MINISTRY OF HUMANCAPACITIES

Hungarian Tertiary Education – Links to

Business and Industry

DR. LÁSZLÓ PALKOVICS State Secretary responsible for

Higher Education

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MINISTRY OF HUMANCAPACITIES

DiagnosisUsing data form OECD’sEducation at a Glance 2014 andPISA 2012

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MINISTRY OF HUMANCAPACITIES25 years of continuous development

In the last 25 years Hungary has paid its long standing debt to the society regarding tertiary education. Higher education became more accessible, groups that had been denied access to education could get the desired degrees, freedom of teaching was realized, the institutional system and structure of the unified Hungarian tertiary education was created, the unity of education and research was re-established, and the demand for the quality development of higher education appeared.

In short: the change of the regime was finished in tertiary education.

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MINISTRY OF HUMANCAPACITIESBroad access to higher education

1990

/199

1

1991

/199

2

1992

/199

3

1993

/199

4

1994

/199

5

1995

/199

6

1996

/199

7

1997

/199

8

1998

/199

9

1999

/200

0

2000

/200

1

2001

/200

2

2002

/200

3

2003

/200

4

2004

/200

5

2005

/200

6

2006

/200

7

2007

/200

8

2008

/200

9

2009

/201

0

2010

/201

1

2011

/201

2

2012

/201

3

2013

/201

40

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Due to the expansion of higher education in the last two decades, the number of enrolled students and the capacity of the institutions have increased considerably.

From 1990 to 2010 the student population in higher education quadrupled

Full-time education Other

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MINISTRY OF HUMANCAPACITIESEducation at a Glance 2014

In the “Hungary Country Note” OECD outlined five key topics concerning higher education:1. Educational attainment matters greatly in Hungary’s labor market.2. Bridging the gap in between secondary and tertiary attainment

remains the main challenge.3. Public expenditure on education is low and has been decreasing.4. The transition from school to work in Hungary is challenging.5. Educational equity remains a major challenge.In the following we show and analyze the corresponding statistical data (from Education at a Glance 2014 and PISA 2012), then we reflect to these challenges with the relevant goals in the strategic agenda.

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MINISTRY OF HUMANCAPACITIESGearshift – a new vision

After 25 years, by 2014, we have reached a point where tertiary education is one of the most successful and competitive branches of the Hungarian economy, and every possibility is given to create the best tertiary education system of Central Europe.Reforms have been implemented, now a gearshift is needed. We have to adapt to the speed of the global world by creating a system thatdelivers better quality, that isperformance oriented and servesthe needs of the economy, throughusing the capabilities of the systemto a full extent by focusing theefforts, concentrating on valuepreservation and creation andusing the resources effectively.

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MINISTRY OF HUMANCAPACITIES

StrategyGuidelines for Performance OrientedTertiary Education Development in Hungary

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MINISTRY OF HUMANCAPACITIESWhat shall we do?

Megatrends

Technology development

Globalization

Demography and longevity

Transformation of society

Limited resources

Challenges

Focusing activities

Collaborations within the institution, between institutions, and with

external partners

Re-interpretation of value-creating processes

Mapping the external needs into the internal structure

Efficiency, effectiveness, generating new resources

Solutions

Competition, performance, quality and success

Restructuring the network

Innovation in education

Profiling and specialization

Effective governance and new business models

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Building blocks of the strategy

VISION

KPI and targets

STRATEGIC GOALS

ENABLERS< . . . . . . . . . . . . . . . . . . . . . . Profiling and specialization . . . . . . . . . . . . . . . . . . . . . >< . . . . . . . . . . . . . . . . . . . . . . Restructuring the network . . . . . . . . . . . . . . . . . . . . . . >< . . . . . . . . . . . . . . . . . . . . . . . . Innovation in education . . . . . . . . . . . . . . . . . . . . . . . . >

< . . . . . . . . . . . . . . . . . . Governance and business models . . . . . . . . . . . . . . . . . . >

TARGET AREASTeachers’ education

Medicalschools

STEMeducation

Businessschools

Agricultureeducation

Excellencein education

Excellence in research

Third mission

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MINISTRY OF HUMANCAPACITIESExcellence in education

• The doctoral education returns to its roots and will again be based on the master-disciple relationship, aiming at new scientific results achieved through original research, which is supported by financial incentives as well. The doctoral training will be a two-tier system: only those students can enter the second phase and receive priority assistance, who scored adequately based on scientific evidence.• The opportunities for gathering international experience will be

increased both for students and faculty. The ratio of students who participate part-time foreign programs will be increased from 10.41% to 20% until 2023.• The number of foreign students in Hungary will significantly be

increased, for the internationalization of the Hungarian institutions, for the better utilization of the infrastructure, and for generating extra revenue.

