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Published on September 11, 2007

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University and Regional Developmentin Korea:  University and Regional Development in Korea Bong Gun Chung Ministry of Education andamp; HRD, Korea Presentation at World Bank BBL December 18, 2003 My Story Goes ::  My Story Goes : What is the Problem? Regional Balance As A National Agenda Three Reform Laws for Balanced Development Some Features of Higher Education in Korea Government Policies for Higher Education Problems of Local Colleges andamp; University Strategy of Univ. Industry Research Cooperation Further Issues and Problems Concluding Remarks Description of the Problem : Shooting the Two Runaway Rabbits :  Description of the Problem : Shooting the Two Runaway Rabbits  The disparity between Large Capital Area and local cities and provinces are exacerbated.  The problems of local universities, for instance, low quality and lack of students, are compounded by the enlarging disparity between Center and Local. However, local universities are requested by the government to solve the problem of enlarging disparity by becoming key players for regional innovation system. Is it possible that the faltering local universities could solve the worsening problems of the local community? Regional Balance for Competitiveness :  Regional Balance for Competitiveness The regional balance issue was chosen as one of the pivotal campaign pledges of President Roh. - The inefficiency of concentration in LCA reaches critical point. - Investment in local area will be profitable in the long run. The powerful Presidential Commission for A Balanced National Development was launched in March 2003. - Local industries combined with the knowledge and skill base of neighboring colleges and universities should be the engine for regional development. - The Commission has designed Regional Innovation System. Backdrop of Problem Identification Disparity between Center&Local:  Disparity between Centerandamp;Local As of 2001, GRDP of Large Capital Area comprised 47.1% of the total. The GRDP of LCA showed a temporary decrease in mid 1990s, reversed afterward. As of 2001, the local tax revenue of Large Capital Area comprised 58.7% of total. In this regard, the financial independence level of LCA was 84.1%, compared to the national average of 62.9%. % GRDP Concentration of Population& Wealthin LCA:  Concentration of Populationandamp; Wealth in LCA population GRDP MoIR, 2003 Concentrated R&D Funds/Manpower:  Concentrated Randamp;D Funds/Manpower As of 2001, 62.7% of funds, 58.6% of manpower, and 66.7% of Randamp;D institutions are located in Large Capital Area. 67% of university related Randamp;D institutions and 60.1% of students are outside of the LCA, but funds and quality of manpower are not sufficient. Randamp;D public Randamp;D univ Randamp;D private MoIR, 2003 The Debate on Concentration Effect :  The Debate on Concentration Effect The concentration of population and industry in the LCA increases the national wealth,while the efficiency of the investment is higher than that of the non-LCA The concentration of population causes the diseconomy of urbanization and localization. There are economy of urbanization and localization, however, it has been decreasing. - The Localized Economy Index of 1982 as 1 decreased to 0.789 in 2001. (Reversed Cost Elasticity to no. of Employed) - The Urbanized Economy Index of 1982 as 1 decreased to 0.759 in 2001. (Reversed Cost Elasticity to Population.) Slide9:  Concentration in Large Seoul Area (One quarter of Population) Transportation Crime pollution Urbanization Cost Investment concentration Disparity Conflict resource misallocation Weak National competitiveness Low real estate price Growing Dependency Weak Local industry Weak Local market Concentration of Power elites Hegemony of Universities In LSA Brain drain From local Drain of Population capital Effects of Brain Drain from Local Chanseok Park, 2003. Slide10:  3 Laws for A Balanced Development The three presidential commissions for regional development have proposed laws that are titled as 'The Ad Hoc Laws for Happiness of Korea.' The Ad Hoc Law of National Balanced Development - Regional Councils and Special Budget Account for RIS The Ad Hoc Law of Decentralization - extensive delegation of powers of the central government The Ad Hoc Law for Construction of New Capital - new Capital at the geographical center of the ROK Slide11:  Speciali zation Local univ RHRD Spread Institutions Developing Poor regions Master Plans of 5 Year Balanced Development Special Budget Account Coordination of Funds Nat’l Council for Balanced Development Regional Council for Innovation The ad hoc Law for Balanced Development Goal Core Projects 5 year Plan Fundsandamp; Admin. Balanced Development Scheme for A Balanced Development Scheme for Regional Development:  Scheme for Regional Development Local Gov’t Local Industries RIS Local Univ. NIS: Central Gov’t Upgrade to innovate Knowledgeandamp;skill Upgrade to produce Human Resources Ventureandamp;New Businesses Improvement of Businesses Regional Development