Commercialisation of Higher Education in South Africa

Introduction and Literature Review

South African education policies place priority on addressing historical education imbalances, but should also be sensitive to the demands of an ever-increasing global knowledge-driven environment. The educational system cannot be dominated by the needs of the domestic educational system of South Africa ignoring the trends exerted by the global world (OEDC Annual Report, 2004:44). Higher education in South Africa should realize that they operate and function in a knowledge-driven global environment in which both domestic and foreign students demand access to the best quality education at the best reputable institutions of higher education in the world.

In this regard, most definitions of internationalization of higher education include the following: “Internationalisation is a process that prepares the community for successful participation in an increasingly interdependent world … The process infuse all facets of the post-secondary education system, fostering global understanding and developing skills for effective living and working in a diverse world” (Francis, 1993 cited by Patrick, 1997).

The position of higher education in South Africa should be evaluated considering the re-integration of South Africa into the global community. South Africa was rapidly re-integrated into the world community by obtaining almost immediate membership of influential international organisations after 1994. Kishun (1998:59) indicated that South Africa became a member of among others the following international institutions: United Nations; Organisation of African Unity; Commonwealth; International Olympic Committee; Federation of International Football Associations; and Lome Convention. Integration of influential international institutions is a necessary but not sufficient pre-condition for internationalization of higher education. Sustainable internationalization should be closely aligned to the emerging global trends and events in the education sector.

An analysis of the basis on which internationalization of higher education occurs is needed as well as the benefits of the internationalization process. This research is conducted against this background.

Problem Statement

Whilst South Africa is in a process of transition regarding higher education to address the imbalances of the past, the question arises whether the South African educational sector is able to compete in the global economy which regard knowledge as a commercialised commodity.

Methodology

A sample size of 781 respondents from six institutions of higher education in South Africa was selected. Senior students were randomly selected using the convenience sampling technique. A semi-structured questionnaire was developed to measure the perceived competitive profile of institutions of higher education in South Africa. The questionnaire constitutes five measuring foci, namely:

· Section A: Institutional information regarding the location where the respondent is enrolled.

· Section B: Biographical information in terms of gender, type of student and country of origin.

· Section C: Decision criteria used to select an institution of higher education.

· Section D: Four competitive dimensions of higher education institutions, including strategic competitiveness, institutional competitiveness, product competitiveness, and tactical competitiveness.

· Section E: Open-ended questions, aimed to identify the reasons why respondents choose a specific institution of higher education, their opinion on the institution’s competitive reputation, and the factors that may influence the international competitiveness of the particular institution.

The data was transformed into two opposite categories, namely those who agreed with the statements and those who disagreed, enabling the researchers to derive a hypothesized agreement-disagreement distribution. Those who neither agreed nor disagreed were allocated to the disagreement group set giving and expected disagreement response set of 57% (p=0.57) and an agreement response set of 43% (q=0.43). The Binomial test was employed to determine whether the observed distribution correspond with the hypothesized distribution using a significance test level of 0.05. Furthermore, the level of agreement or disagreement with the selected competitive statements and the extend of agreements between the respondents from the different institutions on the various statements were determined by executing four statistical procedures, namely: ANOVA to compare the means of respondents from the different institutions; determining how much of the perception variation could be accounted for by the influence of the different institutions of higher education; determining the averages for each strategic dimension to obtain an indication of the level of agreement with the competitive statements; and determining the standard deviations to obtain an indication of the extend to which consensus exists within the sample.

Findings

With regard to the strategic competitiveness of South African institutions of higher education to engage in a seamless network the respondents were of the opinion that South African institutions of higher education give low priority to attract foreign students, are not well known for attracting foreign students, are not actively involved in exchange programmes of students and lecturers, and do not have active engagements or agreements with other tertiary institutions, businesses and communities.

On the issue of institutional competitiveness, the majority of respondents were of the opinion that institutions of higher education in South Africa have the ability to attract quality students, does not have an international student culture, offers qualifications that are internationally accepted, can claim international reputability on post-graduate level, offers competitive tuition fees, deliver research outputs that are internationally recognized, and are not easily accessible.

In terms of product competitiveness the majority of respondents indicated that institutions of higher education in South Africa have active orientation programmes to familiarise foreign and domestic students with the institutions, provide safe and secure learning environments, provide leading information technology for academic growth and excellence, do not easily adapt to the needs and wants of students, and provide convenient service packages to students.

With regard to tactical competitiveness institutions of higher education in South Africa have the ability to compile a diploma or degree offering that meets or exceeds international standards in terms of offering subject content of international standard, having internationally acclaimed staff, aggressively marketing its qualifications internationally, claiming international acceptable through-put, and having acceptable grant and loan schemes accessible to students.

