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Europaudvalget 2003
KOM (2002) 0779
Offentligt

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 10.01.2003

COM(2002) 779 final

COMMUNICATION FROM THE COMMISSION

Investing efficiently in education and training:

an imperative for Europe

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UMMARY

This Communication sets out the Commission's view on the new investment

paradigm in education and training in the enlarged EU within the framework of the

ambitious strategic goal set by the Lisbon European Council in March 2000. In view

of this goal, Ministers in charge of education adopted in February 2002 the

Detailed

work programme on the objectives of education and training systems,

including its

objective 1.5:

Making the most efficient use of resources

The Communication tries to look at the issue of investment in education and training

from a broad perspective, paying attention in particular to the research and lifelong

learning dimensions and to the European Employment Strategy. It starts by exploring

the relevance and contribution of education to core elements of the Lisbon strategy,

such as sustainable growth, competitiveness, R&D and innovation, the creation of

more and better jobs, social inclusion and active citizenship and regional policies.

The new investment paradigm in education and training will be shaped by factors

such as the new requirements of the knowledge society, globalisation, EU

enlargement and unfavourable demographic trends. In view of these factors, the

challenge to be met will be even more considerable than envisaged in Lisbon. Many

regions and several countries of the current and the future EU need to overcome

massive challenges for Europe to reach the Lisbon goals.

Concerning the overall level of funding, the EU suffers from under-investment in

human resources. A clear upward trend in

public

funding could not be identified,

while there is a clear deficit in

private

funding in key areas for the knowledge

economy such as higher education, adult education and continuing vocational

training. EU enlargement is likely to exacerbate rather than reduce these deficiencies.

In view of this, the Communication expresses the Commission's concern about the

prospect of achieving the “substantial annual increase in per capita investment in

human resources” called for at Lisbon, and concludes that new investment will be

necessary in education and training, including (depending on countries' situation)

targeted public expenditure and higher private spending which complements public

funding.

Concerning the need to spend existing resources more efficiently the document looks

first at their efficient

allocation.

It sets out the investment priorities in education and

training resulting from the ‘Objectives process’, as well as from lifelong learning and

the European Employment Strategy. It then identifies a number of common signs of

inefficiencies in expenditure (high failure, dropout and graduate unemployment rates,

excessive duration of studies, low attainment levels) and their possible sources, with

a view to inciting Member States to address these factors and to measure their

incremental costs. The need for the efficient

management

of resources (through

educational decentralisation, partnership approaches and better coordinated action)

and the indispensable role of national and European benchmarks are also underlined.

Detailed work programme on the objectives of education and training systems in Europe, Council document

6365/02, 2002. Objective 1.5 reflects also the need for “adequate resourcing” identified in the Commission’s

Communication “Making a European area of lifelong learning a reality”, 2001.

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Finally, the Communication points out that investment can only be fully effective if

anchored in a European context. Important, sometimes overdue reforms in key areas

such as curricular renovation, quality assurance and the recognition of qualifications,

are basic conditions for efficient investment. Such reforms cannot achieve their full

potential if they are designed for a purely national context and disregard the broader,

new European context. Investors - whether state, region, enterprise or individual -

failing to recognise the European dimension for investment decisions in education

and training would create a handicap for themselves and reduce the efficiency of

their investments.

The Conclusion emphasises that the high expectations of education and training

systems set by Heads of State and Government in Lisbon are fully justified.

Achieving the agreed goals in education and training will be crucial for the success

of the overall Lisbon strategy. The Commission invites Member States to provide the

level of public investment called for by the European social model

, to put in place

partnerships and incentives for more and sustained investment from enterprises and

individuals, to focus funding on areas where it is most likely to produce the highest

quality of outcomes, and to undertake reforms concerning curricula, quality and

recognition with a view to maximising their efficiency in the European context.

NTRODUCTION

Education and training are crucial to achieving the strategic goal set for Member

States at the Lisbon European Council to make the European Union the most

competitive and dynamic knowledge-based economy (and society) in the world. The

Heads of State and Government, meeting in a sequence of spring European Councils

in Lisbon (2000), Stockholm (2001) and Barcelona (2002), confirmed the role and

importance of education and training and set priorities for concerted action at

European level.

In order for this role to be fulfilled, not only must sufficient resources be invested in

Member States’ education and training systems, but these must be well targeted and

managed in the most efficient way. The new focus at European level on education

and training policy issues gives a new context for considering questions of

investment efficiency. The present Communication is based on economic and

educational research as well as on direct contact with stakeholders in education and

training. It wants to offer the Commission's view, and to launch a debate on key

investment issues in education and training in the current and enlarged EU, within

the framework of the implementation of the Objectives process and the Lifelong

learning Communication - as well as in context of the European Employment

Strategy. More specifically, its main purposes are:

–

To analyse the implications for education and training of the call issued by the

Lisbon European Council for a substantial annual increase in per capita

investment in human resources

Lisbon European Council, Presidency Conclusions, paragraph 24.

Lisbon European Council, Presidency Conclusions, paragraph 26.

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–

To clarify the new roles and responsibilities of Member States and Applicant

Countries in ensuring that education and training play their full part in the

achievement of the strategic goal set at Lisbon.

To outline the main components and success factors of a new paradigm for

investment in education and training in the current and in the enlarged

European Union.

To support Member States and Applicant Countries in their efforts to develop

lifelong learning strategies and structural reforms in their education and

training systems and to encourage them to reassess the levels and priorities of

their investment in human resources.

To prepare the ground for the joint report of the Commission and the Council

to the spring 2004 European Council on progress achieved towards their shared

Objectives, in particular Objective 1.5.

ISBON

STRATEGIC

–

3.1.

ROLE OF EDUCATION AND TRAINING IN ACHIEVING THE

GOAL

The call for a substantial increase in investment in human resources

In March 2000, the Lisbon European Council set the EU the ambitious strategic goal

to become by 2010 “the most competitive and dynamic knowledge-based economy

in the world, capable of sustainable economic growth with more and better jobs and

greater social cohesion”. Acknowledging that the Union was confronted with “a

quantum shift resulting from globalisation and the knowledge-driven economy”, the

European Council stressed that this would require not only a “radical transformation

of the European economy”, but also “a challenging programme for the modernisation

of social welfare and education systems”. It also called for a “general reflection on

the concrete objectives of education systems” and for “a substantial annual increase

in per capita investment in human resources”. It pointed out that the future of the

European economy (and society) will depend on the skills of its citizens, and that

these in turn needed the continuous updating which is characteristic of knowledge

societies. In the context of the European Employment Strategy, the Feira European

Council of June 2000 called on Member States to develop and implement coherent

and comprehensive strategies for lifelong learning.

The 2001 Stockholm European Council agreed that the work should continue to

develop a work programme organised around the quality and effectiveness, the

accessibility and the openness to the world of education and training systems. It

indicated that work should be carried out “in the framework of the open method of

coordination and in a worldwide perspective” and that the Applicant Countries

should be involved.

The Barcelona European Council of March 2002 welcomed the

Detailed work

programme on the objectives of education and training systems,

including its

enhanced ambition to make Europe “a world reference for the quality and relevance

of its education and training and the most-favoured destination of students, scholars

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and researchers from other world regions”

. As outlined above, this Work

programme includes a specific objective on “Making the best use of resources”,

which builds on the Lisbon Council’s call for increased investment in human

resources and on the need described in the Commission’s Communication on lifelong

learning for adequate resourcing of lifelong learning in the knowledge society

. This

objective focuses on “increasing investment in human resources while ensuring an

equitable and effective distribution of available means” and refers to total

investment, i.e. by public authorities as well as by private enterprises and individuals.

Given the strong, synergetic links between education and research, it is important to

note that the Barcelona European Council also set a twin objective for research,

namely to increase the overall R&D expenditure to approach 3 % of GDP by 2010

and to augment the share of it funded by business to 2/3

3.2.