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MINISTRY OF HUMANCAPACITIESOpen, excellent research system

• Each institution will focus its research and development activities, and R&D networks will be formed between institutions.• The system of research funding will be transformed so that it will

support the internationally competitive quality and resource concentration.• From 2016 we will create and give extra funding to the so-called

„national centers of excellence”, that will replace the so-called „research university” system.• We will create an excellence based research grant system for the

most talented young professionals (the financing will go to persons instead of institutions, of course institutional overheads will be deductible) that will add an extra 10% resource to the whole budget of the higher education.

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MINISTRY OF HUMANCAPACITIESThird mission

• Higher education plays an active role in the development of innovation competencies of domestic-owned, technology-intensive companies (especially SMEs), in order to better utilize GINOP resources.• We will create a system called „Centers for Cooperation between

Higher Education and Industry” in order to standardize and foster the cooperation between industry and universities. • We will support by EFOP grants the incubation services of higher

education institutions, as well as the foundation of spin-off companies, in order to convert the results of scientific discoveries into innovation.• Higher education institutions can serve as a knowledge-hub in the

underdeveloped regions, and also, they can catalyze the so-called „Smart City” concepts.

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MINISTRY OF HUMANCAPACITIESProfiling and specialization

• We differentiate the profile of institutions, and operate and finance them according to the primary functions of the various types.• Knowledge generation: UNIVERSITY• Knowledge application: UNIVERSITY OF APPLIED SCIENCES• Knowledge dissemination: COMMUNITY COLLEGE

• We create new types (at least in Hungary) of higher education institutions concerning the ownership, financing and operating conditions (e.g. community colleges).• The traditionally established major/minor structure will be

remodeled taking into account efficiency aspects and labor market requirements.• We provide smooth transition from vocational training into higher

education, and a new training type will be introduced (B.Eng.).

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MINISTRY OF HUMANCAPACITIESRestructuring the network

• We rationalize the higher educational institution network, establishing a hierarchic system, which is adapted to the spatial structure of Hungary, intended for improving efficiency and generating competition.• Functional urban regions should be considered as the basic units of

the spatial structure without settlements. • The presence of tertiary education should be ensured according to the

regional function.• The fact that almost everything is concentrated in Budapest is due to

Hungary's spatial structure, which should be handled as a feature instead of problem.

• Qualitative and quantitative development of the Hungarian education beyond the borders.

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MINISTRY OF HUMANCAPACITIESInnovation in education

• Relations between contact hours and students' working hours, term-time and examination period as well as “theoretical subject” and “practical subject” should be reconsidered.• The more intensive learning experience, the practical mastering of

skills and the project- and result-oriented approach expected from the labor market requires the review of “subject-” and “course-centric” teaching arrangement.• We modify the education methodology used in tertiary education

focusing on practice and student’s work. Where it is appropriate, we introduce and implement the dual form of higher education. By 2020, 8% of undergraduate students – in the relevant educational fields – will start the training in dual education.

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MINISTRY OF HUMANCAPACITIESEffective governance

• We separate the professional-academic governance and strategic-economic management of universities (rector vs. chancellor).• We incorporate external stakeholders (maintainer, local economy,

society) into the management of the institution (Board of Trustees).• The management should support the internationally competitive

quality and resource concentration by increasingly building on resources other that direct state funds, obtained from the “market” by institutions, which is promoted also by amendment of the Act on public finances (business activity).• We create the rector's and chancellor's management, assessment

and motivation system.• We re-regulate the students’ union system.

