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INTERNATIONAL HIGHER EDUCATION

Austria’s Fachhochschulen and the Market-Based Model

Erich Leitner
Erich Leitner is professor of education and higher education at the University of Klagenfurt and a member of the executive board of the University for Applied Sciences in Carinthia. Address: Universität Klagenfurt, Universitätsstrasse 24, A9020 Klagenfurt, Austria. E-mail: erich.leitner@uni-klu.ac.at.

In the international context, the higher education system of the Republic of Austria entered the road to institutional differentiation very late (in the 1990s), with the creation of a nonuniversity sector of higher education. During the gradual process of liberalization, universities, previously administered directly by the federal Ministry of Education, evolved into state-controlled institutions. Privately run Fachhochschulen were introduced in 1993 and private universities in 1999. (Fachhochschulen are similar to the former polytechnics in Britain and now call themselves universities for applied sciences.) In 2002, the existing public (i.e., state) universities became autonomous institutions. The leading ideas underlying these reforms were the concepts of neoliberalism and increased bureaucratic authority. The Fachhochschulen represent the first model of Austrian higher education to follow this conceptual approach.

The public universities, which are completely financed by tax revenues, constitute the dominant segment of the Austrian higher education system in terms of numbers and type. In a sign of Austria’s liberal education policy, these public universities are characterized by free and unrestricted access. All prospective students with an upper-secondary-school diploma can study where, what, when, and as long as they wish. This situation led to many courses at universities being overcrowded and to many teaching staff being overburdened. Under these circumstances, a sense of responsibility or special concern for students hardly exists. As a consequence, this system produces extremely high drop-out rates (as high as 50 percent), long study periods (due in part to the fact that students can determine the timing of their final exams), and a lack of coordination of higher education degrees with the needs of the labor market.

As has been pointed out before, apart from the very few private universities that mostly offer only two or three degree programs, the financing of higher education, is almost exclusively derived from tax revenues. Austrians tend to regard higher education less as an investment in their own professional and life opportunities than as a largely societal activity for which the state is expected to pay. This traditional viewpoint resembles the mind-set of the public in Germany, where university fees are presently also being debated. The introduction of such fees in Austria in 2001 (approximately US$450 per semester) still meets with strong public resistance.

The Fachhochschulen had been intended as a radical break from the traditional system. The foundation and the running of Fachhochschulen were placed fully in the hands of the private sector. During the last 10 years, more than 140 degree programs have been established at Fachhochschulen, presently with more than 20,000 students. The limited number of enrollments for each degree program at Fachhochschulen are determined based on the labor-market demands for graduates of the various programs.

The study places for each program, to which annually roughly 30 to 60 students can be accepted, are allocated by a specific selection procedure carried out by those in charge of the respective programs. The curricula are worked out in collaboration between academics and potential employers. Vocationally oriented academic training is thus being offered in close cooperation with industries. Each eight-semester program includes a practical-work semester. Undergraduate theses are usually designed in close cooperation with research and development projects of economic enterprises.

The study programs are predominantly in technical and economic subject areas, although recently more social science studies are also offered. The teaching staff include academics (for instance, some faculty at public universities hold part-time positions at Fachhochschulen), as well as people with vocational positions. At present only about 17 percent of Fachhochschulen teaching staff are employed full-time; the others have only reduced teaching obligations on a contractual basis. In contrast to public universities where academics are civil servants and therefore in tenured positions, the personnel structure at Fachhochschulen results in a high degree of flexibility and adaptability to the changing requirements of the market.

Originally, the intention had been to organize Fachhochschule programs based on an independently financed market-based model and to create a competitive situation between Fachhochschulen as well as between Fachhochschulen and universities. The Austrian economic sector, in particular industries, which had vigorously promoted the foundation of Fachhochschulen, showed little interest in their continuous funding. The argument put forward by industries was that they had to pay sufficient taxes anyway. Cost-covering fees could also not be demanded from students.

A compromise called for the participation of the government in funding an agreed number of study places for each of the respective study programs. Today about US$8,500 from tax revenues is spent on each study place. However, when students, for whatever reasons, drop out of the programs, the government funding is reduced. While students at Fachhochschulen pay the same amount of fees as those at universities, these institutions, particularly if they offer technical subjects, cannot be run on such a financial basis. In almost all cases, the states (Austria is a federally structured country) play a financial role, as well as often local communities. The downside of this financial mix consists of the fact that higher education and science policies are often entangled in a web of provincial political interests.

In conclusion, the privately run Fachhochschulen in Austria have very successfully developed during the first 10 years of their existence. Above all, the numerous private initiatives to establish and operate such institutions have shown the country’s entrepreneurial potential. The Fachhochschulen nowadays represent a serious competition for the universities, despite the fact that both types of higher education institutions depend to the same extent on the public purse. While the originally envisaged market-based model has been used in the planning of programs and the adjustment of curricula to meet the demands of the labor market, in the context of funding matters these market principles have encountered a lot of mental resistance.

[Online] Available: http://www.bc.edu/bc_org/avp/soe/cihe/newsletter/Number42/p8_Leitner.htm