Conclusion and Recommendations

The majority of respondents are in agreement that institutions of higher education in South Africa are able to compete internationally on the four competitive dimensions (strategic, institutional, tactical and product). Internationalisation requires that institutions of higher education in South Africa should emphasise a somewhat loosening of the relationship with Government, despite the paradoxical need to create new transformational bodies to address the imbalances of the past. Internationalisation of higher education implies that internationalised institutions operate on new super ordinate levels which has its own legal, administrative and revenue-raising powers.

In terms of strategic direction institutions of higher education might consider at least one of the following internationalization approaches:

· “Would-be internationalization”: Applies to academics and institutions wanting to be involved in internationalization but facing problems in being considered on equal terms.

· “Life or death internationalization”: Countries, their academics and institutions, which view internationalization cooperation as indispensable for their status and role in the global world.

· “Two areas”: Academics and institutions have the option of striving for either more national or more international status and orientation. The academic field in which one is operating often determines this.

· “Internationalisation by import”: Countries and institutions that treat internationalization only as coming from outside, by hosting foreign students and publishing research. It should not represent a separate strategy towards internationalisation.

References

Kishun, R. 1998. Internationalization in South Africa. In The globalization of Higher Education. Scott, P. ed. Buckingham: Open University Press.

OECD Annual Report. 2004. Education. p.41-45.

Patrick, K. 1997. CSDF project full report: Internationalising the University. Melbourne: RMIT.

The Role of Skill Development and Higher Education in Economic Growth

For shaping the future of state, government is promoting skill development centers and higher education centers. Some major expansion has been done by state government in the field of higher education. Engineering colleges have become the prime center for nurturing talent. Top engineering colleges are busy in producing talented engineers year after year.

Role of Higher Education: Higher education plays a key role in the development of any country, state or region. The chance of economic growth of any state is as good as the pool of their skilled people. No plan of economic development can succeed without skilled people, as economic development depends a lot on the quality of resources they have.

When it comes to higher education shaping the economic development in any state, engineers play a key role. Since infrastructure development is a key thing for economic boost of the state; hence, engineers become vital as they play key role in the construction of roads, bridges, hospitals, schools, railway tracks and many other things.

Higher education also helps in shaping the future of people as skilled people not only get good employment opportunities they also create employment for other as well. Skill development program has helped people to become self-reliant and financially independent.

Roles of Higher Education Institutions: Role of educational institution has changed a lot over the years, unlike the earlier years where most colleges and universities focused on traditional courses, nowadays these higher education institutions offer different programs which not only help them develop certain skill sets but also these programs are designed according to the need of corporate sector, the aim is to groom youngsters in such a way that they become industry ready.

For years Indian educational system was considered as a system which could only produces clerks and it has changed a lot. Nowadays engineering and management has become the preferred choice of the youngsters. Higher education institutions also focusing in developing more entrepreneurs these days in this way they help state government to resolve the issue of unemployment. Skilled people create their own employment rather than someone who holds a degree and wait for someone else to provide him or herself employment.

The number of educational institutions is growing every year with private institutions and universities making their impact as well. With growing demand of quality engineers and management graduates number of institution and universities has started mushrooming. One needs to be very careful while selecting from engineering colleges.

An Entrepreneurial Development Framework for Institutions of Higher Education

Introduction

With increased globalization people have seen the need to increase wealth creation especially within the underdeveloped Third World. It has also become evident that neither the government nor the formal sector can supply the necessary job creation without a sustained effort and partnerships between all sectors of the economy. One means of creating work opportunities will be the development of entrepreneurial and innovative skills within the country. The creation of such job opportunities by encouraging entrepreneurial innovation has been well illustrated by Dana, Korot and Tovstiga (2005:12) in Silicon Valley, Israel, Singapore and the Netherlands. These authors report that in the narrow 35 mile by 10 mile corridor within Silicon Valley 6,500 technology enterprises are located. Singapore is home to almost 100,000 entrepreneurs and had a per capita GDP of US$42,948.00 during 2004 and an annual growth rate of 8.8% (Singapore Statistics, 2006).