Relevance of education/training to the Lisbon goal

When adopting the Work programme on objectives, the Council (Education) and the

Commission underlined that making the European Union the leading knowledge-

based economy in the world would be possible only if education and training

functioned as factors of economic growth, research and innovation, competitiveness,

sustainable employment and social inclusion and active citizenship. Ministers in

charge of education and training acknowledged their responsibility in this process

and re-affirmed their determination to meet the challenge. This was echoed by the

Barcelona European Council in 2002

The contribution of education and training to the achievement by 2010 of the Lisbon

strategic goal will be particularly important in the following areas:

–

Growth

The contribution of education and training to growth has been widely acknowledged

and estimates suggest that investment in education and training produces rates of

return to individuals (private return) and to society (social return) comparable to

investment in physical capital

. The increasing share of services in the economy, the

pace of technological change, the increasing knowledge/information share of the

value of production as well as the scale of economic and social restructuring

strengthen the case for such investment. A recent report produced for the

Commission

concluded that investment in “human capital” contributes significantly

to productivity growth and is an attractive investment relative to alternative

spending, both at the microeconomic and at the social level. At the social level, there

is evidence that human capital investment is responsible for a significant proportion

of aggregate productivity growth. An estimate for OECD countries is that an

additional year of average school attainment increases economic growth by around 5

% immediately and by a further 2.5 % in the long run

. The OECD also found that

Detailed work programme on the objectives of education and training systems, op.cit.

Making a European area of lifelong learning a reality, Communication from the European Commission, 2001

Barcelona European Council, Presidency conclusions, paragraph 47

Barcelona European Council, Presidency conclusions, paragraphs 33 to 43

Returns to investment in education: a further update, Psacharopoulos and Patrinos, World Bank, 2002

De la Fuente and Ciccone, ‘Human capital in a global and knowledge-based economy’, Final report for DG

Employment and social affairs, European Commission, 2002.

De la Fuente and Ciccone, op.cit.

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improvement in human capital was responsible for half a percentage point or more of

annual growth in several EU countries during the 1990s as compared with the

previous decade

–

Competitiveness and dynamism

Competitiveness and dynamism are two aspects where the EU is currently lagging

behind the United States. Education and training need to play a decisive role in

attracting and keeping talent in Europe. The productivity gap between the EU and the

USA continues to get wider. Reversing this trend calls for investment not only in

research and development and ICT, but also in “human capital development”. There

is evidence that the reasons for Europe’s under-performance in this area go beyond

certain obvious mismatches between skills acquisition and needs. It is more deeply

rooted in the insufficient level of educational attainment among the working age

population. It took the EU many years to increase the average duration of schooling

from 70 % of USA level in 1971 to 87 % in 1999

. The outflow of highly educated

people from Europe mainly to the USA continues, in particular in science and

technology, and the EU will invest 1.6 billion Euro to combat it through the sixth

Framework Programme for research and technology development. Education also

contributes to entrepreneurship, both by creating awareness of self-employment as a

career option and by developing the right skills for it

–

Knowledge-based economy and society

It has been widely acknowledged that the scale and quality of human resources are

major determinants of both the creation of new knowledge and its dissemination.

Key factors are the supply of new scientists and engineers in sufficient number, the

reinforcement of research at university level and the constant updating of the

scientific workforce, as well as the overall educational level of the working age

population and the intensity of lifelong learning activities

. Education also plays a

key role in fostering the advancement and dissemination of science and technology

in the transition to the knowledge society. The knowledge sector is dependent on the

ability of education, in particular universities, to offer high quality curricula in

knowledge-intensive areas and to attract a sufficient number of qualified persons to

science and technology

. Furthermore, while innovation requires research and

development activities, it is also dependent on the ability of social partners to ensure

that a generally well-educated and creative labour force stimulates it, uses it and

underpins it.

–

More and better jobs

The Lisbon European Council called for “more and better jobs”, set employment

targets

and emphasised the role of social partners in achieving them. Education

and training contribute to this in several ways. There is clear evidence that school

Education at a glance, OECD, 2002

2002 European Competitiveness Report, European Commission Staff working document , 2002

Entrepreneurship in Europe, Green paper from the European Commission, 2002

2001 Innovation Scoreboard, European Commission, 2002

De la Fuente and Ciccone, op.cit.

Commission Action Plan on Skills and Mobility, COM(2002)72final - point 2

Lisbon European Council, Presidency conclusions, paragraphs 28 and 29

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attainment is a primary determinant of individual income and labour market status.

Recent research suggests that across Europe an additional year of schooling increases

wages at the individual level by around 6.5 % and by as much as 9 % in countries

with a less compressed wage structure. In the positive link between education and

earnings, upper secondary education forms a break point beyond which additional

education attracts a particularly high premium

. Evidence also shows that

unemployment rates diminish with higher educational levels, thus also reducing the

related social costs. It is also clear that the employment rate increases with

educational levels achieved

, including among older people, which is particularly

important given the low employment rate for that age group in the EU and our

rapidly ageing population. The gender gap in access to employment and career

development is persisting and increases with age; gender mainstreaming has the

potential to mobilise a considerable and increasingly highly educated workforce for

Europe. Raising the quality of work contributes towards increasing employment,

productivity and social cohesion. Two important dimensions of job quality are

training (which is shown to have a positive impact in particular on productivity) and

mobility (which requires the removal of barriers within the European labour market;

cf. section 6.2.).

–

Social inclusion and active citizenship

With an increasing premium on skills, the polarisation between the

knowledge rich

and the

knowledge poor

puts strains on economic and social cohesion. Access to

employer funded training is often limited to those who are already well qualified and

some groups get locked into the lower end of the labour market. An important

challenge is to develop education and training throughout life in such a way that

change and restructuring in the economy have no adverse effects on social cohesion.

One of the most important conclusions of recent educational research is that

investing in people is

both

a growth factor, particularly in the current context of rapid

technological change, and a key instrument for enhancing social inclusion

. This is

confirmed by the analysis of PISA results, which show that some of the countries

with the highest average achievements also had the lowest levels of inequality

between individuals and schools

: in other words improving quality does not imply

restricting opportunities, but rather the opposite. Another study indicates that a 1 %

increase in the proportion of the labour force with at least upper secondary education

increases the income share of the poorest two-fifths by 6 % and that of the poorest

three-fifths by as much as 15 %, thus contributing to greater income equality

These rates also reflect the fact that education and training produces social and

economic benefits by developing the personal and civic competencies as well as the

vocational ones. Active citizenship education has the potential to raise the level of

social and political responsibility in civil society and in the workplace.

Education at a glance, OECD, 2002

Eurostat, Labour force survey, quoted in Action Plan on Skills and Mobility, Communication from the

Commission, COM (2002) 72

De la Fuente-Ciccone, op.cit.

PISA, OECD, 2002

Inequality and development, Bourguignon and Morrison, Delta, Paris, 1997

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Regional policies

High quality education and training is also an important element of regional policies,

as an instrument to reduce disparities between more and less developed regions by

providing the human resources needed for economic and social development. The

regional and local dimension of learning has been singled out as one of six key

pillars for lifelong learning strategies in Europe and the movement of Learning Cities

and Regions shows how crucial they have become for local and regional employment

and development. Since regional disparities are bound to increase in the period

following enlargement, this role could become even more important in the few

coming years. The Commission Action plan on skills and mobility has already called

for particular attention to be given to the greater investments in human resources

needed in regions lagging behind

3.3.

A new investment paradigm in education and training

Many regions and indeed countries in the current EU, as well as all Applicant

Countries, face massive challenges to overcome for Europe to reach the Lisbon

goals. The central role of education and training to the achievement of all major

aspects of the Lisbon strategic goal, as set out above, implies significant changes to

the paradigm for investment. It is not only the variables of the investment model that

are changing, but also – and more substantially – the underlying parameters

themselves. This can be seen in four areas:

–

New requirements of the knowledge society

Creating a successful knowledge-based economy and society in Europe demands the

universal acquisition of new basic skills and attitudes, much broader access to

education and lifelong learning opportunities, and social protection measures

(including anti-discrimination and gender-mainstreaming) to accompany rapid and

generalised change. The main implications of these new requirements were set out in

the

Detailed work programme on the objectives of education and training systems.

