Tertiary Education in Finland: Achievements, Challenges and Opportunities

Transcription

1 Tertiary Education in Finland: Achievements, Challenges and Opportunities Jamil Salmi* Prepared for the Ministry of Education 27 November 2014 * Global Tertiary Education Expert; Former World Bank Tertiary Education Coordinator; jsalmi@tertiaryeducation.org;

2 Table of Contents Introduction... 3 Characteristics of High-Performing Tertiary Education Sytems and Institutions... 4 System-wide analysis... 4 Institutional level analysis... 8 Alignment of Fundamental Characteristics of a WPU... 8 Theory of Change within Tertiary Education Institutions Achievements and Challenges from an International Perspective System Performance System Health Expansion Strategy Quality and Relevance Research Strength Stewardship and Governance Financing Options for Strengthening the Finnish Tertiary Education System Impact of Global Trends Reform Options Future Size and Shape of the System Building Up Research Excellence Improved Internal Efficiency Innovative Teaching and Learning Enhanced Internationalization Institutional Autonomy Conclusion References Annexes

3 Introduction In a world where education has become one of the principal drivers of knowledge-based development, many countries are struggling to catch up with their more advanced peers. Finland, however, has little to envy the other nations. The latest Global Competitiveness ranking compiled by the World Economic Forum (WEF) puts it at number four overall, ahead of the other Nordic countries, with a two-place improvement over the past six years. It has consistently led the platoon of high performers in the PISA and TIMMS tests. Its tertiary education system, recently consolidated through a series of mergers, is very well considered among the OECD countries, and ranks first in the WEF ranking. Finland boast one of the highest enrollment rates in the world and its best university, the University of Helsinki, is among the top 100 according to the Shanghai global ranking. But having excellent results at one point in time is no guarantee of eternal success, as Nokia s story demonstrates. The tertiary education system and institutions must keep innovating and improving to remain internationally competitive and relevant to the needs of the Finnish economy and society. Through the preparation of a highly skilled, productive and flexible labor force and the creation, application and dissemination of new ideas and technologies, tertiary education plays a critical role in supporting knowledge-driven economic growth strategies and the construction of a democratic, socially cohesive society. In this context, the objectives of this report are two-fold. First, it aims to provide an overview of the present performance of the Finnish tertiary education system in relation to the leading OECD countries, including its Nordic neighbors, and identify existing issues and challenges. Second, on the basis of this diagnosis, it explores the main reforms and policy options that could be considered in order to address the problems at hand. Specifically, the report seeks to answer the following key questions: How well is the Finnish tertiary education system performing? How does it compare with similar OECD countries? To what extent is it aligned with global trends and good practices? What are the key issues that need to be solved as a matter of urgency? What would be priority areas for tertiary education reform in Finland? What menu of options should the Government contemplate? What would be adequate conditions for effective reform implementation? The report was prepared using the following five sources of information: Review of official publications in Finland and relevant documents produced by the OECD. Review of recent academic works on tertiary education reforms in OECD economies. Analysis of national, regional and international statistics on tertiary education. Interviews of a small sample of Finnish tertiary education experts and practitioners. Analytical framework and database on tertiary education reforms developed by the author over the past 20 years. 3

4 The report starts with a presentation of the analytical framework applied for assessing the performance of the Finnish tertiary education system and institutions, and continues with an examination of the country s main achievements and the identification of areas for improvement. It finishes with a series of proposals and suggestions for the future development of the Finnish system as a high-performance system. Characteristics of High-Performing Tertiary Education Sytems and Institutions What metrics should be relied upon to assess the performance of Finland s tertiary education system? This first section sets the analytical framework used to benchmark and explain the results of the Finnish system and institutions. System-wide analysis The proposed framework is built on the premise that well-performing tertiary education institutions do not operate in a vacuum. As suggested by Engeström in his active theory developed in the mid-80s, the behavior of individuals and institutions is influenced and mediated by the socio-technical context in which they function (1987). Therefore, the assessment must take into consideration key forces at play at the level of what could be called the ecosystem within which they operate (Salmi, 2011). These forces can have a facilitating or constraining effect, depending on the circumstances. As illustrated in Figure 1, the main dimensions of the tertiary education ecosystem include the following elements: Macro environment: the overall political and economic situation of the country, together with the rule of law and the enforcement of basic freedoms, which influence, in particular, the governance of tertiary education institutions, their level of funding, academic freedom, and safety in the physical environment; Good stewardship at the national level: leadership in tertiary education, translating into a vision and a strategic plan to shape the future of tertiary education and the capacity to implement reforms; Governance and regulatory framework: the governance structure and processes at the national and institutional levels that determine the degree of autonomy that tertiary education institutions enjoy and the mechanisms of accountability they are subject to (especially important from the viewpoint of the human resources policies and management practices that allow emerging research universities to attract and keep qualified academics); Quality assurance framework: the institutional setup and the instruments in place for assessing and enhancing the quality of research, teaching, and learning; Financial resources and incentives: the absolute volume of resources available to finance tertiary education in the country (mobilization of public and private resources) and the mechanisms through which those resources are allocated to various institutions; Articulation and integration mechanisms: the links and bridges between high schools and tertiary education, and the pathways and procedures integrating the various types of institutions that constitute the country s tertiary education system, all of which affect the academic characteristics of incoming students and their academic results as they move through the tertiary education system; 4

