesire to improve the demand ‘antenna’ of UAS among industry partners, stimulates theparticipation in peer to peer networking, develop research methods and to share knowledge,
especially knowledge produced for specific target groups. Funding proposals must be submittedas consortia, through which the relations between UAS and SME’s are reinforced, as well aslinkages with Academic University. Depending on the sub-type of the RAAK calls, coreconsortium partners can amount to 10 companies, with peripheral partners up to 50The challenges in the formation of consortia with industry partners force an outward look.Meeting the proposal criteria for funding approval means that concrete research questions areaddressed as articulated by SME’s (or public organisations). Through the collaboration inprofessional networks and industry clusters, UAS faculty has to acquire a much more preciseunderstanding of research and knowledge demands in his/her professional field of work.Departing from the student oriented pathway of knowledge transfer, new processes of knowledgecirculation are to be identified and actively serviced. To succeed, faculty must have an adequateunderstanding of the knowledge position they can deliver themselves. Alternatively they mustsource knowledge in the scientific realm on one side, then on the other side share and contributeto applications of knowledge in practice.Reflecting on a few years implementation of RAAK, 3 strategic lessons are learned. First lessonis the importance of the understanding of how knowledge circulation functions and what the roleof UAS means in the local environment. As a consequence, successful faculty manages toposition each funding application in the knowledge value chain. A second lesson is to haveaspiration and ambition in the knowledge function. Each research proposal will only be funded ifthe ambition is to add value to state-of-the-art work by ‘others’ and translate knowledge intoapplications that lead to success in collaborating industry organizations. The third lesson is thatexternal, as articulated by responsible and committed partners, can only be intercepted andunderstood if the faculty see themselves and the UAS operate in an ecosystem. In such anecosystem the UAS with its different partners are relating interactively, each with an owninterest, but also living together in the local situation in such a way that is mutually supportive.From these lessons and emerging conclusions, Saxion now recognizes and experiments with a re-iterating two step funding acquisition strategy: 1. Act in dialogue; Working together with actors in local industry, the profession, the community, developmental goals can be jointly identified and funding searched. The knowledge sharing pathway with society becomes a two-way dialogue, in which students, researching faculty and publications all are instruments. Funding agencies are also part of local and national ecosystems. Saxion aims to participate in dialogue with partners and about themes and topics that matter. 2. Acquire through competition; Local business works with the most knowledgeable and ambitious partners, government agencies equally pursue funding for the most ambitious proposals in progressing knowledge. Through the selective funding procedures, each application must reach the highest standards possible. Saxion understands that for translating the knowledge ambitions into funded proposals, market principles help to move the ecosystem forward and aims to compete at the top of its capacity.This strategy has emerged partly from the past experience with success and failure in fundingapplications, partly by studying and anticipating the implications of the policy environment. Theimplication of the funding acquisition strategy is that a diverse range of topics is pursued. Eachtheme or topic has its own arena, in which the partners, the funders and the university all
participate. This results in a multiplication of arenas, both horizontally and vertically. Strategicselection of pursued themes keeps the workload manageable. Matching the dialogue partners atvarious levels and in various arenas is the operational challenge for Saxion in pursuit of fundingdiversification.Saxion is on its way to adapt to internally to diversifying funding. This is expected to yieldresults in the near future, however much also still remains to be done. The current strategydocument, leading up to 2012, commits the organization strongly to an outward look. This is alsorealized by the board, the members are actively pursuing participation in regional and disciplinespecific organizations. More strategic guidance in fund acquisition is to be realized in the nearfuture, in part through steering research programming, in part through enhancing the fundingacquisition strategy. Through board participation in the local ecosystem, much information iscollected and disseminated about the position of the university. Feedback is coming in,undoubtedly leading to fresh looks at the strategy beyond 2012. Internally, the board hasrefreshed the perspective on the Planning & Control cycle to include not only regular expenditurereviews but also income reviews.Having centralized the organization in the early and mid-2000’s, now decentralization is gainingstrengths which leaves the organizational units with added tasks in research and fund acquisitionplanning that were not visible before. Acquiring funds through competitive funding programsnow takes place in a consultative and strategic decision making process, that acknowledgesfunder rules. The organization model shows a growing acquisition and administrative capacitydedicated to externally oriented research. Professors and faculty are increasingly participating inregional and professional networks and are busy opening up their research lines to adopt externaldemand.A serious effort is training additional project managers from a pool of staff or faculty that notonly have a professional role in the education-as-a-process organization, but also gain experiencein working in individual projects. With a few centrally appointed coordinators for research, forproject capacity development and for scouting funding Saxion is enhancing its capacity to acquirea wider range of funds. Work is and still needs to be done to align further the generaladministration function with project and funder requirements.The main challenge for the near future is the culture of the institution. While research readiness isgrowing and external demand articulation finds its place, an outreaching and entrepreneurialattitude towards funding acquisition still has to reach a higher level. Internal processes andattitudes towards both tangible and intangible costs/benefits of knowledge sharing through non-students pathways needs still to sharpen up. For the near future, the debate about the optimalpathway mix of providing knowledge to society will continue to challenge the funding strategy.
i Factsheet Bekostiging Hbo, www.ocwduo.nl, accessed 14 June 2010ii Website www.HBO-Raad.nl, accessed 14 June 2010iii Financiering en financien van het hoger onderwijs 2000-2005, van Klaveren, D; CBS 2006iv Annual report and accounts 2009, Saxion 14 June 2009, www.jaarverslagsaxion.nlv Revenue Diversification and Sustainability: A Comparison of Trends in Public Higher Education in the UK and US;Standard & Poor’s Performance Evaluation Services; Commissioned by The Council for Industry and Higher Education(CIHE) December 2008vi Funding models of Universities of Applied Sciences; Rector’s Conference of Swiss Universities of Applied Sciences,Benedetto Lepori 2007; Servizio ricerca USI-SUPSI, Lugano