Although the main challenges implied by the Lisbon strategic goal are obviously

related to the labour market, the contribution of education and training to the

knowledge economy can hardly be dissociated from its contribution to society in

general and to the individual citizen: these two dimensions are complementary and

interdependent. This is shown in the high social returns generated by educational

investment, which diminish the need for expenditure in other areas such as

unemployment benefits, welfare payments, pensions, social insurance, healthcare,

etc.

–

Globalisation and worldwide competition

The Heads of State and Government set a new challenge in Barcelona in spring 2002,

with the announcement that the EU should become

a world reference for the quality

and the relevance of its education and training and should be the most attractive

world region to students, scholars and researchers.

Globalisation affects education

and training systems and institutions in various ways, both directly (e.g. the growth

Commission Action Plan on Skills and Mobility, op.cit., point 11

cf. EU-funded project on Public funding and returns on education – PURE, 2002

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in the funding of research and development activities and of universities in the USA

and other knowledge-based powers in the world increases the need for more

investment in these areas in Europe) and indirectly, through the need to equip

citizens with the skills and competencies they need to take up jobs, and more

crucially to keep these jobs in a rapidly changing technological and economic

environment. Thus, globalisation implies not only increased investment levels but

also a parallel reform process to increase the quality and relevance of school,

university and adult education and vocational training curricula and the coherence of

European education and training systems and to enhance their visibility and

recognition abroad. In the light of such impacts of globalisation, and the accelerating

pace of competition in education and training worldwide, the extent of the challenge

at European level in terms of investment and reform is almost certainly widely

underestimated. Developments such as the Bologna process in higher education and

the Bruges process in vocational training move in the right direction. But the pace of

change does not yet match the pace of globalisation, and we risk falling behind our

competitors if it is not increased.

–

Enlargement of the European Union

The enlargement of the EU also represents a major new challenge. By 2010 at least

twelve Applicant Countries should have become full Member States (with ten

countries joining in May 2004 and at least two more later on). There are big

discrepancies between the future Member States in their economic and educational

performance, but they share a key factor, namely their relative deficit compared to

current EU Member States in the development of a knowledge-based economy and

society. The Lisbon strategic goal and its implications for education and training set

for an EU of 15 will have to be met by 2010 by an EU of at least 27. The main

challenge will be to create a knowledge-based economy and society in all new

Member States, in spite of regional imbalances, and to forestall migration flows

within the EU which would have serious negative consequences for education and

training as well as research and development in the new Member States.

–

Demographics

The stabilisation of birth rates at a low level within the EU would appear to hold out

the prospect of fewer participants in all levels of education and training and

consequent expenditure savings. However, this would be a mistake. In spite of fewer

young children, total enrolments in education at European level did not decline, with

more people staying longer in the upper end of education systems. In addition, the

EU must keep up with fast changing technologies in spite of its ageing population,

with significantly fewer young people than in the USA and in Asian countries

(except Japan) leaving initial education and training with up-to-date skills. Another

aspect of the demographic challenge concerns the working age population, since

growth results also from higher labour force participation and education and training

has been singled out as a key factor in influencing it

. These demographic

constraints imply increased investment within Europe in lifelong learning

opportunities for those who have left the formal education system, increased

participation in the higher levels of education and training (also later in life), efforts

Increasing labour force participation and promoting active ageing, Joint report Commission/Council to the

Barcelona European Council, March 2002

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to allow and encourage workers to stay in employment longer and investment in the

integration of immigrants and their children and families (over 70 % of population

growth is expected to come from immigration). Moreover, the EU as a whole will

face over the coming decade the challenge of replacing a high proportion of its

teaching workforce, as existing staff retires. It will be imperative to keep the

profession attractive to high quality newcomers. Enlargement will not ease, but

rather enhance this trend: all accession countries except Cyprus have birth rates

below the EU level and in all but three the natural increase of the population is

negative

3.4.

An even bigger challenge than envisaged in Lisbon

The logic of the previous analysis is that the challenge in education and training is

likely to be even bigger than envisaged in Lisbon. It could be summarised as:

Providing an engine for the new knowledge-based European economy and society;

overcoming accumulated delays and deficits in relation to key competitors;

accommodating a severe demographic constraint; and overcoming high regional

issues that will be exacerbated by enlargement during the vital transition period.

Simply maintaining the status quo or changing slowly would clearly be hugely

inadequate in the face of such a massive challenge. It is of formidable size for many

regions and several countries in the current EU, and will grow even further with

enlargement. It calls for radical reform and resolute investment decisions in

education and training in the years up to 2010.

It is therefore important to categorise spending on education and training as real

investment with a lasting beneficial effect – indeed as providing a net saving when

viewed in the larger context set out above – rather than merely as recurrent

consumption expenditure. This is amply justified by the impact of such investment as

economic and social factors of growth

. The paradigm shift needs to be from

government consumption to knowledge investment, in recognition of the

“compelling evidence that education contributes to personal development, social

cohesion and productivity, has a measured and major impact on economic growth

and reduces societal costs by preventing social exclusion, health problems and

crime”

HE CHALLENGE OF ACHIEVING A SUBSTANTIAL INCREASE IN TOTAL INVESTMENT

Overall, the analysis of the current situation and recent trends reveals that the EU

suffers from a global under-investment in the development of human resources. This

applies to education and training in general and to some areas of particular

importance in the knowledge era in particular. Public authorities have a key

responsibility in addressing these funding deficits in order to deliver a substantial

increase in total investment. However, they cannot succeed without the support of a

wide range of partners. Realising a genuine and sustained increase in investment in

Eurostat, Population change in 2001.

The new economy: beyond the hype, OECD,2001

DG-group meeting, Copenhagen, June 2002; follow up paper by Hans Borstlap, Ministry of Education,

Culture and Science of the Netherlands

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human resources requires action from all relevant actors, i.e. from individuals,

enterprises, social partners and public authorities.

4.1.

No clear upward trend in public expenditure on education and training

On average EU Member States spend just over 5% of their GDP on publicly funded

education and training, with very substantial differences between Member States.

This figure is the same as in the USA and is higher than in Japan (3.5%). However it

has not increased in recent years. On the contrary, there has even been a slight

decline, from 5.2% of GDP in 1995 and 1996 to 5.1 % in 2000, with a low of 5,0 %

in 1998 and 1999, resulting from very substantial reductions in some countries. Yet,

over the same period, the share of total public expenditure devoted to education and

training has slightly increased (from 10 % to 11 %), partly as a consequence of

falling levels of total public expenditure in the EU, but also as a signal of a relative

shift of priorities towards education in several countries. A similar observation

applies concerning per capita public expenditure: the number of new entrants to

primary education has stabilised in recent years after a prolonged period of decline,

but this decline has been offset by students staying longer in education, which means

that the per capita expenditure remained about stable overall, but increased with

respect to primary and secondary school-age people. At the other end of the lifelong

learning spectrum, new investment needs are created by the promotion of active

ageing in the EU as a contribution to higher employment rates and longer working

lives. Europeans in the age group 55 to 64 have large skill gaps and educational

deficits.

Investment does not yield the same returns at all levels of the education and training

systems. Rates of return to both individuals (private return) and society (social

return) vary according to country and gender. Different rates of return may reflect

labour market deficiencies (unemployment among the low-skilled and migrants,

rigidities in wage bargaining, low female employment levels, etc.) and different

levels of investment (higher investment causes marginal returns to diminish and so

drives average returns down). Current estimates for the EU indicate that such

investment returns tend to be lowest in Nordic countries and highest in the UK and

Ireland, and that returns to women are significantly higher than to men. Comparing

estimated rates of return at various stages of the education system indicates that

upper secondary education is becoming the basic level of education for the

knowledge society. There is compelling evidence that the duration (and so the cost)

of periods of unemployment falls substantially once average attainment increases

from below upper secondary to upper secondary education

. In the EU at present,

25% of 25-29 year olds and 52 % of 55-64 year olds have not attained upper

secondary level. Investment is needed to ensure that in future everybody attains at

least this level.

4.2.

