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The shock to
the economy of the US-led war against Iraq was almost immediate.
Just days after Tomahawk cruise missiles slammed into Baghdad in
the opening salvoes of the conflict Ceylon tea prices plunged at
the Colombo auctions while petrol prices went up. These developments
could have a ripple effect on the entire economy and threatens the
fledging recovery that was being made after the crisis of 2001. Worst hit were
low grown teas, which are produced mainly by small holders in the
south. Prices fell sharply and significant quantities remained unsold
because of reduced demand from buyers who are uncertain about the
timely arrival of shipments and the ability to move the tea across
Middle Eastern borders, many of which remain closed. Although some tea trade officials expressed confidence that the downturn in the tea sales is temporary and that demand will inevitably recover because consumers in Middle Eastern countries have acquired a taste for this variety of tea and the beverage is an important part of their diet, that optimism remains to be confirmed. The crisis therefore
has both social as well as political implications for the government.
Ceylon tea is not only our best-known brand name and perhaps our
most strategic economic sector. We are the
world's biggest tea exporter and the commodity is a key foreign
exchange earner. The industry also provides a significant amount
of employment with a sizeable section of the population depending
on the tea trade both in the central hills as well as in the south. Some sections
of the industry, such as private tea factory owners, are still unhappy
with the government's response as it does not address their concerns
to the desired extent, but the offers of state support are critical
for the industry to get over the current crisis. Another important
concern is the safety of our migrant workers. About a million or
so workers are employed in the Gulf and they sent back about $1.2
billion last year. These workers, mostly housemaids, are now our
highest foreign exchange earners and their remittances are critical
for the economy. So far there are no indication that there will
be a mass exodus of migrant workers from the Gulf. But if hostilities
intensify and there are fears that weapons of mass destruction could
be used, many workers are likely to flee the region. The tourism
industry could be another casualty of the war despite the optimism
expressed by some travel trade officials that the conflict and the
uncertainty it generates is unlikely to reduce arrivals. It is inevitable
that Western tourists who are known to be very sensitive to war
and terrorism issues would cut down on overseas travel especially
in a climate where they have become targets of terrorists as the
recent bombings in Bali shows. Any further
increases in fuel prices - and this is bound to happen if the war
drags on and crude oil prices rise - will inevitably have an impact
that would be felt across the whole economy, fuelling inflation
and putting pressure on interest rates. This would
raise borrowing and production costs, delay investments and make
it more difficult for our exporters to compete in overseas markets. The government
has made good its previous assurances of support to the tea industry
and no doubt stands ready to help other sectors of the economy should
the need arise. Likewise, it would do well to warn the people of the implications of a lengthy war without of course making it a convenient cover for the inefficiency and corruption that have begun to mark this regime's rule only a year after being in power. Making British universities business like By Professor
Gordon Campbell, University of Leicester (The following
presentation was made in Colombo recently and shows the success
in the business-like approach of British universities which are
good lessons for Sri Lanka) The notion
of enterprise in the public sector may strike many business people
as an exceedingly unpromising topic. We associate the public sector
with the rhetoric of service and the reality of unresponsive bureaucracy.
In the case of universities, we think of them as part of the educational
system of the state, and the associations that the term 'university'
evokes do not include enterprise; on the contrary, we think of universities
as insulated from the hard world of commerce, hence our love of
the image of the ivory tower. The managerial
structures of British universities differ from those of businesses
of similar size, though there are points of apparent similarity.
On the whole, the collegiate model, in which universities are run
by academics, has been superseded, though it survives in a reasonably
pure state in England's ancient universities, where it is now the
subject of strenuous debate. The new models of management in some
respects resemble those of the private sector. British universities
are not controlled directly by government. Indeed, governance is
the responsibility of university councils which are in some respects
analogous to boards of directors. Every university also has a vice-chancellor
whose position is analogous to that of a chief executive; the term
'vice-chancellor' may strike you as odd, but it makes sense historically:
in the late Middle Ages, the chancellors of the universities were
members of the royal court, and the universities were run by their
deputies, who were called vice-chancellors. In most countries university
heads are either appointed by the state or elected by academic staff,
but in Britain vice-chancellors are appointed by the university
councils. Similarities between the universities and companies are
also encouraged by the presence in universities of familiar figures
such as directors of finance, of human resources and of estates
(i.e. physical resources). It is worth reflecting on how real these
analogies are, and how businesslike British universities have become. Business
ways Boards of directors
consist of business people who are paid to do a job, and their pay
is often related to the performance of their companies. Members
of university councils, however, are people who have risen to the
tops of their professions, typically in areas such as business,
law, accountancy and local government, and have decided to lend
their expertise to local universities for free; they are motivated
by notions of public service, active citizenship and the sheer pleasure
of being involved in a lively and worthwhile enterprise. Until recently
Councils were large and unwieldy bodies overpopulated with the great
and good, and their behaviour tended to be uncritically benevolent.