In addition higher education has become a prime export commodity of total world services trade, amounting to a staggering 3% (Grundling & Steynberg, 2006:5). With the increased interest in entrepreneurial innovation as an economic driver there is a need to develop expertise within this area. Thus there is a need to develop entrepreneurial innovation knowledge within higher education institutions to ensure the maintenance of a competitive edge in an under developed market. Dana, et al. (2005:10) define knowledge as “the integration of information, ideas, experience, intuition, skills and lessons learned that creates added value for a firm”. In addition Dana et el. (2005) define innovation as “the process by which knowledge is transformed into new or significantly modified products and/or services that establish the firm’s competitive edge”. It can thus be seen that it is imperative that higher education in South Africa actively pursue a policy to encourage entrepreneurial innovation to ensure the creation of expertise, the development of new industries and the empowering of students to establish themselves within an entrepreneurial innovative culture. Higher education will be required to become a key player in domesticating knowledge and diffusing it into the economy in order to serve as engines for community development and social renewal (Grundling & Steynberg, 2006:6).

Problem statement

The research question under discussion is formulated as What minimum requirements should be set in an entrepreneurial and innovation framework in order to support entrepreneurial and innovation knowledge creation at institutions of higher education?

Purpose

This article attempts to develop a framework to encourage entrepreneurial thinking within a higher education environment, taking into account consideration policy and infrastructural requirements, knowledge creation fundamentals and institutional arrangements.

Policy intervention

Policy initiatives within higher education institutions are essential to establish guidance for entrepreneurs, funding agencies, industry, labour in general and for students and institutions of higher education in particular. From a higher education perspective government as well as institutional policy requirements will be discussed in brief.

·Government policies

If this is to be accomplished it will require government intervention to construct policies which should include the reduction of taxation in the form of capital gains tax rate, providing incentives for increased spending on research and development, encouraging active venture capital markets, an alteration of the ‘hiring and firing’ labour regulations, and encouraging the spending on new technology shares (Da Rin, Nicodano & Sembenelli, 2005:8).

·The higher education institution policies

The higher education institution must provide a working atmosphere in which entrepreneurship can thrive. Venkataraman (2003:154) proposes that it is not merely the injection of capital that enhances the development of entrepreneurship. Rather, it is the tangible infrastructural essentials such as capital markets, advanced telecommunications, sound legal and transportation systems. In addition, intangible components must be in place. These intangibles are access to novel ideas, informal forums, role models, region specific opportunities, access to large markets, safety nets and executive leadership. As policy within the institution is developed it must consider and include a planning process to accommodate these essentials.

Policy must also augment the entrepreneurial culture within the higher education institution as a new mindset of students must be established from one of expecting to be employed, to one of providing work opportunities for others. Technology licensing offices (TLOs) must be established at the higher education institutions. Stanford University sponsored research expenditures of US$391 million generated 25 TLO start ups in 1997 (Gregorio & Shane, 2003:209). An investment in patent rights by the higher education institutions will ensure future capital investments into the institution. Intellectual property (IP) policies should be framed so as to capture the wealth generated and to distribute it equitably between investors, partners, the university and the entrepreneur. Such rewards will generate future interest for both the investors and the entrepreneurs. Policies, procedures and network contacts to capture venture capital must be established.

Research and Development policies in entrepreneurship must be refined and focused. Currently, the focus of entrepreneurial research at Tshwane University of Technology in South Africa falls within the three niche areas of business clustering, business development and management of innovation. In each of these niche areas it will be necessary to develop Masters and Doctorate programmes in entrepreneurship and innovation. This in turn will mean a need for the improvement of the staff qualification profile within these areas. Along with the Masters and Doctorate programmes, accredited research outputs must be produced in entrepreneurship and innovation (Grundling & Steynberg, 2006:6). In addition to the Masters degrees in Entrepreneurship and the Masters degree in Comparative Local Development, a Masters degree in Cognitive Reasoning should be considered for the future. Such a course should include a thorough foundation in finance reasoning along with creative thinking and business planning.

Institutional structures to be established

The higher education institution will have to establish itself as a seamless knowledge node into which a variety of parties can contribute. Parties contributing to such a knowledge node might include industrial partners, specialists from industry, relevant government agencies, foreign investors, community forums, labour unions, academic specialists, research foundations, funding agencies, students and potential entrepreneurs. Such a node would provide the necessary contact between entrepreneurs, funding agencies, industry and labour. This will ensure exposure of research and innovative ideas to the relevant parties. It would also provide a relevant export/import platform for entrepreneurship within the country. In addition to this, regular colloquia should be held to allow potential entrepreneurs to expose their innovative ideas to the funding agencies. An information network connecting entrepreneurs to venture capitalists should be established within this knowledge node.