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MINISTRY OF HUMANCAPACITIESNew business models

Direct state funding EU tenders Tuition fee Firm investments Donations0%

10%

20%

30%

40%

50%

Actual Robust Idealized

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MINISTRY OF HUMANCAPACITIESIncome structure of the universities

2010-2017

2010 2011 2012 2013 2014 2015* 2016* 2017*250,000

270,000

290,000

310,000

330,000

350,000

370,000

390,000

0.0

100.0

200.0

300.0

400.0

500.0

600.0

213.6 202.2 186.6 183.9 197.9 201.4254.2 264.9

283.1 303.4288.5 320.7 301.1 305.0

282.7 282.7

361,347

359,824

338,467

316,226

306,016294,298

283,076

273,791

Állami felsőoktatási intézmények saját bevétele (mrd Ft) Felsőoktatási működési és felhalmozási támogatása (mrd Ft) Hallgatók létszáma összesen (Fő)Own revenue, state universities [billions HUF] State spending, all universities [billions HUF]

Number of students

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MINISTRY OF HUMANCAPACITIESSummary - Reflections in the

strategyKey topics in the Hungary Country Note Relevant goals in the strategic agenda

Educational attainment matters greatly in Hungary’s labor market

Smooth transition from vocational training, new type of diploma (B.Eng)

Bridging the gap in between secondary and tertiary attainment remains the main challenge

Profiling institutions, decreasing drop-out rate, correcting student/staff ratio, master-disciple relation

Public expenditure on education is low and has been decreasing

Slight increase in direct state funding, plus 10% excellence based grants for young researchers, significant direct (EFOP) and indirect (GINOP) EU funds

The transition from school to work in Hungary is challenging

Project-based education, soft-skills in curricula, dual education, future reform of vocational education, university-industry cooperation

Educational equity remains a major challenge Restructuring the institutional network, community colleges in disadvantaged regions

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MINISTRY OF HUMANCAPACITIES

Strategy Deployment – Selected ActionsInnovation in Education – “Dual” or Cooperative Education

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MINISTRY OF HUMANCAPACITIES

• Right from the starting of vehicle engineer education (academic year 2012-2013), Kecskemét College offered for vehicle engineer students a cooperative (dual) type education as well.

• Recently the number of dual-type vehicle engineer students has become 60 with 4 participating companies altogether.

• These companies are: Mercedes-Benz Manufacturing Hungary Kft. (31 students), Knorr-Bremse Fékrendszerek Kft. (26 students)

• The students in the dual training system were more successful and enrolled more credits than their peers.

• Practically there were no drop-outs during the dual trainings, all of the students were educated according to the model curriculum and the students were able to complete the basic course within 7 semesters.

Dual Education – Preliminary Examples

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MINISTRY OF HUMANCAPACITIES

• The actors of the Hungarian industry, especially the automotive companies, expressly require professionals with practical training background.• The modification of the Act On National

Tertiary Education in July 2014 created an opportunity for introducing the “dual” form in the Tertiary Education.• Dual training can be introduced only on

existing basic training courses that are already accredited • The Act created the Dual Training Council

the task of which is to determine the quality and development directions of the dual training education• In the Tertiary Education Strategy the

government has defined as an objective that in dual Bachelor programs in the relevant fields of study the proportion of the first-year students has to reach 8% of the total number of students in the dual Bachelor programs till 2020.

Dual Education – Practice Oriented Training

5 weekscorporat

epractice

3 weeksexam

period

12 weekscollege studies

5 weekscorporatepractice-

lat

8 weekscorporatepractice-latkor-lat

4 weeks vacation

12 weekscollege studies

3 weeksexam

period

I, III, V. semester

II, IV, VI. semester

MINISTRY OF HUMANCAPACITIES

• In September 2015, 19 higher education institutions launched 30 various types of BSc programs, in cooperation with almost 200 firms; 440 students could start their studies in dual form.

• The introducing of dual training seems especially successful on STEM fields; • More than 57 % of the so called dual students start their studies on engineering

programs.

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12%

22%

9%

57%

Distribution of students according to the training fields

Agrár Gazdaságtudomány Informatika MűszakiAgriculture

Economics Informatics Engineering

21%

31%10%

38%

Dual trainings according to the training fields

Agrár Gazdaságtudomány Informatika MűszakiAgriculture

Economics Informatics Engineering

Dual Education – Practice Oriented TrainingFirst year experiences are very positive

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MINISTRY OF HUMANCAPACITIES

Strategy Deployment – Selected ActionsStronger positon in RDI

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MINISTRY OF HUMANCAPACITIESDefined Performance Indicators

Research and Innovation BASE VALUE TARGET VALUE

Number of researchers [person] 37,000 (2012) 56,000 (2020)

Number of R&D employees per 1,000 employees 8 (2011) 12 (2020)

Tertiary educational R&D&I cost as percentage of GDP 0.24 (2012) 0.5 (2020)

Direct R&D&I revenue of the institutional system [as percentage of the total budget] 1.5% (2012) 10% (2020)

The proportion of students obtaining a PhD degree [total number of students admitted in the relevant year]

22% (2013) 30% (2020)

Number of patents in tertiary education [as a % of patents registered in Hungary] 13% (2013) 25% (2020)

The number of domestic centres of excellence appearing in the professional measurements of the Centre for Higher Education (CHE)

2 (2014) 10 (2020)

Number of institutions included in the League of European Research Universities (LERU)

0 (2014) 1 (2025)

Number of tertiary education international research projects funded from framework programmes (FP7 / Horizon2020)

397 (2007–13) 635 (2023)

The number of foreign language publications written in tertiary education 10,177 (2012) 13,000 (2023)

:

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MINISTRY OF HUMANCAPACITIESWhere are We Standing?

