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proportion of income by source of income is highly diversified according to the type
of public institution. In 2010, in public technical institutions, the proportion of income
from teaching was 68.7 percent and from research 26.2 percent, for universities it
was 81.3 percent and 13.9 percent, and for universities of economics 91.3 percent
and 5.1 percent (GUS 2011: 342). Public institutions are much more deeply involved
in research activities than private institutions, for which (except for several semi-
elite institutions) research is a fully side activity, both in terms of academic mission
and in terms of institutional funding. The structure of income from teaching activities
(rather than from all activities) according to sources of funding for teaching shows that
the main source of funding in public institutions is from the state budget (72 percent),
followed by tuition fees (17.4 percent) and other sources (10.1 percent). In private
institutions, the main source of income from teaching activities is tuition fees (86.6
percent). Generally, over 80 percent of all income from teaching goes to public
institutions (82.2 percent); also almost all state subsidies (98.1 percent) go to public
institutions and additionally, almost a half (48.1 percent) of all income from student
fees go to public institutions as well (GUS 2011: 344-347).
316 Chapter 6
are rarely rewarded (or punished) for their entrepreneurialism and rarely act
as separate business units, as is often the case with most successful public
entrepreneurial universities.
6.3. The strengthened steering core
The role of the strengthened steering core in entrepreneurialism of the
private institutions studied, not surprisingly, is very important. Clark s
notoriously weak capacity to steer themselves , exhibited by traditional
European universities (Clark 1998a: 5, see also Aghion et al. 2008, and
Mazza, Quattrone and Riccaboni 2008) is not observable in the private
sector studied. There does not seem to be the need for balancing influences
across multiple levels of these institutions nor the need to keep a constant
balance between particular departments through the intervention of the
center. In contrast to public entrepreneurial institutions (and even more, in
contrast to the whole public sector in higher education), the role of faculty
participation in central councils is severely reduced (here again Buckingham
is an exception). But in general, collegial management is non-existent, and
relationships between academics on the one hand, and administrators/
management/ founders/ owners on the other hands are very limited. As
Clark observed about ambitious universities concerned about their
marginality , and even survivability , they cannot depend on old habits
of weak steering . They need to become quicker, more flexible, and
especially more focused in reactions to expanding and changing demands .
A strengthened steering core is a necessity and it is prevalent in the private
sector. It is also becoming widespread in various parts of public higher
education across Europe (as a consequence of the spread of the New Public
Management ideas and public sector reforms, see conceptualization by Jan-
Erik Lane, Lane 1990, Lane 1997, Lane 2000, and Ferlie, Musselin and
Andresani 2009).
The university center is constantly dealing with risk, the management
and understanding of which is crucial; and the risk, to be managed on a daily
basis, is the financial one (as the rector in the Russian case study of the
University of Pereslavl put it, the university constantly encounters
difficulties securing basic daily needs & which demoralises staff and
distracts it from its mission , EUEREK case studies: Pereslavl, Russia, 17).
The role of obtaining resources (through retaining or increasing the number
Academic Entrepreneurialism and Private Higher Education in Europe 317
of students) seems more important than the role of building prestige or
reputation for the private institutions studied. In terms of management
structures, as in public entrepreneurially-minded universities, private
institutions have powerful centers, strong management groups, usually
comprising only a few administrators. In decision-making, the role of
collegial bodies seems, in most cases, marginal (most often, even if they
nominally exist, only their formal approval of decisions taken by top
administrators is sought). Most private institutions do not use resource
allocation procedures to make strategic choices about their future direction.
Also no major impact of what Clark termed new bureaucracy is reported:
both the number, and the role, of development officers, technology transfer
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