A clear deficit in private funding in key areas for the knowledge economy

There are major discrepancies between the EU and the USA in the level of private

funding of education and training. Private expenditure on educational institutions has

been increased very little in the EU since 1995 (from about 0.55 to about 0.66 % of

GDP). In Japan the figure is more than double (about 1.2% of GDP) and in the USA

Training and Learning for Competence, CEDEFOP, 2001 (tables pp. 334 and 246)

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it is as much as three times higher (1.6%). Expenditure by enterprises on continuing

vocational training has increased in the period 1993-1999 (from about 1.6 % to about

2.3 % of total labour costs, i.e. from about 0.8% to 1.1 % of GDP) and may have

increased somewhat more since, but it remains insufficient to ensure the "adequate

resourcing" called for in the Communication on lifelong learning.

The EU invests significantly less in total in higher education than the US. In spite of

a massive increase in participation and the consequent substantial growth of public

expenditure on higher education, the current level of total (public and private)

investment at tertiary level remains much lower in Europe than in the USA. The

USA spends more than twice as much as the EU per student in tertiary education

In terms of GDP, the EU average is only 1.1 % compared to 2.3 % in the USA. The

funding gap is thus even greater for higher education than for research and

development, where the figures are 1.9% of GDP in the EU and 2.7% in the USA

and the difference is also mainly explained by lower R&D spending from European

companies. Given the dual role of universities in education and research, the funding

deficit arguably hits them hardest and makes it more difficult for European

universities to promote their attractiveness to students and researchers from the

whole world and to reverse the outflow of talent. It is very important to realise that

the largest share of this deficit stems from the low level of private investment in

higher education and research and development in the EU compared with the USA.

At the same time, private returns on investment in tertiary education remain high in

most EU countries, because the demand for highly qualified manpower has grown

even faster than participation in higher education. This demand however varies

enormously between countries, and such discrepancies could well constitute an

incentive for greater mobility of graduates within the enlarged EU, including in the

form of unwanted brain drain from certain less favoured regions or countries.

Faced with relatively low private investment levels and high private returns on

university education, the main responsibility of authorities is not only to continue to

provide higher education institutions and students with a sufficient level of public

funding, but also to find ways to add to it by increasing and diversifying private

investment in higher education. The new EU-level target to raise the level of

investment on research and development to 3 % of GDP by 2010

is likely to have a

positive impact on universities as one of the main beneficiaries of such additional

spending. At the same time there is an increasing need to ensure that additional

resources produce higher quality and relevance, lower failure and dropout rates, and

enhanced social equity in access to higher education and its benefits.

The other area where there is a clear need for more private investment is continuing

vocational education and training and adult education. Lifelong learning is still far

from being a reality for all and there are signs of a widening gap in the take-up of

learning opportunities between those with low skills and the higher educated and

between younger and older age groups. Measures to broaden access and increase

participation levels therefore need to be vigorously pursued, with particular attention

paid to those adults least prepared or inclined, or with the least opportunity to learn.

Emphasis should also be given to addressing market failure and ensuring that the

USD 19,200 in US, USD 8,600 in EU (weighted average), in PPPs. Education at a glance, OECD, 2002

More Research for Europe – Towards 3 % of GDP, Communication from the European Commission, DG

RTD, 2002

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right incentives are in place to encourage disadvantaged groups to take up training

opportunities

. In spite of the growth of private enterprise spending on vocational

training mentioned above (from 1.6% to 2.3% of labour costs from 1993 to 1999),

the current level of funding does not match the challenge facing Europe in this area.

There are still great differences from one country to another (e.g. the above

percentage varies in the range 3:1). Only 40% of European employees participate in

continuing vocational training courses (23% in SMEs) and only 62% of all

employers provide any type of training to their staff (56% of SMEs)

. This raises

important questions concerning the dialogue between public authorities and social

partners.

A particularly important issue concerns the fiscal treatment of lifelong learning and

other incentives to invest in learning (including the recognition of prior learning)

According to OECD, there was a convergence of views in the late 1990s that public

authorities alone could not provide the resources needed for lifelong learning, that

employees and employers should finance at least part of it in view of the

considerable private returns it generates, and that financial incentives were

insufficient to lift the very low levels of participation of poorly qualified persons

4.3.

The likely impact of enlargement on EU investment performance

While some Applicant Countries (the Baltic countries and Slovenia) spend more than

the EU average, the majority of them, including all the large ones, are below EU

average in terms of public expenditure on education and training as a percentage of

GDP

. This is of course even more visible in terms of expenditure per student or

employee

. In several countries this represents however a comparable or higher

proportion of total public expenditure as in the EU (varying from less than 10% to

over 15%). Except in two, the level of private funding is very low in the Applicant

Countries, especially with regard to in-company training. Enrolment rates tend to be

high (often higher than in the EU) up to upper secondary level, but they decline very

sharply at higher education level. Participation in higher education (in particular in

areas relevant to the knowledge economy), in continuing vocational education and

training (in terms of beneficiaries, volume of courses and proportion of training

companies) and active labour market measures lies in most cases below EU average -

even though they may be higher in some Applicant Countries than in some current

Member States. The decrease in public investment in adult education has been very

sharp in several countries over the last decade. The current funding deficit in higher

education and continuing vocational education and training in the EU will become

even greater after enlargement. Considering the whole education and training system,

there is in several Applicant Countries a need for more public investment, which is a

particular challenge in some of them, in view of their budgetary constraints and the

already high proportion of public expenditure dedicated to formal education. In spite

of some strong achievements, international surveys like IALS and PISA also show

qualitative gaps, with Applicant Countries tending to score towards the bottom of the

Employment in Europe 2002, European Commission, DG Employment and Social Affairs, 2002

CVTS 1 and CVTS 2, Eurostat

New mechanisms to finance lifelong learning, OECD, 2002

Preparation by candidate countries for involvement in the EU lifelong learning policy: achievements, gaps

and challenges, Interim report (Synthesis of monographs exercise), European Training Foundation, 2002

CVTS2, Eurostat 2002

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groups

. This indicates that, notwithstanding past efforts and the priority already

given to human resource development (by the countries themselves as well as by EU

through the ETF and PHARE), education and training systems in most Applicant

Countries will need very considerable new investment in the form of funding as well

as qualitative and structural reforms to catch up with the requirements of the

knowledge-based economy and society

4.4.

Targeted increases in public expenditure and higher private contributions

The above analysis of the current situation and recent trends raises legitimate

uncertainties concerning the achievement of the “substantial increase” in investments

in human resources called for in Lisbon. This is even more the case when one

considers that the goal set in Lisbon by the EU of 15 will need to be achieved by

2010 by an enlarged EU of at least 27.

Given the increased pressure on public resources created by low growth since 2001,

a deteriorating economic outlook and severe budgetary constraints, the current

investment levels already represent a real effort. Despite this, the arguments for

holding to the Lisbon objective of a “substantial increase” in investment in education

and training remain as compelling as ever, in particular since this investment is itself

a determinant of future growth.

Significantly higher investment, especially in some Member States and regions, will

be necessary in education and training - in coordination with those needed in

research and development - to transform the EU into the most advanced knowledge-

based economy and society. This conclusion is however not an appeal for all

Member States to invest more public money across the board: this would be unlikely

to produce high results while it would put additional strain on public resources,

productivity and competitiveness.

The increase needs to come from a combination of targeted public investments and

higher private contributions. The biggest funding deficit in European education and

training is the comparatively low contribution from private sources (companies and

individuals) in addition to (not as a substitute for) the public funding which

guarantees the continuity of the European social model in education and training.

Public authorities in Member States and Applicant Countries have the responsibility

to deliver the "substantial increase" in total investment. Targeted increases in public

investment are needed in some countries, e.g. to ensure that all have access to

learning opportunities throughout life, that everyone reaches upper secondary

education and that regions lagging behind receive adequate support. Such targeted

increases in public investment may be achieved within overall budgetary constraints,

where appropriate, by re-directing funds from areas of lower returns towards

investment in the development of human resources

. Setting benchmarks to monitor

progress will be indispensable

Preparation by candidate countries for involvement in the EU lifelong learning policy, op.cit

Prof. Erich Gundlach (Kiel Institute of World Economics), quoted by De la Fuente – Ciccone, op.cit.

