the future of south african universities: what role for business? part

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CDE Round Table is an occasionalpublication reflecting discussions heldon key contemporary topics

The Centre for Development and Enterpriserecently hosted a round table discussion onthe role of business in the future of SouthAfrican universities, shortly before theCouncil on Higher Education released itsreport on reconfiguring the shape and sizeof the higher education system.

Participants included business andprofessional people, university leaders,public policy makers, and other experts,including Dr. Ramesh Mashelkar FRS,Director General of the CSIR in India, andRichard Brown, chief executive of theCouncil for Industry and Higher Educationin the United Kingdom.

This was CDE’s second round table onthe topic. The first round table, which tookplace in 1998, broke new ground and raised

critical issues now at the heart of policydebates about the higher educationsystem.

The second round table focused onbusiness’s interests and concerns in thiscontext. Key questions addressed in thecourse of the day were:• What does South Africa need from itsuniversities in the new millennium?• What does business need from highereducation in the context of globalisation?• What will help businesses develop acoherent strategy to pursue its interests inrelation to the higher education system?

This is an edited version of the day’sdiscussion. A number of experts had beenasked to make lead-in presentations, andthese are summarised in the main text.

The future of South Africanuniversities:

What role for business?Part Two

‘ South African business – despite an overloaded

agenda – must urgently think through its collective

needs and address its own interests in influencing

the future of higher education.’

F U T U R E O F S A U N I V E R S I T I E S


Higher education andnational economic success

• Globalisation and the development ofknowledge-based economies are makinghigher education increasingly importantto the economic viability of nations.Applied knowledge will be the primarysource of comparative economic advan-tage for companies and countries in the21st century.• Many countries have recognised thathigher education institutions are majoreconomic resources and are activelypromoting partnerships for nationaldevelopment between government,business and higher education.• Higher education has a vital role inhelping South Africa to develop aninternationally competitive economy, amore prosperous and equitable society,and a stable democracy. Better education,better learning, better research, betterproducts and better economic growth arethe prerequisites for a better quality oflife for all South Africans.

Crisis in higher education

• A major reconfiguration of South Africanhigher education is now on the table fordiscussion. This reappraisal has been precipi-tated by a multi-dimensional crisis extendingfrom the schools into the tertiary sector, andthe need – in the national interest – to reshapean institutional terrain distorted by apartheidplanning. There are too many institutions,many of them in the wrong places, and theyare of very uneven quality.• The national participation rate in highereducation is falling. At present it is only 15% inthe relevant age group, and is dropping to-wards levels found in the least developedcountries. This must ring alarm-bells for SouthAfrica’s future competitiveness. By contrast,the average participation rate in OECD coun-tries is 51% (over 70% in the USA), and 21% inmiddle-income countries. A well-educatedpopulation is crucial to South Africa’s future.Increasing the participation rate must becomea major policy-driver.• Expectations of significant growth in highereducation in the post-apartheid era have

Summary ofkey points

FrancisAntonie, senior economist,Standard Bank of SA

Susan Bedil, managing director, MidrandUniversity Campus

Ann Bernstein, executive director, CDE

Julia Boltar, partner, Webber WentzelBowens

Richard Brown, chief executive officer,Council for Industry and HigherEducation, UK

Prof. Ian Bunting, consultant: Departmentof Education; head: InstitutionalInformation Unit, UCT

Ahmed Essop, chief director: Planning &Management, Department ofEducation

Dr Geoff Garrett, president & chiefexecutive officer, CSIR

Participants in the round table

Views expressed by theparticipants are not

necessarily those of CDE

Janice Gobey, recruitment manager, InvestecBank Ltd

Prof. Douglas Irvine, senior associate, CDE

Andrew Johnson, manager: HR Development,Anglovaal Mining Ltd

Margie Keeton, executive director, TshikululuSocial Investments

Derek Keys, former Minister of Finance; director,Billiton

Piyushi Kotecha, chief executive officer, SAUVCA

Dr Robin Lee, Robin H Lee & Associates

Prof. Chabani Manganyi, adviser to the Vice-Chancellor, University of Pretoria;formerly director general, Department ofEducation

Dr Ramesh Mashelkar FRS, director general,CSIR, India

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evaporated. There are fewer students nowthan in 1995. Contrary to the NCHE’sprediction that the number of school-leavers with matric exemption would risefrom 89 000 in 1994 to over 130 000 in1999, there were only 63 000 in 1999 –less than half the projected figure.• Higher education has become a cut-throat business as institutions competefor a limited pool of matriculants, espe-cially those with maths results goodenough to enter science, engineering,technology and business programmes.• The historically black universities(HBUs) are in crisis. Their studentinflows have dropped dramatically, andthey are in severe financial difficulties.Problems of governance and manage-ment are so profound at many of theseinstitutions that even if there weresufficient funds it is questionablewhether they could pull themselvesthrough.• Political correctness seems to insist ontalking about the crisis in general termsto avoid focusing on HBUs, as this is a

sensitive issue. But the higher educationsystem is not dysfunctional in all its parts– some institutions are well managed,reasonably strong financially and academi-cally efficient. Nevertheless, there is aworrying shortage of skills in even themost reputable universities and in aca-demic departments critical to theeconomy.

Rationalising highereducation

• South Africans are hesitant to talkabout merit and the need for excellence. Ifwe want to be globally competitive we haveto face up to reality. How many world-classcentres of excellence can South Africarealistically aim to have? Probably not asingle university in this country cancurrently assemble critical mass at interna-tional levels in its key departments andresearch centres.• The current re-appraisal of the shape,size and functions of the higher educationsystem is long overdue. Hard choices arepostponed at the nation’s peril. South

Ken Maxwell, non-executive chairman,Anglovaal Mining Ltd

Dr Khotso Mokhele, president, NationalResearch Foundation

Enver Motala, consultant, Council onHigher Education

Ivan Mzimela, head: Group HRDevelopment, Nedcor Ltd

Dr Pat Ngwenya, executive director,Acumen Holdings Ltd

Andrea Parkerson, manager, StandardBank Foundation

Prof. Lawrence Schlemmer, consultant

Prof. Nick Segal, director: GraduateSchool of Business, UCT

Dr Paul Shongwe, manager: PublicAffairs, Standard BankFoundation

Prof. Sibusiso Sibisi, deputy Vice-Chancellor: Research, UCT

Dr Dhiru Soni, deputy Vice-Chancellor,University of Durban-Westville

Michael Spicer, executive director:Corporate Affairs, AngloAmerican Corporation of SA

Prof. Ian Steadman, director: WitsFoundation, University of theWitwatersrand

Dr Errol Tyobeka, chief director: PublicScience and Liaison, Dept. ofArts, Culture, Science &Technology

Prof. Charles van Onselen, researchprofessor, University of Pretoria

Dr Bruce Young, manager: Technology &Concept Development, SASOLTechnology (Pty) Ltd



Africa has to nurture and strengthencentres of excellence – institutions, depart-ments, and programmes.• A coherent, co-ordinated andintegrated system is not synonymous witha uniform system. Institutions must definetheir missions realistically to meet differ-ent needs, playing complementary roles inthe national system of higher education.Each must aim for excellence in deliveringits own particular mission.• Private institutions are often viewed asa threat to the public universities. Thissector has grown anarchically and needsbetter regulation; but it enriches the rangeof choices in methods of instruction,curricula and qualifications. However, itcannot replace comprehensive pro-grammes of teaching and research under-taken by public institutions in high-costfields.

What business needs fromhigher education

• Higher education in the 21st centurymust be responsive to broad changes inthe economy and to business’s needs.However, it is important to distinguishbetween the specific short-term trainingneeds of business and industry, and therole of higher education in developingcritical thought and the generic skills thatmake graduates flexible and adaptable.• South Africa needs more and better-educated people in all walks of life. Inparticular, business needs:– more graduates to support the develop-ment of a knowledge-based economy, bothin organisations and as entrepreneurs– a system of higher and further educa-tion geared to lifelong learning, to ensurethat workforce skills can be continuouslyupgraded in changing circumstance– world-class research, with a consciousemphasis on commercial applications– a growing pool of well-educated people

who can participate creatively in policy debatesand respond successfully to the country’schallenges.• South Africa’s universities have by andlarge not adapted to the economic challengesfacing South Africa, and are not sufficientlyresponsive to business’s needs. They have old-fashioned curricula, ageing equipment,dilapidated campuses, and pay structures thatdon’t attract competent young people intotheir employ.• The fundamental question is how SouthAfrica can best use limited resources to getvalue for money and organise the system as awhole to meet national goals.

Business and its interests

• There is a lack of effective communicationbetween business, higher education andgovernment in South Africa. Currently there isno meeting ground where business and highereducation can begin to influence and impacton one another in constructive ways.• Business has failed to lodge itself as aneffective stakeholder in higher education inthe eyes of both the universities and govern-ment. For example, the Council on HigherEducation which advises the Minister ofEducation has only one employer voice amongits twenty members – and according to theCHE this is not through lack of trying toattract high-level business participation.• CDE’s research shows that many seniorbusiness people in South Africa have a limitedunderstanding of the information age and itsimplications for the future of business. Nor arethey aware that business could play an activerole in influencing education to meet thechallenges of globalisation.• In many countries, industrial innovation isbecoming as important in their universities’range of activities as teaching, research, andcommunity service. A national innovationsystem hinges on collaborative interactionsamong tertiary institutions, government andindustry. While research links of this kind are

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growing in South Africa, they are still veryunderdeveloped, and must be expandedvigorously.

Business needs a strategy

• CDE’s research into internationalexperience in business-university co-operation shows that business now hasunprecedented opportunities to influenceuniversities in a series of mutually benefi-cial relationships. South Africa can gainsignificantly from practices pioneered anddeveloped in other parts of the world.• At the public policy level, partnershipsbetween business and higher educationhave been set up in many countries tomeet the challenges of the knowledge-based economy. Such partnerships can behighly influential – for example, theCouncil for Industry and Higher Educationin the UK is not just a pressure group forbusiness, but promotes a vision of the roleof higher education in society in a creativepartnership with business.• The report of the Council on HigherEducation’s task team on reconfiguring theshape and size of higher educationpresents business with an opportunity anda threat. It recommends that the Ministershould begin a process of consultation withkey national stakeholders; and it arguesthat funds – including private sectorfunding – will have to be mobilised forstrategic interventions in the system.• The key conclusion from the roundtable is that South African business –despite an overloaded agenda – musturgently think through its collective needsand address its own interests in influenc-ing the future of higher education, if it isnot to be co-opted on to other people’sagendas at this time of change.

