Crisis and funding of research

By Katka Svickova

In normal times, politicians of all strands are unanimously committed to the support of education, research and development. They never forget to stress how important these areas are to secure future prosperity. In crisis times, the “now” becomes more important than the future prosperity as governments are confronted with hard choices how best to use public funding to alleviate the negative effects of the economic crisis and help to re-start the up-cycle. Instead of the promised growth, public budgets for education and research either stagnate or fall in several Central and Eastern European countries (and as might be the case elsewhere in Europe, too).


A few months ago, investing in research and development was still promoted as one of the solutions to the economic crisis. Accordingly, the Czech national anti-crisis plan committed to increasing the R&D public spending over the next three years. Originally, the spending on research should grow by 8 % in 2010. Yet at the end of June, the government decided to freeze the annual outlays on research over the next three years at the level of 2009.

In addition to this, the Czech university and research community is in a sharp dispute over the allocation of these research funds. The conflict in essence boils down to rebalancing the spending to favor applied at the expense of basic research. The prevailing “now before then” logic favors the applied research – as a means to give a boost to industrial innovations. The funding allocations should be more result - and performance - oriented but the criteria, according to which the evaluation of performance is done, are far from perfect and heavily disputed.

Within Central and Eastern Europe, the Czech Republic actually belongs to countries with comparatively high governmental outlays to research: in 2007, it was 0,58 % of GDP as compared to the CEE average of about 0,4 % of GDP. However, both Czech Republic as well as the region are below the EU-27 average of 0,67 % of GDP spent on research from public funds (comparisons and calculations are based on available Eurostat data).

The education and research budget is now under strain not only in the Czech Republic. In Latvia, for example, the spending was reduced by about 65 million EUR affecting teachers’ salaries and resources to vocational schools, scientific institutions, state universities and colleges. The cuts were adopted under the pressure to trim the public budget in a country perhaps most stricken by the economic crisis in Central and Eastern Europe so far. They brought students and teachers to demonstrate in the streets in the course of spring. Also in Poland, discussions are under way to cut educational and research spending.

The developments show that despite the continuous mantras about the importance of research and development, these sectors are also subject to economic cycles and the workings of politics. A question that emerges from the Czech debate and governmental action is whether the cuts as well as the new rules for dividing public funding for research were passed after a profound weighing of short-term and long-term consequences of these decisions. To the most important consequences of the current decisions affect the capacity to engage in basic research. The abrupt shift of funding from research institutions such as Academy of Sciences (and to lesser extent universities) that are focused on basic research to institutes of applied research that are connected to various ministries and major industrial firms, may in the long term undermine both.

From the short-term perspective, more support to applied research in the situation when the budgets of the private sector are strained might bring more immediate results and help to increase the competitiveness of the industry. However, the private sector is also more likely to finance this type of research itself after the worst effects of the crisis on firms are over. On the other hand, basic research requires a lot of funds with uncertain and long-term results, and is thus not so attractive for the private sector. Moreover, the institutes focused on basic research are fundamental for creating the necessary human capital that allows applied research institutes to operate successfully within the global research networks. It is therefore here where public funding plays a crucial role.

Making public choices about educational and research priorities, and subsequent reforms of the system, including how public funds are allocated, are relevant in all conditions. However, the “now” perspective of crisis times should not prevent a decision-making based on sound weighting of both short-term and long-term consequences of the different options.

Read more on Crisis and funding of research

Saving glut or… investment famine?

by Ugo Pagano

The financial crisis is often blamed on a saving glut, while protectionism is almost unanimously viewed as its most dangerous potential consequence. But it is more likely that the crisis is due to a famine of investments due partly to protectionism camouflaged behind the blessed principles of ‘intellectual property’.

The immediate causes of the crisis are often seen as being the lack of regulation and the expansionary policies of the Fed, which by keeping interest rates artificially low, has provoked an excessive supply of saving. As amply explained by the well-known models of adverse selection, the latter has in turn produced a growing pool of toxic debt, with the consequences by now evident worldwide. According to an article in the Economist of last January, a beneficial “flow” of saving has turned into a disastrous “flood”, but this flood is more due to “global imbalances” generated abroad than being an endogenous product of the American economy and policies. Governor Bernanke has long argued that the role of the Fed in credit expansion has been marginal, and that the prime cause of the crisis has been a saving glut forced on the United States by massive inflows of savings from other countries.