5 Location: the quality of economic, social, and cultural characteristics and infrastructures available, including public services, recreational amenities, housing, transportation, and environmental quality; and Digital and telecommunications infrastructure: the availability of broadband connectivity and end-user devices to support the delivery of educational, research, and administrative services of tertiary education institutions in an efficient, reliable, and affordable way. 5

6 Figure 1 - Articulation of Outcomes and Determinants in the Tertiary Education System political & economic stability, rule of law, basic freedoms telecommunications & digital infrastructure location results attainment learning equity research technology transfer values stewardship (vision, leadership & reform capacity) governance & regulatory framework articulation & integration mechanisms quality assurance & enhancement resources & incentives drivers of performance Source: Elaborated by Jamil Salmi (2011) 6

7 In this context, the benchmarking approach applied in this report makes a fundamental distinction between (i) the results of the tertiary education system and the institutions that it comprises ( system performance ) and the drivers of performance that account for these products ( system health ), with the purpose of addressing the following three questions: How well does the tertiary education system actually produce expected outcomes at the current time (system performance)? How well do the tertiary education system s key inputs, processes and enabling factors reflect conditions that are known to bring about favorable outcomes (system health)? How well has the system evolved over the past decade and what has been the speed of change of key performance and health indicators (time dimension)? 1 Table 1 summarizes the principal dimensions of system performance and health analyzed in this report, based on the conceptual model presented in Figure 1. Table 1 Conceptual Framework for Benchmarking Tertiary Education in Finland Focus of Benchmarking Main Dimensions of Analysis System Performance Educational Attainment Equity Learning Achievement and Labor Market Outcomes Research Output Technology Transfer Results Values System Health Access and Expansion Strategy Curriculum and Pedagogical Practices Internationalization Quality Assurance Relevance to the Needs of the Economy Stewardship and Governance Financing Elaborated by the author 1 This conceptual framework was developed by the author while working at the World Bank in the context of a wider policy research project on the measurement of the results of education systems. A summary presentation of the framework for tertiary education can be found in Salmi (2013). 7

8 The main performance measures can be defined as follows: Attainment refers to the stock of qualifications in a given population, measured by calculating the proportion of adults in the working age population who have completed a tertiary degree. Learning achievement refers to the quality and relevance of the education and training experience of tertiary level graduates. This is one of the most difficult areas to measure in the absence of widely accepted metrics such as PISA or TIMMS. Equity refers to disparities in the results (attainment, academic trajectories and labor market results) of disadvantaged groups such as low-income groups, females, minorities, and people with disabilities. Research outcomes refer to publications and advanced training, measured by the number of scientific journal citations relative to a country s population and the capacity of the system to prepare PhD graduates. Knowledge and technology transfer represent the contribution of tertiary education institutions to the national economy and to the development of the regions that they serve. Possible indicators to measure this include the number of patents registered by universities and the proportion of doctoral graduates working outside universities. Values, behavior, and attitudes refer to the effectiveness of tertiary education in equipping graduates with positive values and citizenship skills. This is a very difficult area to measure, but the methodological challenges do not justify neglecting this important dimension of the role of tertiary education. Institutional level analysis Seen from the institutional viewpoint, what are the distinctive features of the best performing universities? The methodology used in this report to analyze the results of Finnish universities involves two complementary aspects: (i) alignment of the three sets of fundamental characteristics of well-performing universities, (ii) theory of change to explain the internal transformation of universities into better performing institutions. Alignment of Fundamental Characteristics of a WPU The superior results of well performing universities highly sought graduates, leading-edge research, and dynamic technology transfer can essentially be attributed to three complementary sets of factors (Salmi, 2009): (a) a high concentration of talent (academics and students), (b) abundant resources to offer a rich learning environment and support advanced research, and (c) favorable governance features that encourage strategic vision, innovation, and flexibility, enabling institutions to make decisions and manage resources without being encumbered by bureaucracy (Figure 2). While the configuration of results research, learning and technology transfer depends on the nature and specific mission of each tertiary education institution (research intensive, teaching, applied science, etc.), the alignment of the three sets of factors is a requirement for any kind of institution. 8