CDE’s recommendations

• The CDE round table provides pointersfor how and why business leaders should

respond to the new circumstances facingtheir companies and the country’s systemof higher education.• Business should:– urgently initiate an appropriatecollective process to study the ‘shape andsize’ report from a business interestsperspective in order to engage produc-tively with government and highereducation institutions and make a consid-ered contribution to this debate– develop a well-researched position onthe way in which the interests of govern-ment, the higher education sector, andbusiness – and therefore the interests ofthe nation – link to and coincide inrespect of higher education– exercise a greater influence on universi-ties by more co-ordinated and vigoroususe of voluntary membership of internaluniversity decision-making, advisory orconsulting bodies– use financial donations and grants touniversities much more strategically– sharply increase its collaboration withuniversities, science councils and othersuch bodies in carrying out researchprogrammes, actively co-operating withuniversities in the commercialisation ofresearch results as a key element in SouthAfrica’s strategy for economic develop-ment– take the initiative to establish a high-level business-higher education forum forthe exchange and development of viewsas a continuing base for influencingpublic policy on higher education inSouth Africa.• The government needs business as anactive partner in the difficult task ofrethinking the higher education system.The stakes are high. Effective and strate-gic business participation in the debateabout the future of South Africa’s systemof higher education could make all thedifference between success and failure.



Acronyms and Abbreviations

CHE Council on Higher Education

CIHE Council for Industry and Higher Education (UK)

CSIR Council for Scientific and Industrial Research

HBU Historically black university

HEIs Higher education institutions

NCHE National Commission on Higher Education

SAQA South African Qualifications Authority

SAUVCA South African University Vice-Chancellors’ Association

THRIP Technology and Human Resources for IndustryProgramme

UDW University of Durban-Westville

UCT University of Cape Town

Unisa University of South Africa

UWC University of the Western Cape

White Paper Education White Paper 3 of 1997

Wits University of the Witwatersrand

‘ The key issue in higher education must be how the

system can best contribute to achieving the goals of

economic and social development and democracy in a

society committed to innovation, competitiveness and

excellence… Hard choices must be made. Government

will need clear vision, real courage and effective

strategic management skills in reshaping higher

education. It will need help in putting such a

package together.’

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The next session took a closer look at howlarge universities currently work withbusiness, the professions and government;and how South African business views itsrelations with universities. Opening up awider perspective, two speakers reviewedinternational practice in strategic co-operation between business and highereducation institutions. South Africa lags farbehind many of its competitors in thisregard. The concluding session focused onways to address the issue.

What does business need from highereducation in the 21st century? Globally,business-university collaboration has becomea vital element in knowledge-basedeconomic development. How is South Africashaping up?

The day began with an overview ofcritical problems and challenges in thehigher education sector. This led into adiscussion of the role of public and privatehigher education in a developing country,drawing on India’s experience in particular.

The round table discussion

Introduction

South African

education is in crisis

at every level.

The reappraisal now

taking place is long

overdue. It is

imperative that this

new approach

should not fail.

Introducing the discussion, Ann Bernsteinsaid that CDE was particularly pleased thatDr Ramesh Mashelkar and Richard Brownhad accepted the invitation to participate inthe round table. South Africa can learn agreat deal from international experience inthis context.

CDE has done extensive work on the roleof business as a social actor1, but does notlay claim to any special expertise in thecomplex world of higher education policy,apart from the round tables it has organisedon this topic. However, importantbackground research had beencommissioned as a resource for thisdiscussion.

South African education is in crisis atevery level, as Professor Kader Asmal statedunequivocally and courageously when he

took up his appointment as Minister ofEducation in 19992. The higher educationsystem, he has said, is irrational,fragmented, wasteful and unfocused – aconclusion already arrived at by the CDEround table in 19983.

The last ten years in higher educationshow above all the power of a wrong ideaand the extremely harmful consequences ofno-one wanting to identify and take thehard choices required. We have never had21 ‘universities’ and we certainly do nothave anything like this today. And weshould all be ashamed that we everpretended otherwise at such great cost.

Political orthodoxy has maintained thatthe ‘historically disadvantaged institutions’were entitled to massive financial redressand that the country’s 21 ‘universities’

1 CDE Focus no 4, Corporate business in a wider role: Brief results of two CDE surveys on resource flows from business tosociety in South Africa, June 1999; CDE Role of Business Series: Business and democracy: Cohabitation or contradiction?May 1996; Perspectives on business, economic growth and civil society, July 1996; Business and government in SouthAfrica, November 1996; Peter Berger and Ann Bernstein (eds), Business and democracy: Cohabitation or contradiction?London: Printer Press, 1998.2 Minister of Education Kader Asmal’s policy statement, Call to action: Mobilising citizens to build a South African educationand training system for the 21st century, 27 July, 1999.3 CDE Round Table no 2, The future of South African universities: What role for business? (Part One), July 1998.



150

140

130

120

110

100

90

80

70

601994 1995 1996 1997 1998 1999

SCHOOL LEAVERS OBTAINING MATRIC EXEMPTION

(thousands)

Source:Department of Education

NCHE projections

Actual

could and should all do the same kinds ofthings and achieve the same degree ofexcellence. It ignored the fact that whatused to be called ‘the bush colleges’ werecreated by the apartheid government toserve its own political ends rather thaneducational requirements, the needs ofstudents or any other national interests. Agreat deal of precious money, time andeffort has been wasted over the past decade.The costs of this failed approach are beingborne by thousands of individuals and theirfamilies and can be seen too in thecountry’s growing skills crisis.

The reappraisal now taking place is longoverdue. It is imperative that this newapproach should not fail. All stakeholders inthe future of South Africa’s universities andthe wider higher education system must putaside their own narrow interests and applytheir minds to the national interest. In thisarea neither the constitution nor theFreedom Charter and its principles tell onewhat to do. What is required is a clearphilosophy concerning education,development, limitations and futurepossibilities in a developing country suchas South Africa.

The problems in higher educationhighlight broader dilemmas facing bothgovernment and business. Government

must open up new opportunities formillions of citizens in many different fieldsto deal effectively with poverty andinequality. It must modernise a countrycaught in a time warp by apartheid andinternational isolation, with an economy inbad shape, and make South Africa aglobally competitive nation. In this contextthe key issue in higher education must behow the system can best contribute toachieving the goals of economic and socialdevelopment and democracy in a societycommitted to innovation, competitivenessand excellence. What does this mean for thefuture of universities? Hard choices mustbe made. Government will need clearvision, real courage and effective strategicmanagement skills in reshaping highereducation. It will need help in putting sucha package together.

Business it must be said immediately isa highly competitive, individualistic andfragmented sector. It is much easier forcorporations to try to meet their short-termneeds for skilled staff on the assumption –increasingly faulty – that there is a healthy,productive and modernising highereducation system in place, than to tacklethe larger systemic issues head-on.Business, like government, is confrontedwith very many new demands in a highlycompetitive world that is causing a dramaticshake-up in the composition of the SouthAfrican corporate sector. Those companiesand business leaders who do think seriouslyabout larger national issues are swampedwith too many demands and hampered bytheir extremely limited capacity for strategicpolicy analysis, not to mention policyintervention. And even where companiesshare long-term interests it is often the casethat they do not see these clearly oralternatively do not know how to make aneffective impact on national policy change.

This round table discussion should notassume a healthy functioning highereducation system in South Africa, nor thatbusiness is an organised entity that either

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Overview and trends

UNIVERSITY AND TECHNIKON ENROLMENTS

(thousands)

800

700

600

500

400


1995

DoE status quo

DoE worst case

DoE best case

Institutional projections

NCHE projections

Actual

1996 1997 1998 1999 2000 2001 2002

knows its own interests or currently has thecapacity or leadership to promote them.

Business has a real interest in the futureof higher education in South Africa. Thekey question is what role South Africanbusiness can play in this area of national

policy, demanding hard choices andinstitutional development to ensure its ownregional and global competitiveness – anoutcome that is in business’s own interestsand the prerequisite for South Africa toachieve all its national goals.

Optimistic expectations of significantgrowth in higher education in the post-apartheid era have evaporated. Reviewingcurrent trends, Ian Bunting noted thatenrolments have in fact declined in publicuniversities and technikons.

There is a lack of data on enrolments inprivate sector institutions, but it is ex-tremely unlikely that large numbers ofstudents in higher education are unac-counted for. Public sector statistics covermost students in higher education pro-grammes at private institutions becausepublic institutions generally register themfor degree purposes.

There are now fewer students in thesystem than in 1995, when there were 570000 students in South Africa’s universitiesand technikons. On a projected growth rateof 4%, the National Commission on HigherEducation (NCHE) had expected totalenrolments to reach 770 000 by 2002. Thethree-year rolling plans for 1999 – 2001submitted by higher education institutions(HEIs) were likewise based on assumptionsof significant growth. However, not only hasgrowth been slower than expected, but from1998 onwards enrolments actually dropped,falling to 564 000 in 1999.

The Department of Education’s bestcase scenario currently is that with lucknumbers might reach 610 000 by 2002 –but enrolments most likely will continue todrop to 520 000, and could go down to440 000 if things get really bad.

What’s going on? The growth up to 1998

was not brought about by large numbers ofnew entrants, but reflected the fact that toomany students who were unlikely to suc-ceed were staying in the system for toolong. Then, in the face of financial con-straints HEIs began to insist that outstand-ing debts had to be settled and fees paid inadvance. Academic exclusion rules wereenforced more strictly as well. Suddenlyfewer students were re-registering, andmore students were dropping out withoutcompleting a degree. Between 1998 and1999 retention rates fell dramatically in thehistorically black universities (HBUs), andat Unisa and Technikon SA.

The enrolment rate of new entrants hasalso declined. In the mid-1990’s the NCHEpredicted a 10% growth in school-leaverswith matriculation exemption – expectingthe number to rise from some 89 000 in



1994 to over 130 000 in 1999. In realitythere were only 69 000 matric exemp-tions in 1998, and 63 000 in 1999 – lessthan half of the projected figure. And notall go into the universities. Combinedwith shifts in retention rates, this ac-counts for the current decline in studentnumbers.

Higher education has become a cut-throat business, with institutions compet-ing for a limited pool of matriculants,especially those with maths results goodenough for them to move into science,engineering, technology, business andcommerce.

At the same time, through-put isinefficient. Between 15% and 20% ofstudents should be graduating annually –but from a base of some 600 000 enrolledstudents in 1998 (350 000 in contactprogrammes and 250 000 in distanceprogrammes) there were only 76 000graduates and diplomates, just over 12%.At reasonable throughput rates of 20% forcontact programmes and 12% for distanceprogrammes, there should have been atleast 100 000 graduates and diplomates,or 25 000 more than were actuallyproduced.

