International Higher Education, Fall 2002

South Africa and the For-Profit/Public Institutional Interface

Daniel C. Levy
Daniel C. Levy is Distinguished Professor and director of PROPHE: at the State University of New York at Albany. Address: Education Building, SUNY-Albany, Albany, NY 12222, USA. E-mail: <Dlevy@uamail.albany.edu>. PROPHE website: <http://www.albany.edu/~prophe/>. This article is one in a series of contributions that are part of the research program of PROPHE, a Ford Foundation–funded activity.

The For-Profit Surge
A for-profit surge is one striking dimension regard-ing the general expansion of private higher education globally. Many private higher education institutions maintain formal nonprofit legal status while functioning like for-profits; increasingly common, however, higher education with for-profit legal status, which is our focus.

The U.S. for-profit surge of the last two decades, having caught almost everyone by surprise, is now the subject of a spate of data-packed studies. The United States is a unique case for such research. But it is far from unique regarding the presence or expansion of for-profit higher education. Brazil, China (assuming passage of significant new legislation), Jordan, Malaysia, the Philippines, and Ukraine are among countries with growing, sometimes prominent, for-profit sectors, even while many other nations proscribe for-profits.

South Africa provides a particularly interesting example for exploring for-profit dynamics beyond the U.S. case. Its private higher education surge took place in the 1990s, going well beyond prior proprietary schools and correspondence courses. Quite unlike the U.S. case, South Africa’s private higher education is mostly, even overwhelmingly, for-profit. Thanks largely to recent surveying by both the Human Science Research Council and the Education Policy Unit at the University of the Western Cape, the country may be developing an informational base on for-profits superior to any outside the United States.

The South African case can help us explore the dynamics of the for-profit/public interface. One key aspect of that interface concerns for-profits and government policy; a related aspect, considered here, is the relationship between for-profit and public higher education institutions. South Africa shows striking tendencies in the for-profit/public institutional interface. Future research will have to assess how common these tendencies are in places where for-profits exist, as well as how they differ from those within higher education’s more general private (including nonprofit)/public interface.

Complementarity
Complementarity is a key principle and reality in South Africa. A 1997 white paper of the initial postapartheid government welcomed private higher education but with restrictions emphasizing how private higher education should provide enhanced postsecondary access and job relevance while not basically challenging public higher education.

In fact, South Africa’s for-profit expansion has occurred largely at "level 5," a postsecondary level "below" the standard first-degree university level. More extensively in South Africa than in the United States, such concentration appears common among for-profits. (For-profits are also prominent in South Africa’s "further education," which, however, is not counted as higher education.) Also quite pronounced in South Africa is the for-profit concentration on commercial fields of study; these sometimes include material or approaches sparse in the public sector.

Unlike much of the Third World, South Africa has not suffered major erosion in the perceived quality of its public universities. As in most Asian countries, then, no major exodus of elites has occurred from the public to the private sector. In circumstances like these, an academically formidable public sector may feel little threat from an expanding private for-profit sector that leaves aside traditional high-prestige academic tasks.

Moreover, in such settings the public institutions’ stance may even be favorable rather than indifferent. For one thing, the striking commercial thrust of the for-profits, with their lower status, may reduce (not eliminate) pressure on the publics to take in less-prepared students, assume tasks outside their expertise or interest, respond directly to the marketplace, and meet rigid bottom lines.

Nor are public institutions necessarily just passive observers. On the contrary, South Africa quickly became notable in the 1990s for the extent of the partnerships between public and private higher education institutions. Parallels and variations exist in other countries where private commercial higher education (for-profit or nonprofit) thrives, as in China and Malaysia.

South Africa’s public institutions may seek access to paying students, underrepresented groups, and perhaps to commercial innovation and stimuli for their own personnel. The private institutions tend to seek ties to high-status institutions, access to facilities, enhanced opportunities for their students to transfer upward, and use of developed curriculum—all of which in turn improves their ability to recruit students. Each partner thus strengthens its legitimacy and its finances, though only one partner identifies the latter with profit.

Tensions
But South Africa also shows tensions in such for-profit/public institutional interfaces. Even where the institutions are happily partnered, government may be very suspicious of the financial arrangements, what it winds up subsidizing, what the public institutions truly provide to private students, and what the for-profits really deliver in quality. In 1999 the government imposed a moratorium on new partnerships.

Moreover, institutional types do not always get along well with each other, even where partnerships exist. The for-profit predominance of South Africa’s private growth does not ward off common public-sector wariness about new private institutions, especially in settings lacking much private higher education tradition. Public critics allege the privates’ low academic quality and hypercommercialism, charges that ring especially true to many (accurately or not) where the privates are for-profit. Meanwhile, for-profits sometimes charge public institutions with obstruction, haughtiness, and failure to deliver on certain partnership promises.

Furthermore, for all the for-profit/public complementarity, the South African case shows the kind of intersectoral competition that can exist simultaneously. True, the very limited presence of universities (as well as nonprofit and religious institutions) in private higher education limits intersectoral competition at the top of the academic hierarchy. But where exceptions have arisen, public institutions have lobbied government for controls. Thus, recent government restrictions have fallen especially hard on aspiring transnational institutions (such as Bond and Morgan) that had taken quick strides in the 1990s.

But the more common form of competition where for-profits predominate is a business competition. For-profits find ways to trim costs. As in the United States and apparently in South Africa as well, they drop both frills and academic pursuits not directly linked to attracting students with job aspirations. Indicators suggest success on the job front and with student satisfaction. Innovative or at least job-oriented fields of study pose threats to public competitors, as can hierarchical and lean management and faculty structures. The South African for-profit challenge sharpens where large business groups own private higher education institutions and foster direct job training and access.

Such for-profit challenges are particularly tough while, in South Africa as in most of the world, there is increasing pressure on higher education generally to be more efficient on matters such as job relevance. How such challenges play out against the striking complementarity that for-profits also can bring will say much about the future for-profit/public higher education institutional interface in countries such as South Africa.