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Europe’s World-Lagging Universities Need Increased Funding

Brexit has revealed a neglected truth that is highly inconvenient to European policymakers: the European Union’s remaining universities are nowhere to be found at the top of world rankings. Unfortunately, EU officials appear to have no interest in acknowledging the problem, much less addressing it.

BRUSSELS – One of the many negative consequences of Brexit is that what was an educational superpower on the global stage has become a second-rate contender. With the United Kingdom’s departure, the European Union has lost first-rate universities such as Cambridge, Oxford, UCL, Imperial College London, and my old home, the London School of Economics.

Worse, Brexit has revealed a truth that is highly inconvenient to European policymakers: the EU’s remaining universities are nowhere to be found at the top of world rankings. In the 2020 QS World University Ranking, the top EU university is at number 50 (Delft University of Technology). In the Academic Ranking of World Universities, the EU’s top representative is the University of Paris-Sud, at 37. In the Times Higher Education World University Rankings, it is the University of Munich, at 32. By contrast, Switzerland, China, Japan, and the rest of East Asia’s developed economies all have universities near the top of some or all of the major rankings.

The most common response I have encountered among EU officials is denial of reality. When challenged, top European Commission officials simply say: “I don’t believe in rankings,” and extol the wonders of EU member states’ universities.

To be sure, there is a solid “upper-middle class” of European universities: the Netherlands and Sweden have several. What we lack are excellent institutions: universities that can attract the world’s best researchers in any given field and offer them a hefty salary and ample research funds. The truth is that, like in other fields of endeavor, research talent is highly concentrated: good researchers like to work with other good researchers, and isolated talent is expensive.

Moreover, continental university systems – most notably in Germany, France, Italy, and Spain – are hindered by antiquated, bureaucratic, and often endogamic governance systems. It is difficult to obtain outside funding, hard to spend it, and challenging to hire top researchers. As a result, in all these countries, top universities are a pale reflection of their glorious pasts.

The consequences of these problems are evident: without sufficient resources and good governance, our universities cannot lead in key areas like artificial intelligence and biotechnologies. And without leading research universities, the EU cannot compete in the global technological race. It is no wonder that eight of the world’s top 15 technology companies by revenue are American. Three are Japanese, and China, South Korea, and Taiwan account for the remaining four. EU officials should appreciate the significance of Europe’s absence from that ranking.

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To address it, the EU needs to act to secure funding and improve governance. Currently, the best source of funding is the European Research Council. It funds outstanding individual researchers in a meritocratic and transparent way without regard for geographic balance. Shockingly, the European Council’s July agreement launching the Recovery Fund reduces substantially the resources initially promised to the European Research Council, the only effective tool that Europe has to raise the level of its research sector. This is an unacceptable response to what is a critical situation for the European university sector.

Europe has another source of available funds: the European Institute of Innovation and Technology (EIT), endowed with a budget of €2.4 billion ($2.8 billion) in the last EU budget. Never heard of it? Neither had I until a few months ago. In traditional European fashion, the EU’s members could not agree on where to locate it; although they decided on Budapest, in effect it has become a virtual university.

It has also been an unqualified failure. But this failure has not impelled the EU to rethink the EIT. The European Parliament is reviewing limited aspects of it, but the report will be a whitewash. Properly used, the money now being wasted on the EIT could lay the groundwork for a proper frontier institution.

But funding is not enough. All continental European universities share the same antiquated governance systems, which prevent them from making crucial decisions, such as budgetary allocations and hiring choices, in an independent and results-oriented fashion. As Philippe Aghion and other researchers have shown, European universities’ lack of competition and autonomy hinders their performance. The EU should launch a “good governance” project to diffuse best practices such as effective accountability mechanisms, merit-based grants, and greater competition for students and faculty.

As part of this “good governance” project, resources that are currently spent on the EIT could be used to set up a new fund that would reward only the best European universities and departments in terms of research and teaching. This new framework would aim to create incentives for institutions to strive for excellence and adapt their governance and management practices to an objective-based funding system.

Sadly, none of this is a priority for EU institutions. French President Emmanuel Macron did propose a European University in his 2017 Sorbonne speech, but, as with many of the other good ideas contained in that address, Europe has done little about it.

When Europe has the will, it can effectively deliver truly effective joint research initiatives, like the ERC, that incorporate research insights into university performance. If we are to achieve global technological leadership, as the Commission’s recent White Paper on Artificial Intelligence argues we should, we must put our money where our mouths are and press for profound reforms to ensure that European universities are where they belong: at the top.