Such forums would allow industrial partners to present commercially-oriented research proposals to the higher education institution which funding agencies in turn would be willing to fund. Gregorio and Shane (2003:212) also emphasize the need for the higher education institution to demonstrate intellectual eminence. It is suggested that better quality researchers are more likely to exploit inventions than lesser qualified researchers. The intellectual eminence also makes it easier for researchers involved to start enterprises and to exploit their inventions (Gregorio & Shane, 2003:212). In addition, more eminent researchers provide a better knowledge base and this in turn will attract better qualified researchers and students. To ensure an intellectual eminence of their outputs, higher education institutions should select students carefully.

The higher education institution should also encourage the development of incubators, either close to the institution or close to the involved industry. This will certainly influence the start up capital expenditure. Gregorio and Shane (2003:213) suggest that such incubators would allow entrepreneurs to “ripen” technologies in close proximity to inventors and specialists.

The establishment of technology parks could be instituted at the institution. Dana, et al. (2005:12) report that the first technology parks were established in the Netherlands. It is hardly surprising that the Netherlands is one of the leading nations in promoting entrepreneurship, comparing favourably with Israel, Singapore and Silicone Valley. Perhaps such parks could be established in conjunction with the government and serve to expose students to the entrepreneurial culture.

Information networks connecting entrepreneurs to venture capitalists should be established within the higher education institution. Dushnitsky and Lenox (2004:618) reinforce this view. Gregorio and Shane (2003:214) also recommend that in exchange for taking an equity stake in TLO start-ups the institution should pay patenting, marketing or other up-front costs. These measures would encourage the formation of start-up enterprises. Furthermore, locating a higher education institutional foundation presence in physical proximity to the enterprises donating the capital might be an advantage (Gregorio & Shane, 2003:211).

Strategy to develop an entrepreneurial innovative culture

·Re-curriculation of syllabi within Entrepreneurship programmes

When training entrepreneurs two realms of knowledge should be recognized, “tacit” and “explicit”. “Explicit knowledge is easily identifiable, easy to articulate, capture and share. By contrast, tacit knowledge consists predominately of intuition, feelings, perceptions and beliefs, often difficult to express and therefore difficult to capture and transfer. Of the two, tacit knowledge carries the greater value in that it is the essence of innovation” (Dana et al., 2005:10). Perhaps an illustration given by Ali (2001:339) serves to illustrate the difference between the skills involved in producing an artifact. The engineer is a man of action developing mental skills but seldom having the opportunity to develop manual skills. The craftsman uses his hands more than his head, tools more than instruments and rarely uses science or mathematics. Both are geared towards inventing. The engineer is concerned with ideas and artifacts, while the craftsman is concerned with the making of artefacts. The craftsman has no ready made methods and the technique is devised during the process. The engineer draws mainly on explicit scientific skills while the craftsman draws on intuitive, tacit knowledge. This person is involved in the creation of something new, an innovative skill. The engineer’s plans and blueprints might well involve tactic knowledge.

In curriculum design one must recognize the difference between infrastructure supporting recursive skills which are typically routine in nature and infrastructure supporting the nurturing of innovation and making skills. These involve designing, innovating, communicating in groups, problem solving, face-to-face communication, idea generation and group-work (Ali, 2001:41). Brown and Duguid (1991) quoted by Ali (2001:342) make use of the expression “communities of practice” to describe the social context for developing work, learning and innovation. Lin, Li and Chen (2004:4) and Markman and Baron (2003:291) make use of the term “social capital” to describe the ability to establish networks of supporting relationships. This ability is seen as a means of mobilizing environmental resources to overcome obstacles and threats within the entrepreneurial process. Others have noted how important social capital is in the creation of new business ventures. Lin, et al. (2004:4) recognize the need for formal and informal funding relationships within the business environment. Such entrepreneurs are termed “business angels” for they gain access to required resources, such as capital investors, suitable distributors and talented employees from the external environment. Lin, et al. (2004:6) thus regard social capital as “entrepreneurial social infrastructure”. Harris, Forbes and Fletcher (2000:125-126) suggest that planning “dampens” the entrepreneurial spirit and that emergent problems tended to be better training triggers than planned approaches. It is proposed that the learning style for entrepreneurs should be one using facilitators, learning by doing, interactive classroom approaches, peer group work, problem solving, grasping opportunities and holistic approaches. It is recommended that inputs should be made by outside speakers and entrepreneurs (Harris, et al., 2000:126). Johnson (1987:31, in Harris et al., 2000) states that an entrepreneur’s planned approach to any problem should be problem awareness, problem diagnosis, the development of solutions and the selection of a solution. Once again the need for “an emergent” approach rather than a “planned approach” is emphasized. In addition, Harris, et al. (2000:133) emphasize the need for long standing close relationships in the development of the entrepreneur. Such partners can share vision, and serve as sounding boards for ideas and concerns. These relationships are vital for the development of innovative thinking. The findings suggest that entrepreneurs must be trained in a less structured way, which involve group work, class discussions, specialist input, a concentration of social skills, communicating and conflict management. The methodology must involve face to face contact and the developing of lasting relationships.