There is something appealingly infantile in Bernanke’s argument. For many of us (and for me at my mother’s), ‘bellyfuls’ and the indigestion which they cause are due to the excellent and over-abundant food that is served. The real weakness in Bernanke’s thesis, however, is not so much its infantilism as the inaccuracy of its content. As shown by the data set out in the Bank of France paper by Moec and Frey, there has been no overabundance of savings in other countries, but rather a famine of investments. In recent years, savings have not grown around the world; instead, and especially outside the United States, investments have diminished. In other words, the abundance of food in America has been the result of a blockage in the digestive systems of its neighbours. It can be argued that, in this situation, the Americans have generously done the digesting on behalf of other countries, and give them transfusions of pre-digested food. Part of the saving absorbed by America, in fact, has been injected in the form of direct investments in countries suffering from blockages in their digestive systems. Is it therefore not the fault of the neighbours if they have been unable to create suitable investment opportunities and if, moreover, they have poisoned the Americans with their flood of savings?

The problem is that the lobbies for the American multinationals, by applying pressure for the new architecture of international trade founded at Marrakech in 1994, have played a major role in causing the blockages of their competitors’ digestive systems. We may start from 1992, when George Bush Senior concluded a presidency replete with success in foreign policy which saw, among other things, the collapse of the socialist economies and the disintegration of the Soviet Union. Yet the slogan “It’s the economy, stupid!” was enough to make him lose the elections against Clinton. The cause was not so much the economic crisis which began in 1990 as the consolidated perception that the “American model” was falling behind the alternative Japanese and German models. In the previous decade, a huge body of studies had described the miracles of Japanese management and suggested various ways in which the Americans could imitate it. By the end of the 1990s the situation had gone into reverse. The United States (and the United Kingdom) had become the model to imitate, and yesterday’s heroes (not only Germany and Japan but, after the 1997 crisis, also all the Asian tigers) strove to restructure their economies on the so-called Anglo-American model. In the meantime the Chinese economy had undergone rapid development. What had led to this unexpected reversal?

The explanation may lie in the standard liberalist refrain: only the Americans (and the British) had suddenly have rediscovered the virtues of the market, thus offering numerous investment opportunities precluded to their rigid competitors. However, on closer inspection, it was not the virtues of competition, but rather the advantages of intellectual monopoly, which enabled the United States rapidly to catch up with the other Western economies. Indeed, in the first half of the 1990s, the United States no longer had global military and political rivals. It was thus able to reorganize the world economy so as to enhance its scientific and technological leadership, and above all its monopoly positions, to the maximum.

The salient features of the new world were contained in the TRIPS agreement signed at Marrakech on 15 April 1994. Significantly, TRIPS was the 1C annex to the agreement founding the WTO. The preamble to TRIPS states as self-evidently obvious that “intellectual property rights are private rights” like all other private property rights. Yet this obviousness would have been unknown to an innovation economist of Schumpeter’s calibre, and it has been recently disputed in Boldrin and Levine’s fine book Against Intellectual Monopoly. Whilst the granting of property rights (including intellectual ones) constituted the natural basis for free trade, ratification of TRIPS necessarily created an annex to the WTO agreements, and an obligatory requisite for access to international trade. Unlike all previous international agreements on intellectual property, the inclusion of TRIPS in the WTO constitution created an efficient mechanism with which to enforce intellectual property rights. States could now be disciplined through the institutions of the WTO itself; and, in extreme cases, access to international trade by intellectual property “thieves” could be restricted.

Notwithstanding the seductive rhetoric extolling free trade and private property, the Marrakech agreement surreptitiously introduced super-tariffs such that the most extreme protectionism pales into insignificance. Since TRIPS, intellectual property rights have become global monopolies; that is, in a certain sense, customs tariffs of almost infinite magnitude. Not only are competitors of other countries not allowed to export a good to the country of the intellectual monopolist, they are also prohibited from producing it in their own country. When multinationals of some countries organize themselves into “patent pools”, the economic desertification of that sector in other countries becomes inevitable, resembling Britain’s erstwhile levies on its colonies, especially India (Marcello De Cecco, Money and Empire, Rowman and Littlefield, 1975).