Self-sustained Localization UIR univ. industry research cooperation the key element of RIS Higher Education and Community :  Higher Education and Community teaching research service innovation skill Culture, community Higher Education Region OECD (1999) The Response of Higher Educational Institutions to Regional Needs, p.11 Slide14:  Some Features of Higher Education in Korea Rapid Expansion, particularly since 80’s Heavily dependent on private resources Low level of investment in faculty and facilities Hierarchy among colleges and universities Slide15:  0 100 200 300 400 500 600 1967 1971 1975 1981 1985 1990 1995 Entrants (1,000) 0 200 400 800 1200 1600 2000 Total Enrollments (1,000) Total Tertiary Enrollments Entrants Total Jr. College Univ. From Chun Shik Woo, 2002 Rapid Expansion Increase in Enrollment:  Increase in Enrollment Korea: Statistical Yearbook of Education, each year USA: Digest of Education Statistics 2001, NCES, Table 185 Japan: White Paper, MEXT, Heisei 13th year 2000 2000 Rapid increase since 1990 in colleges and universities Reasons for the Rapid Expansion:  Reasons for the Rapid Expansion High Rate of Return in Socioeconomic, Cultural, and Psychological Terms Demand on college graduates accompanied by economic growth  Changes in the Control Policy of the Government - The 1981 Graduation Quota System with 130 percent Admission - The 1994 Ease of Control on New Establishment based on the principle of free entry to market Private Universities in Korean H.E.:  Private Universities in Korean H.E. Source: KEDI, MoEandamp;HRD, Statistical Yearbook of Education, 2003, p. 604 Large share of Private Universities Relative Proportions of Public&Private Expenditure on Tertiary Education:  Relative Proportions of Publicandamp;Private Expenditure on Tertiary Education EAG, 2003, OECD, p. 220 Expenditure for Higher Education:  Expenditure for Higher Education % of GDP, 2000 OECD, EAG 2003, p.208 An international comparison Slide21:  Sources of finance for H.E. Dependent on tuition andamp; fees Number of Students per Professor:  Number of Students per Professor Jinwha Chung, KIET, 2003 Year 2002 Number of Pupils per Teacher:  Number of Pupils per Teacher Hyunsook Yu, KEDI, 2001, p.17 Year 1999 Competitiveness of Korean H.E.:  Competitiveness of Korean H.E. World Competitiveness Yearbook, each year, IMD World Competitiveness Yearbook, each year, IMD Transfer of knowledge between univ and industries Competitiveness of higher education SWOT Analysis of H.E. in Korea:  SWOT Analysis of H.E. in Korea Strength Opportunity Weakness Threats High level of enrollment Randamp;D capacity potent Government support Knowledge based econ Lifelong learning era Environment Lack of specialization Evaluation system Government control Isolated from Industry Recruitment crisis Pressure to open market Government Policy for H.E. :  Government Policy for H.E. Quality Control Practices by per-student Indices - The approval of new establishment is usually made when the criteria of land, building, and faculty are met. Control of Enrollment Quota - The Ministry of Construction and Transportation, not the MoEandamp;HRD is authorized to approve the increase of the colleges and universities in LCA. Provision of Financial Resources - Various types of earmarked budgets are provided by different government ministries to induce changes and reforms in universities. Specialization of Schools - The MoEandamp;HRD has been trying to introduce the specialization of colleges and universities such as research, education, and vocational training. Slide27:  Quality Control by Indices In order to secure the financial stability of schools, all private universities are mandated to possess the property for profit that is equal to the total amount of the annual revenue. The minimum criteria for establishing univ. Comparison of Increase in Schools :  Comparison of Increase in Schools Educational Statistics, KEDI, 1981, 2002 For the purpose of population control the increase of universities in LCA is half of those in the local area. Slide29:  Financial Resources for H.E. Operationandamp;capital For public univ MoEandamp;HRD Research funds etc Other ministries General purpose Special purpose Gov’t In-Univ. Private sector Operationandamp;capital For public univ Research funds etc MoIC MoST MoIR MoAF MoHS Facilities Equipment Research fund etc Brain Korea 21 Engineering Int’l manpower Education reform etc Basic science Model univ Research ctr Science Res Ctr Engineering RC Regional RC Specialized Res Techno Park Tech Incubator Ctr New tech venture Heath/Medicine R etc MoL 3.3 2.4 0.9 1.3 1.1 0.34 0.53 Gov’t total Operation Capital Private fund In-Univ fund Gov’t Randamp;D fund Outer- Univ. fund 2.5 3.3 0.8 0.3 0.1 1.1 Unit: trillion Korean Won, 2000 Source: Hyunsook Yu, KEDI, 2001 Slide30:  Specialization of Collegesandamp;Universities Medium level professional High level professional Field technician Local univ RIS Local voc college specialization Brain Korea 21 Project Univ Industry Res Cooperation Scholarship for engineering /science student Specialization LCA univ Local Brain Korea 21 Voc coll tailored curriculum Voc coll in LCA