The Cooperation Solution for Universities

The Cooperation Solution for Universities

Michaela Knust (Georg-August-University Goettingen, Germany) and Svenja Hagenhoff (Georg-August-University Goettingen, Germany)
Copyright: © 2009 |Pages: 7
DOI: 10.4018/978-1-60566-198-8.ch067
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Abstract

E-learning gained a significant foothold in the field of higher education in the US and Europe during the last decade of the 20th Century. For the last couple of years, media-based teaching has increasingly supplemented university lessons. However, the production and further development of e-learning materials have significant cost potentials, which are much higher than face-toface lectures (Seibt, 2001). Due to the lack of financial resources, state-run universities, in particular, need to find ways to finance the development and maintenance of such expensive, high-quality e-learning materials. Charging tuition fees is one commonly used method of financing higher education throughout Europe and the US (Eicher & Chevaillier, 2002b). In Germany, however, students do not have to pay tuition fees for their primary academic education at state-run universities. Only further education comes at a cost. Given the high demand for further education, we assume that we can potentially cross-subsidize the primary academic education with proceeds from further educational products and study programs.1 However, when considering intensified activities in the further education sector, one needs to verify whether the existing university structures are able to meet the challenges involved.
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Introduction

E-learning gained a significant foothold in the field of higher education in the US and Europe during the last decade of the 20th Century. For the last couple of years, media-based teaching has increasingly supplemented university lessons. However, the production and further development of e-learning materials have significant cost potentials, which are much higher than face-to-face lectures (Seibt, 2001). Due to the lack of financial resources, state-run universities, in particular, need to find ways to finance the development and maintenance of such expensive, high-quality e-learning materials. Charging tuition fees is one commonly used method of financing higher education throughout Europe and the US (Eicher & Chevaillier, 2002b). In Germany, however, students do not have to pay tuition fees for their primary academic education at state-run universities. Only further education comes at a cost. Given the high demand for further education, we assume that we can potentially cross-subsidize the primary academic education with proceeds from further educational products and study programs.1 However, when considering intensified activities in the further education sector, one needs to verify whether the existing university structures are able to meet the challenges involved. This introduction leads to a number of major questions that will be discussed in this article:

  • Which organisational and financial challenges will state-run universities have to face if they want to gain a foothold in the further education market?

  • How can state-run universities fund the development and maintenance of e-learning despite the scarce financial resources?

  • To what extent are inter-university cooperations or cooperations with the private sector able to reduce these difficulties?

These questions are discussed particularly with regard to German state-run universities. The discussion can, however, be applied to state-run universities in Europe and the US, because they all face the same challenge—being able to develop e-learning materials despite of the lack of financial resources and thus being able to compete with private universities.

Key Terms in this Chapter

Business Models: With regard to business models, we have to verify which cooperation partner is responsible for which partial tasks. We can either assign services that have been provided by the public sector to the private sector (privatization) or both cooperation partners can invest resources to accomplish these tasks (partnership). Outsourcing is an example of privatization, while franchising is an example of partnership.

Inter-Sectorial Cooperation: A cooperation that is represented by a more or less stable partnership between the private and the public sector.

Public-Private Partnership: A more or less stable cooperation between the private and the public sector. All partners bring along specific resources. Based on the division of labour, they aim at the same goal for a particular period of time. A PPP can generally be defined by three elements: the partnership, the inter-sectorial, and the performance-enhancing element.

Financing Models: Financing Models provide capital to the public sector. Exemplary financing models are factoring, lending, or borrowing (finance market models), leasing, renting or contracting out (reward models), and marketing of the own resources or sponsoring (fundraising).

Learning-Curve Effects: Originally, the experience- or learning-curve effect describes that each doubling of the accumulated amount of production reduces the production unit costs by approx. 20% to 30%. This effect does not only refer to production but can appear in all business areas to a certain degree.

Inter-University Cooperation: Cooperation between different universities or university institutes. In the context of this article, such universities must be state-run and not private-run, otherwise such cooperation would be considered an inter-sectorial one.

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