With notable exceptions like Krugman, a chorus of alarm at the dangers of impending protectionism has been raised in recent months. It is claimed that one of the worse effects of financial crises is the disruption of free trade. Yet the relationship between the two phenomena has a chicken-and-egg complexity which does not admit to easy solutions. It is certainly true that the crisis is generating protectionist attitudes and the resumption of economic nationalism. But it also true that protectionism, by appropriating the blessed principle of private property rights, has helped produce the financial crisis. It initially only reduced opportunities for investment outside the United States, while the latter, thanks to direct investments by its multinationals, for a certain time also ‘digested’ for others. In fact, as Moec and Frey show, the crisis was preceded primarily by a fall of investments outside America. This fall was initially attenuated by the direct investments of multinationals endowed with an unbeatable recipe based on American intellectual monopoly and low-cost Chinese labour.

Added to the fall of investments by other countries was a gradual digestive blockage of the American multinationals themselves. Already in July 2005 an article in the Economist talked of a “corporate savings glut”, and its subtitle noted that the great corporations, more than the emerging economies, had become the world leaders of the global switch to thrift. The same article then referred to Keynes’ famous paradox of thrift whereby if everyone wants to save, they must (in the absence of investments) reduce their saving … though they naturally first go through speculative bubbles and various “financial innovations”.

In conclusion, although the financial crises have provoked protectionism, the super-protectionism of intellectual property has driven down investments. This has happened in two stages (largely overlapping in time) and through two mechanisms. The first stage after TRIPS saw the launching of the Chinese-American model and a shift to investments designed to consolidate American intellectual monopolies. As new spaces opened up for the American companies super-endowed with these “resources”, numerous opportunities for investment were closed to Japan and the former Asian tigers, which had neither America’s monopolistic endowment nor China’s lower costs. This phase culminated in the Asian crisis of 1997. In the second stage, because of the mechanisms described in the well-known tragedies of the anti-commons, world intellectual monopolies became too pervasive and began to block each other. At this point the accumulation mechanism used by the great “knowledge owners” became jammed as well. The fall in investments therefore created some of the factors that led to the financial crisis, and the latter in its turn drove investments down to further depths from which it will be difficult to re-emerge without a significant number of economic policy measures. One such measure should engender an investment super-multiplier by combining Keynesian policies, on the one hand, with the capacity for knowledge to be used infinite times without deterioration on the other. Support for aggregate demand and the re-appropriation of knowledge may constitute the two components of a single policy intended to free innovation from the cage of intellectual monopoly and to furnish greater investment opportunities for everyone.

Read more on Saving glut or… investment famine?

Roadmap for Czech tertiary education reform

By Katka Svickova

In January 2009, the Czech government adopted the White Book on Tertiary Education, a document which defines where the Czech tertiary education should be heading in the next ten to twenty years. It foresees a complete overhaul of the Czech tertiary system in terms of structure, governance and financing. In addition to their two traditional roles of education and research, tertiary education institutions shall play a third, equally important role: in the “production of knowledge and creation of the innovation potential of the society“.


The White Book promises to let fresh wind into the whole system that faces similar problems like systems in the whole Europe (also in my post from May 2008). However, given the low proportion of tertiary educated people in the population and comparably low spending on education overall, the overhaul is particularly pertinent in the Czech Republic. How to make tertiary education more open and accessible while at the same time not to undermine the quality of teaching? How to make tertiary education more sustainable financially? How to increase the volume and quality of research and its application in the economic sphere? These are just examples of questions that the White Book promises to answer. So what does it propose?