specialization basics Bottom Up allocation Top down allocation 2,637 (31%) 3,965 (46%) 1,980 (23%) 3,150 (37%) 5,432 (63%) Unit : 0.1 bil Korean Won, 2004 Specialization of schools:  Specialization of schools Survey from 107 engineering colleges, including 11 polytechs KIET, 2002 (from Jung Jin Wha, 2003) Specialization that schools want to be in future Current State of Local Universities:  Current State of Local Universities Wide Spread Unpopularity - As of 1999, 62.5 percent of the top 5 percent of Korean SAT enter the universities in LCA of which accommodation ratio to the total is 32.5 percent. Increasing Vacancy - The under-recruitment of LCA schools is 1.5% compared to that of 7.5 in local areas. Increasing numbers of local universities are losing students. Low Level of Employment Rate - In mid 90’s the employment ratio of LCA schools was 70.9% compared to 57.0%. After the foreign currency crisis, they were 60.8% and 56.0%. Problems Slide33:  Current State of Local Universities Causes of the Problem Socioeconomic Gap between LCA and Locals Enlarged Concentration of Decent Jobs in LCA Top Down Fragmented Projects by Central Government Lack of Leadership in Regions for Univ. and Industry Low Investment in Local Colleges and Universities Easy Approval of Establishment of Universities Shooting the Two Rabbits:  Shooting the Two Rabbits Reinforcing Univ. Industry Research Cooperation Customer Oriented Education andamp; Training Randamp;D for Production Technology Innovation Technology Transfer and Advice to Firms Assistance to Incubate New Businesses Successful UIRC brings in regional development Univ. Industry Research Cooperation:  Univ. Industry Research Cooperation Insulation between Univ. and Industries - Univ. : academicism and supplier centeredness - Industry : distrust on the competency of univ. Problems in Funding System and Practice - insufficient amount with irregularity - coordination among different funding sources - researcher’s needs rather than those of industries - equipment for research rather than manufacturing Diagnosis of Problems Problems of C&I in Engineering College:  Problems of Candamp;I in Engineering College Complaints by Firms on Univ Education:  Complaints by Firms on Univ Education Federation of Korean Industries, 2002. 12 87% Practiceandamp;field education 75% Creativity education 68% Field experience of faculty 70% Diverse instructions 72% Curriculum update Slide38:  Geography - Universities that are located inside industrial complex - Campuses that are clusterized for industries Equipped with High Quality Facilities - Attractive to neighboring industries to participate Openness of the Universities - Exchange of personnel between univ and industries - Curriculum tailored to the needs of industries - Emphasis on the technology that industries demand Univ. Industry Research Cooperation Factors for Success from Case Studies Slide39:  Fostering UIR-centered Universities - select andamp; concentrate on 10 Hub Universities for UIR School Enterprise in Public Universities - sales of the goods and services produced in classes Campus Head Quarter for UIR Cooperation - control all UIR related activities, programs, funds Reward System for Professors - favors in faculty evaluation, Patent fees Curriculum Development by Business Requests - specialized departments and courses Highlights of New UIR Cooperation Issues and Problems:  Issues and Problems Survival of the Fittest Funds are concentrated to selected local universities. How many weak ones should perish? Ironically, balanced development causes inequality. Insufficient Resources The budget increase for local universities are incremental, so that the funds should be concentrated rather than spread to more AMAP. Inefficient Coordination at Center andamp; Local The Ministries insist on funding of their own respective programs at schools. Waste and duplication are likely at the center and local. Slide41:  Reverse Discrimination to LCA The schools in Large Seoul Area are disadvantaged due to the special support to the local ones as the total amount of funds are limited. Hegemony Conflicts in Local Community Deans, presidents, mayors, governors will compete for RIS leadership Insufficient incentives for firms to participate The policy measures for UIRC are tilted to univ compared to individual firms to take part in the cooperative relationship. Issues and Problems Issues and Problems:  Issues and Problems Value conflict in reinforcing UIRC Job stability of faculty unfavorable to UIRC The job stability and the inflexible labor market of Korean professors are likely to be unfavorable to UIRC as they are not motivated to seek for out-bounding activities. Some Facts about UIRC:  Some Facts about UIRC MoEandamp;HRD, 2003 What companies benefit from UIRC How companies enter UIRC MoIR, 2003 % Concluding Remarks:  Concluding Remarks Policy makers should always keep in mind that : 'Isn’t UIRC Panacea to the complicated problems of the deteriorating local universities and the disparity between center and local?' What should you do if it shouldn’t be one? Slide45:  Thank you!

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