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Tuesday, May 3, 2005

University gap set to widen


One year has passed since Japan's national universities gained corporate status. How have they changed? Following are my personal views on the merits and demerits of some of the changes.

Consider budgeting. Previously, the budgets of national universities -- which were provided through the "national-school special account" -- were extremely rigid because personnel and nonpersonnel expenses were allocated mechanically according to the number of teachers.

Since incorporation, personnel and nonpersonnel expenses have been lumped together as "operating-expense grants." The education ministry determines the amounts of these payments before distributing them to the universities, but decisions on how to use the money are left to each university.

Beginning in fiscal 2005, these grants will be reduced at the rate of nearly 1 percent a year. This is a reasonable step, given inefficiencies in spending. Gradual cuts in these subsidies will encourage self-support on the part of universities. Still, budget austerity may hurt efforts to promote education and research. So the ministry has created a new budget item: "special education and research expenses." This is a kind of bonus paid in addition to operating-expense grants.

Universities apply for these extra expenses on the advice of the Science and Technology Council. Applications are screened by the education and finance ministries. However, universities that receive bonuses exceeding the cuts in operating-expense grants could end up with a net reduction in total grants.

Thus a "budget gap" will likely develop between universities that foster new ideas about education and research and those that don't. The 21st-century "center of excellence" program, which started in fiscal 2002, will likely widen this gap.

A tacit ranking exists among Japanese universities. Incorporation is likely to accelerate a shift of talented teachers to higher-ranked universities that are trying to improve their teaching staff. Private universities no doubt will worry about losing some of their best teachers to national schools.

Business corporations improve efficiency by reassigning employees from support divisions (administration, accounting) to frontline divisions (sales, production). Universities, though, cannot reassign "indirect" personnel to teaching positions.

Kyoto University, where I teach, has a teaching staff of about 3,000 and a nonteaching staff of about 1,500 (excluding nurses). Most of the nonteaching employees are assigned to administrative divisions such as general affairs and accounting. Their number, when compared with that of teachers, is too large.

In my opinion, the efficiency drive by national universities should focus on cutting the number of administrative personnel. Since layoffs, in reality, are not feasible, attrition may be the only way to reduce administrative staff.

By way of comparison, the economics faculty of the University of Illinois, where I once taught, had only four administrative employees: a secretary to the faculty chairman, two women in charge of academic affairs, and a typist. Administrative functions were completely centralized.

By a rough estimate, the university's administrative center probably had 200 to 300 personnel at most. Most of their work was aimed at getting funds from outside organizations such as the National Science Foundation. Many of them had expertise in writing application forms for research funds and in revising, if necessary, proposals written by teachers.

The role of administrative personnel at Japanese national universities should be to support teachers, not "control" them. Teachers and employees should work closely together toward improving the quality of education and research. Such cooperation is essential to the efficient management of universities.

Summing up, the incorporation of national universities has great merit for those that succeed in hiring talented teachers at home or from abroad; getting the largest possible amount of bonus expenses for education and research; improving organizational efficiency; and securing outside funds. But incorporation is a big disadvantage for universities that maintain the status quo.

My concern is that incorporation may widen the gap between universities. In a country that tends to respect uniformity rather than diversity, the "ranking" among universities will likely become even more pronounced. As a result, competition among universities may well end up as a one-sided game in favor of a handful of "winners."

Takamitsu Sawa, professor of economics at Kyoto University, is also the director of the university's Economic Research Institute.


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