The Czech Republic is an EU leader in inequality of access to tertiary education by social background. The proposed solution focuses on lifting the disadvantages of a student´s social background on the one hand, and broadening of the educational offer on the other. The first goal should be achieved, above all, through a change in the financing of the tertiary system – instead of all public finances going directly to the educational institutions, part of them should be redirected to the students themselves in the form of educational grants and special educational loans. This shall allow students to pay tuition fees, enable students from socially disadvantaged families that cannot afford to support their child at university to cover his or her expenses, and bring more competition for students among tertiary education institutions. The second goal of broadening the educational offer should be achieved by a greater diversification of tertiary education and expanding considerably the two and three year long bachelor programs both in terms of capacity and variety of offer. The bachelor degrees should be practice- and profession oriented.

The White Book also correctly posits, though, that the solution to the problem of accessibility lies to a large extent outside the tertiary education institutions. Decreasing the selectivity and improving the quality of primary and secondary education are also of key importance, together with spreading the culture of overall appreciation of tertiary education and the aspirations for acquiring it in all groups of the society.

The diversification and the financing reform (increase in financing from both public and private sources, the latter predominantly in the form of tuition fees, but also better spending of these resources) shall go hand in hand with a change in governance of the tertiary sector towards more autonomy. This autonomy will also relate to internal structuring of the individual institutions and allocation of funds in research-related activities inside them. The White Book also seeks to eliminate barriers between the university research and the private sector whereby higher autonomy should create the necessary space for finding the best arrangements for individual tertiary institutions.

Of course, the brief summary above cannot go into all the complexities of the reforms outlined in the strategic document. And surely, the White Book does not address all needs of the tertiary sector in sufficient detail and thoroughness. What the document does, though, is a fair attempt at an analysis of the strengths and weaknesses of the current system, perceiving them in their complexity and inter-relatedness. The reform outlined on this basis reflects these complexities well.

In all, the document is well thought-through and well argued, taking clear positions e.g. on the above mentioned overhaul in the financing structure of tertiary education and introduction of tuition fees, on broadening of the bachelor level education and connecting it with practice, or on the concept of universities as places of “knowledge production” for the market. This poises it to become a subject of controversy among experts and politicians – and rightly so given the pertinence of the issue. It would be a pity if the current financial crisis pushed such a debate too much into the background. A high-quality and well-functioning educational system is not only one of the essential ingredients of a sustainable, diversified and sophisticated domestic economy but can also serve as an important social cushion. Tertiary educated people have generally better chances on the labor market and so far, the lay-offs in Central Europe caused by the crisis have taken their toll predominantly among the lower educated labor force (see one of my previous blog posts on this topic). Even though this might change as the crisis unfolds, tertiary education can significantly increase one´s chances of finding another job.

The problems that the Czech tertiary education is facing and the directions proposed in the White Book do not differ substantially from the situation and debates in other European Union countries. However, hidden in the text of the document is a precondition for undertaking and success of the reforms outlined: the existence of healthy and well-financed tertiary sector institutions in which teaching as well as basic research are at high level and independent of commercial activities. Reaching this standard alone is a daunting task: yet we all should wish and care about its successful completion.

Read more on Roadmap for Czech tertiary education reform

Who loses in the economic crisis?

By Katka Svickova

As the crisis progresses from the financial into the real economy and starts hurting the businesses as well as their staff, what is a better defense of an individual against its vagaries: his or her brain- or muscular power?

At the moment, we do not yet have a clear picture about how badly hit in terms of real production cuts and subsequent unemployment the Central European economies really are and will be by the global financial crisis. Yet there are already a few signs of who is affected...

In the Czech Republic, especially the trouble of the car and car part manufacturing sectors are put into spotlight. Skoda Auto, the Czech Republic's largest car manufacturer and a subsidiary of Volkswagen since 1991, has cut down production. The Czech Automotive Industry Association predicts that nearly 10 percent of the country's auto workers, or around 10,000 people, could lose their jobs within six months. So far, however, the redundancies started with contractual manual workers, partially „imported“ from countries like Vietnam and Mongolia to overcome bottlenecks on the domestic labor market. Also in the case of the glass, textile and logistics branches, the unemployment hit predominantly manual workers. In the whole Czech economy, up to 40 000 more redundancies are expected in 2009. Conversely, Slovakia, called also the Detroit of Europe, has not yet heard of any mass lay-offs by the automotive investors or in any other economic sectors.