9 Figure 2 - Characteristics of Well-Performing Universities: Alignment of Key Factors Concentration of Talent Students Teaching Staff Researchers Abundant Resources Public Budget Resources Endowment Revenues Tuition Fees Research Grants Graduates WPU Knowledge & Technology Transfer Leading-Edge Research Leadership Team Strategic Vision Culture of Excellence Autonomy Academic Freedom Favorable Governance Source: Elaborated by Jamil Salmi 9

10 The first and perhaps foremost determinant of academic excellence is the presence of a critical mass of top students and outstanding faculty. The most recognized universities globally are able to select the best students and attract the most qualified professors and researchers, not only from the country where they are located but also internationally. Abundance of resources is the second element that characterizes well-performing universities, especially in the case of research-intensive universities that require sophisticated laboratories and equipment. These universities have four main sources of financing: government budget funding for operational expenditures and research, contract research from public organizations and private firms, the financial returns generated by endowments and gifts, and tuition fees. The third dimension concerns the degree of academic and managerial autonomy that universities enjoy. WPUs operate in an environment that fosters competitiveness, unrestrained scientific inquiry, critical thinking, innovation, and creativity. Institutions that have substantial autonomy are also more flexible because they are not bound by cumbersome bureaucracies and externally imposed standards, notwithstanding the legitimate accountability mechanisms that do bind them. As a result, they can manage their resources with agility and quickly respond to the demands of a rapidly changing global labor market. These autonomy elements are necessary, though not sufficient, to establish and maintain well-performing institutions. Other crucial governance features are needed, such as inspiring and persistent leaders; a strong strategic vision of where the institution is going; a philosophy of success and excellence; and a culture of constant reflection, organizational learning, and change. Theory of Change within Tertiary Education Institutions The above framework can be complemented by a theory of change elaborated recently by the author as an input to an ongoing evaluation of NORHED, the Norwegian government s university partnership program (DPMG, 2014). As represented in Figure 3, the theory of change involves two dimensions. First, it identifies institutional-level factors that affect the performance and sustainability of tertiary education institutions by directly influencing their mode of operation. Second, it models the inputs and intermediary results that, according to the literature and international experience, lead to better graduates and research. 10

11 Figure 3 - Theory of change for producing well-qualified graduates and high quality research Institution-level enabling conditions Leadership, vision, & plan Internal quality assurance & institutional research Resources & incentives for teaching, research and student aid Appropriate qualifications, experience and motivation of academic staff Effective selection of incoming students, esp. graduate students Sequence of causal links within universities Intermediary results High quality and relevant programs/ courses; engaging pedagogical practices and sufficient time spent on active learning activities Dynamic collaborative and multi-disciplinary research Favorable learning environment and research infrastructure Increased number and quality of graduates; increased and better-quality research Linkages with industry & community; stakeholders inputs Source: DPMG, 2014

12 The most important dimensions in the causal chain explaining the performance of any tertiary education institutions include the following aspects: academic preparation and motivation of incoming students; qualifications, experience and motivation of academic staff influenced, in turn, by institutional recruitment policies, faculty development programs and incentives systems; existence of close linkages with employers and the community to improve the relevance of students learning experiences and ensure that university research is oriented to the resolution of priority economic and social problems; and learning environment and research infrastructure; The intermediary results box in Figure 3 illustrates how, in high-quality universities, the abovelisted key input factors are combined into producing a relevant curriculum, offering a collaborative and proactive learning process, and undertaking dynamic research activities. These translate ultimately into high quality graduates and high quality research outputs. Achievements and Challenges from an International Perspective As announced in the previous section, benchmarking the Finnish tertiary education system involves two steps, first assessing its results and second analyzing the drivers of performance that account for these results. System Performance Educational Attainment The first key outcome is the level of educational attainment, calculated as the proportion of adults in the working age population who have completed a tertiary level degree (Table 2). The data clearly show very positive results. In its 2013 Country Note, the OECD congratulated Finland for being among the most well-educated countries. The latest available statistics from the 2014 edition of Education at a Glance indicate that, in 2012, 40% of Finnish adults age held a tertiary education qualification, compared to the OECD and EU21 averages of 33% and 29% respectively. The only possibly worrisome trend is the slowing down in the growth of the attainment rate of the age group relative not only to the OECD and EU21 averages, but also to Finland s Nordic neighbors. Even though tertiary education attainment increased overall by 7 points between 2000 and 2012, the age group gained only one point. In fact, Finland had the smallest increase compared to all benchmarking countries.