Roughly 22 000 of these graduatesand diplomates were in science, engineer-ing and technology; 18 000 in businessand commerce, and 36 000 in the hu-manities. It is worth noting that thetechnikons produced only 9 000 gradu-ates in science, engineering and technol-ogy. These institutions are not reallyfocused on technical education butincreasingly offer vocational training incommerce and the humanities.

Changing enrolment patterns inhigher education have far-reachingimplications. There’s been an overall lossof white students. Many seem to be going

4 At ‘historically white’ universities, black students now comprise close on 50% or more of the student body at every institution,with the sole exception of Stellenbosch (25%). In 1999 black students were in the majority at Natal (76%), Wits (54%), UPE(79%) and Pretoria (62%). By contrast, some HBUs do not have a single white student, and others have very few - constitutingno more than 1% of the HBUs total overall (CHE, Annual Report 1998/99).

elsewhere, leaving the country, doing otherthings. It is estimated that in the system asa whole there were only 160 000 whitestudents in 1999 – 100 000 less than in1993 – with technikon registrations show-ing the biggest decline.

The only growth points are historicallyblack technikons and historically whiteAfrikaans universities, where new distanceeducation programmes are attracting largenumbers of black students. Enrolments atthe so-called ‘historically white’ Englishuniversities are stable4. The HBUs are incrisis. Their students inflows have droppeddramatically from over 110 000 to 79 000,and are expected to fall even further to60 000. At its peak, UWC with more than14 000 students was the same size as UCTand Stellenbosch; it now has just over 9 000students – and if current flows continue itcould fall to below 6 000. The other HBUsshow similar patterns, with North West asthe one exception.

Declining enrolments are likely to havecrippling effects on the ability of severalinstitutions to continue to fund theiractivities. HBUs confront huge financialproblems and even starker prospects. Asenrolments drop, the enrolment-drivenstate subsidy declines, and there are fewerstudents to pay tuition fees. Fundingproblems are compounded by the inabilityof many institutions to collect student feeseffectively.

On the research front, available dataindicate that the higher education system’sresearch outputs have declined since 1994,compromising South Africa’s research anddevelopment agenda. In 1998, about 65% ofall publications recognised for subsidypurposes were produced by only six of the21 universities. These six institutions alsoproduce close to 70% of the country’smasters and doctoral graduates.

The fundamental

question is how

South Africa can

best use its limited

resources to get

value for money

and organise the

system as a whole

to meet our

national goals.

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Re-thinking shape and size

The Council on Higher Education (CHE) –the statutory body set up to advise theMinister of Education – has been chargedwith the task of urgently developing aframework and strategy for reconfiguringthe higher education system so as topromote national goals more effectively.The Minister made it clear that he wanteddetailed, practical proposals.

Reporting on the ‘shape and size’ taskteam’s work in progress, Enver Motala saidthat it was resisting pressures to be drivenby the current crisis. The fundamentalimpulse in reshaping higher educationcomes from the 1997 White Paper and theprinciples it established, leading to a highereducation system which is planned, gov-erned and funded as a co-ordinated whole.The system must serve local, regional andnational needs for economic, social andcultural development, and is expected toplay a central role in meeting the challengeof international competition in an environ-ment of rapid technological change.

The Minister has stressed that the sizeand shape of the system must not bedecided only on the basis of institutions’research capabilities, and that the contribu-tion of HBUs will have to be borne in mind.The relationship between science, techno-logy and the humanities must be consid-ered carefully, balancing the intellectualfunctions of universities against the require-ments of technical and practical education;and any proposed mergers will have to takeinstitutional values into account.

A coherent, co-ordinated and integratedsystem is not synonymous with a uniformsystem. The fact that historically the mostsignificant differentiation in South Africahas been along socially unacceptable linesdoes not rule out other forms of differentia-tion that will:

• Enable institutions to find differentniches so as to meet national needs andcompete in the higher education environ-ment.• Increase overall participation levels inhigher education.• Provide greater access, with differentadmission criteria for different institutions.• Provide for diverse programmes, withdifferent methods of teaching, learning andassessment.• Produce a flexible, innovative systemwith outcomes qualitatively higher than atpresent.Stringent procedures will have to be devel-oped to evaluate the work of different typesof institutions.5

Discussion

• The ‘shape and size’ task team was set upbecause there is undeniably a crisis. Thereare too many institutions, many of them inthe wrong places, and student numbers aredropping. A significant number of institu-tions are in serious financial difficulties.The problems of governance and manage-ment are so profound at many of the HBUsthat even if there were sufficient funds it isquestionable whether they could pullthemselves through. To what extent willpublic policy interventions be able to dealwith this crisis and manage the necessarychange in an orderly way?• Is there a crisis in higher education assuch? The system is not dysfunctional in allits parts. A kind of political correctnessseems to insist on talking about the crisis ingeneral terms to avoid focusing on HBUs, incase that seems to scapegoat them. But thebottom line is that some institutions are notdysfunctional – they are well managed,reasonably strong financially and academi-cally efficient. The trouble is that the CHE

5 The CHE’s report, Towards a new higher education landscape, was released on 18 July 2000. See box on p28.

There are too

many institutions,

many of them in

the wrong places,

and of very uneven

quality.



and its task team seem reluctant to sayunequivocally that the crisis is actuallylimited to some sectors and some institu-tions.• Declining student numbers in ruralHBUs do not constitute a crisis, though thatmight be the perception. There was a realcrisis when numbers were at their peak in1995. The University of the North was incrisis when it had 17 000 students becausethat was way beyond its capacity.• The declining participation rate in highereducation, which is falling to levels found inthe least developed countries, must ringalarm-bells for South Africa’s future competi-tiveness. In 1996 the NCHE said that theparticipation rate, calculated at 19%, mustgrow to 30%. Recent calculations show aparticipation rate of only 15% in the relevantage-group. South Africa must recognise thatan educated population is an importantnational goal. Increasing the participationrate must become a major policy-driver.• Statistics don’t tell the whole story – onemust also look at the quality of highereducation in different institutions. The factthat South Africa has no established systemof quality assessment is a major problem.The CHE is still at an early stage in tacklingthis issue. Without objective procedures,quality judgements simply reflect the reputa-tion of an institution or a degree, which may

not always be well-founded.• It is probable that not a single universityin South Africa can assemble critical massat international levels in its key depart-ments. UCT has a first rate physics depart-ment, with 16 members of staff. To be aserious contender internationally thereshould probably be over 100. Warwick,which is very good in British terms, has 35– and knows that it doesn’t have a sustain-able quality base. No business school in thiscountry can assemble a core faculty toensure a high quality core education, withspecialisations as a bonus.• The better managed and betterresourced institutions are already re-appraising what they do and how they do it,and making better use of resources.• The perceived tension between equityand quality is based on a misconception. Ifinstitutions define their missions realisti-cally and focus on excellence in delivery,this resolves the apparent contradiction.One institution might commit itself tobeing internationally excellent in a specificresearch field; another might focus onwidening access. Each must aim for excel-lence in terms of its particular mission. Anoutput-driven system can foster diversityand get away from a hierarchical conceptionof institutions that are in fact comple-mentary.

UWC

Peak enrolment


HEADCOUNT ENROLMENTS IN HISTORICALLY BLACK UNIVERSITIES

(thousands)

North UDW Zululand Venda Unitra North West Fort Hare Medunsa

1999 enrolment

Possible 2002 enrolment

16 000

14 000

12 000

10 000

8 000

6 000

4 000

2 000

0

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What does business need from higher education?

Does business really needSouth Africa’s publiclyfunded universities?

Does business really need South Africa’spublicly funded universities? Behind thisprovocative question lies the larger issue ofwhat business in South Africa needs andwants from higher education in general.

Introducing the discussion aroundthese issues, Douglas Irvine noted that inthe face of global competition and theopportunities offered by new technologies,business everywhere is being forced torethink its strategies, its operating struc-tures and its relations with higher educa-tion.

A book published by the AmericanCouncil on Education, What businesswants from higher education6 has caused aconsiderable stir in the United States.According to its authors, business needs:• Employees who are intellectuallyequipped to work in the 21st century; whoare ‘successfully intelligent’ and can thinkanalytically, creatively and practically.• Teachers trained to lay an excellentfoundation in the school system – a dimen-sion often neglected in discussions aroundhigher education.• A system of life-long learning in achanging world of work.• A society with a large proportion ofhighly educated people, because as highearning consumers they are important forthe economy.• Institutions that produce knowledgeand information with business applications.HEIs are only one element in the institu-tional mix, but in many countries there is agrowing emphasis on the role of universi-ties in this context.

Business leaders in America wantgraduates with excellent communicationskills; who are flexible, able to work inteams and with people from diverse back-grounds; with a sound ethical training, andan adequate understanding of globalisationand its implications.

The authors of this study focusing onwhat business wants from higher educationalso make the important point that highereducation is about more than productivityin the workplace. The quality of life forindividuals and the societies in which theylive is linked to higher education in manyways – including their ability as citizens ina democracy to contribute to public debateand make informed decisions.

How successfully are South Africanuniversities and technikons meeting re-quirements such as these?

The role of universities in adeveloping country

His own career, Ramesh Mashelkar said,had been made possible only because abursary from a business undertaking hadenabled him to get an education. Disinter-ested philanthropy of that kind is no longerat the centre of business’s relations withhigher education. Interactions are nowmore focused, more strategic, and there isnothing wrong with that – provided there isalso an understanding of the broader socialcontract.

Many people say that the 21st centurywill be the century of knowledge. Theproducts of mind will dominate it, andindeed they are already beginning to do so.The definition of rich and poor is going tochange. Nations will be information rich,knowledge rich; and information poor,knowledge poor. Ignorance will be the new

6 Diana Oblinger and Anne-Lee Verville, What business wants from higher education, Phoenix: American Council on Education/Oryx Press, 1998.

In 1998, about 65%

of all publications

recognised for

subsidy purposes

were produced by

only six of the 21

universities. These six

institutions also

produce close to 70%

of the country’s

masters and doctoral

graduates.



form of poverty. A nation’s comparativeadvantage will lie in its access to knowledge,and its capacity to produce knowledge thatcan be put to work and turned into wealthand social goods. If this is so, then tertiaryeducation is clearly the cornerstone oftoday’s knowledge societies. Future position-ing in the global economy will depend on acountry’s ability to excel in tertiary educa-tion, and not only in quantitative terms.Quality is a critical issue.