Public Finances in EMU 2002,

European Economy n° 3/2002

European benchmarks for education and training: follow-up to the Lisbon European Council, Communication

from the European Commission, COM(2002) 629 final

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The Structural Funds, as the financial arm of the European Employment Strategy,

with €60 billion available in current programmes (2000-2006) from the European

Social Fund alone, have also an important role to play in supporting the improvement

of policies and systems and the special effort needed to address the problems of

regions lagging behind. The forthcoming mid-term review of Structural Funds

programmes provides an opportunity to assess the nature and direction of

Community investments.

Governments will also need to mobilise support from a wide range of actors and to

provide positive incentives for more and sustained investment from enterprises

(including SMEs) and individuals and for public-private partnerships in the field.

Enterprises could e.g. be invited to fund or co-fund equipment, schools, scholarships,

activities for curricular change, chairs or departments at universities, research units,

training courses to attract students and apprentices in areas facing a lack of qualified

workers, etc.

Such measures would avert the worst-case scenario, where insufficient public

funding is not offset by increased private funding, resulting in endemic

underfunding, reduced quality and socially restricted availability of education and

training opportunities.

PENDING EXISTING RESOURCES MORE EFFICIENTLY

This section relates to Objective 1.5 “Making the most efficient use of resources” in

the Work programme on objectives, as well as to “adequate resourcing” in the terms

of the Communication on lifelong learning. It identifies some priority areas for

ensuring long-term system efficiency in view of their importance for achieving the

EU-wide Lisbon strategic goal.

This exercise is also highly relevant to lifelong learning policies and to the European

Employment Strategy. The Lifelong Learning Communication emphasised that

resources must be re-channelled across the whole spectrum of formal, non-formal

and informal learning at all ages, and all decisions aimed at maximising the

efficiency of investment in education and training should be screened against this

background.

Priorities identified in this way may also be of relevance for ensuring the maximum

efficiency of European Investment Bank and Structural Funds investments, both in

current and in future Member States.

5.1.

The implications of the "Objectives process" in terms of investment

The

Detailed work programme on the objectives of education and training systems

calls for investments in certain areas that have been identified as shared priorities of

the Member States. It takes on board priorities from the Lifelong learning and

European employment strategies. It also includes the priorities that were outlined by

the Lisbon European Council itself, in particular the halving of the number of young

people not achieving upper secondary education, the transformation of schools and

training centres into multipurpose centres, the renovation of curricula, the

development of IT skills,

e-learning,

foreign languages and mobility. The Work

programme thus provides a good background for the efficient allocation of resources

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in view of the situation, needs and policy choices in each country. An analysis of the

Objectives programme shows that it calls for investments in the following main

areas:

–

Investment in the training and retention of education staff

This concerns mainly: a) young and in-career teachers and trainers in initial and adult

education, in particular concerning open and flexible teaching methods and

learning, the use of ICT, the renovation of curricula in initial education and

continuing education courses and the availability multimedia; b) heads and

administrative staff at all level to underpin the decentralisation of curricular and

management issues; and c) staff providing customised guidance and counselling. The

ageing profile of teachers, trainers and support staff across the EU creates particular

investment needs, in the form of training and measures to attract new personnel to

the teaching and training professions

. Similarly, higher education needs to remain

attractive to young researchers and mature talent, in particular by building up bridges

and mobility between universities, research laboratories and industry.

–

Investment in new basic skills

The new basic skills include digital literacy, learning to learn, social competencies,

entrepreneurial skills and language learning and should be accessible to all age

groups. Needs for higher levels of basic skills adapted to the new labour market and

the knowledge society concern young people and adults, employed or unemployed,

and are particularly acute for certain categories (e.g. low-skilled and older workers or

inactive women who want to return to work) and in certain regions or whole

countries. The potential of ICT and new

e-learning

methods to improve the learning

process, reach more people and reduce costs needs to be further researched and

exploited.

–

Investment in providing access to lifelong learning to all

Public expenditure in this area has generally risen and there is evidence of

increasingly shared responsibility for financing, including a rise in businesses’

expenditure on continuing training. Since 1997, Member States have developed

efforts in the direction of coherent lifelong learning strategies and increased

investment in quality and access within the context of the European Employment

Strategy. The Communication on lifelong learning calls for adequate resources and

for their redistribution across the learning spectrum. Key conditions for success are

the development of further fiscal and other incentives to learning, and the

involvement of the social partners in these strategies.

–

Investment in ICT

Investment is needed in hardware, software, maintenance and training, as well as in

the development of

e-learning

activities and teaching material, in line with the new

learning programme

. Substantial investments have been made in all countries in

the past few years, equipping schools with ICT, providing nearly 100 % of them with

an Internet connection, creating web-based information and educational resources,

Eurydice Reports on Teachers, particularly Report 1 on initial training and Report 3 on conditions of service

e-Learning: designing tomorrow's education, European Commission, 2000

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etc. Nonetheless, ICT is likely to remain a significant cost item until the pace of

technological change slows and it becomes a universal commodity such as

stationery, which may be the case by 2010. The potential of networking between

public education and training institutions and of public-private partnerships as a

source of complementary funding in this area does not seem to have been fully

exploited up to now

–

Investment in social inclusion and active citizenship

Measures aimed at fostering social inclusion concern key aspects such as pre-primary

education, active citizenship education, gender mainstreaming, the prevention of

failure and dropout, second chance schools for adult learners, etc. They go well

beyond employment-related issues and are strongly emphasised in both the

Communication on Lifelong Learning and the

Detailed work programme on the

objectives of education and training systems.

These longer-term measures are maybe

the most fundamental ones. They require deep-reaching curricular and structural

reforms to enhance the quality and relevance of learning opportunities available to

all, as well as targeted increases in public investments to underpin these reforms -

including in the form of support to relevant civil society organisations which have

played, and will need to play a crucial role in this area throughout the enlarged EU.

Such investments are a natural priority in all countries in need of more efforts to

ensure that the development of education and training systems is for the benefit of

all.

–

Investment in guidance and counselling

Investment in guidance and counselling services should be seen as providing early

prevention strategies capable of significantly reducing mismatches between

education and training and the needs of the labour market

, increasing completion

rates in secondary and higher education and facilitating the transition to work as well

as the return to studies

. Reinforcement of these services is also needed in view of

the necessity to increase the number of young people, especially young women,

choosing further study and careers in mathematics, science and technology

5.2.

Tackling areas of inefficiency

In addition to priority areas for investment identified in the Objectives work

programme, actual investment decisions need to be taken in the light of the situation

in each country. One way of increasing the return on investment at Member State

level is to identify and eliminate current inefficiencies in spending. The

corresponding resources can be saved and re-invested more meaningfully elsewhere.

The following paragraphs set out a list of common signals and possible sources of

such inefficiencies.

Commission Action Plan on Skills and Mobility, op.cit., point 8

Commission Action Plan on Skills and Mobility, op.cit., point 1

Why Guidance matters, OECD working paper Rationale, 2002

Detailed work programme on the objectives of education and training systems, op.cit., Objective 1.4.

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Higher than average failure and dropout rates

In the EU, still about 30 % of pupils leave school without achieving upper secondary

level and non-completion rates are also high in higher education in several countries.

Where failure/dropout is higher than elsewhere, it may result from the imposition on

learners (or on their parents) of too early a choice between future learning pathways.

This situation can be created either by inflexible systems or by socio-economic

conditions. Premature or ill-informed decisions can lead to higher failure rates,

dropout, or other manifestations of demotivation. In this context, one should point

out the indirect costs of allowing vocational education and training options to be

perceived as second best, in secondary as well as in higher education. This tends to

distort orientation choices away from studies more suited to certain students and

towards those that are regarded as more prestigious or better fitting male or female

stereotypes. Better guidance leading to higher completion rates would save social

expenditure resulting from failure and dropouts and could free these resources for

more productive investment in areas such as special needs education or the regular

updating of courses curricula

–

Comparatively high graduate unemployment

While general economic factors have an important role to play in graduate

unemployment, it may also be comparatively high in some countries as a result of

curricula that are too rigid or only partly relevant to employers' needs. Addressing

this issue may call for a reallocation of funding to other sectors of the education or

training system, or for linking increased investment to improvements in relevance

and flexibility. There may also be more hidden, longer-term effects entailing

significant inefficiency costs, e.g. when education and training systems overtly or

implicitly transmit values such as risk aversion rather than an entrepreneurial spirit

–

Lower achievement levels

While there is a general positive correlation between investment level and

achievement, this is not the case in all countries. In some cases achievement levels

(as measured by instruments like PISA or IALS) are lower than in other countries

with a comparable or even lower level of expenditure. Several factors could account

for such a situation, including poor quality of courses, poor teaching, the inability to

tackle the problems of disadvantaged groups or regions or inefficient allocation of

resources.