13 Table 2. Trends in Educational Attainment ( ) year-olds year-olds Average annual growth rate Average annual growth rate Australia Canada Denmark Finland South Korea Netherlands Norway Sweden Switzerland United Kingdom United States OECD average EU21 average Source: OECD, ( Another way of showing the dynamic evolution of the Finnish tertiary education system in relation to other countries is by looking together at the tertiary attainment level for the age group and the gross enrollment rate for the age group. One interesting finding from the data presented in Figure 4 is that many comparator countries, including the other Nordic countries, appear to be more efficient than Finland in graduating their students. Switzerland and the United Kingdom obtain the best results in that respect. This may be linked to the fact that a high proportion of Finnish students work as they study. 13

14 Figure 4 Attainment and Enrollment Rates in Finland and Comparator Countries (2012) Switzerland UK Sweden OECD average Norway Netherlands Denmark Australia Finland USA S. Korea ,6 61, ,4 74, ,3 79,6 86,3 93,7 94,3 98, Attainment GER Source: Education at a Glance 2014 (OECD) and UIS Equity The equity dimension refers to disparities in the results (attainment and academic trajectories) of potentially disadvantaged groups such as low-income groups, females, ethnic minorities, and people with disabilities. This is not an area where statistics are abundant, but the limited existing information provides some light on the achievements of the Finnish tertiary education system. Unlike what happens in most countries of the world where access to tertiary education is heavily influenced by the socio-economic background of students parents, Finland has one of the fairest systems in the world. Using parental education as a proxy of income, Table 3 presents the probability of attending tertiary education relative to the level of educational attainment of one s parents. The odds ratio shown in the second column represents the likelihood of attending tertiary eduction of people whose parents have themselves completed tertiary education relative to individuals whose parents have only below upper secondary education. For example, in the case of the OECD average, the figure indicates that students from the most educated families are 4.5 times as likely to attend tertiary education as students from poorer families. While the Nordic countries are all way below the OECD average, Finland enjoys the best result, surpassed only by South Korea. 14

15 Table 3 - Likelihood of Participating in Tertiary Education Relative to Parents Educational Attainment (2012) Countries Probability of Attending Tertiary Education (Odds Ratio) Australia 4.3 Canada 2.6 Denmark 3.0 Finland 1.4 Korea 1.1 Netherlands 2.8 Norway 2.0 Sweden 2.3 Switzerland 6.8 United Kingdom (England) 6.3 United States 6.8 OECD average 4.5 Source: Education at a Glance, 2014, Table A4.1b Finland is also a world leader regarding girl education. According to the OECD (2013), Finland is one of the seven OECD countries where tertiary attainment rates for women are higher than those for men by at least 10 percentage points. In 2011, the proportion of males with a tertiary education qualification was 33%, compared to 46% for women. However, having achieved gender parity in overall enrolment is only one part of the equation. It is also important to look for any form of gender streaming of women toward specific types of tertiary education institutions and/or toward specific disciplines leading to lower paying occupations. Enrolment statistics for 2013 reveal that female students are equally represented in the polytechnics and universities, at 53.8% and 53.5%, respectively. Table 4, which shows the proportion of female students in sciences and engineering programs, confirms Finland s good standing in terms of gender equality, especially in the sciences, where it is among the leading countries. Finland s gender score in engineering education puts it rather in the lower group. 15

16 Table 4 Gender Equity in Science and Engineering Programs (2012) Countries Science Engineering Australia Finland France 25.8 Germany 18.6 Netherlands Norway Republic of Korea Sweden Switzerland United Kingdom USA Source: Unesco Institute of Statistics At the postgraduate level, Finland s gender balance results are way above the OECD average. As Table 5 indicates, the proportion of female students from the relevant age cohort who enter postgraduate programs is 3.6, compared to the 2.6 OECD average. However, the proportion of females is lower than that of males, as happens in Norway, Switzerland and the United Kingdom. This is an area where Finland needs to improve, following the example of Australia, the Netherlands and Sweden. 16

17 Table 5 Gender Equity in Postgraduate Programs (2012) Countries Men Women Australia Finland Netherlands Norway Republic of Korea Sweden Switzerland United Kingdom OECD Average Source: Unesco Institute of Statistics Finally, it is essential to verify the extent to which women are well represented in leadership roles in tertiary education institutions, as most countries have been lagging in that respect. Data on the gender distribution of university leaders are scarce, but since 2008 the European University Association (EUA) has conducted a survey among its members that provides relevant information. Table 6, which presents the evolution of the proportion of female rectors in EUA member universities, indicates that Finland has progressed in an impressive way. With almost a third of female rectors in 2013, it is well ahead of the large Western European nations (France, Italy, German), the United Kingdom and even the former socialist countries, which had traditionally be ahead in that matter. Sweden is the only country doing better than Finland, with close to 45% of female rectors. 17