In the last few years, however, Councils have been reformed and
reduced, and as a result now exercise their powers of governance
(an activity distinct from management) much more energetically than
has historically been the case. This is an area in which clear progress
has been made. New breed A similar shift has taken place in the nature of vice-chancellors. When I entered the profession, vice-chancellors were distinguished academics who had assumed high office but had very little executive authority: they had very limited executive powers and were in reality little more than chairmen of their Senates, and so could easily be outvoted. If I may indulge in a little caricature, I might describe the behaviour of that generation of vice-chancellors as resembling that of senior civil servants more than chief executives; they assiduously avoided serious criticism of government and worked conscientiously to secure gongs (the knighthoods to which they and their wives aspired); to my youthful eyes they were chiefly remarkable for their gold cuff links and their worldly wisdom. Today's breed of vice-chancellor is very different indeed. They are not necessarily highly successful academics, because that is not usually a criterion; they are hired because they are successful managers; many, including Leicester's vice-chancellor, are wonderfully entrepreneurial. Such instincts might have seemed indecorous, even vulgar, to an earlier generation, but they are now essential for growth and for the maintenance of quality of educational provision. The differences
between business structures and university structures are highlighted
by two institutions in the universities that have no exact counterparts
in business. One is the post of registrar, and the other is the
academic senate of the universities. The registrar has an analogy
in business in his role as company secretary (so Leicester's registrar,
for example, is formally styled 'Registrar and Secretary'), but
he is also responsible for the administration of the university.
Wearing their company secretaries' hats, registrars can be exceedingly
cautious in the judgements. In recent years, however, their managerial
expertise has enabled some registrars to refashion themselves as
entrepreneurs. By far the best example of this transformation is
Leicester, where our last two registrars have been largely responsible
for the fostering of our distance-learning programmes: as managers
they have facilitated growth, and as company secretaries they have
cautiously insisted on quality of provision; it is an ideal combination.
The one area that remains open for debate is the question of who
most usefully reports to whom. Should directors of finance, estates
and human resources report to registrars, who are the principal
administrators, or to vice-chancellors, who are the chief executives?
I am not confident about the answer, but the analogy to business
implies that the latter may be the better route. Senate The other anomalous
institution is the Senate. One could construct an analogy to share-holders,
but I am not certain that it would be sufficiently fruitful to be
worth the effort, because we are unlikely to agree that universities
should be run for the benefit of those who inhabit them. The Senate
consists of the professors of the University, and it is the body
that has traditionally exercised the most powerful authority in
the University. The Senate has always been an uneasy combination
of executive, legislature and judiciary, and it has traditionally
been too large to do anything other than obstruct change. Unreformed
senates are at once incapable of exercising managerial roles and
unwilling to relinquish their powers to professional managers. Leicester's
Senate is one of those that has not been reformed, and my view (from
which many of my academic colleagues would dissent) is that reform
is essential, because universities now live in a competitive environment.
We must reduce the size of the Senate and turn it into a body that
can facilitate action rather than ratify or impede it. At Leicester
we are at present contemplating such reform, and I hope that in
the course of the next few years I will be able to report that such
reform has been accomplished. The culture
of British universities has changed markedly in the course of the
last twenty-five years. How have these changes come about? Why have
old-style vice-chancellors and registrars been replaced by entrepreneurial
managers? In order to understand this transformation I must take
you back to 1981, when the Prime Minister was Mrs. Thatcher. Love
her or loathe her, she was the most important British Prime Minister
of the second half of the twentieth century, and she changed the
culture of Britain. It is too soon to judge the long-term benefits
and damage of those changes with confidence, but in the case of
the universities I shall risk a judgement which may prove to be
wrong. Mrs. Thatcher believed that universities were soft and over-subsidised,
and in 1981 she instituted a series of cuts to the funding of British
universities that left us on our knees. Every university in Britain
was forced to close academic departments, and because the cuts were
sudden and unexpected, the closures were unplanned, and in some
cases depended on the age profile of the academics; it was easier
to close a department of ageing academics, who could be pensioned
off, than one with young academics. Out of the ashes of her destruction,
however, enterprise arose like a phoenix, and this new energy has
proved to be of enormous benefit to British universities: they are,
like plants, healthier because they have been pruned. US examples There are analogous
American examples, one of which is particularly striking. When Ronald
Reagan became governor of California in 1960, more than 80% of the
financing of UCLA came from the state of California; it was at that
point a reputable but slightly sleepy university, enlivened only
by occasional student riots. Governor Reagan instituted a brutal
round of cuts, and suddenly UCLA had to hustle for its money. By
1995, thirty-five years later, UCLA had reduced its dependence on
state funding to 35%, and in the course of that process had become
a world-class university. Enterprise, in short, improved the quality
of the university's research and of its educational provision. There were
lessons in this for British universities. Our difficulty was that
we needed to raise money and had no commercial expertise. Expertise
had to be developed, and it came from academic staff. I can offer
three examples, the first of which is university scientists. Britain
has no system of scientific academies like those in the old Soviet
Union and its satellites, where universities were purely educational
institutions and research was conducted in separately-funded academies.
