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Jakarta Post

Now is the time for public-private partnerships in higher learning

  • Said Irandoust

    The Jakarta Post

Jakarta   /   Sat, March 14, 2015   /  06:46 am

Can Indonesia become a research and development and higher learning hub for Southeast Asia?

Of course it can, but not without serious change to the way higher learning is structured.

To achieve a knowledge-based society for the republic, we must face up to a hard truth: Our universities and the way they are structured, governed and operated needs to change, and they need to change now.

A serious move toward a competitive higher education system in a global economy will require ways to overcome challenges within the sector in the areas of governance, quality, financing and its relationship to the private sector.

To build across-the-board architecture to support world-class higher education and research and development, we must consider new solutions to facilitate the kind of investments that already cash-strapped governments can seldom afford. Thankfully, a promising solution is at hand: a public-private partnership (PPP).

A PPP is a venture that is funded and operated through a partnership of public and private sector interests. Such an interface of roles allows a private sector firm to assume responsibility for a mission for example as a service provider while maintaining public accountability for essential aspects of service provision.

The growing importance of private sector engagement in higher education can be a feasible way to make Indonesia a regional education hub. PPPs should be an essential part of how to create a new model of higher learning for the 21st century hopefully emanating from Indonesia.

According to the Institute for Higher Education Policy (IHEP), private financing of higher learning is now a global phenomenon.

There are many indications of a major transformation of the relationship between universities and society that also affect universities'€™ '€œpublicness'€, or the public mission they have for society.

A number of countries are now using market or quasi-market mechanisms in the external and internal governance of universities.

In addition, the profusion of distance and cross-border education is fueling a rise of private non-profit and for-profit higher learning providers in certain regions and countries around the world.

In Asia, competition is ratcheting up, and we are now witnessing a profound rise of the continent'€™s universities fueled by unbridled and highly creative funding mechanisms.

Consider the following recent developments. In the Gulf States, hundreds of millions of dollars are being spent to open branches of top US and European universities, such as Cornell in Qatar and the Sorbonne in Abu Dhabi.

Late last year, the new King Abdullah University of Science and Technology opened in Saudi Arabia with a US$10 billion endowment fund that exceeds that of all but five American universities.

In China, the nine universities known as '€œThe C9'€ receive supplemental government funding to enhance their global competitiveness and become China'€™s '€œIvy League'€. In India, the Education Ministry recently announced its intention to build 14 new comprehensive universities of '€œworld-class'€ stature.

The Government of India also recently approved a bill to allow foreign education providers to set up campuses in India and offer degrees.

Meanwhile, many governments are experiencing difficulties in providing a level of funding sufficient to accommodate growing numbers of students and support costly research facilities.

In an era marked by global competition for students and academics, the maxim is now on proving value for money, relevance, as well as achieving quality and excellence in research. Public-private arrangements can overcome limitations in public funds to cover investment needs and increase the quality and efficiency of education.

Introducing the private sector to higher learning also brings with it management efficiencies in areas such as marketing, finance, human resource development and employability of the graduates.

The International Finance Corporation (IFC) of the World Bank Group, which is actively engaged in private education, concurs. The IFC maintains PPPs should be used to support socially responsible and sustainable development through for-profit and not-for-profit institutions, to expand access to quality education to people from all income groups, to introduce innovative means of financing and delivering education services, to improve quality standards in education, to help students and institutions obtain access to financial support and to complement public financing and provisions to achieve public education goals.

When the concept of PPPs was hatched more than a quarter-century ago, it was strongly contested. Nowadays PPPs are found in the public domain in many countries around the world, and their number has been rapidly increasing in recent years.

This has resulted in a marked increase in cooperation between the public and private sectors for the development and operation of a wide range of economic activities, including the education sector.

Over time, many misconceptions have been debunked, including the notion that private education does not hold a public mission. Clearly, public-private partnerships are not the same as privatization.

Furthermore, entering into a public-private partnership does not mean the public sector loses control over the provision of educational services.

Conformity and uniformity are anathema to the mission of universities. Indeed, highly successful higher learning systems around the world give autonomy and flexibility to universities, and promote constructive competition and world-beating excellence to attract the best minds for research and development.

Future education behemoths like India and China know this and are actively and successfully promoting PPPs in higher education.

Indonesia too can avail of the expertise existing in the private sector, and benefit by positioning itself as a regional leader.

The next stage, however, must entail vastly increased investments and comprehensive public and private synergies in higher learning to catalyze overall Indonesian competitiveness.

With the right political will, the country can realize its vision and become a research and development and higher learning hub for Southeast Asia.


Professor Said Irandoust was the former vice president of i3L, Indonesia International Institute for Life Sciences, in Jakarta and former president of AIT, Asian Institute of Technology, based in Thailand. He is currently a director at Swedish Accelerated Innovation.

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