18 Table 6 - Proportion of Female University Rectors Countries Austria 5.9% 17.4% Belgium 0% 9.1% Bulgaria 7.1% 18.1% Czech Republic 0% 5.0% Denmark n.a. n.a. Finland 11.8% 30.8% France 8.5% 10.7% Germany 5.1% 13.3% Italy 1.7% 6.8% Netherlands 0% 7.1% Norway 0% 11.1% Romania 7.1% 10.0% Russia 5.6% 9.1% Spain 9.8% 10.9% Sweden 34.0% 44.0% Switzerland 0% 7.1% United Kingdom 9.5% 15.5% Europe average 5.5% 10.3% Source: European Association of Universities These highly positive gender results are aligned with Finland s general standing in the Global Gender Index calculated by the World Economic Forum. In the latest 2014 edition, Finland came second after only Iceland (WEF, 2014). The children of immigrants are another equity group worth monitoring. Should data become available, the Government of Finland would need to verify that the access and completion rates of children of immigrants are not significantly lower than those of the average population. Quality and Learning Achievement The second key dimension of performance is learning achievement, which refers to the quality and relevance of the education and training experience of tertiary level graduates. This is one of the most difficult areas to measure. Unlike what happens at lower levels of education, where tests such as TIMMS and PISA are widely accepted as metrics for assessing learning outcomes 18

19 in an international perspective, no such instrument exists for tertiary education yet, despite promising developments in recent years. 2 In the absence of direct measures of learning outcomes, the global rankings can be used as a useful proxy to assess the quality of tertiary education in Finland from an international benchmarking viewpoint. In spite of their methodological limitations (Box 1), the rankings identify top universities that significantly contribute to progress in knowledge through their cutting-edge research, offer high-quality teaching with innovative curricula and teaching methods, and produce graduates who excel in the global labor market. Box 1 - Understanding and Using Rankings to Their Best Advantage Just as scarcity and prestige increasingly mark the purchase of consumer goods, the users of tertiary education are also looking for indicators that enhance their capacity to identify and access the best universities. In this race for excellent education, countries are striving to develop world-class universities that will spearhead the development of a knowledge-based economy. Because of the power of rankings, institutions are playing a game of innovating and investing in light of ranking methodologies, perhaps at the expense of their real mission and strengths, financial resources, and institutional capacity. Regardless of their controversial nature and methodological shortcomings, university rankings have become widespread and are unlikely to disappear. Because they define what world-class is to the broadest audience, they cannot be ignored by anyone interested in measuring the performance of tertiary education institutions. The following general recommendations, developed out of a recent analysis of league tables, may help clarify how to read and use rankings: Be clear about what the ranking actually measures. Use a range of indicators and multiple measures, rather than a single, weighted ranking. Compare similar programs or institutions. Institutions can use rankings for strategic planning and quality improvement purposes. Governments can use rankings to stimulate a culture of quality. Consumers of the rankings data can use them as one of the instruments available to inform students, families, and employers and to fuel public debates. Source: Salmi and Saroyan, The OECD has elaborated tests to measure the acquisition of generic competencies and professional skills in the areas of economics and engineering, which were piloted in 2012 in the context of the AHELO project (Assessment of Higher Education Learning Outcomes). In the United States, many institutions use the Collegiate Learning Assessment to try and measure added value at the undergraduate level. A few countries in the LAC region Brazil, Colombia and Mexico have also been pioneers in that respect, as discussed later on in this report. 19

20 Figure 5 displays the results of Finland s universities in the most recent edition of the Shanghai ranking, together with comparator countries. 3 To make the comparison more meaningful, the figure takes the size of countries into consideration; it shows the number of universities in the top 100 and in the top 500 (Shanghai ranking) divided by the population of the country. It also includes the States of Masachussets and California because of their outstanding performance. Figure 5 Number of Ranked Universities Per Million Inhabitants (2014) Massachussets Sweden Finland Denmark Switzerland Australia Netherlands Norway Canada United Kingdom United States California Korea , , ,60 0, ,2 0,4 0,6 0,8 1 1,2 1,4 1,6 U per Million (100) U per Million (500) Source: Academic Ranking of World Universities (ARWU) and World Atlas Finland s overall results are very encouraging. When looking at the top 500, Finland comes third in the group of comparators, after the State of Massachussets and Sweden. Its results are similar to those of Denmark and Switzerland, and significantly better than the other comparators. 3 This report favors the Academic Ranking of World Universities prepared by Shanghai Jiao Tong University over the Times Higher Education and QS rankings because the latter two give a lot of weight to the results of a reputation survey, which adds a significant element of subjectivity. 20