At the same time, reading these forecasts, one should not forget that the seasonally adjusted unemployment rate in the Czech Republic was 4,4 % in October 2008 (Eurostat) – one of the lowest in the EU. Besides lay-offs, there are also many vacant positions on the labor market (albeit their number is lower than a few months ago). Qualified and skilled IT workers and engineers are still in high demand.

Also in Hungary, which was hit very hard by the financial crisis, the real economy started to feel the pain. National Labour Service (AFSZ) reported that there were 420 000 job-seekers in October 2008 whereby their number increased by 21 000 in a single month. As of February, further 14 000 employees could lose their jobs besides the already announced lay-off plans. Firms cutting their staff are for example Laird Technologies (electronics component manufacturer), Suzuki, Foxconn (manufacturer of spare parts for mobile phones), Videoton or General Electrics. In all, the crisis is felt most in the construction, automobile, electronics, IT and equipment manufacturing, tourism, hotels and processing industries.

Hungarian government plans to linder the effects of the crisis on workers by creating jobs in public work programs: in 2008, 25,000-30,000 poor and jobless Hungarians had temporary work and further 50,000-90,000 jobs should be created. This indicates a message about the skill level of workers made redundant – these public work programs can be hardly dominated by highly-skilled positions. Moreover, engineers, IT graduates and other tertiary educated workers are still demanded by employers.

Polish economy is also bracing for lay-offs in its glass, steel, chemical, automotive and electronics branches. At the same time, exporters in Poland were threatening to lay off staff already in summer 2008 (so before the economic crisis). According to forecasts, the unemployment may exceed 10 % - but this is hardly a steep jump compared to 9,6 % in June 2008. One of the sources of increased unemployment is going to be, according to expectations, a return of a part of the large Polish emigrant workers pool from Western Europe.

In all, at this stage, it seems that the adverse development in the real economy has not yet bitten the well-educated core of the labor force in Central Europe. Rather, it will probably lead to tuning down of the outcries about the scarcity of welders, metal turners and other manual professions, and the need for more young people to learn these professions.

In the end, therefore, the cloud of unemployment might have a silver lining: a clear message to the policy makers as well as individuals that investment into people´s brains has good and stable returns. Moreover, this kind of investment may not vanish into thin air so easily, like the billions sunk in sub-prime financial investments did.

Read more on Who loses in the economic crisis?

Anti-crisis policies in knowledge-intensive economies

By Ugo Pagano, visiting professor at Central European University. web.me.com/ugopagano

A long period of neo-liberal academic dominance is coming to an end. Unfortunately, it is being wiped out by a difficult economic crisis and not by an end of the inertia of cross-citations-based academia. Some “old theories” (which were academic pariahs until a couple of months ago) offer the main intellectual framework for anti-crisis policies. Re-considering past theories and policies is certainly a very useful re-starting point. However, policy suggestions should not ignore how much the economy has changed since the thirties. At that time, the main focus of policies stimulating aggregate demand was on traditional infrastructures, like bridges, roads etc. In a modern knowledge-intensive economy, the focus should be different. Policies should exploit the new opportunities that contemporary economies offer for Keynesian-type measures.


The knowledge-intensive economy is characterized by an unprecedented share of privately owned knowledge (or, in other words, by widespread monopoly rights on intellectual assets). While global institutions (WTO and the related TRIPs agreements) have made private intellectual property more profitable, no global institution has increased the convenience of public intellectual property. The present (and, even more, the missing) institutions of the global economy have made it convenient to over-privatize knowledge and over-monopolize the economy by an intensive web of intellectual property rights (IPR).
Intellectual private property rights (IPR) can be a cause of economic stagnation. Monopoly prices restrict production. The drive to acquire monopolies may initially stimulate investments but, after a while, the stimulus is increasingly offset by the fear that the use of new knowledge may be blocked by monopolies on pre-existing complementary knowledge (the so called anti-commons tragedy). Moreover, IPR involve asymmetric arrangements for rich and poor countries. While developing countries export their commodities in competitive conditions, many firms of the first world countries can sell knowledge-intensive goods under the monopoly shield granted by IPR. Although being sold as a necessary ingredient of free trade, IPRs offer stronger protection than the strongest protectionist tariffs. They grant total protection not only for the home market but also everywhere else in the World. Similarly to high tariffs, they can make the economic crisis only worse.

