HELENA. Economies of Scale at Faculties
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1 HELENA Higher Education Global Efficiency Analysis Economies of Scale at Faculties Matthias Klumpp, HELENA Project, PIM, University of Duisburg-Essen KORFU Workshop, University of Saarbrücken,
2 Agenda 1. Introduction 2. Historical View: 5 Years Back 3. Today s View: Research Results 2012/13 4. Implications 5. Discussion 2
3 1. Introduction Research Interest Management Question of University and Faculty Steering / Sizing Multi-Level Problem (University Faculty Institute Chair Researcher ) Increase of Competition and Societal Stakeholder Expectations Lack or Relative Decrease of Government Resources Allocation of Optimal Budget and Resources Research Questions Is there a connection between faculties' efficiency and their size, i.e. are there economies of scale for faculties? What can we learn from this for faculty and research management? 3
4 2. Historical View: 5 Years Back I Research Findings: Task of LLL getting more important above 20 years Academic Training nur Studium Vocational Training nur berufl. WB n=64 n=121 74,0 74,4 10 to 20 years Academic Training nur Studium Vocational Training nur berufl. WB n=47 n=48 73,0 74,6 below 10 years Academic Training nur Studium Vocational Training nur berufl. WB n=16 n=13 71,5 78,8 66,0 68,0 70,0 72,0 74,0 76,0 78,0 80,0 Aging Competence: Berufswertigkeit level by age / work experience (left side) Klumpp, M.: Citizenship and Employability, 35th EUCEN Conference, University of Edinburgh
5 2. Historical View: 5 Years Back II Low Low Change Capacity High Traditional European HEI Agile university Change Intensity Pushed university Reformed university High 5
6 2. Historical View III Output Ranking Scores for Ranking Positions and GEI Awards Klumpp, M./Zelewski, S. (2008): Higher Education Production Analysis, in: Conference Proceedings 15 th International Working Seminar on Production Economics, Innsbruck, Vol. 2, p
7 2. Historical View III Efficiency Ranking Relation Ranking Points per Budget ( ) Changing Picture 7
8 Research Setups (I) University Level Efficiency Analysis (DEA, 2012) / Teaching EUMIDA Dataset (EU), 370 Universities in Europe (II) Comparative Faculty Efficiency Analysis 4 Universities (DEA, 2012) Two German and two Swiss Universities with Budget Allocation on Faculty Level (III) Economic Faculty Efficiency Comparison (DEA, 2013) / Research Data Sources Handelsblatt Ranking Economics and DFG Funding Ranking Input: Number of Professors, Outputs: Publication Points (Journals) and DFG Funding Altogether 25 Universities, 5 thereof Private Universities (no DFG Funding) 8
9 I. 9
10 I. Hypothesis: Diseconomies of Scale (University Level) 10
11 I. Hypothesis: Diseconomies of Scale (University Level) 11
12 I. 12
13 II. a) University of Duisburg-Essen Number of faculties: 10 Number of students: 37,085 Economics 10% Business Administration 6% Education 8% Biologie 8% Total budget: 337,994,193 Physics 8% Chemistry 10% Mathematics 5% Humanities 14% Engineering Social 25% Sciences 6% 13
14 II. b) University of Frankfurt Law 4% Economics 7% Social Sciences 3% Number of faculties: 16 Medical Science 36% Number of students: 33,666 Total budget: 466,546,355 Education science 3% Psychology and Sports Sciences 3% Evangelical theology 1% Catholic theology 1% Philosophy and History 3% Language and Cultural Studies 4% Modern Languages 3% Biomedical sciences 6% Biochemistry, Chemistry and Pharmacy 13% Physics 6% Geography 5% Computer science and mathematics 2% 14
15 II. c) University of Bern Medical science 42% Theology 2% Language and Literature 5% Historical and Culture Studies 8% Social and Economics 13% Number of faculties: 7 Number of students: 15,342 Law 6% Total budget: 429,460,047 Natural sciences 24% 15
16 II. d) University of Zurich Number of faculties: 6 Number of students: 20,404 Total budget: 441,729,395 Medical Science 10% Law 11% Theology 3% Mathematical and natural science 37% Economics 16% Philosophy 23% 16
17 II. In general, the internal budget allocation is very diverse and different to each university ( fingerprint ). All universities allocated halves of their budget shares to two or three faculties. Medical faculties in two universities (Frankfurt and Bern) received more than one third of budget share which is the highest share. Whereas, that of Zurich university s was only 10%. Mathematics faculty in Zurich university received the highest budget share whereas the lowest budget share of 2% was allocated to this faculty compared to university of Duisburg-Essen and Frankfurt. 17
18 II. a) University of Duisburg-Essen 50=0% 90=36.14% Potential improvements Unit name Share of total Budget Score of efficiency Percent Total budget Percent Third-party funds Percent Count Graduates Education 7.95% 100 0% 0% 0% Economics 9.63% 100 0% 0% 0% Mathematics 4.98% 100 0% 0% 0% Social Sciences 6.08% % 0% 53.69% Biology 7.49% % 0% 0% Engineering 25.40% % 0% 62.18% Humanities 13.62% % 55.60% 0% Physics 8.26% % 0% % Business Administration 6.11% % % 0% Chemistry 10.48% % 0% 0% 18