21 However, Finland s performance is less stellar when focusing only on the top 100 universities in the world. Its score is markedly lower than those of the top US States, Denmark and Sweden, as well as the Netherlands. This reflects the fact that the University of Helsinki, ranked number 73 in 2014, is the only Finnish university making it to the top. By contrast, Switzerland has five universities in the top 100, Holland four, Sweden three, and Denmark two (Table 7). Table Shanghai Ranking Countries Number of universities in Top 100 Top Ranked University (position) United States 52 Harvard U (1) California 11 Stanford U (2) United Kingdom 8 Cambridge U (5) Switzerland 5 Swiss Federal Institute of Technology Zurich (19) Australia 4 U of Melbourne (44) Canada 4 University of Toronto (24) Netherlands 4 Utrecht University (57) Massachussets 3 Harvard U (1) Sweden 3 Karolinska Institute (47) Denmark 2 U of Copenhagen (39) Finland 1 U of Helsinki (73) Norway 1 U of Oslo (69) Korea 0 Seoul National U ( ) Source: Academic Ranking of World Universities (ARWU) Over time, the standing of Finnish universities has not significantly improved. When comparing the 2004 and 2014 Shanghai rankings, Finland s score remained stable, whereas Massachussets, Sweden and Switzerland made impressive progress. This seems to indicate a stronger focus on boosting excellence at the top than in Finland. Considering that the Shanghai ranking is biased in favor of the hard sciences and engineering, it is also useful to look at the few existing social sciences rankings to examine how the Finnish universities fare in relation to those of the comparator countries. The results are not very good overall. Table 8 shows the results of the Tilburg University ranking of the top 100 economics schools in the world. No Finnish university appears, while universities from the Denmark, Netherlands, Sweden and Switzerland make it into the ranking. 21

22 Countries Table 8 Tilburg Ranking of Schools of Economics ( publications) Number of universities in Top 100 Top Ranked University (position) US 52 Harvard U (1) UK 10 LSE(11) California 8 Stanford U (3) Netherlands 5 Tilburg U (19) Germany 5 U. of Bonn (23) Massachussets 4 Harvard U (1) Australia 4 U of Melbourne (48) Spain 3 Pompeu Fabra U (37) Sweden 3 Stockholm U (55) Canada 2 U of Toronto (17) France 2 Toulouse S. of Economics (30) Israel 2 Hebrew U of Jerusalem (44) Denmark 2 U. of Copenhagen (50) Italy 2 Bocconi U (53) Singapore 2 National U of Singapore (66) Switzerland 1 U of Zurich (26) Belgium 1 U Catholique de Louvain (28) Hong Kong 1 HK U of Sc & Technology (91) Japan 1 U of Tokyo (93) Austria 1 U of Vienna (96) China 1 Tsinghua U (96) Source: Tilburg University Ranking of Schools of Economics Similarly, the ranking of the top 100 research business schools prepared by the University of Texas in Dallas does not includes any Finnish university, whereas Denmark and the Netherlands are represented (Table 9). 22

23 Table 9 University of Texas at Dallas Ranking of Business Schools ( publications) Countries Number of universities in Top 100 Top Ranked University (position) US 72 U of Pennsylvania (1) Canada 8 U of Toronto (23) California 7 Stanford U (7) Hong Kong 5 HK U of Sc & Technology (16) Massachussets 4 Harvard U (2) Netherlands 3 Tilburg U (34) Singapore 3 National U of Singapore (43) France 2 INSEAD (14) UK 2 London Business School (24) Australia 2 U of Melbourne (67) Denmark 1 U of Copenhagen (81) Korea 1 Korea U (88) Spain 1 U of Navarra (90) Source: University of Texas in Dallas Ranking of Business Schools Finally, in the rankings of finance programs published by the University of Arizona (Table 10), Denmark, the Netherlands and Sweden are all represented, but no Finnish university is included. 23

24 Table 10 Arizona State University Ranking of Finance Schools ( publications) Countries Number of universities in Top 100 Top Ranked University (position) US 76 New York U (1) California 8 UCLA (5) Hong Kong 4 HK U of Sc & Technology (23) Canada 4 U of British Columbia (30) Massachussets 3 Harvard U (3) UK 3 London Business School (15) Netherlands 3 Tilburg U (41) France 2 INSEAD (37) Israel 2 Tel Aviv U (66) Singapore 2 Singapore S. of Management (75) Switzerland 1 Swiss Finance Institute (57) Sweden 1 U of Stockholm (72) Denmark 1 Copenhagen U (99) Korea 1 Korea U (99) Source: Arizona State University Ranking of Finance Schools Research output While Tables 8-10 looked at the publications results of Finnish universities in specialized fields (business, economics and finance), Figure 6 presents the overall research outcomes of Finnish universities as measured by the number of scientific journal citations relative to the country s population. Finland s overall results are very favorable compared to large countries such as the United States and the United Kingdom. Finland is also doing better than Canada and South Korea. However, compared to Denmark, the Netherlands and Sweden, its output is significantly lower. 24

