inside South African research, business, politics
Global patterns ... some implications for South Africa
Colin Bundy | Council on Higher Education
A handful of institutions ... reinvented themselves as "entrepreneurial universities". They diversified their curricula, ran market-oriented courses, experimented with new delivery modes, and entered into profit-making public/private partnerships.... With highly managerial leadership styles, they shifted from milking the military-industrial-research complex of late apartheid years and filled their pails instead from incentive schemes promoting applied research in support of the post-apartheid economy. These were the Afrikaans-medium universities, with Pretoria as the most successful prototype, closely followed by the Free State, Potchefstroom and RAU.
SA research-intensive universities raise nearly half their funds from third-stream income
Higher Education Monitor 8 | Council on Higher Education
Higher education in South Africa is funded by a combination of state subsidies (first-stream income), student fees (second-stream income) and funding from other sources (third stream income). In common with higher education around the world, the sector's reliance on state subsidies has declined. …. As fee income has not kept up with inflation, universities have turned increasingly to third-stream income to fund their operations. …
Third-stream income includes income from contract or sponsored research, entrepreneurial or commercialization activities, philanthropic funding, provision of services, from investments and from borrowing. In South Africa the breakdown is around 34% from contracts, 21% from profit on investments, 18% from sales of services, 15% from interest and dividends and 9% from donations and gifts. Contract research funding comes from the state and from science councils, from international sources and from business or industry. In total contract income was worth about R25 billion [must be R2.5 billion] in 2007 and it is estimated that some 33% of this income, about R830 million, comes from the state [from state departments and science councils in the form of research grants and contracts]. Contract income has been increasing at around 10% to 15% per annum.
While institutions have been increasing their commercial activities, income from entrepreneurial and commercial sources has not increased significantly. There is little tradition in South Africa of private giving to universities and this area remains underdeveloped …. Third stream income now accounts for 33% of the income of public institutions, up from 28% in 2004 (CHERTL, 2009). .... As is to be expected, the ability to raise third-stream income varies considerably across the sector. Universities of technology raise the least third-stream income …. For the five top research institutions, on average 45% of their income is third-stream …. [the highest is] 54% at the University of the Witwatersrand. (pp. 65-70)
SA state funding is part of first-, second-, and third-stream funding
Higher Education Monitor 8 | Council on Higher Education
Given that there is limited scope for increasing student fees, universities have been pressured into developing third-stream income sources. Since 2004 there has been a dramatic 62% increase in third-stream income while both state subsidies and income from fees have increased by 27%. On the face of it, public sector institutions are becoming less dependent on state funds, although both second- and third-stream income include funds that originate from the state. Public higher education institutions receive public money in direct subsidies from the national Department of Education (first-stream income), through NSFAS in the form of student fees (second-stream income) and from state departments and science councils in the form of research grants and contracts (third-stream income).