Another factor that should be written into the curriculum is the ability to deal with problems that arise and then to reschedule goals so as to accommodate the new situation. This is clearly illustrated by Ireland, Kuratko and Morris (2006:12) showing the presence of internal and external triggers of corporate entrepreneurship. External triggers that encourage entrepreneurship arise from developments in the external environment. These include diminishing opportunities, rapid changes in technology, labour shortages, aggressive moves by competitors, change in the market structure or regulatory threats. Internal triggers include employee rewards, directives from managers, tension between staff, problems with cost control, etc. Ireland, et al. (2006:12). Triggers for entrepreneurship may be summed up in the statement “necessity is the mother of invention”. This once again emphasis the need for trainers to concentrate on the entrepreneurial process rather than the content, with particular emphasis on change, the unexpected and resolving problems that emerge within any particular process.

Markman and Baron (2003:288) regard self-efficacy as an important success factor in developing entrepreneurs. Self-efficacy is defined as “the extent to which persons believe that they can organize effectively, execute actions to produce given attainments” (Bandura, 1997 quoted by Markman and Baron 2003:288). Successful entrepreneurs will have high self-efficacy and tend to believe that their actions will lead to a successful venture. It is also suggested that entrepreneurs need to recognize opportunities from possible businesses. In addition it is suggested that entrepreneurs need perseverance and need to be able to overcome adversity and uncertainty. The curriculum should thus contain training on self esteem, reliability, perseverance, overcoming setbacks, having a vision, setting goals and rescheduling if things go wrong.

Boussouara and Deakins (1999:204) suggest that a gradual approach into a high technology business can be an advantage in that it allows time to develop contacts, strategy, and networks as well as gives time to acquire funding and income. The latter authors emphasize the need to acquire market-based knowledge for a successful business (Boussouara & Deakins, 1999:205). It is thus recommended that networks and external business agents present relevant market research to the trainees. These findings should be brainstormed and shared in the larger group.

Conclusion

In this article an attempt has been made to develop a framework for the development of entrepreneurial thinking within a higher education environment. This framework needs to be supported by government policy initiatives and include taxation incentives for entrepreneurs, encouraging investment in research and development, incentives for industry for active venture capital and alterations to the labour law to accommodate small entrepreneurial industries. In addition techno-parks should be developed in conjunction with government to expose students to the entrepreneurial culture.

Research should be done within the business development niche area to investigate these policies and communicate the needs to government. If government officials are participating in the knowledge node it might provide the necessary exposure to government.

Policy initiatives from within the higher education institution should establish the knowledge node which should include academic specialists, research foundations, relevant government officials, industrial partners, specialists from industry, foreign investors, community forums, labour unions, funding agencies, students and potential entrepreneurs. Information networks connecting entrepreneurs to venture capitalists should be established within this knowledge node. Intellectual Property policies should be developed by the business development niche area to ensure that possible TLO start-ups within the higher education institution are protected and that patenting, marketing or other up-front costs are paid by the higher education institution or associated enterprises. The higher education institution could liaise with the Innovation Hub established in conjunction with the CSIR. A cooperation agreement could benefit both parties. Research should be carried out by the business clustering niche area to select the most appropriate combinations and networking within the knowledge node.

To ensure intellectual eminence the correct researchers, academics and industrialists should be chosen within the entrepreneurship cluster. Incubators and TLOs should be founded to “ripen’ developing technologies and to form small innovative industries. Research within this area could be done by the niche areas business development and management of innovation.

A funding agency for the entrepreneurship innovation (previously termed the institutional foundation) could be located close to the industry partners for fundraising. All three niche areas should be actively networked with industries on an ongoing basis, communicating needs and proposals.

A teaching strategy should be developed to foster tacit knowledge development. Group work, problem solving, idea generation, innovating, designing and face to face communication should be extensively used. Smaller classrooms need to be utilized allowing for group work. Curricula should include topics like self efficacy, perseverance and the need to overcome adversity. In addition market-based knowledge should be presented by specialists from the industry on an ongoing basis. Networking should be a normal part of the curriculum and will allow venture capitalists to be connected to the innovations developed within the knowledge node.

If South Africa and institutions of higher education do not see the need to develop entrepreneurship within all communities, people may be delegated to a life of poverty, with no opportunity to work or to develop South Africa’s rich natural resources for future generations.

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