25 Figure 6 Scientific Citations per One Million Inhabitants in Finland and Comparator Countries (2013) Switzerland Denmark Sweden Netherlands Norway Australia Finland United Kingdom Canada United States South Korea Source: US National Science Foundation The Leiden ranking, which measures not only the number of publications but also their impact (most highly cited publications), provides another assessment of the performance of Finnish universities (Table 11). The CWTS Leiden Ranking 2013 is based on the database produced by Thomson Reuters, called Web of Science bibliographic. 500 universities worldwide are ranked according to their publication output in the Web of Science database in the following five fields: (i) biomedical and health sciences; (ii) life and earth sciences; (iii) mathematics and computer science; (iv) natural sciences and engineering; and (v) social sciences and humanities. 4 4 The CWTS Leiden Ranking measures the scientific performance of 750 major universities worldwide. Using a sophisticated set of bibliometric indicators, the ranking aims to provide highly accurate measurements of the scientific impact of universities and of universities involvement in scientific collaboration. The CWTS Leiden Ranking 2014 is based on Web of Science indexed publications from the period. Detailed information is available at: 25

26 Table 11 - Leiden Ranking of Universities in Finland and Comparator Countries (2014) Countries Number of universities in Top 500 Performance index (# of U relative to population) Top Ranked University (position) Australia Australian National U (104) Canada U of Toronto (87) Denmark Technical U of Denmark (73) Finland U of Helsinki (269) Korea Pohang U of Science and Technology (173) Netherlands Leiden U (53) Norway U of Oslo (317) Sweden Switzerland United Kingdom Karolinska Institute (125) Ecole Polytechnique Federale de Lausanne (21) Cambridge U (19) United States (all States) Rockefeller U (1) Massachussets MIT (2) California Source: U of California, Berkeley (4) Table 11 offers two insights into Finland s results. First, in terms of overall performance relative to the size of its population, Finland has the second best score after the State of Massachussets, which is an excellent achievement. Second, Finland s top university, the University of Helsinki, is ranked relatively low, together with the University of Oslo. In all the other countries, even 26

27 though the overall performance may be less than Finland s one, the flagship university has a much higher position than the University of Helsinki. Taken together, these two facts suggest that Finnish universities are more homogeneous in their scientific production than those of comparator countries. Technology transfer Finally, measures of technology transfer indirectly capture the role of tertiary education institutions in supporting their country and region s economic development. Figure 7 presents the number of patents granted per one million inhabitants for Finland and comparator countries. It would be even more meaningful to distinguish between patents produced by companies presumably by Finnish university graduates and those developed directly by universities. But in the absence of detailed data that allow discriminating between the two, the comparison reveals that, on a per capita basis, Finland s overall patent results are extremely good in relation to the other Nordic countries, the Netherlands and the United Kingdom. This reflects well on the contribution that Finnish universities make as an active players in the national innovation system. Figure 7 Patents Granted Per 1 Million Inhabitants (2012) Korea United States Australia Canada Norway Finland Netherlands United Kingdom Sweden Switzerland Denmark 261,0 154,4 113,1 107,7 104,9 57,5 34,0 625,5 806,4 780,0 2269,1 0,0 500,0 1000,0 1500,0 2000,0 2500,0 Source: WIPO Promotion of Democratic Values While it is hard to measure the exact contribution of education basic, secondary and tertiary to the transmission and acquisition of positive values that promote good democratic behaviors and good government, value indices such as the Economist Intelligence Unit's Democracy index can be used as a proxy of the citizenship attitudes and skills imparted by national education systems. Based on five categories, electoral process and pluralism, civil liberties, functioning 27

28 of government, political participation, and political culture the ranking distinguishes between full democracies and flawed democracies. Together with the other Nordic countries, Finland belongs to the first category, which has 25 countries, and finds itself at number 9 (Table 12). Table 12 Democracy Index 2013 Country Rank Score Norway Sweden Iceland Denmark New Zealand Australia Switzerland Canada Finland Luxembourg Netherlands Ireland Austria United Kingdom Germany Source: Economist Intelligence Unit _WEB-2.pdf&mode=wp&campaignid=Democracy

29 System Health This section analyzes the main factors explaining the performance findings presented above, looking successively at the factors influencing the quantitative development of tertiary education, the quality dimensions of the Finnish system, aspects of stewardship and governance, and financing. Expansion Strategy The high attainment levels of the Finnish tertiary education system reflect the combined effect of three positive features: high quality / high coverage secondary education, generous funding of tertiary education, and a diversified system that offers a wide range of educational options. First, at 95%, Finland has the third highest secondary education graduation rate in the world after only Portugal and Slovenia. As will be discussed later in the Quality section, the outstanding PISA results vouch for a high level of academic preparation of Finnish high school graduates. Second, the absence of tuition fees and the existence of a very generous system of student support (see later section on Financing) mean that Finnish students face no financial entry barrier at the tertiary level, except for the opportunity cost of studying that all students are subject to by definition. Third, along with Austria, Germany and the Netherlands, Finland is one of the few European countries with a clearly defined dual system. The 14 universities and the 27 polytechnics (universities of applied science) provide many learning opportunities to new students, with a stronger vocational / professional orientation in the latter group, which enrolls 45.4%% of the total number of students in the public system. In addition, a number of private institutions operate in Finland, offering additional academic and professional training options to both young and mature students. According to Unesco statistics, 26% of Finnish students attend a private institution, compared to 15% in Norway, 9% in Sweden and only 2% in Denmark. Finally, in terms of lifelong learning opportunities, 2.2 million adults participate in some form of continuing education training on a yearly basis. To give an international perspective to these institutional diversification aspects, Table 13 presents the share of students enrolled in private institutions as well as the proportion of students in non-university institutions in the main regions of the world outside Western Europe, confirming the importance of the polytechnics sub-sector in the case of Finland. 29

