HSG to receive more autonomy Do universities live in an ivory tower or do they really see themselves as the long arm of the economy? Neither, nor, as the annual media meeting about the role of research and the future funding of the HSG reveals. 12 September 2013. With about 7,700 students enrolled for Autumn Semester 2013, more than 80 professors and almost 500 lecturers and researchers, a total of approx. 2,600 employees in all and a consolidated expenditure of CHF 208m, the University of St.Gallen is not only an internationally important education and research institution but also a weighty economic factor and one of the biggest employers in the Canton of St.Gallen. At the annual meeting at the beginning of the Autumn Semester, the University Executive therefore focused on the present and future funding of the University and on the role of research, also against the background of the current debate about how education and research should be funded. Time-tested funding model President Thomas Bieger showed how the HSG is being funded at present: the HSG reported expenses in the amount of 208.3 million francs. This is covered by basic public funding and self-financing, including tuition fees. The basic public funding of approx. 50 per cent consists of the funding contribution from the Canton of St.Gallen, contributions from students’ cantons of origin and resources from the Confederation. These monies from the public purse constitute solid and reliable funding, and as such are an indispensable basis for the University. In addition to basic public funding, the HSG generates substantial resources on its own (revenue from executive education, research cooperation and transfer research, service contracts, research programmes, donations, membership fees from friends’ associations, as well as sponsorship), which together with the tuition fees amount to 50 per cent of the required monies. This does not only relieve the cantonal budget, but also helps achieve a quality in research and teaching which makes the HSG’s prominence beyond the region and the considerable economic effects for the region and the Canton of St.Gallen possible in the first place, said Bieger. The University Act enables the University of St.Gallen to generate additional funds to complement basic public funding and tuition fees. The University of St.Gallen is aware of the fact that cooperation with sponsors and companies has to be entered into in such a way that the academic freedoms of teaching and research will not be affected. It therefore accords great value to precise rules and contractual regulations, which will safeguard the following central principles, in particular: • preservation of the freedom of teaching and research, • commitment to the HSG standards for subject matter and curricula, • compliance with international standards and the HSG rules for the appointment and employment of research and teaching staff. The HSG with its high degree of self-financing also wants to be a pioneer in the field of transparency, said Bieger. This is why one of the key elements of the current Annual Report is the description of the funding structure and the principles related to it. In addition, the HSG is planning further steps towards a transparent description of self-financing. Accordingly, the closed meeting of the Senate will deal with the issue of transparency as early as September. Lump-sum cuts of the government contribution The way in which the University aims to fund itself in a viable manner whilst maintaining its position as a leading European business university was explained by Education Minister and Chairman of the University’s Board of Governors, Stefan Kölliker. With over CHF 9m annually in comparison with the University’s in-house financial plan, the HSG had made a substantial contribution to the cantonal cost-cutting packages I and II, he said. This contribution could only be made through a reduced increase in academic posts, through an increase in tuition fees and through freezing the budget of the Administration. Also, in the 2013 relief programme for 2014 and 2015, lump-sum cuts were planned in the cantonal funding contribution of CHF 2m each year and of CHF 3.5m for 2016. More scope of action In the context of the 2013 relief programme, the government proposed the “introduction of performance agreements of several years’ duration with binding government contributions and a simultaneous increase in autonomy” for its institutions of tertiary education (HSG, Pädagogische Hochschule and Fachhochschulen). The introduction of performance agreements of several years’ duration, said the President of the Government, would be linked to the expectation that the institutions of tertiary education would assume financial responsibility to an even higher degree than now. Increased autonomy should enable them to act more entrepreneurially. The opportunity of allocating surpluses to equity and the risk of having to cover deficits with amounts taken from equity would encourage the institutions to husband existing (government) resources and to look for additional monies from third parties. Private individuals and trade and industry would be more prepared to make monies available if they had the guarantee that their contributions would indeed benefit teaching and research at the institutions of tertiary education rather than compensate for the reduction in public contributions. Adaptation of the legal situation The Cantonal Parliament debated the 2013 relief programme in two special sessions and envisaged the introduction of performance agreements of several years’ duration with binding government contributions and a simultaneous increase in autonomy for the institutions of tertiary education. According to Kölliker, a government dispatch along these lines and a draft amendment to the University Act were intended to be prepared in the coming months. As early as 2014, the dispatch and the draft amendment were expected to be debated in the Cantonal Parliament. An introduction was scheduled for 1 January 2015, but no later than at the beginning of 2016. No further cost-cutting measures In concrete terms, the University assumes that in the medium term, the overall lower contribution from the Canton of St.Gallen could be compensated for through an increase in efficiency and through additional services, said President Bieger. “Since further cost-cutting measures cannot be implemented, the gaps of 2014 and 2015 will be stopped by drawing on reserves to the tune of CHF 2m each year. This cannot be done over a period of several years, though; accordingly, the positive effects of autonomy must begin to cut in from 2016.” An important element in the concept of increased financial autonomy is played by internationally widespread fund-raising. For this purpose, a necessary instrument was created by converting the existing HSG Alumni Foundation into the HSG Foundation as early as the last academic year. Basic and application-oriented research “The HSG conducts basic research at a very high level,” said Torsten Tomczak, who as Vice-President for Research provided an insight into the role and future development of research at the HSG. Thus the German Handelsblatt rated the HSG’s business administration faculty as the strongest research faculty in the German-speaking area in 2012. Traditionally, HSG research has been characterised by a high degree of practice orientation. Thus numerous so-called “labs” have been set up at the HSG most recently; they constitute a framework for cooperation between HSG researchers and important industrial corporations. “These labs enable the HSG to fund trail-blazing basic research and to combine it with a high degree of application orientation. Such cooperative ventures exist with companies like Bosch, BMW, the SBB, SAP and Hilti,” said Tomczak. Tomczak also emphasised, however, that cooperation with sponsors must be well and clearly regulated. “The HSG sets great store by precise rules. The freedom of research and teaching must be guaranteed unreservedly. The HSG has rejected sponsorship and cooperation offers from the private sector in the past because it reckoned that they would have jeopardised the freedom of research.” In order to continue to be perceived as one of Europe’s leading business universities in the future, too, the University would also require global recognition for its research. This was not only demanded by the scientific community, said Tomczak, but also by practice, i.e. big corporations and SMEs which wanted to be supported by excellently educated students and the latest research findings when facing worldwide competition, no matter whether this was in China or in the domestic market. Although the HSG’s research was already very well positioned internationally in some fields, said Tomczak, the reinforcement of this development was a central task for the coming years.