In listing India’s comparative advan-tages, its high level of technical educationmust certainly be near the top. About fiveyears ago on a visit to the sub-continentJack Welch, CEO of General Electric,observed that while India is rightly regardedas a developing country in many respects, itis a developed country in terms of intellec-tual infrastructure – and he proceeded toset up his company’s second largest R&Dcentre there, which employs a thousandIndian PhD’s.

India has some 250 universities, sixinstitutes of technology that are real centresof excellence, 19 regional engineeringcolleges and a large number of privatecolleges. But all is not well in the system.While the number of universities has grown,there are large variations in quality. Veryfew are really world class institutions. And,although it is widely recognised that teach-ing without research is sterile, many univer-sities have not accepted this principle andare not seriously engaged in research.

There is also a migration crisis. Some ofthe best minds do not stay in India. Forinstance, some 500 000 students take theannual entrance exam for the IndianInstitute of Technology. Only 2 000 areselected. Forty per cent of the institute’sgraduates eventually leave the shores ofIndia. Many go not because of better mate-rial prospects but for the psychologicalrewards of working in more innovativesocieties.

Another worrying problem is thatenrolments in science are declining, and

there is a diminishing pool of practisingresearch scientists. Apart from the well-known phenomenon of scientists movinginto management, very large numbers arenow going for careers in software, leading toan over-concentration of scientists in onefield.

In assessing any system of higher educa-tion one must look not only at its customers(students and their families) and end users(employers), but also at its suppliers – theschools. India is currently looking verycritically at its school system. There arepoorly designed curricula, uninspiringteachers and so on. India is also lookinghard at the potential role of informationtechnology to reach those who are nowunreached and to include the excluded. Butit would be a mistake to assume that it isenough to provide information. A specialeffort is being made to look at issues such asenjoyable learning, effectiveness of commu-nication, creative and critical thinking.Education must open up minds, not just toknowledge but to ideas, to inspiration. Wemust understand the hierarchy of data,information, knowledge and wisdom.Winning nations and corporations are thosewho convert information into insight. Andthis can only be done through a process ofintelligent and creative enquiry. India istrying to go back to basics and see howthese issues can be addressed. In the finalanalysis there is no substitute for a goodteacher.

The two key issues in South Africapreoccupying current debates about highereducation concern the size and shape of thesystem, and excellence and equity. India alsofaces these issues. There are too manyuniversities in India and they are not all ofthe same quality. Hard decisions are post-poned at one’s peril; they cannot be avoided.Democracy does not mean equality; it meansequal opportunity. How to provide equalopportunity is the fundamental issue.

It’s very easy to destroy centres ofexcellence. India preserves them as a matter

It’s very easy to

destroy centres of

excellence. India

preserves them as a

matter of policy.

There are centres of

excellence that

operate entirely on

the basis of merit.

No other con-

sideration applies.

R O U N D T A B L E


of policy. There are centres of excellencethat operate entirely on the basis of merit.No other consideration applies. India issetting up performance indicators for its250 universities and linking budgets toperformance. A committee set up to reviewregional engineering colleges (the mainsuppliers of engineering graduates toindustry), found that their governing boardswere becoming politicised. It changed thesystem of governance completely, bringingin top technologists and industrialists torestore merit. This is being demanded ofthe private education sector as well. Theprivate sector latched onto engineering andmedicine as profitable fields, creating havocbecause colleges were established withoutadequate laboratories or teachers. Tenthousand engineers who were basically sub-standard were coming out every year. Thishas now been remedied.

It is one thing to say we’ll be globallycompetitive, it is another to assemble thetechnological skills which will make youcompetitive. You must gain critical mass.Each nation must find its own solutions inthis regard. India found that its universitysystem was inadequate to create criticalmass, particularly in very high technologyareas such as high performance computingand high performance materials, where thereal strengths in terms of resources andmanpower were located in its 40 CSIRlaboratories. It therefore proceeded to linkthese laboratories with universities incollaborative relationships.

Tomorrow’s industries will be knowledgeindustries. This does not simply mean thatinformation technology constitutes theknowledge industry. If you buy a kilogramof steel, 90% is material, 10% is knowledge.If you buy Microsoft, 95% of it is knowl-edge, 5% is material. But in between, thereis a whole range of industries, products andservices that must incorporate a higher andhigher knowledge content. Only those thatincorporate knowledge successfully willwin.

Public versus Private?

Speaking on the role of publicly fundedinstitutions, Chabani Manganyi said that ithas become clear that South Africa’s HEIsmust respond more consciously to theneeds of the economy at local, national andtransnational levels. As we repair andimprove the system, we must produceemployable graduates and enlarge the poolof human capital in our changing economy.

Public institutions must develop andmaintain a world-class yet locally relevantscience and research base. That certainlydoes not mean that every institution shouldaim to operate at this high level. It isstriking that in Japan, for example, a largenumber of universities are only four-yearinstitutions.

Our system has suffocated for a longtime under a homogenising tendency, thebelief that a university in Venda must havethe same kind of BSc or MSc as one inCape Town. It is to be hoped that oneoutcome of the task team’s work will be toallow the system to diversify.

Diversity is being promoted in anotherway through the growth of private sectorinstitutions. Public institutions are clearlychallenged by the internationalising multi-national private university system that hascome onto the scene. Is this competition anunmitigated threat? Fears that privateinstitutions will destroy the public systemare greatly exaggerated. We need a judiciousand balanced response to the private sector;we certainly need a regulatory framework;but we also need to appreciate that healthycompetition is good.

In the field of science and technology,government policy post-1994 has beendesigned to encourage and support innova-tion, inter-disciplinary studies and cross-sectoral co-operation among researchinstitutes and HEIs. A key issue is howHEIs can organise their operations to findsynergies with the business sector. In thepast few years, there have been a number of

It is one thing to say

we’ll be globally

competitive, it is

another to assemble

the technological

skills which will

make you com-

petitive. You must

gain critical mass.



exciting instances of universities,technikons, and research councils respond-ing to this policy framework. For example,incubation work in the engineering facultyat Pretoria University is an importantdevelopment in the relationship betweenthe university sector and business. TheGauteng innovation hub, another recentinitiative, is the result of an alliance be-tween the CSIR, Pretoria University, andother stakeholders. The intention here isnot only to transfer technology but also totransfer entrepreneurial capability, interact-ing with established companies and creat-ing start-up opportunities for new compa-nies and new technologies. Initiatives ofthis kind can make an important contribu-tion to the country’s competitiveness.

One of the most impressive things aboutSouth Korea is the extent to which thatcountry has managed to integrate educationand development. The idea of developingthe national economy is embedded ineducation policy throughout the system.The challenge for South Africa is to bringbusiness and the higher education sectortogether so as to understand these connec-tions.

What is the role of private institutions?Pat Ngwenya noted that it is important todistinguish between the institutionalfunctions of tuition, and certification – thatis, awarding degrees and diplomas. Manyprivate institutions in South Africa provideonly tuition, in partnership with otherinstitutions that certify the qualifications.

The primary role of private education isto provide alternatives and enrich the rangeof choices in methods of instruction,curricula and qualifications offered. Whilethere are no standard ways of measuringquality in either public or private educa-tion, a number of private institutions inSouth Africa are benchmarked againsthighly reputable institutions in other partsof the world. One way to nurture quality isto focus on the quality of teaching. Privatesector teaching staff on flexible employ-

ment contracts know that they must deliverresults. By the same token, they are paidattractive salaries.

Another indicator of the quality ofeducation offered by an institution is itsrelevance to the world of work, as judgedpragmatically by students and employers.The private sector has clearly made itselfhighly attractive in this regard. Moreattuned to the market, it increases access tostudies which students really want toundertake.

In a system that is more flexible thanthe public sector, private providers canassess students’ capabilities in terms oftheir objectives, tailor a curriculum tomatch their requirements, and establishchannels to prospective employers. Inaddition to core components in a standarddegree, students can include coursesrelevant to workplace needs – so that a BScgraduate, for example, can also be equippedto understand budgeting and businessoperations.

Another field of opportunity for privateinstitutions is the massive gap in themarketplace for imaginative programmes infurther education, rather than highereducation, that will help school leavers tobecome employable.

Discussion

• South Africa’s universities are a drag onthe economy. Business in any countryneeds the state to make an investment intertiary education, but the way in which theuniversities are handling that investmentcomes close to being a liability as far asbusiness’s interests are concerned. Ouruniversities have by and large not adaptedto the economic challenges facing SouthAfrica. They have old-fashioned curricula,ageing equipment, dilapidated campuses,and pay structures that simply don’t attractcompetent young people into their employ.They are not utilising ways to generateadditional income by making themselvesviable partners with business.

If we want to be

globally competitive

we have to talk about

excellence and we

have to face up to

reality. South Africa

is not nearly as big

as India, so how

many world-class

centres of excellence

can we realistically

aim to have?

R O U N D T A B L E


• Most business people in South Africaaren’t attuned to the potential role of HEIsin the economy. Conversely, universitiesdon’t know what they can offer business.Companies need to know what universitiesare offering, and what they can build on.Universities must get out and marketthemselves.• Is ‘business’ synonymous with thecorporate business world in this context?Many or perhaps most graduates no longergo into large corporations. We need to knowwhat smaller businesses require fromhigher education.• Long-established academic departmentsof direct importance to business are incrisis. For example, the chemical engineer-ing department at one of our most reputa-ble universities has five members of staff;three are within five years of retirement;the other two are over 40. It is dead on itsfeet. There is virtually no prospect ofemploying younger staff. The gap betweenacademic and industrial salaries is now solarge that a well-qualified graduate whojoins Sasol, for instance, can expect to beearning more than the top of the seniorlecturer scale within eighteen months.• The undoubted importance of scienceand technology must not blind us to thedangers of a decline in the humanities.We need a due balance in the system as awhole, and one of the challenges is toensure that the humanities are sustained inthis period of change. For instance, thereare good grounds – intellectual, cultural,national – for thinking that we should beproducing more history graduates.• Any sensible analysis of the relationshipbetween higher education and the economymust make important distinctions withregard to the humanities. This is a highlydiverse sector. Some of these academicfields are vital to business; others areequally important but more indirectly;while yet others are clearly less significantin terms of business’s needs.• We must be careful to distinguish

between the specific training needs ofbusiness and industry, and the role ofhigher education in developing criticalthought and the generic skills that makegraduates flexible and adaptable. Businessoften has a short-term view of its needs.The higher education system cannot bereduced to servicing business’s immediateneeds, though it should be responsive tothem, as well as to broader changes in theeconomy.• A kind of recipe book, mechanicalmentality prevails in many of our HEIs –the complete opposite of the kind offlexibility and adaptability which graduatesneed in the new economy. Universitiesmust remember that their primary role is toteach high level theory because it isthrough grappling with abstract conceptsthat people gain intellectual flexibility.• Recent research among employeesindicates a clear preference for privatesector education, precisely because theseinstitutions function in a more business-likeway. They understand students’ needs andrequirements, and are prepared to designcourses to meet them. Public HEIs are fartoo inflexible and conservative in theirresponse to changing needs. They arereluctant to relax rules and regulationsgoverning fixed curricula; slow in respond-ing to requests to develop new modules;and all too often use outdated text booksrather than drawing on current informationresources and new technologies. Theysimply are not sensitive to their potentialmarket.• Foreign institutions came into SouthAfrica in partnership with the privatesector because public institutions were tooreticent and hidebound to recognise thegreat opportunities for public-privatepartnerships. Many public sector education-ists still can’t understand that one can makea profit without compromising quality.• Private institutions are often viewed as aprofound threat to the public sector, but asystem of higher education that does not

South Africa’s

universities are a

drag on the economy.