30 Table 13 Enrolment in Private Institutions and in Non-University Institutions as a Share of Total Tertiary Education Enrollment by Region (2011) Region Private Enrolment (%) Enrolment in Non- University Institutions ISCED Level 5B (%) East Asia and the Pacific 42,2 26,1 Eastern Europe and Central Asia 29,2 16,8 Latin America and the Caribbean 50, Middle East and North Africa ,8 South Asia ,1 Sub-Saharan Africa ,4 Source: Author s calculations based on available data at the World Bank s Edstats website, not all countries are represented. The three favorable factors presented above explain Finland s good performance with respect to youth unemployment statistics reveal that the proportion of Finnish students who were neither employed or in any form of education (12% of year-olds) remained significantly lower than the OECD average (16%), notwithstanding the financial crisis and resulting economic recession (OECD, 2013). At the same time, the Finnish tertiary education system has a few unique inter-related characteristics that are worth underlining as they represent potential challenges in the medium and long term. Specifically, because of a structural bottleneck at the beginning for their studies, many students are working students, resulting in relatively low graduation rates and longer study durations. As the OECD signaled in 2013, there is a large difference between the proportion of students who graduate from programmes designed as preparation for entry into tertiary programmes, and the proportion who actually enter them by the age of 25: 85% of students graduate from programmes which give eligibility for higher education, while the proportion of students under 25 years old who enter university level education is 51%. This is partly due to a numerus clausus system in Finnish higher education, which means that the number of entry places is restricted. Graduates from upper secondary general education may have to take a break of two to three years before obtaining a place in a university or polytechnic institution (OECD, 2013, p. 2). In contrast to the open access practice in Denmark, Norway and Sweden, in Finland the Ministry of Education intervenes by determining the number of new tertiary education places based on labor market trends and projections. While this system has favorable results in terms of improving employment prospects for graduates and aligning education offerings closer with the needs of the economy, it restricts the freedom of choice of first-time students and has adverse efficiency consequences because of the longer presence of students in the system, the higher dropout rates, and the apparently lower graduation rates. Finnish students end up spending

31 years in tertiary education compared with the OECD average of 3.4 years. This explains why the average age of Finnish students is significantly higher than in most other European countries as well as in North America, and why Finland is commonly considered as one of the best lifelong learning performers. Quality and Relevance Available information, including the findings of the 2009 OECD review of tertiary education in Finland, indicates that the quality and relevance of education at Finnish universities and polytechnics is well regarded. As Table 14 reveals, the unemployment rate of tertiary education graduates is significantly lower than that of people with lower levels of education, and it is also lower than the OECD and EU averages. Unemployment Rate Table 14 Labor Market Outcomes (2011) Finland OECD average EU21 average High School Incomplete (Males) 11.3% 12.6% 15.6% High School Graduates (Males) 6.9% 7.3% 8.5% Tertiary Education Graduates (Males) 4.0% 4.8% 5.2% High School Incomplete (Females) 11.3% 12.2% 15.1% High School Graduates (Females) 6.4% 8.0% 9.1% Tertiary Education Graduates (Females) 3.7% 5.1% 5.5% Source: OECD Education at a Glance 2013 Three aspects are worth underlining against this background. On the positive side, the excellent academic results of Finnish high schools explain the good results at the tertiary education level. On the challenge side, Finland could do even better with respect to the quality of teaching, and the country is still lagging behind in terms of internationalization of tertiary education. Academic preparation of secondary education graduates As indicated in the theory of change presented in the first part of this report, many researchers have identified students prior academic performance to be the best predictor of academic success (McKensie and Schweitzer, 2001; Zeegers, 2004). In this respect, Finnish universities and polytechnics have the advantage of being able to select from a pool of academically well qualified academically and highly motivated students is a key determinant of the quality of the future graduates. Nothwistanding the small decline in the math score between 2003 and 2012, Finland s outstanding results in the PISA tests speak for themselves (Table 15). In 2012, Finland was number one in reading, number two in science, and number three in math among all comparator countries. 31