The present institutions of the knowledge-intensive economy are likely to become one of the causes of a prolonged stagnation. However, the knowledge-intensive economy offers great opportunities for more effective Keynesian policies. Instead of being used to nationalize inefficiently the assets of firms producing private goods, Keynesian policies could be used to decrease the monopolization of knowledge and to transfer efficiently knowledge from the private to the public sphere. The WTO, which has made intellectual private property more convenient, should be balanced by the institution of a strong WRO (World Research Organization) which helps to make intellectual public property feasible whenever it can better foster development. Countries should acknowledge that knowledge is a non-rival good which should be treated as the most precious and specific global common of humankind. In Jefferson’s vivid image, knowledge is like the flame of candle: lightening one more candle is not diminishing the flame of the other candles. By contrast, allowing others to contribute to the fire increases the shining of each candle!
Anti-crisis policies should include the funding of public research infrastructures.
This funding should be coordinated at supranational level to avoid the free riding problems among countries, which are presently fettering the development of investments in public research.
More important, in the present crisis, the funding can immediately take the shape of a public acquisition of well-established IPRs from private firms. The effects of this policy would go well beyond those entailed by many current anti-crisis measures:
In the first place the funding does not involve a nationalization of the firm or the use of taxpayers money without any counterpart. By contrast, while the IPR is paid at its private value, it is transferred in the public arena where it has a greater public good value and decreases costs for many producers.
Secondly, financial support is granted to firms who have proved to be innovative. A powerful stimulus for new investments is given to the most efficient firms. On the one hand, these firms receive fresh funds but, on the hand, having sold the old intellectual property rights, they face tough competition. Therefore, they have an urgency to invest in the production of new intellectual assets, which boosts aggregate demand.
Thirdly a monopoly price for the asset is replaced by the lower competitive price, which has again a positive effect on aggregate demand.
Finally, the “anti-commons” problem is eased; everyone can now invest in new knowledge with the awareness that complementary pre-existing knowledge is less likely to be owned by other firms. The policy decreases the costs of future risky transactions necessary to use the fruits of innovation. While the immediate funding goes to incumbent innovative firms, which may often belong to the richer countries, the increase of the knowledge freely available to everyone has widespread beneficial effects and contributes to the overall development of the world economy.
The multiplicative effects, which we have indicated, are stronger than those traditionally associated with standard Keynesian policies: their total effects are more powerful both on aggregate demand and on the level efficiency of the economy. An investment “super-multiplier” can be made to work in knowledge-intensive economies

Read more on Anti-crisis policies in knowledge-intensive economies

Reforming Slovak primary and secondary education. Or not really?

By Katka Svickova

After the summer holidays, the roughly 830 thousand Slovak pupils and secondary school students should return into a different school than the one they left at the end of June. At least this is what the new Law on Education passed by the Slovak Parliament in May 2008 envisages. And at least for a part of the pupils at first, as the law will be implemented gradually. However, what this new school will ultimately really be like, and how new it really will be, is uncertain as the real changes can only be seen in the classroom and in a few years at the earliest. In spite of this uncertainty (or perhaps facilitated by it), the reform triggered a strong critical reaction.



Main features of the Slovak educational reform

On paper, the reform goes with the freshest winds of change blowing across Europe: education should be based on new, creative approaches, explorative, project- and problem oriented methods, on own activity and participation of the pupils in their education, on new content of subjects stressing competences and capabilities rather than memorized knowledge. The number of pupils or students per class should be reduced. Schools are promised more autonomy in determining the content and the form of the subjects taught. Parents, pupils and representatives of employers´ organizations should obtain more space for direct participation in the governance of schools and in the creation of educational programs. Last but not least, the choice between schools should be free and so should be the offer of educational opportunities. So can the pupils be looking forward to an educational paradise unfolding over the next few years?

