University sector finances are broken; can social enterprise be the solution?

By Dr Eric Lybeck, Lecturer & Presidential Fellow at University of Manchester

The world of academia, particularly within research-intensive universities, is undergoing a seismic shift. Growing financial challenges threaten our longstanding academic traditions and structures, but amidst this turmoil, might social entrepreneurship provide a means of preserving what’s best in higher learning, while at the same time, breaking down the barriers between ‘town and gown’?

The looming financial crisis in top-tier research universities

Recently, the Financial Times highlighted an alarming trend: a majority of Russell Group research-intensive universities in the UK have reported an average financial shortfall of about £2,500 for each domestic undergraduate student in the ongoing academic year.

Even more concerning, financial analysts predict this deficit could double, reaching £5,000 by the year 2029-30. This looming financial challenge recalls the pronounced funding crisis of the mid-1990s, a crisis that controversially culminated in the introduction of university tuition fees.

The looming financial crisis at UK universities https://t.co/XPU9UlALkM

— Financial Times (@FT) July 18, 2023

However, the fiscal crisis for universities goes beyond tuition fees. With uncertainty around Horizon Europe funding coming into play, inflation and related pressures, the apprehensions concerning the management of research expenses have skyrocketed. Navigating the tight rope of funding becomes harder and harder for individuals and institutions.

Zooming in on the day-to-day operations of these institutions, the root of the problem becomes evident. The days of armchair philosophers is well and truly gone. Contemporary academics find themselves ensnared in a relentless pursuit of research funds, often to merely keep their roles intact. The fierce competition of these bidding processes, combined with an archaic accounting system, exacerbates the issue. Soaring overheads are gauged against the number of full-time researchers creating perverse incentives when these cost-benefit calculations are integrated into grant proposals.

More and more value projects get sidelined as non-viable within this environment. The highly bureaucratised system becomes inherently biased towards larger-scale projects, neglecting the smaller yet often transformative experiments and more humble projects. Sadly, many academics, once at the forefront of innovation, are retreating or leaving the profession simply to conduct their research properly.

Investing in Civic Engagement

In response to the overemphasis on ‘world leading’ research and a global student market, a ‘Civic University Commission’ was established to encourage more local engagement. This has since been supported by the government, research councils, and a ‘Civic University Network’ is based in Sheffield Hallam to document best practices.

However, while the terminology surrounding ‘civic engagement’ and ‘social responsibility’ is becoming a regular fixture in boardroom discussions, there remains a mismatch between intent and action. Initiatives hastily labelled as ‘civic’ often prove to be mere reiterations of previous efforts. Universities’ genuine commitment and strategic investment in robust civic engagement is still wanting.

This discrepancy means many community projects, despite their undeniable potential, are left in limbo, as academics, burdened with ever-increasing teaching and research responsibilities, find it difficult to engage – then, when funding is sought, the same competitive atmosphere pervades experiences, resulting in more failed bids than successful investments in community-led initiatives.

Such a lacklustre approach often leaves community partners disillusioned. They feel the brunt of unsuccessful funding bids, experience the sting of unmet promises, and grapple with the void left behind post-project completion even when initial projects are successful, but not sustained by follow on funding.

Social Entrepreneurship: A Way Forward?

With a bit of foresight and ambition, universities could solve these problems, through investment and engagement with social entrepreneurs. Imagine a more collaborative future where academic researchers partner seamlessly with community organisations, leading to projects that resonate with real-world impact.

Instead of transient associations, these alliances promise lasting change, with the flexibility to morph based on genuine community needs and not just the whims of fluctuating research grants.

However, for social entrepreneurship to gain a firm foothold in academia, several inherent challenges must be overcome:

• Lack of experience: Academia desperately requires pioneers in this realm. Initiating student and faculty groups for exploratory projects could serve as a starting point. With firsthand experience, these pioneers can refine strategies and catalyse widespread change.
• Time constraints: Social entrepreneurship projects, by their nature, demand patience. Universities need to recognise this and be willing to invest time in such transformative ventures.
• Funding: Even though the ultimate aim is to attain self-sustainability, initial capital is indispensable. Governments can bridge this gap by offering specialised grants aimed at fostering both university-led and community-driven social entrepreneurial initiatives.

Conclusion

The financial clouds gathering over research-intensive universities are undeniably dark. But within this challenging environment lies a promising chance for reinvention. By embracing social entrepreneurship and bolstering civic engagement, academia has the potential to evolve and adapt in this changing landscape.

Dr Eric Lybeck is a Presidential Fellow and Lecturer at University of Manchester. He is committed to making universities and places better through research, engagement and teaching. He contributes regularly to media in print, television, radio and online on a number of topics including issues around culture wars, higher education policy and politics/culture generally.