19 II. b) Frankfurt Unit name Share of total Budget Score Percent Total budget Potential improvements Percent Third-party funds Percent Count Graduates Law 4.03% 100 0% 0% 0% Modern Languages 3.40% 100 0% 0% 0% Economics 6.95% % 0% 0% Physics 5.69% % 0% % Social Sciences 2.91% % 0% 0% Psychology and Sports 2.78% % 0% 0% Computer science and 2.44% % 0% 0% Science of education 2.89% % 0% 0% Natural science 6.36% % 0% 2.55% Medicine 35.57% % 0% % Language and Cultural 4.46% % 0% 0% Geography 4.75% % 0% 37.59% Philosophy and History 3.07% % 0% 0% Biochemistry, Chemistry 13.31% % 0% 49.44% Evangelical theology 0.79% % 0% 0% 19 Catholic theology 0,59% 24,52-75,48% 0% 0% 90=7% 50=18%
20 II. c) University of Bern 50=42.16% 90=44.55% Unit name Social and Economics Share of total budget Score Percent total budget Potential improvements Percent third-party funds Percent count graduates 12,86% 100 0% 0% 0% natural sciences 24,32% 100 0% 0% 0% Historical and Culture 7,37% 94,87-5,13% 0% 0% Law 5,92% 75,37-24,63% 0% 0% Language and Literature 5,05% 63,18-36,82% 0% 0% Theology 2,32% 54,71-45,29% 0% 0% Medicine 42,16% 32,81-67,19% 0% 0% 20
21 II. d) University of Zurich 50=0% 90=76% Unit name Share of total budget Score Potential improvements Percent total budget Percent third-party funds Percent count graduates Economics 15,62% 100 0% 0% 0% Philosophy 23,21% 100 0% 0% 0% Mathematical and natural Science 37,47% 91,70-8,30% 0% 70,66% Medicine 10,30% 88,34-11,66% 279,37% 0% Theology 2,76% 84,09-15,91% 0% 173,00% Law 10,65% 74,21-25,79% 119,02% 0% 21
22 III. University Prof. DFG in Mio. Publication Points 2012 Rang 2012 Rang 2009 Publication Points A+ Journals Publication Points A+ & A Journals St.Gallen Uni ,30 30,10 Wien Uni ,00 22,80 Zürich Uni ,80 35,70 Wien WU ,60 24,30 München TU , ,10 32,10 Mannheim Uni , ,30 36,60 Frankfurt / Main Uni , ,00 25,90 München LMU , ,30 20,70 Hamburg Uni , ,90 18,10 Köln Uni , ,00 29, Zürich ETH ,00 14,40
23 III. a) Input Orientation, CCR (Constant RTS) 23
24 III. a) Input Orientation, CCR (Constant RTS), Correlation -0,
25 III. b) Output Orientation, BCC (Variable RTS), Correlation -0,
26 III. b) Output Orientation, BCC (Variable RTS) Unit name Score Giessen Uni Kühne Logistics University 100,00% 100,00% Leading Group of Econ./Man. Berlin ESMT 100,00% Jena Uni 100,00% Faculties Kiel Uni 100,00% Mannheim Uni 100,00% München TU 100,00% Aachen RWTH 99,20% Darmstadt TU 97,80% München LMU 94,80% Frankfurt / Main Uni 83,70% Bonn Uni 82,10% Middle Group of Econ./Man. Köln Uni 81,60% Faculties Berlin TU 80,20% Hamburg Uni 80,00% Berlin FU 70,50% Hannover Leibniz Uni 69,80% Koblenz/Vallendar WHU 64,70% Augsburg Uni 60,40% Magdeburg Uni 56,80% Würzburg Uni 52,00% Improvement Group of Frankfurt School of Finance and 51,80% Econ./Man. Faculties Münster Uni 51,50% EBS Uni 49,40% Duisburg-Essen Uni 43,20% 26
27 4. Implications Interesting Results: No empirical evidence for economies of scale can be found (hypothesis not falsified but increasing probability for a diseconomies of scale hypothesis) Possible reasons and influences: Coordination efforts, increasing mission diversity and mission creep with institutional size Positive view: Benchmarking reveals efficiency potential in most settings and analyses for all subgroups (large/small, private/public) Efficiency view may be a complementary and necessary perspective 27
28 4. Implications Management Approach : Aust size matters strategies very cautious application, only with checks and balances Rethink objectives, strategies and excellence concepts in combination with quality profiling Make excess cost of excellence and size visible in institutions (and also provide fair cost allocation) Make efficiency view a standard KPI / management question in major decisions (e.g. research results for efficiency costs of mergers) 28
29 5. Discussion Suggestions for Further Research: Intensive and increasing rigor regarding data quality necessary (examples EUMIDA, Handelsblatt Ranking, THE Ranking etc.) Larger datasets needed (comparative view) also indicator for dataset size and quality (DEA) Discussion about legitimate objectives and output indicators still necessary Drilling down into individual institute and researcher settings in order to quantify efficiency influences ( production function ) Increase awareness of production diversity in universities / faculties further (researchers, HE managers deans, politicians) 29
30 5. Discussion Peer Community. Excellence Society Communication Teaching Outcome Qualities Research Outcome Quantities Teaching Interdisciplinary and International Setting Resources/ Infrastructure Efficiency Input Qualities (Researchers/Lecturers/ Students/Professionals) Input Quantities Objectives, Content, Profiling, Benchmarking Quality Culture, Aspiration and Strategy (University) 30
31 5. Discussion
32 5. Discussion Is there an efficiency banana in pursuing excellence? Level of excellence (high) Level of efficiency (high)
33 Thank you for your attention! Dr. Matthias Klumpp Contact: Phone Mail HELENA Higher Education Global Efficiency Analysis Förderkennzeichen 01PW
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