In Britain research is one of the principal functions of universities,
and a significant minority of university staff in traditional universities
such as Leicester hold full-time research positions, and are not
involved in teaching. For these scientists, their job security is
reliant on a regular flow of contract income, and they have learned
to hustle, selling their expertise to industry and to government
agencies in Britain and abroad. This ethic can also be seen in scientists
who combine teaching and research: in Leicester's engineering department,
for example, every member from the teaching staff conducts research
that is supported by income from outside the university. In Genetics,
one of our colleagues invented the technique of genetic fingerprinting,
which has many forensic and medical applications. In Space Physics,
our academics sell their expertise to NASA, to the European Space
Agency and to Russia, and they manufacture components: if you want
to manufacture thousands of units of a product, you go to a factory,
but if you want to manufacture one high technology product, like
a Mars walker, you come to a university like Leicester. Entrepreneurs Scientists
in British universities are academic entrepreneurs, and they engage
in this activity not so much because the managers motivate them
to do so but because their jobs are on the line if they do not generate
income. This is a healthy state of affairs, and British universities
are in many respects better places because their scientists have
had to become entrepreneurs. That said, it is easier to find funding
for applied research than for speculative (or 'blue skies') research,
and we have not solved that problem. One point of growth in the
area of applied research is the development of science parks that
combine academic and business expertise in the development of products
and services that can be sold and so generate income. The second example is international officers. This is a breed of academic entrepreneurs that first appeared in the early 1980s, encouraged by the Thatcher government to promote Britain abroad. Those who found their way into this new profession often had experience of sales, because they had usually worked as schools liaison officers, and they shared a conviction that the intellectual health of a university could be improved by a healthy admixture of international students. This development was welcomed by finance directors, because international students became a new income stream, and so were particularly important at a time when government was cutting back on university funding. It was also welcomed by academics, because international students contribute massively to the quality of education that we provide for British students. It has, however, taken a long time to convert academic staff to the view that international students had to be offered courses that they wanted to do, courses with an international element and, in many cases, a vocational element. That task is not yet completed, but is well advanced. Innovations The third example is schools of management and business. Such schools were in many universities slow to develop, because the economics departments from which they sprang worried that their academic subject would be threatened by the professional subjects of business and management; economists argued that they were educators, whereas business and management specialists were merely trainers. In the event, these fears have not been realised, and economics remains a healthy subject. Academic economists who refashioned themselves as business specialists and channelled their energies into the development of courses in business and management began to practice what they preached, and so designed courses for which there was a market demand; a few universities, including Leicester, also thought about delivery methods for which there was a market demand. Out of this thinking grew a world-wide locally-supported distance-learning operation of which Leicester's students in Sri Lanka are among the beneficiaries. This activity
has commercial benefits, but there are also academic advantages.
We maintain our quality by various methods, the most striking of
which is our insistence that all assignments and examinations be
marked in Leicester, which allows us to maintain a world standard.
We are now the second largest provider of distance learning of any
English university except the Open University. Britain's Open University,
though superb in many ways, is one of the universities that allows
assignments to be marked locally, and it therefore cannot maintain
a world standard. Leicester is the second-biggest player in terms
of quantity but the top player in terms of quality. Challenges I should like
to conclude by setting out three challenges that lie ahead if enterprise
is to be further developed in British universities. First, those
of us who work in these universities must contrive to place more
people with entrepreneurial instincts and managerial expertise in
our senior management teams, posts to which the principal aspirants
are too often those whose research has gone dead but would nonetheless
like to enhance their pensions; only through the realisation of
that reform can we accelerate the erosion of the anti-entrepreneurial
risk-averse culture that has traditionally typified universities.
Second, we must encourage academic staff to look beyond the narrow
confines of their own disciplines and begin to participate in a
corporate view of their institutions. Third, and perhaps most importantly,
we have to persuade government to leave us alone. Government provides
a surprisingly small proportion of our income (only about half in
the case of Leicester, and even less at some other universities),
but behaves as if it were the sole provider, setting up wearisome,
bureaucratic, time-consuming organisations designed to monitor quality
of process, but which in fact compromise quality of product. We are stiflingly over-regulated, and need to be set free to charge the market price for our products, to compete with other universities at home and abroad, and to restore the standards of education and research that have long characterised British higher education. Such measures would allow the entrepreneurs in the universities to complete the process of transformation from cautious and complacent organisations to universities that are fit and ready to compete with the best in the world.
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