Business … needs the

state to make an

investment in tertiary

education, but the

way in which the

universities are

handling that

investment comes

close to being a

liability as far as

business’s interests

are concerned.



have room for private institutions is un-thinkable in the modern world. However,private institutions cannot replace thecomprehensive programmes of teachingand research undertaken by publiclyfunded HEIs, because these activities arenot profitable and must be subsidised. Infields such as science and engineering, withtheir high costs and emphasis on postgradu-ate programmes, private institutions canplay only a limited role at best.• We need a clearer picture of the privatesector’s involvement in higher education.

This sector has been allowed to grow in ananarchical way, and boundaries betweenhigher education and further education andtraining are blurred. Private institutionsmust be involved in the process of develop-ing a regulatory framework best suited toSouth Africa’s circumstances throughdialogue with government, the CHE,SAUVCA and business.• The fundamental question is how SouthAfrica can best use limited resources to getvalue for money and organise the system aswhole to meet our national goals.

Universities and business in South Africa

Working relationships?

This session began with short presenta-tions reviewing some of the ways in whichlarge universities in South Africa workwith business, the professions, and govern-ment.

Nick Segal noted that state funding forSouth Africa’s universities has remained atroughly the same level for a number ofyears. Universities have enjoyed a protectedposition in an education budget undersevere pressure. While universities mayconsider themselves fortunate, there arenevertheless important questions about theeffects of the subsidy system. One dangerin subsidising suppliers in any field is thatit protects them from the discipline of themarket. A more unexpected effect, per-haps, is that universities supported by statefunding have in fact been subsidisingbusinesses for years by undertakingcontract research and other such activitiesat unrealistic rates. Universities have beencharging about 10% for overheads. It hasnow become evident that the real cost onaverage is probably 105%, ranging from40% in soft areas up to 200% in engineer-ing and medicine.

For universities, the strategic question

is how to diversify their financial basewithout compromising the academic en-deavour in either teaching or research.They can learn from impressive examplesshowing how this has been done in otherparts of the world over the last two decades.

Focusing on research links betweenuniversities and external bodies, SibusisoSibisi noted that these are multiplying in avery encouraging way. The volume ofcontract research commissioned by industryand government is growing. There has alsobeen a considerable increase in statefunding for programmes that promotecollaborative work between industry andacademia. THRIP is a major example,stemming from a Department of Trade andIndustry policy initiative, and run by theNational Research Foundation on behalf ofDTI. Another example is the InnovationFund run by the Department of Arts,Culture, Science and Technology. In pro-grammes of this kind there is a clear shiftfrom pure research towards research withan eye to practical applications, innovationand entrepreneurship. Inevitably there arequestions about the extent to which thisaccords with a university’s central mission.

The most significant challenges thatuniversities encounter in this context

A national

innovation system

hinges on collabor-

ative interactions

among tertiary

institutions, govern-

ment and industry. If

the lack of effective

communication

between these sectors

persists, South

Africa’s chances of

becoming a really

innovative country

will be minimal.

R O U N D T A B L E


include:• Confidentiality. The unavoidabletension between an academic ethos gearedto the publication of research results, andthe need to protect research for commer-cial advantage, has to be managed verydelicately if the university’s academicmission is not to be compromised.• Cost recovery. Universities are subsi-dising industry in their contract research.Costs attach to the use of infrastructureand equipment, including replacementcosts that must be built into budgets.South African industry balks at even theextraordinarily modest charge of 10% foroverheads. The widespread perception inindustry that universities are places whereyou can do research on the cheap, mustchange.• Ownership of intellectual property. Incontract research this problem is generallyhandled on a case by case basis, negotiatedbetween the research group and theindustry in question. However, withincreasing government support for univer-sity-business partnerships, and a growingemphasis on commercial applications,issues of intellectual property rights havebecome more acute. South Africa mustthink very seriously about a national policyon ownership of intellectual propertyarising from publicly funded research. Thebest known example of intellectual prop-erty rights law – the USA’s Bayh-Dole Actof 1980 – gave a significant impetus touniversity-business partnerships and isarguably the single most important factordriving the dramatic technology transferfrom research institutions to industry inAmerica.

South Africa can benefit from interna-tional experience in many respects. Forexample, despite our very different circum-stances we can learn from the report onpublic investment in investor researchpublished by the Canadian AdvisoryCouncil on Science, to be more active inestablishing synergies between research

institutions, investors and entrepreneurs,and in nurturing start up companies. Hereour financial sector must be prepared toplay a more active role. The infrastructureof Warwick University’s science park, forinstance, was wholly funded by BarclaysBank. If we are serious in our belief thatSouth Africa’s future lies in knowledge-based industry, and more particularly insmall knowledge-based enterprises, busi-ness and government must invest in ouruniversities. It is in these institutions thatmost of the requisite knowledge genera-tion is likely to take place.

Ian Steadman said that he wanted todeconstruct the myth of ‘the university’before talking about what business isdoing, what it is not doing, and what itcould be doing.

What is Wits? Or UCT? Or the Univer-sity of the North? Institutional identities assuch exist only in our imagination. Intalking about standards at a given institu-tion, one is talking not about the univer-sity as a whole but about a large number ofdepartments of varying quality. Somemight be working well; others might not.

In practice companies choose a depart-ment (for instance, geology) which theyidentify as a centre of excellence, and intowhich they then put money with a view tobenefiting a particular industry. Or theysupport a particular academic who isproducing graduates useful to business.Such support is not unimportant ormisplaced – but it doesn’t cover academicactivities which are less obviously relatedto business’s interests, though no lesscrucial, such as the gastro-enterologyresearch at Chris Hani BaragwanathHospital, or the reproductive health unitworking on HIV/AIDS. Although research-ers tell us that the HIV/AIDS crisis isgoing to knock 15% off the bottom line ofbusiness by the year 2002, Wits has notsucceeded in getting business to putmoney into HIV research. Nor can busi-ness be persuaded to fund disciplines in

Long-established

academic depart-

ments of direct

importance to

business are in

crisis.



the humanities and social sciences such associal anthropology. Of course, universitiesmustn’t churn out masses of studentswhose qualifications are irrelevant to theworld of work. But it must be rememberedthat an important part of a university’sfunction is to contribute to and createpublic intellectual life. How can businessbe convinced that it is in its own intereststo help sustain a tradition of criticalinquiry and public intellectual debate?

Views from the businesssector

CDE commissioned two research studies toestablish how South African businesscurrently thinks about its relations withhigher education, and what it needs fromhigher education in the context of globaleconomic competition. The first studyinvolved a substantial number of inter-views with business leaders in the corpo-rate sector and professional organisations.A second smaller study focused on businesspeople serving on the councils of sevenSouth African universities7.

Presenting the findings, DouglasIrvine noted that fierce competition torecruit suitable graduates from a shrinkingpool means that businesses are generallyreluctant to divulge recruitment strategiesand information about their relations withspecific HEIs.

No clear picture emerges of whatbusiness wants from higher education,apart from the obvious points: moreeffective preparation for the world of work;more maths and science graduates; and agreater emphasis on business and technicalcourses – all too often narrowly conceivedin terms of a Bachelor of Commercedegree. Many senior people in businessappear to have a limited understanding ofthe information age and its implications foreconomic activity. Only a very small

proportion of people interviewed men-tioned the importance of critical thoughtas something required by business in the21st century.

Business is not unwilling to interactwith HEIs, especially in discussions aroundcurricula. Generally this is seen as adialogue with specific institutions andfaculties, rather than system-wide. Compa-nies tend to put their money into indi-vidual students through bursaries andscholarships, into individual members ofacademic staff through salary supplementa-tion and sponsored chairs in specificdisciplines, and into particular institutionsthrough strategic bilateral arrangements –generally those institutions which they seeas having proven track records. By andlarge, business is very narrowly focused inthis regard, though there are notableexceptions.

Organised business doesn’t talk directlyto universities about their needs or whatshould be provided. The National BusinessInitiative’s focus in the educational sectoris on schools, colleges, and further andtechnical education, not on the universitysector.

By and large business people evincelittle awareness that business might be ableto play an active role in response to thecrisis in higher education, or in influenc-ing education to meet the challenges ofglobalisation. No coherent sense of direc-tion emerges, except in a few specificsectors and professions.

In large corporations it is unusual tofind anyone who can take a view of busi-ness’s overall needs in relation to thehigher education system. Inside thesecorporations, various structures deal withsuch matters from their own differentperspectives – recruitment is a humanresource issue, research is dealt with by theR&D people, educational matters as such

7 Philippa Garson, Business and higher education in South Africa: Views from the corporate sector, report commissioned byCDE, 2000; R H Lee, The role of business people on university councils, report commissioned by CDE, 2000. These researchpapers can be ordered from CDE.

The real question

that emerges from

CDE’s research is

whether business can

rise to the challenge

of defining its col-

lective interests and

then find ways to

promote them

effectively in the

public policy arena.

R O U N D T A B L E


go to corporate social investment pro-grammes, and so on.

Business leaders, perhaps understand-ably, would rather look to government todevelop a vision and formulate policy.They’re hesitant to adopt a commonposition or strategy. They are reluctant toput forward unpopular or critical views inpublic, especially where they perceive thatissues are politically sensitive. The realquestion that emerges from CDE’s re-search is whether business can rise to thechallenge of defining its collective interestsand then find ways to promote themeffectively in the public policy arena.