–

Excessively long degree or other qualification courses

The time actually spent by students studying for a particular higher education degree

in different Member States may vary by as much as 100%. The total cost of a

graduate varies enormously within the EU and can account for a large proportion of

apparent differences in funding in some countries or institutions. The relevance for

efficient spending of monitoring the duration of courses is underlined by recent

attention given across Europe to the validation of informal and non-formal learning,

Commission Action Plan on Skills and Mobility, op.cit., point 3

Entrepreneurship in Europe, Green paper from the European Commission, 2002

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which has become recognised as an effective investment. It lowers the threshold for

entrance into lifelong learning and increases the return to the person, the employer

and society. It means less time is needed to complete a qualification or to attain a

certificate, suppliers are required to provide more tailored but also shorter and more

targeted modules, the individual has to finance him/herself for a shorter time, he/she

misses work less, and there is the added motivation of knowing that what individuals

have already achieved will help them progress more quickly.

–

Educational dead-ends.

Dead-ends occur where there is a lack of flexibility and permeability within and

between the various constituent parts of education and training systems – and

sometimes between education/training and work: people are prevented from

swapping tracks if they find they are on the wrong one or when they want to resume

study/training at a higher level or a later in life. This is usually the result of a lack of

assessment of prior and informal learning acquired by applicants to education and

training courses, in particular when they change tracks, and in continuing vocational

education and training and adult education.

There are of course other areas where there is concern about the efficiency of

spending. This is the case for e.g. the Active Labour Market Policies to re-train the

unemployed and inactive wanting to work; evaluations suggest that combining

training with other measures such as work experience and taking into account both

the characteristics of the individual and labour market conditions are crucial factors

of success.

Overall, investing more pays off only when it is linked to higher quality, more

relevance to the learners needs, increased social, economic and democratic efficiency

and/or improved access. Investing more in inadequate or over-long curricula without

first reforming them would perpetuate inefficiencies rather than resolving them.

Efficient investment should serve to boost and reward quality and innovation in

teaching/learning. This requires careful monitoring of inputs and outputs at

European, national as well as institutional level, with an eye to equality of access

across socio-economic and age groups taking their different learning needs into

account.

5.3.

Efficient management of resources

There is a positive link between educational decentralisation (i.e. not just the

deconcentration of central administration, but the possibility to change and adapt

curricula, methods and management) and attainment which became increasingly

clear in the light of TIMSS / PISA results. The importance of local management of

resources was emphasised by Member States themselves in their response to the

Commission's Memorandum on lifelong learning.

Efficient decentralisation however calls for new investment in a) the training of local

authorities and school administrators and teachers in the management and efficient

use of resources; b) the establishment of a quality assurance system permeating all

levels, i.e. the dissemination of a culture of quality awareness throughout the

educational and training system, based on confidence in, and autonomy of local

actors working according to a common core of quality standards; these should in

particular ensure that more accountability at school/local level does not jeopardise

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equity, gender mainstreaming or student participation; and c) a transparent

qualification framework encompassing general and vocational qualifications, suited

to national needs but also compatible with similar frameworks at the European level

(cf. Section 6 below).

Another important aspect is the involvement of all relevant actors through a

partnership approach. In particular, governments and social partners should explore

the possibility of developing various types of public-private partnerships in order to

mobilise additional human and financial resources

. Partnership working has been

identified as a critical factor for motivation, openness, relevance and quality of

education in a lifelong learning perspective

. Partnerships involving private

financial contributors may also have the potential to encourage more responsible

behaviour of students, families and educational staff, and may thus enhance the

efficiency of overall spending. This should however under no circumstances be

allowed to restrict access for learners from less favoured backgrounds.

Maximising efficiency also requires coordinated action between ministries. Lowering

the barriers at national and European level between the ministries in charge of

education, employment, economy, research, youth, environment, health, etc. could

avoid the duplication or dispersion of effort and funding and could thus boost the

results of reforms. A particularly telling example of this can be found in the area of

customised counselling/guidance provided to learners and to employed and

unemployed youth and adults, some of them in difficult situations. Despite the

common pattern of tasks, these key activities tend to fall under the purview of

different ministries depending on the target group involved and/or the activity

envisaged (study, first job, labour market training, etc.). Such fragmentation often

creates major difficulties for users and reduces the overall effectiveness and

efficiency of the services provided. Investing efficiently for the knowledge society

also requires a coordinated approach between the authorities in charge of education

and training and those in charge of research and innovation, in view of the ambitious

twin Barcelona objective to increase R&D expenditure and the share of it funded by

business. Coordination efforts in these directions are also in progress at European

level, in particular through the integrated approach to the implementation of the

Work programme on objectives and other relevant European policy developments.

The setting of national and European benchmarks is also an indispensable means for

each country to situate its own achievements in comparison with others’. It is also

crucial to measure progress towards the overall Lisbon strategic goal and the detailed

Objectives agreed for European education and training systems

FFICIENT INVESTMENTS NEED TO BE ANCHORED IN THE EUROPEAN CONTEXT

The need for reforms in education and training depends in each country on its

particular structures, levels of attainment, strengths and weaknesses and policy

orientations. Such reforms are the responsibility of Member States and Applicant

Countries, in accordance with the principle of subsidiarity. Accordingly, the purpose

Financing of Education, Eurydice, 2002

Making a European area of lifelong learning a reality, Communication from the European Commission,

op.cit.

European benchmarks in education and training: follow-up to the Lisbon European Council, op.cit.

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of this section is not to review possible national reforms, but to point out that these

reforms, while decided and conducted at national level, need to take serious account

of their increasingly important European dimension, which has become a critical

factor for their efficiency.

The importance of investing in the European dimension of education and training has

been stressed in the Communication on lifelong learning and in the Action plan on

skills and mobility and is emphasised in the Objectives work programme (in

particular in Objective 3.5). The provision of a clear and stable frame of objectives at

European level is also a necessary condition for success of the investment strategies

in the Applicant Countries. It avoids the danger of moving targets, which can easily

undermine even generous investment policies. The fact that all Member States

(current and new) introduce convergent change/reforms towards goals shared by all

may in itself serve as a powerful factor of motivation and integration. This underlines

the importance of including Applicant Countries in both the European Employment

Strategy and the implementation of the Objectives work programme - as agreed by

education Ministers in Bratislava in June 2002.

6.1.

National reforms in the context of the European knowledge area

In a more integrated Europe, investments in education and training have acquired a

much stronger European dimension. Investment and reform in these areas geared

only towards national and regional needs and disregarding their European dimension

would not be as effective as they could be in the context of the European knowledge

area. Criteria for assessing the quality and relevance of study/training programmes

and institutions need to be compatible at European level and to pave the way to

making Europe a world reference in these areas. In other words, investment and

reforms need to be undertaken in such a way as to achieve

as much convergence as

necessary

(while keeping

as much diversity as possible),

in line with the message

sent by Education Ministers in their policy statement at the beginning of the

Objectives work programme

. Acting in this coordinated way has the potential to

release considerable European added value, in higher education, adult education and

continuing vocational education and training as well as in other policy areas, e.g.

employment or regional development. Such reforms are also crucial for economic

growth and employment policies and for the efficiency of EIB and Structural Funds

investments, i.e. for the overall achievement of the Lisbon goals.

6.2.