Not really, say the critics. While they agree that the educational reform is long overdue, most of them call for its further postponement – for reasons connected both to its content and to the capacity of the current system to implement it. Indeed, the reform was really fast, and there was little time for a thorough public debate: the draft was presented in September 2007, the law was passed in May 2008 and its implementation starts in September 2008. In other countries, a similar process took normally between 3 and 4 years. In the Czech Republic, for example, the educational reform, launched in September 2007, was more thoroughly debated in its preparation phase and schools got more than 2 years to get ready for it.

Given the almost astronomic speed of the reform in Slovakia, the question is how significant changes it indeed brings. And if it really signals a watershed change - breaking with the traditional centralised system oriented at pupils cramming and reproducing facts - why the scope for the discussion was deliberately so limited. Reform of the educational system turns almost all members of the society into stakeholders. One would hardly find a person today, who would doubt that education is of crucial importance for the development of the individual as well as the whole society. Yet even the short time allowed for public debate could hardly hide lack of interest from the public.

What is really in the magic box?

The critics, who raised their voice most loudly, pointed out that the new law is not a reform at all but rather a bundle of atomistic and often second-rate regulations. Moreover, its effect will be contrary to the one promised. Instdead of more autonomy, it will bring more centralization and control. Yes, individual schools should create their own educational programs. Yet according to the critics, the binding framework educational programs set by the Ministry of Education, prescribing obligatory content and conditions of education, do not give much space for schools to add their own content. As a representative of a secondary schools association said, the secondary schools will copy the ministerial framework educational programme to 95 %. And yes, the law proclaims more freedom of choice; yet at the same time, there will be always only one textbook available for free for individual subjects, approved by the Ministry. The freedom of choice of school will allegedly be limited by the power of the Ministry to set limits for the number of pupils in the individual study programs of secondary professional schools. The critics also say that the reform does not address a serious problem of inequality of chances in education. (However, besides a call for personal assistants and an improvement of the quality of elementary education, they also do not suggest any concrete proposals how to solve this complex problem). In all, despite the huge need for reform, the new law does not deviate too much from the old system.

Perhaps, the character of the law was best pronounced by the Minister of Education, Jan Mikolaj, when presenting its draft: „Do not search for liberal values in this reform, I openly say, I think that we are not in such a deep mess.“ But perhaps, the audience should look for nationalistic values instead. The Ministry of Education is in the hands of the Slovak National Party, whose leader, Jan Slota, is (in)famous for numerous anti-Hungarian statements. The Hungarian minority in Slovakia feels the limitation in the choice of schoolbooks as a measure against them. No wonder - after a statement by Slota who called Stephen, the Hungarian king and saint who is depicted on the cover of a current textbook used by the minority, “a Hungarian clown on a horse.“ In its introduction, the law also states that one of the aims of education is to enhance the respect to national traditions, values and state language by all citizens.

What can pupils expect when they return to school in September?

Based on the Czech experience, where educational reform, on paper very similar to the current Slovak one, has been implemented since last September, not much groundbreakingly new should be expected from the initial phases of the reform implementation. The Czech discussion shared some similarities with the Slovak one. Its conclusions and lessons learned from a year of implementation indicate that much more depends on the individual teachers and school directors than on what is written on paper in the Ministry. Many schools started experimenting with new methods and new teaching approaches much earlier than they were told by the law. Those which did not want to or could not do this, just produced and handed in the obligatory school programe, and (with a few cosmetic changes) continued their business as usual. This might be the case of many Slovak schools too. Since indeed, the teachers and schools got very little time to prepare for the changes.

Although the critics of the educational reform in Slovakia pointed to some pertinent (but at the moment unresolvable) issues, the attention left several other, equally if not more important ones, in the background. In particular the issue of school financing, governance and teachers´ remuneration (and the level of autonomy schools really have here), the education and motivation of teachers (ensuring that they also actually have the competences they are expected to develop among the pupils in the classroom), or active involvement of stakeholders (especially parents).

All worth, at least, of prospective blog posts ;)

Read more on Reforming Slovak primary and secondary education. Or not really?