In the second CDE study, interviewswere conducted with seven senior businesspeople, most of them with very lengthyperiods of service on university councilsacross the spectrum of historically differen-tiated institutions. What emerged is that ascouncil members they operate in anindividual capacity, they don’t see them-selves as ‘representing’ business in anyway, they don’t articulate business inter-ests, they don’t confer with other businesspeople about business-higher educationissues. Their perception is that businesshas not established its claims as a primarystakeholder in higher education in the eyesof administrators, academic staff and otherinterests represented on councils.

Discussion

• CDE’s research on the situation inSouth Africa tells a pathetic story. Some-thing must be done to get business andhigher education to talk to each other –not in a NEDLAC type institution, but insome way that can really work.• Business has not only failed to lodgeitself as an effective stakeholder in theuniversities but also in the eyes of govern-ment. The CHE has only one employervoice in a council with twenty members –and this is not through lack of trying toattract high-level business participation.• Businessmen on university councils

have not distinguished themselves indealing with issues of governance and theinstitutions’ financial responsibilities.They appear reluctant to bring theirbusiness skills to bear on managementissues. Has any businessman resignedfrom a university council because accountsfor the year were not audited?• The skills crisis in even the mostreputable universities and in academicdepartments critical to the economy has tobe tackled as a matter of urgency bybusiness and higher education. We cannotlook to government to solve the problem.• From the perspective of the legalprofession, business clearly needs theuniversities, but the universities also needbusiness. Very often business is seenchiefly as a potential source of funds, withuniversities as the source of expertise. Butbusiness has a lot of expertise to offer, notonly in research partnerships but also inteaching. While universities are strugglingto secure and retain competent staff,highly qualified people in the privatesector may well be prepared to lecture in apart-time capacity. At Wits, for example, allthe lecturers in certain postgraduate lawcourses are practitioners, and academicstandards haven’t been compromised.• South Africa needs good universities.But how do we get there? Dr Mashelkarmade a very important point about meritand the need for excellence, which SouthAfricans are nervous to talk about. If wewant to be globally competitive we have totalk about excellence and we have to faceup to reality. South Africa is not nearly asbig as India, so how many excellent centrescan we realistically aim to have?• The Department of Arts, Culture,Science and Technology should have amore central role in shaping developmentsin the higher education sector. In theWhite Paper on Science and Technologythere was a vision of a national system ofinnovation. We need to think seriouslyabout fleshing that out. The problem of

Businessmen on

university councils

have not distinguished

themselves in dealing

with issues of

governance and the

institutions’ financial

responsibilities…

Has any businessman

resigned from a

university council

because accounts for

the year were not

audited?



critical mass must be addressed by identify-ing knowledge wherever it is located – inuniversities, industry, science councils,parastatals – and establishing workingpartnerships.• A national innovation system hinges oncollaborative interactions among tertiaryinstitutions, government and industry. Ifthe lack of effective communicationbetween these sectors persists, SouthAfrica’s chances of becoming a reallyinnovative country will be minimal.• Globalisation is an inescapable realityimpacting on business and education alike,providing strong grounds for the interna-

tionalisation of research in industry and theHEIs. It is absolutely necessary for us tostrengthen international links if our re-search is not to lag behind.• In the 1980’s the debate in Britain wasremarkably like that in South Africa today,indeed further behind in some ways. Eventhen it was clear that the knowledgeeconomy and therefore the output of HEIswould be crucial to Britain’s economicfuture. Most of the captains of Britishcorporations didn’t understand that. A fewdid, however, and they got a remarkableenterprise going, the Council for Industryand Higher Education (see p.24).

8 R H Lee, International experience in business-university co-operation, report commissioned by CDE, 1999. The full papercan be ordered from CDE. An executive summary is posted on CDE’s website: http://www.cde.org.za

Business & universities: strategies for co-operation

Review of internationalexperience

Robin Lee reported on a wide-rangingresearch project he had undertaken forCDE to investigate international experience

in business-university co-operation.8

Two key conclusions emerged:• As we go into the 21st century, businesshas unprecedented opportunities to influ-ence universities in a series of mutuallybeneficial relationships.• Most of these relationships have alreadybeen pioneered and developed in otherparts of the world, and South Africa cangain significantly by putting this experienceinto practice.

Government features very largely as thethird player in business-university relationsworld-wide. A government’s choice ofmacroeconomic policy is almost invariablythe factor that precipitates a new relation-ship between business and universities.Macroeconomic policies with a strongemphasis on an outward-looking economy,export-oriented industries, inflation target-ing and control of public expenditure,brought about a profound reorientation inbusiness-university relations in the UK inthe late 1970s and early ’80s, a bit later inthe USA, in Canada and Australia at the

Business-university-governmentpartnerships

Argentina, Australia, Brazil, Canada, Costa Rica, France, HongKong, Japan, Malaysia, Singapore, the United Kingdom, the USAand Venezuela all have specific government agencies which workwith universities and business to encourage various kinds of part-nerships, primarily in technology transfer and the commercialisa-tion of research results. Examples of governmental involvementinclude grants to ‘technology incubators’ in Brazil; support for re-search centres developing technologies for regional industries inJapan; the ambitious development of a ‘technopolis’ in Johor state,Malaysia; the promotion of ‘smart partnerships’ between academiaand industries by the Malaysian Industry-Government Group forHigh Technology; the Teaching Company Scheme in the UK; andthe Government-University-Industry Research Roundtable in theUSA.

R O U N D T A B L E


end of the ’80s, and are now doing so in alarge number of Latin American countries.

The choice of macroeconomic policy isalmost always followed by a correspondingdecision to reduce university funding. Thisforces universities to reorientate them-selves towards more beneficial relationshipswith business. In many cases legislationthen helps to drive the process forwardthrough laws such as the Bayh-Dole Act,which made it possible for Americanuniversities to benefit from intellectualproperty produced from federally fundedresearch, and similar legislation in manyother countries. Governments in pursuit ofan entrepreneurial and outward-lookingeconomy take steps to encourage universi-ties to become entrepreneurial themselves.Further measures include the establish-ment of new government agencies to assistand promote relations between businessand universities, generally under theauspices of the department responsible fortrade and industry. THRIP, TipTop,Bottom Up and a number of other schemesare typical South African examples. Inmany countries government will alsofinance various initiatives directly, mostnotably in Latin America.

Industrial innovation is becoming asimportant as teaching, research, andcommunity service in modern universities’range of activities; and governments areencouraging businesses to outsourceresearch to universities through policiesand funding provisions that further stimu-late the process.

The relationship is therefore notbetween two partners but three: business,universities and government. A number ofthinkers have developed the concept of the‘triple helix’ to describe this relationship,implying that a new kind of intellectual andeconomic life is being created. The protago-nists of this view believe that there isevidence that this process has now devel-oped an autonomous life of its own, nolonger dependent on continuous planned

support from any of the three partiesinvolved. Every time a successful business-university-government project is developed,this creates more opportunities for furtherprojects, which multiply in their turn.

Business-university relations internationally

CDE’s comprehensive survey of international practice shows 14major ways in which business engages with universities:

• Business influences public policy in the field of higher educa-tion by belonging to policy forums and other organisations, andparticipating in policy task teams.

• Business works with universities in local or regional economicdevelopment. Some of the most productive relationships are re-gional or local rather than national.

• Business participates in university governance. It influences thestrategies and missions of universities by playing an active part ingoverning bodies and in an advisory capacity.

• It assists universities to become more business-like in their man-agement, for example by helping them to focus on adding valueto their core business as universities and outsourcing other func-tions.

• Business participates in the delivery of lifelong learning by pro-moting the concept and providing ongoing access to higher edu-cation for employees.

• It provides opportunities for work-related learning to students.

• It influences the quality, quantity, nature and direction of uni-versity research through grant or contract funding.

• By recruiting personnel from university staff and students, busi-ness demonstrates that an investment in higher education opensup greater life opportunities.

• Business works with universities and their staff to develop andcommercialise the intellectual property they produce, generatingincome for the university and its staff in the process.

• Business uses university staff in a consultancy capacity.

• Businesses make use of university plant, workshops and labo-ratories, avoiding the duplication of specialist facilities in theircompanies and providing income to universities.

• Business develops new ideas from university research in thepublic domain, converting these into economically productiveproducts or services.

• Through working with university staff, businesses gain accessto wider international networks of expertise.

• Business makes grants or donations to universities.



Pull quote here?

CDE

The international survey undertaken forthis round table (involving an extensiveliterature search and study of the activitiesof more than 80 universities) shows four-teen major ways in which business isengaging with higher education. While theoverwhelming majority of business peoplein South Africa think that the only thingbusiness can do for higher education is tomake grants or donations, this is only asmall part of business-university relationsworld-wide.

In every country surveyed for thisreport, governments are attempting tocreate conditions in which business anduniversities can work together to an evengreater extent. Currently South Africanuniversities have a low level of co-operation

with business9. They are not oriented todeveloping partnerships with business orindustry beyond traditional business schooland engineering faculty links, and are stilla long way from conceiving of themselvesas ‘entrepreneurial’ in their relations withbusiness. At the same time, South Africanbusiness has not thought seriously enoughabout the kind of universities it (and thecountry) needs. It has put minimal effortinto influencing either state policy onuniversities or the ways in which universi-ties manage themselves.

It is important that this situation shouldchange. Very positive outcomes can begained from sensible alliances, partnershipsand commercial transactions betweenbusiness and universities without loss ofidentity or autonomy by either. Much ofthe learning about what works has alreadytaken place in other countries.

The Council for Industry andHigher Education in the UK

Richard Brown outlined the activities ofthe Council for Industry and HigherEducation (CIHE) and some of the issuesfacing it, relating this to themes in theround table discussion.

CIHE is founded on the belief that thefuture of the UK depends on the develop-ment and application of knowledge. CIHEis not just a pressure group for business. Ithas a much wider vision of the role ofhigher education in society in a creativepartnership with business.

It was formed in the 1980s by a smallnumber of business leaders who felt thathigher education and business were talkingat or past each other – and that establish-ing the process of dialogue was as impor-tant as specific outputs or even an agreedagenda.

Membership is by invitation, and

9 In 1997, a survey of 244 firms in the manufacturing sector showed that only 30 had co-operation agreements with HEIs.Only 60% of these reported ‘satisfactory’ or ‘very satisfactory’ relationships. (Tjaart van der Walt and William Blankley,South African strategies for the promotion of research and technology innovation: Towards effective collaboration and newbusiness development, Industry and Higher Education, February 1999, pp15-24.)