Investing in curricular renovation, quality assurance and recognition of

qualifications in the context of the European knowledge area

The most fundamental need for reform in education and training with respect to the

emergence of the knowledge society concerns curricular renovation in general

education, vocational education and training, higher education and adult education -

in other words throughout the whole spectrum of lifelong learning. Such renovation

needs to reflect the priority given to basic skills; the diversification of learning

pathways and methods to suit various types of learners; the effective use of ICT in

teaching and learning; the promotion of sustainable employability for men and

women; the integration of a European dimension into all courses, including through

the effective learning of foreign languages and the possibility for students and

Detailed work programme on the objectives of education and training systems, op.cit. (introduction)

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trainees to undertake a significant part of their learning in another country; as well as

more flexibility in the articulation of courses and greater permeability between

education/training tracks. Such multifaceted curricular renovation is at the core of the

Work programme on objectives (cf. Section 5.1). It is also a basic requirement in the

Bologna process in higher education and in the newly adopted resolution on

enhanced cooperation in vocational education and training (the Copenhagen

declaration)

; in both cases, contacts between the world of education and work

(professional bodies, employers, research units, etc.) may contribute to shaping better

curricula and to creating incentives for more private contributions to education and

training. While the issue of curricular renovation concerns all countries, it has

particular importance and urgency in a number of Applicant Countries, where there

is a risk that funding may go to unproductive parts of the education and training

systems if curricular reforms are further postponed.

Related to curricular reform is quality assurance. Not all investments in quality

assurance will pay off. This will be the case only where priority is given to curricular

reform linked to the needs of the economy and of society, and where the need for

quality assurance mechanisms to be trusted beyond national boarders is fully

recognised. “Quality” in a European perspective cannot be decreed by law or

authorities. It exists only where it is seen as such by others (users, employers, other

institutions, other countries). Hence, the first imperative for quality assurance

systems developed at national level should be to build up their relevance and

credibility (e.g. through the inclusion of stakeholders and non-nationals in the quality

assurance bodies) and their compatibility with those used elsewhere in Europe. These

aspects are fundamental to the future development of higher education (as

emphasised in the Bologna process) as well as of vocational education and training

(as underlined in the follow-up to the Quality Forum and in the Copenhagen

Declaration). In both areas, a common core of quality criteria is needed at European

level to ensure their transparency, comparability and compatibility. Work towards

this goal has started but it needs to be reinforced and accelerated.

The achievement of greater efficiency of educational investment in the European

context and the completion of a European labour market call for a step change in the

recognition of qualifications and competencies acquired anywhere in the EU. The

Barcelona European Council of March 2002 welcomed the Commission Action Plan

to remove the barriers within European labour markets by 2005, including those

resulting from failure to recognise formal qualifications and non-formal learning. In

spite of significant policy measures in this area (e.g. the Directives on professional

recognition, the Commission Action Plan on Skills and Mobility or the Mobility

Action Plan adopted by the Nice European Council) and various instruments that

were introduced to support these policies (European curriculum vitae, EuroPass,

ECTS credits, NARICs, Diploma Supplement), progress has been much slower than

expected. The cumbersome and tardy recognition processes in place in many

countries or at many institutions remains the single biggest obstacle to a fluid and

effective European labour market and to Europe-wide employment perspectives for

holders of qualifications

. No European knowledge area, and no European labour

Council Resolution on the promotion of enhanced cooperation in vocational education and training (VET),

Document 14343-2002 and "Copenhagen Declaration" of the European Ministers in charge of VET and the

European Commission of 30 November 2002.

Commission Action Plan on Skills and Mobility, op.cit., points 10, 15, 19 and 20

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market can exist without a transparent, user-friendly and predictable system for the

recognition of degrees and qualifications across internal borders in the current and

enlarged EU.

Ensuring the efficiency of investment in education and training - and making

progress towards the Lisbon strategic goal - requires in the above areas resolute

decisions based on clear priorities. At a time of accelerating integration of labour

markets and economies, education and training cannot and must not be allowed to

fall behind. Moreover, there is growing awareness among European students and

trainees of a need and a right to study for qualifications that can effectively be used

all over the EU. Institutions and national accreditation bodies will increasingly need

to find ways of delivering such qualifications, and those that do not will run the risk

of penalising their own citizens by restricting their opportunities in the European

knowledge economy and society.

6.3.

Enhancing the value of European education in the world

Making Europe a worldwide reference for the quality and relevance of its education

programmes and institutions implies specific action and investment. It is a highly

ambitious target for the current EU, and even more so for the enlarged Union.

Initiatives such as Erasmus-World and the introduction of common visa policies for

non-EU students and trainees, combined with similar action in the area of research,

have the potential to enhance the image of Europe worldwide as a destination for

students, scholars and researchers. However, lasting success in this area will depend

on curricular renovation, the establishment of an understandable, coherent

qualifications framework, and the promotion of European institutions and degrees

throughout the world

. Of course, European degrees are unlikely to be better

recognised in the wider world, and the world is unlikely to see Europe as a reference,

as long as Europeans themselves do not cross-recognise their own degrees.

ONCLUSION

THERE IS AN URGENT NEED FOR DETERMINED ACTION

The political targets set by Heads of State and Government imply that expectations

of education and training are extremely high. They are fully justified in view of the

essential role of education and training in the achievement of the Lisbon strategic

goal, as the European Council has explicitly acknowledged.

The Lisbon goals and the ensuing objectives agreed for education and training

remain more valid then ever. They were set by Member States themselves for

themselves. This Communication does not intend to provide indications of what

should be done in any particular country, and issues raised in it are clearly more

important in some countries than in others. The core responsibility to deliver on the

agreed goals lies with the education and training authorities in the current and future

Member States. It is clear that if regions and countries fail to invest more, and more

efficiently in their people they see their economic and social performance - and those

of Europe as a whole - fall behind. In view of this, the Commission emphasises the

importance of sticking to the agreed targets and of pursuing an investment policy

The globalisation of Education and Training: Recommendations for a Coherent Response of the EU, report

by Academic Cooperation Association (ACA) for the European Commission, DG EAC, September 2000

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where sufficient funds are directed to those areas where they will contribute most to

achieving the goals set at national and European level.

These goals will be more difficult to achieve than was originally thought, as a result

of raised European ambitions, stronger competition resulting from increased

investments in knowledge systems in other world regions and the challenges related

to demographics and enlargement. In view of these challenges and of the current

signals of a slow start to action, the Commission is concerned that the goal of more

and better investments in education and training might not be achieved by 2010;

given the core contribution of education and training to other policy areas, this could

well jeopardise the EU’s overall goal set in Lisbon.

In order to avoid this, the Commission invites Member States and Applicant

Countries, depending on their specific situation:

–

To review public investment - overall and to important sectors of the education

and training system – increasing it in a targeted way where necessary,

including by re-directing existing investments to the development of human

resources throughout the life cycle. This is essential in the enlarged EU to

ensure the quality, equity, social cohesion and regional balance (in terms of

growth and employment) called for in the Lisbon conclusions, the Work

programme on Objectives (and lifelong learning), the European employment

and social inclusion strategies and the “European social model”.

To put in place policies and incentives to encourage more private investment in

education and training as a complement to, not as a substitute for adequate

public expenditure. This should be coordinated with similar efforts in R&D, in

view of the twin Barcelona objective to increase overall R&D expenditure and

to have 2/3 of it funded by business. Achieving this requires a partnership

approach and action from all relevant actors: individuals, enterprises, social

partners and public authorities. The state has the responsibility to avoid

situations of underfunding which could jeopardise not only the quality and

attractiveness of its own education and training systems, but also the

achievement of the EU’s internal goals and its international competitiveness.

To target investment on the long term efficiency of systems, i.e. to focus

funding on areas where it is most likely to produce more quality, relevance,

efficiency and access possibilities. This requires a review of the allocation and

management of current spending. Current inefficiencies in spending need to be

identified and their cost should be estimated. The setting of national and

European benchmarks is an indispensable means for each country to situate its

own achievements in comparison to others’ and is also crucial to measure

progress towards the overall Lisbon strategic goal and the detailed Objectives

agreed for European education and training systems.

To create the conditions for maximum efficiency of investments, by

undertaking the kind of curricular renovation, quality assurance and

qualification recognition called for by the new European context in the field of

education and training as well as employment. Reforms and investments that

are designed and implemented in a purely national context, disregarding

broader European issues, will not achieve their full potential. Institutions and

systems failing to recognise that learners need and demand qualifications that

–

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can be used throughout Europe would handicap their own citizens and reduce

the efficiency of their own investments.