Innovation Union Scoreboard 2013BG TR RO LV M

K PL LT MT

HR HU SK EL RS CZ PT ES IT NO EE CY SIEU

27 FR IE AT UK IS BE LU NL FI DK DE SE CH

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

0.323

0.544

Modest Innovators Moderate Innovators Innovation Followers Innovation Leaders

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MINISTRY OF HUMANCAPACITIESWhat is in the Background?

Human resources

Open, excellent research system

Finance and support

Firm investments

Linkages & enterpreneurship

Intellectual assets

Innovators

Economic effects

0

0.5

1

EUHungary

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MINISTRY OF HUMANCAPACITIESOpportunities – High Tech

Production

High Tech Products Medium Tech Products

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MINISTRY OF HUMANCAPACITIESFinance and Support

R&D Expenditure in % of GERD

EUROSTAT: in 2012 the GERD was 1,3%.KSH, most recent data: in 2013 the GERD indicator was 1,44%, that means a 15.5% increase compared to the GERD in 2012.

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MINISTRY OF HUMANCAPACITIESFinance and Support (cont.)

R&D Expenditure in higher education institutions in % of GERD

R&D expenditures in higher education are essentially unchanged for a decade, the investment to GDP ratio is fluctuating around 0.24%.

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MINISTRY OF HUMANCAPACITIESLinkages & Entrepreneurship

• We will create a system called „Centers for Cooperation between Higher Education and Industry” in order to standardize and foster the cooperation between industry and universities. • We will support by EFOP grants the incubation services of higher

education institutions, as well as the foundation of spin-off companies, in order to convert the results of scientific discoveries into innovation.• Higher education institutions can serve as a knowledge-hub in the

underdeveloped regions, a new type of higher education access, the so called community “college” will be introduced

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MINISTRY OF HUMANCAPACITIESIntellectual Assets

• Higher education institutions are important players in the field of intellectual property applications: 15% of the domestic patents have been produced here.• Unfortunately, the promotion system for faculty that is based almost

exclusively on bibliometric indicators has a strong „novelty-destroying effect”, therefore the indicators need to be reconciled with the measurement of economic and social innovation.• Higher education institutions should protect their own intellectual

capital, so we introduce a complex, performance-based promotion system for faculty, that is corresponding to a competitive wage package.

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MINISTRY OF HUMANCAPACITIESInnovators

• Higher education plays an active role in the development of innovation competence of domestic-owned, technology-intensive companies (especially SMEs), in order to better utilize GINOP resources. We want to double the revenues generated by selling R&D products and services of institutions.• We want to transform teaching methodology used in higher

education more practice and student-centered, and where it is possible, we will introduce the dual form of training (8% of freshmen will begin their studies in dual form in 2020).

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MINISTRY OF HUMANCAPACITIESEconomic Effects

• We will complete the change of the governance system that was started with the introduction of the Chancellor’s role: we canalize the interests of the owners directly (and the society indirectly) into the institution's management, and clearly separate academic, economic, and strategic decision-making competencies.• The introduction of the system of Chancellors has created a

framework for institutions to increasingly build on sources from the „free market” (revenues earned outside of the state budget), therefore we will promote the modification of Public Finance Act (to promote entrepreneurial activities).

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MINISTRY OF HUMANCAPACITIES

Summary

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MINISTRY OF HUMANCAPACITIESRunning Projects – Contentual

• Most of the structural, consolidation actions has been started or already finished• First results in operational performance is observable• Qualitative improvement projects are being started, such as:• Changes in remuneration systems (increase)• Redefinition of the PhD system• Restructuring the education content• Innovation in education processes• Increasing RDI entrepreneurial freedom in order to generate own

income• Modification in tax system for motivation companies to support

universities• ….

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MINISTRY OF HUMANCAPACITIES

Thank you for attention!