University-community enterprisepartnerships

Partnerships between universities and business are not restricted

to the area of private entrepreneurship, with a dominant profitmotive. Many universities have brought knowledge and skills intopartnerships with private sector finance to provide support anddevelopment opportunities to poor communities in search of asustainable economic base.

Carleton University in Ottawa and the University College of CapeBreton in Nova Scotia, Canada, have worked together withcommunity development enterprises on Cape Breton Island to haltand then reverse economic decline in the area. Profit-makingventures include a small shopping centre, a high-tech ropemanufacturer, a plumbing and heating company, a tourist hotel, aradio station and ski resort.

The two universities have now extended this approach to acompletely different community – in the Yucatan area of Mexico,home of the remaining Mayan people who were living there whenthe first Spanish colonisers arrived.

In ventures of this kind the community business corporation createsa powerful instrument for the regeneration of economicallymarginalised communities.

R O U N D T A B L E


comprises leading business people, Vice-Chancellors of universities and heads ofother HEIs and of four Further EducationColleges. CIHE has some 40 membersfrom private sector companies represent-ing a cross-section of British businessranging from financial institutions, IT andengineering companies, through to theservice sector; and it deliberately includesthree small or medium sized enterprises soas to engage with their rather differentperspectives. Similarly, the fifteen Vice-Chancellors represent institutions rangingfrom internationally recognised researchcentres such as Cambridge University,Imperial College London, and Edinburgh,through to the University of Westminster(a former polytechnic), and GlasgowCaledonian (whose mission is largely toserve the inner-city population); institu-tions with very diverse missions, recog-nised as all equally valid and havingcomplementary functions in the system ofhigher education.

The heads of the Quality AssuranceAgency and the Higher and FurtherFunding Councils are also present at CIHEmeetings. A government minister normallyattends, together with senior officials fromthe Department of Trade and Industry orthe Department for Education and Em-ployment depending on the issues beingdiscussed.

The full Council meets about threetimes a year (over lunch, finishingpromptly at 2.30), operates only at com-pany chairman and chief executive level,and does not allow substitutes. It is pre-cisely by getting these top people roundthe table with university and college headsthat policy is influenced.

CIHE is supported by various workinggroups, including a policy forum com-posed of senior human resources repre-sentatives from business, and representa-tives from the academic world. Other sub-groups are formed to work on specifictopics.

Issues tackled by CIHE have included:• The need to increase participationrates in higher education to 50% to matchthe best of Britain’s international competi-tors such as South Korea and Singapore;an objective which has been adopted byTony Blair’s government;• Increasing access for disadvantagedgroups – seen as both a social and aneconomic imperative – so that as busi-nesses de-layer, individuals throughout theorganisation will have the knowledge,power and confidence to take decisions;• Defining the kinds of skills needed bygraduates, such as academic depth andcritical ability; flexibility; high-leveltransferable skills; problem-solving skills;communication skills and the ability tolearn for themselves.

CIHE promotes collaboration betweenbusiness and academia to help developrelevant skills, among other things bytrying to provide opportunities for qualitywork experience for every student. It has asubsidiary, the National Centre for WorkExperience, which focuses on this issue. Ithas also encouraged partnerships withHEIs in developing real life case studiesand simulations, refreshing the curricu-lum and helping the system to becomemore flexible. CIHE considers thatstudents must not only be equipped withskills that make them more employable;their academic training should alsoencourage them to become entrepre-

Business-university policypartnerships

Partnerships between business and higher education at the publicpolicy level are exemplified by the Council on Industry and HigherEducation (CIHE) in the UK, the Business-Higher Education Forum(BHEF) in the USA, the Corporate-Higher Education Forum inCanada, the Business-Higher Education Roundtable in Australia,the Business-University Forum in Japan, and the Polish HigherEducation-Business Forum.

The skills crisis in

even the most

reputable universities

and in academic

departments critical

to the economy has to

be tackled as a

matter of urgency by

business and higher

education. We

cannot look to

government to solve

the problem.



neurial, to think about starting their ownbusinesses and create wealth.

CIHE is increasingly concerned withissues of quality. Too many institutions inthe UK are trying to do too many things.They lack critical mass in world terms, andhaven’t thought enough about comparativeadvantage. This is even truer at the depart-mental level. HEIs must decide on theirfocus and mission. They also need toappreciate that, like business, they mustoutsource and buy in courses from otherinstitutions where they don’t have criticalmass. To achieve economies of scale andshare best practice they need to engage inpartnerships with institutions sharing thesame mission, with other institutions intheir locality and with private companies.The private sector has for long beenrestructuring, focusing on core activitiesand entering partnerships. Higher educa-tion will want to learn the lessons andadopt similar approaches if it is to deliverthe excellence its customers deserve andincreasingly expect.

Introducing this discussion, MichaelSpicer stressed that it is important todeconstruct not only ‘universities’ but also‘business’. Business is not a collectiveentity ready and willing to act on a clearvision of its interests. In fact, SouthAfrican business is in disarray at present –as can be seen if one looks at employerrepresentative bodies. Business is movingfrom the old establishment towards a newset of arrangements, but it has not yetarrived. Older businesses are modifyinginto new forms of corporate life, and someare listing abroad. Among the newerbusinesses no clear set of actors hasemerged as yet who are ready to take uppublic policy issues and engage in socialresponsibility activities.

Business and universities: Quo Vadis?

It would be short-sighted not torecognise these problems in looking tobusiness for a positive initiative. However,it is clear that we have arrived at animportant point of decision. It is absolutelynecessary for business and highereducation to set the process in motion.Starting with one or two key issues, thingscan take their course: the substance candevelop out of the process.

This calls for leadership from businesspeople who feel passionate about the issue– people with influence, who will galvanisenot only their peers but also governmentand the educational sector. We mustsharpen our ideas about how to catalysethe process, focusing on the issue ofleadership.

Business-Higher Education Forum (USA)

The BHEF was established in 1978 by 20 presidents, chairpersons

or chief executives of business corporations, and 20 presidents orchancellors of universities. Membership has now grown to 90, bya process of invitation. It acts under the auspices of the AmericanCouncil on Education and the National Alliance of Business.

The BHEF has three goals:

• To identify and act on public policy issues of joint concern tobusiness and universities

• To enhance public awareness of such public policy issues

• To guide the evolution of relationships between business andhigher education in the USA.

Since its inception, the BHEF has published influential reports inareas such as higher education and global economic trends(America’s Competitive Challenge) and relationships betweenbusiness and higher education (Corporate and Campus Co-operation). One of its major initiatives at present is a study ofuniversity-industry research collaboration.

Observers credit the BHEF with major influence on public policy,especially in the area of legislative change to permit easiercommercialisation of research results.

R O U N D T A B L E


Discussion

• Every organisation in South Africa isbedevilled by skills shortages today anddesperately worried about skills shortagestomorrow. It’s a great irony that this hasn’ttranslated into a clear perception of mutualinterest between business and highereducation.• In CDE’s research survey, it was notablethat the mission statement of virtually everyuniversity in other developing countries –Singapore, Malaysia, Venezuela, Argentina –committed the university right up front to thecountry’s central economic goals. While themission statements of South African HEIs allinclude a commitment to nationalreconstruction and development, when askedto spell out their visions for themselves notone of the 36 institutions related this to itsown immediate socio-economic environment.• Business needs champions to take up thechallenge of getting a dialogue going withhigher education. Even though the businessagenda is overloaded with other issues thisproblem must be tackled as a matter ofurgency not only in the interests of businessbut also in the national interest.

• When business or university leadersapproach government separately their case ismuch weaker than if they can make a jointapproach. When a partnership representingleading business people and Vice-Chancellorsgoes to government and says that in thenational interest they are really concernedabout a particular issue, it is much morelikely that they will be listened to –particularly if government departments havealso been involved in the process.• Even in Britain, business has only cometo recognise the central importance ofknowledge in the last ten or fifteen years.The CIHE was crucial in changing thatperception and getting CEOs to see astrategic self-interest in getting together andcreating a platform for dialogue with highereducation. In the late 1980s an outstandingset of publications on best practice inbusiness-university relations, commissionedjointly by CIHE and the Department of Tradeand Industry, raised the level of debatedramatically.• To get buy-in from business leaders andVice-Chancellors we need a crisp statement ofcritical issues around which a sharedunderstanding can develop.

In essence, Ann Bernstein pointed out,the key conclusion from the CDE roundtable is that South African business musturgently address its own interests ininfluencing the future of South Africanuniversities.

The facts are indisputable. There areenormous problems facing the highereducation system as a whole; the fewinstitutions and pockets of globalexcellence are under threat; the feedersystem from our schools is not deliveringthe quantity or quality of studentsrequired; South Africa is slipping againstits competitors globally with respect to

CDE Recommendations

higher education; and the country is aboutto embark on a new and ambitious round ofchange and intervention, the outcomes ofwhich are uncertain. Business has afundamental interest in ensuring that thisround of change positions South Africamore favourably in terms of its own needsand those of the country for a sound systemthat delivers increasing numbers ofstudents equipped for the highly flexible,competitive international informationeconomy and educates citizens to sustain,participate in and support the kind ofvigorous public debate essential for avibrant democracy.

The key conclusion

from the CDE

round table is that

South African

business must

urgently address its

own interests in

influencing the

future of South

African

universities.



HOW WILL BUSINESS RESPOND?Major recommendations of the CHE shape and size task team

The report of the CHE’s shape and sizetask team, Towards a new higher educationlandscape, which was released shortly afterthe round table took place, presents both anopportunity and a threat to business inSouth Africa.10

The task team understood its brief as ‘anoverarching exercise designed to putstrategies in place to ensure that our highereducation system is indeed on the road tothe 21st century. The restructuring willtherefore impact on the system as a whole.

The recently released CHE report, Towards anew higher education landscape, arguesthat ‘South Africa cannot afford to continuewith the incoherent, wasteful anduncoordinated system inherited from thepast. It must confront what is required by adeveloping country with respect toknowledge, human resource and serviceneeds and take decisive action toreconfigure the higher education system…Far-reaching changes in higher educationare overdue, urgent and unavoidable.’Its recommendations include the following:• The system must ensure a geographic

distribution of HEIs that will best servenational and regional socio-economicneeds.

• The distinction between ‘universities’ and‘technikons’ should fall away.

• The total number of HEIs should bereduced through a process ofrationalisation involving the combinationof institutions, without closing down anyexisting institution.