As has been shown in this document, “making the most efficient use of resources”

(Objective 1.5.) will be crucial for allowing education and training to meet their own

objectives and to play their full role in the European Employment and Social

Inclusion strategies and in the achievement of the overall Lisbon goal. The

Commission looks forward to discussing these issue with Member States and

Applicant Countries and invites them to look at their policies for investment and

change in education and training as core determinants of their own future in the

enlarged EU and of the future of Europe in the world.

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ANNEX

Table 1: Public expenditure on education and training

Public expenditure on education and training as a percentage of GDP

1995

IRL

FIN

USA

JAP

5.2i

5.0i

7.7

4.7

2.9

4.7

6.0i

5.5

4.9

4.3

5.0

6.5

5.4

6.9

7.5

5.0i

4.9

3.5

1996

5.2i

5.0i

8.1

4.8

3.1

4.7

5.9i

5.3

4.9

4.0

5.0

6.4

5.5

7.0

7.6

4.8i

1997

5.1i

4.9i

7.9

4.7

3.4

4.5

6.0i

5.2

4.6

4.1

4.8

6.3

5.6

6.5

7.9

4.7i

5.2

3.5

1998

5.0i

5.2

8.2

4.7

3.5

4.5

5.9i

4.9

4.6

(:)

4.9

6.3

5.6

6.2

8.0

4.6i

5.0

3.5

1999

5.0i

5.5I

8.0I

4.7

3.7

4.5

5.9i

4.6

4.5

(:)

4.8

6.3

5.7

6.2

7.7

4.6i

4.9

3.5

2000

5.1i

(:)

3.5e

4.5e

5.8e

4.5e

4.6e

(:)

4.9e

(:)

6.0e

8.4e

4.9e

2001

(:)

3.5e

4.4e

5.7e

(:)

4.5e

(:)

4.9e

(:)

8.3e

(:)

Data for 1999 for selected Candidate Countries

3.8

4.4

7.4

5.7

6.3

6.5

4.7

5.2

3.4

4.3

Source:

Eurostat, data for USA and Japan: OECD

e = data for 2000 and 2001 are estimates

i = see footnotes

(:) = Data not available, Candidate countries: only countries for which data are available are shown

B: only Flemish Community for 1995-1997

B, DK: change in coverage in 1999

FR: educational expenditure figures do not include OD's (Overseas Departments).

K: estimates, based on data for UK financial years, which run from 1 April to 31 March

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Table 2: Private expenditure on education and training

Private expenditure on educational

institutions

as a % of GDP

1995

IRL

FIN

USA

JAP

0.6

0.3i

1.3

1.0

0.4

0.5

0.1

0.3i

0.0i

0.1

0.2

1.7

1.2

Enterprise expenditure on continuing

vocational training

as a % of labour costs

1993

IRL

FIN

USA

JAP

1.6

1.4

1.3

1.2

1.1

1.0

2.0

1.5

0.8

1.3

1.8

0.7

2.7

1999

0.7

0.3i

1.2

0.3i

0.9

0.4

0.3i

0.1i

0.1

0.2

0.7

1.6

1.1

1999

2.3

1.6

3.0

1.5

0.9

1.5

2.4

1.7

1.9

2.8

1.3

1.2

2.4

2.8

3.6

Data on enterprise expenditure on continuing vocational training for selected candidate countries (i),

% of labour costs, 1999

1.0

1.9

1.8

1.1

0.8

1.2

0.8

0.5

1.3

Source:

Private expenditure on educational institutions: OECD (Education at a Glance 2002)

Enterprise expenditure on continuing vocational training: Eurostat

i = see footnote

A, B, EL, P: Public subsidies to households included in private expenditure

Candidate Countries: only countries for which data are available are shown in the table

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Table 3: Total expenditure per pupil/student by level of education, 1999

in 1000 US Dollar converted using Purchasing Power Standards (PPS)

Primary level

(ISCED 1)

IRL

FIN

USA

JAP

Source:

OECD

Netherlands: Public and government-dependent private institutions only

Greece, Italy: Public institutions only

USA: Public and independent private institutions only

Austria: Enrolment data for 1998/99

Data for selected Candidate Countries:

Czech Republic 1.8/3.4/5.7

Hungary 2.2/2.4/5.9

Poland 1.9/1.6/3.9

Slovak Republic na/2.2/5.3

4.1

4.0

6.7

3.8

2.2

3.6

4.1

3.0

5.4

4.2

6.6

3.5

4.1

5.7

3.6

6.6

5.2

Secondary level

(ISCED 2-4)

6.2

6.4

7.6

6.6

2.9

4.9

7.2

4.4

6.5

5.7

8.5

5.2

5.9

5.6

8.2

6.0

Tertiary level

(ISCED

5-6)

8.5

9.7

10.7

10.4

4.3

5.7

7.9

9.7

7.6

12.3

12.1

4.8

8.1

14.2

9.6

19.2

10.3

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Table 4: Expenditure on tertiary education from public and private sources

as a % of GDP

1995

total

IRL

FIN

USA

JAP

1.1

1.6

1.1

0.7

1.0

1.1

1.3

0.8

1.2

1.5

0.9

1.9

1.6

1.2

1.0i

1999

total

1.1

1.3

1.6

1.1

1.0

1.1

1.4

0.8

1.3

1.5

1.1

1.8

1.7

1.1

2.3i

1.0i

public

1.0

1.5

1.0

0.9

1.1

0.7

1.0

1.4

1.0

1.8

1.5

0.8

1.1i

0.5i

private

0.2

< 0.1

0.1

< 0.1

0.3

0.1

0.3

0.1

0.3

< 0.1

0.1

< 0.1

0.2

0.3

1.2i

0.6i

Source:

OECD

i = see footnotes

Because of rounding public and private not always add up to total

USA, Japan: Post secondary non-tertiary included in tertiary education

Data for selected Candidate Countries, Total, 1999:

Czech Republic 0,9

Hungary 1,1

Poland 1,0

Slovak Republic 1,1

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Table 5: Lifelong Learning-Adult

Population aged 25 to 64 years

participation

education

and

training

Per cent having followed any kind of

education or training in the 4 weeks

preceding the survey

1996

1999

2000

2001

Participation rate in continuing

education and training during one year

(%)

Survey

year

Job related All continuing

continuing education and

education and

training

95/96

98/99

2000

95/96

98/99

94/95

98/99

2000

94/95

95/96

2001

IRL

FIN

USA

5.7e

2.9

18.0

5.7

0.9

4.4

2.7

4.8

4.4

2.9

12.5

7.9

3.4

16.3

26.5

8.2

6.9

19.8

5.5

1.2

5.1

2.6

5.5

5.3

13.6

9.1

3.2

17.6

25.8

19.2

8.5e

6.8

20.8

5.2

1.1

5.1

2.8

5.5

4.8

15.6

8.3

3.3

19.6

21.6

21.1

8.4e

7.3

17.8

5.2

1.4

4.9

2.7

5.1

5.3

16.3

8.2

3.3

19.3

17.5

21.7

Source: Per cent having followed training in the 4 weeks preceding the survey: Eurostat:Participation rate in

continuing education and training during one year: OECD

(:) = Data not available

b = break in series

e = estimate

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Table 6: Change in the number of young people in the European Union,

1975-2000

(Mio)

1975

1980

1985

1990

1995

2000

projection

2005

2010

40.1

39.2

43.9

42.4

46.7

45.3

130.7

126.9

0-9 age group

54.2

48.5

44.7

43.6

42.9

41.4

10-19 age group

55.6

58.0

54.9

49.1

46.0

44.9

20-29 age group

50.5

52.2

55.8

58.4

56.6

51.0

0-29 age group

160.4

158.8

155.4

151.1

145.4

137.2

Source: Eurostat, EU projection based on Eurostat data for 14 EU countries

Table 7: Change in the number of pupils and students in the European Union,

1996-2000

(Mio)

1996

1997

1998

1999

2000

All pupils and

students

83.5

83.4

83.7

85.1

Primary and

secondary level

71.6

71.1

71.4

72.6

72.5

Tertiary level

11.9

12.3

12.5

12.6

Source: Eurostat

Break in time series in 1999