To better and more open universities - through reduction of funding? Alias a special Czech way of tertiary education improvement.

The plans for financing the tertiary educational sector revealed last week by the Czech government indicate that Czech universities would experience a real decrease of teaching funding per student. This announcement came shortly after presenting the White Paper for Higher Education: with the aim to make tertiary education accessible and open to broad masses of students. Already between 1995 and 2004, the per capita funding decreased by one third, the biggest slump among the OECD countries. At the same time, more money was promised to private universities, making the Czech Republic one of the few European countries providing such support. The government and its main party, ODS (Civic Democratic Party), apparently do not see any contradiction between the White Paper goals and their financing needs. And so ODS could proudly launch one of the pillars for their regional election campaign last week: promoting and opening education for everybody.

Read more on To better and more open universities - through reduction of funding? Alias a special Czech way of tertiary education improvement.

Fresh wind into the Czech higher educational sector?

Czech universities are allegedly too elite-oriented. Only 9 % of children from worker families are studying at university in the Czech Republic, and thus have a six times lower chance to be accepted to university than the children of tertiary-educated parents. The new White Paper for Higher Education is supposed to remedy this situation. The draft presented by Prime Minister Topolánek on 13 May envisages opening the access to universities and their massification. It also introduces new governance and financing mechanisms, which already raised opposition among the rectors. Their main complaint is about the threatening intrusion of the state into university autonomy. The debate launched on May 13 will thus center around the broader questions of university autonomy vs. accountability, responsiveness to the labor market needs, entrepreneurial universities or the relationship between research and teaching and their funding but embed them into the Czech context.

Read more on Fresh wind into the Czech higher educational sector?

From brawn to brain-based economies? Welcome to the Knowledge and Skills section

Have you ever heard the term “knowledge-based economy?“ And about how much knowledge, ideas and skills matter for economic competitiveness - a precondition for economic growth and prosperity? If you are reading this blog you probably have, and probably more than once. Yet what is a knowledge-based economy really? And are the Central and Eastern European countries on their way from brawn-based to brain-based economies?

According to the World Bank’s Knowledge Economy Index 2007, Sweden is the most knowledge-based economy out of some 140 economies ranked. From the countries of Central and Eastern Europe (CEE), Slovenia occupies the 23rd rank, followed closely by Estonia (25th), Hungary (28th), and the Czech Republic (29th). Lithuania, Latvia, Poland and Slovakia did not make it into the first thirty, but are close. What is more, both these Baltic countries made an impressive jump since 1995, according to the index. Romania and Bulgaria rank only behind countries like Barbados, Chile or Malaysia. Slovakia has been the only country out of the CEEs which backslid. index definition, out of the CEEs, Slovenia has the most conducive environment for knowledge to be used effectively for economic (and social) development. This means that its economic and institutional regime provides incentives for efficient use of existing and new knowledge. It has an educated and skilled population that can create, share and use knowledge well. It has an efficient innovation system of firms, research centers, universities or consultants that can tap into the stock of global knowledge and assimilate and adapt it to local needs or create new knowledge. And, last but not least, it has information and communication technology that facilitates creation, dissemination and processing of information. Again, in the CEE environment.

Without going into the nitty-gritty of this index, I used it because it shows a variation in the performance of the countries in the region of my interest. It also indicates that there are interesting stories of change over time. In my blog entries, I would like to tell something more about these stories and about the individual elements of which the Knowledge Economy Index consists. I will write about the skill- and knowledge-formation policies in the countries of the Central and Eastern European region. These include education and R&D policies and reforms but also broader measures targeting the labor market and enterprise support, which foster skill acquisition and utilization in the economy.
However, (and at the same time), my understanding and interpretation of all the above-mentioned issues goes beyond the notion of a high skills economy. Rising productivity in the twenty-first century does not only depend on new technologies, research and development, or the level of funding devoted to education and training, but also on how these are embedded in ´institutional´ and social relations. In line with Brown et al (2001), therefore, I prefer and adopt the concept of high skill society.

Katka Svickova

Read more on From brawn to brain-based economies? Welcome to the Knowledge and Skills section