• Reconfiguration should result in adifferentiated system, with three types ofpublic HEIs:– ‘bedrock’ institutions (some 19 in all)

concentrating on undergraduateprogrammes, with limited post-graduate teaching to masters level

– six institutions working in selected

areas of research, offering onlyselected doctoral programmes butextensive masters programmes, andundergraduate programmes

– a very small number of full researchinstitutions, with comprehensivepostgraduate programmes todoctoral level, as well asundergraduate programmes.

• A single distance education institution,combining Unisa and Technikon SA.

• A four-year bachelor’s degree, with thefirst two years providing for thedevelopment of broad basic skills.

• The national participation rate inhigher education should be raised to20% of the 20-24 year age group overthe next 10-15 years.

• The Minister must begin a process ofconsultation with key nationalstakeholders on the proposedreconfiguration.

• Public and donor funds must bemobilised to support these changes.

Initial reactions from HEIs have beenmixed, but generally unenthusiastic andopenly hostile in some cases. The reportwill clearly be the subject of intense debateand institutional manoeuvring for sometime to come.

How will business respond?

There can be no business as usual (Ministerof Education, May 2000, press statement).’11

In its report the task team puts forward apackage of recommendations that –irrespective of whether you agree with them,believe they are achievable or not – willundoubtedly alter the higher educationlandscape in South Africa.

The task team made two proposals ofdirect significance for business:• The opportunity – ‘The Minister shouldbegin a process of consultation with key

R O U N D T A B L E


national stakeholders on the proposedreconfiguration of the higher educationsystem’ (p. 66).• A threat and an opportunity – ‘Public,international donor and private sector fundsshould be mobilised for strategic interventionstowards the reconfiguration of the system andthe achievement of quality, equity andefficiency in higher education’ (p. 68).

The ideas and work involved in the CDEround table provide pointers for how andwhy business leaders should respond to thenew set of circumstances facing theircompanies and the country’s system ofhigher education.

CDE would put forward the followingpriorities:

The business sector should developa well-researched position on the

way in which the interests of government,the higher education sector, and business– and therefore the interests of the nation– link to and coincide in respect of highereducation. The higher education system ofSouth Africa can be successfully developedonly on the basis of this understanding.Without it higher education cannot play itscrucial roles in democratisation, economicgrowth and social equity. It will bedangerous for the country if the (mistaken)perception is allowed to develop thatbusiness might have interests in respect ofhigher education which are not shared bythe tertiary sector itself or by government orthe rest of society at large. Business has toensure that its proposals with respect to thefuture of higher education are clearlydesigned and perceived to promote nationalinterests and not a narrow sectional interest.

As a core element of this broadunderstanding business should

develop a collective perspectivearticulating the distinctive benefits fromhigher education to business. This shouldbe publicised and accepted within the

business sector, and linked positively to theperspectives of government and the highereducation sector.

Leading corporations shouldurgently initiate an appropriate

collective process to study the report onthe ‘shape and size of higher education’in South Africa from a business interestsperspective. They need to do this informedby their own needs now and for theforeseeable future, and fully cognisant ofthe many problems facing schools andhigher education in South Africa. If therecommendations threaten to weaken orundermine centres of excellence for thesake of bailing out and supportinginstitutions with very limited capacity tocontribute to the economy then nationaland business interests will be adverselyaffected.

On the basis of this work andequipped with its own vision, needs

and perspective business should engagewith senior cabinet ministers and seniorofficials in government and a selection ofhigher education institutions in order tomake a considered contribution to thedirection of the ‘shape and size’ debate.This will require resources (people andtime) appropriate to the task.

Business should take the initiativeto establish a co-operative business-

higher education forum for the ongoingexchange and development of views. Thisforum could contribute to the consultationsundertaken during the ‘shape and size’debate, and beyond that to the much-needed, ongoing process of consultation andco-operation. This forum needs to operateand make inputs at the highest level, withvery senior business participation andcompetent professional support staff, toprovide a continuing base for influencingpublic policy on higher education and theschool system feeding into higher

10 CHE shape and size of higher education task team, Towards a new higher education landscape: Meeting the equity,quality and social development imperatives of South Africa in the 21st century, July 2000.11 CHE, Towards a new higher education landscape, p5.

The report of the

CHE’s shape and

size task team,

Towards a New

Higher Education

Landscape,

presents both an

opportunity and a

threat to business

in South Africa.

4

3

5

2

1



Higher education has a vital role in helpingSouth Africa to develop an internationallycompetitive economy, a more prosperousand equitable society, and a stabledemocracy.

South Africa is the most developedeconomy on the continent but it is losingmomentum relative to certain otheremerging markets. We have already lostrelative position. After the second worldwar we were at the level of Brazil andAustralia in terms of productive strength.Now South Africa has been overtaken bysouth east Asia and seem likely to fallrelative to the economies of easternEurope, Latin America and south Asia. Wedo not have large regional markets nor dowe have domestic savings, cheap capital orcheap labour. South Africa’s lifeline for theprotection of our relative position in theemerging markets of the world dependsincreasingly on high level skills andtechnological innovation.

Business must protect and build thisresource base otherwise we are going tobecome merely the leading economy in sub-

education. The UK’s Council for Industryand Higher Education provides a usefulmodel for South Africa.

Business should exercise much moreinfluence on universities by more co-

ordinated and vigorous use of voluntarymembership of internal universitydecision-making, advisory or consultingbodies. A meeting of business members ofuniversity councils once a year – perhapsunder the auspices of the forum – to sharethoughts and strategies on making theirinputs more effective could strengthen theircontribution immeasurably.

Business should make strategic useof its financial donations and

grants to universities. This sounds obvious

but it does require businesses to formulateclearly what their interests are in respect offunding higher education. Considerationshould be given to the drafting of a set ofstrategic guidelines in this respect.

Business should sharply increaseits collaboration with universities,

the science councils and other suchbodies in carrying out research pro-grammes.

Business should actively begin to co-operate with universities in the

commercialisation of suitable researchresults to the benefit of business,universities and society as a key elementin South Africa’s strategy for economicdevelopment.

Concluding remarks

South Africa’s lifeline

for the protection of

our relative position

in the emerging

markets of the world

depends increasingly

on high level skills

and technological

innovation.

6

7

8

9

Saharan Africa. Business has to look toitself, to universities, to the educationsystem in general and to the interface withtechnology. It has to get serious about thisand begin to co-ordinate its efforts. For thisit needs to act collectively through abusiness-higher education forum backed byexpertise, and it needs to develop politicalwill as much as government needs to do so.Vision and leadership is required to bringtogether an inherently disorganised set ofbusiness players and interests.

South African business now has anopportunity to influence the future of thecountry’s universities in an unprecedentedway and to a significant degree. It also hasan unusual opportunity to influence publicpolicy towards higher education as a whole.The methods of doing so and the variety ofspecific roles business can play are clearlydelineated in studies of the internationalexperience and current South Africanpractice by CDE and other business fundedorganisations on how best to influencepublic policy. Indeed many governments,universities and businesses around the

R O U N D T A B L E


12 Lee: International experience in business-university co-operation: Executive summary, p1.

world are ‘simply getting on with taskswhich South African business anduniversities regard as novel and evenrevolutionary’.12

International experience shows that thenew knowledge economy is the key forcebehind the changing relationship betweenbusiness, universities and government.Economic globalisation is creating an evergreater drive for competitiveness inbusiness and a relentless search for nicheexport areas, often involving high techproduction, marketing and sales. In turncompanies are seeking more highlyqualified employees and require access tolifelong learning and skills improvementfor their employees throughout theircareers. Universities must respond to theseneeds and to the other demands of aknowledge-based economy. This does notonly apply to areas of high technology.Knowledge and the technologies ofimplementing knowledge are just as vital inprogrammes of poverty relief and thedevelopment of markets in communitiespreviously excluded from the benefits ofmodern innovation as they are in pushingcomputer applications beyond previouslyimagined limits. A better quality of life forall is based on better knowledge, betterproducts and better economic growth.Business and universities could co-operate

fruitfully in all these areas, even if thedemands of economic growth were notactually compelling them to do so.

Globalisation has had specific impactson universities. Through a series of linkedpolicy decisions relating to successfulmacro-economic policy, globally competitiveimperatives are the ultimate cause ofdiminishing state support for universitiesand the increasing need for universities todiversify and increase their sources ofincome. Universities therefore have veryimmediate reasons for entering intopartnerships with business.

The government needs business as anactive strategic partner in the difficult taskof rethinking the higher education systemSouth Africa currently has, to one far bettersuited to a middle income developingcountry determined to become a globalcompetitor and an African success story.Business can be government’s key ally intaking the country forward and beyond thenarrow interests and perspectives strugglingto catch up with President Mbeki’s boldvision of a modern, globally competitivenation.

The stakes are high. Effective andstrategic business participation in thedebate about the future of South Africa’ssystem of higher education could make allthe difference between success and failure.

‘ Many governments, universities and businesses

around the world are simply getting on with tasks which

South African business and universities regard as novel

and even revolutionary.’



T H E E N T R E F O R E V E L O P M E N T A N D N T E R P R I S ED

Published by the Centre for Development and EnterprisePilrig Place, 5 Eton Road, Parktown, Johannesburg 2193, South Africa

P O Box 1936, Johannesburg 2000, South AfricaTel 27-11-482 5140 Fax 27-11-482 5089

e-mail: [email protected]://www.cde.org.za

BOARDE Bradley (chair), F Bam (deputy chair), S Ndukwana (deputy chair)

A Bernstein (executive director), F Antonie, J Bezuidenhout , D Bucknall,C Coovadia, O Dhlomo, W Esterhuyse, K Kalyan, M Keeton, L Lambert, A Lamprecht,

J Latakgomo, R Lee, G Leissner, J Mabuza, J McCarthy, J McGregor, R Menell,I Mkhabela, S Motau, K Mthembu, M Mthembu, W Nkuhlu, M O’Dowd, F Phaswana,

R Plumbridge, D Ramaphosa, E Ratshikhopha, L Schlemmer, N Segal,C Simkins, M Spicer, M Tisani, J van Wyk

CDE acknowledges the financial support of The Standard Bank Foundationin sponsoring the Round Table discussion.

This CDE Round Table was edited by Douglas Irvine.

Members of the media are free to use and report information contained in this publication onthe understanding that the Centre for Development and Enterprise is acknowledged and acopy of the publication in which any information is used is sent to the executive director.Otherwise no part of this publication may be reproduced, stored in a retrieval system ortransmitted in any form or by any means, electrical, mechanical photocopy, recording

or otherwise, without the prior permission of the publisher.

C E

the future of south african universities: what role for business? part

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