Don’t Be Fooled By The Recent Claim That The Knox-Sollecito Case Imperils Perugia University

At first glance this headline looks terrible: Perugia: Less Money And Students; University Is at Risk Of Closure

Something has gleefully been made of this in some quarters to the effect that those meanies who prosecuted Knox and Sollecito have seriously dissuaded other students from enrolling and now put the whole university and town at risk.

Look into the cries of risk of closure more closely though, and a rather different and more innocuos explanation emerges.

Google this phrase “universit√†¬† a rischio chiusura” and for all of Italy you will get nearly three MILLION hits.  Three million claims is an awful lot of gloom and doom - and in fact Perugia only came very lately (and very mutedly) to the sobfest.

Universities all over Italy (map of just some above) have been forcefully claiming for several years that this or that faculty or department or program risks closure. This intensified when one year ago the Rome Parliament capped university staff costs.

Articulate academics are hardly famous for simply taking their medicine and keeping quiet about it. Especially as staff cutbacks are also happening in corporations and other institutions all over Italy (and all over Europe, for that matter).

And there are not a lot of empty seats in the lecture halls and seminar rooms in most Italian universities including Perugia.. Most programs still get more applications than there are places.

The number of foreign exchange students headed for Perugia may have dropped slightly, but with current uncertain economic conditions they have also dropped somewhat all over. Perugia continues to attract more and more Chinese students.

Budget wars all over the world are the same. In the best way they know how, the universities are putting in their bids for resources, and trying to show the world how they in particular in the bigger scheme of things really matter. Very healthy.

There are no signs the town or university of Perugia are arguing against the prosecution’s Cassation appeal going forward.

Posted by Peter Quennell on 01/25/12 at 03:04 PM in

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Many universities all over the world are sick today. Both the administration and the faculty must share the blame for this mess.

many universities cannot survive without government support; this is a fact. If we exclude majority of the US universities (considering the case in Europe and Asia, right now), only a small part of the money comes from the student fees and if the government backs out, they have no other option but to close. Student fees cannot be enhanced to the US levels and attracting more students (who will pay hefty fees) is really very difficult for the middle and low tier universities.

Faculty salary has gone up again and again but both the performance and the output have remained static, more or less. It has become a vicious cycle as more and more faculty concentrate on research and outside consultancy (to supplement their packet and pocket), the students are more frustrated than ever. As a result, the university reputation goes down, and enrolment suffers. At the same time the universities are unable to attract decent teachers who see a better career prospect in the industry.

The problems are not new but so far the universities managed to break even because of external research funding (from which the university gets a fixed percentage).  As the external funding drops, the universities are feeling the pinch and the government is refusing to take up the slack. Bad economy hurts everyone!

US universities are not directly comparable as they have a very good (means tough) administration and a fair carrot and stick policy. Many have a decent corpus to tide over small term problems and they hardly have any significant amount of dead wood. Top US universities have a diverse portfolio that also comes in handy when the economy sours. I am not quite sure but many US universities may also face rough weather if their non-profit status goes.

The solution is simple- improve administration, remove dead wood and slowly reduce subsidy on the higher education. Allow universities to diversify.

The fundamental question remains: who will bell the cat? If we do it ourselves, we shall come out of the mess much better and economically stronger.

genius, n.: Person clever enough to be born in the right place at the right time of the right sex and to follow up this advantage by saying all the right things to all the right people.

Posted by chami on 01/25/12 at 04:51 PM | #

Hi Chami. This is an incredibly interesting and high-stakes area. You speak from the inside and that looks to me like a masterful thumbnail analysis.

I want to add one trend that seems to matter. There is a tendency here in the US for men (but not women) to discount higher education and instead head right into the workforce.

Because SOME made it big as college dropouts (Bill Gates and Steve Jobs and Peter Thiel, the guy who started Paypal) therefore many think college education just a drag that will sap all creativity and nip their billionaire ambitions in the bud.

Take a look at this:

That has to be music to millions of Asian ears as they get on with eating our lunch.

Bill Gates and Steve Jobs before he died and Warren Buffet now all argue that there MUST be more trained engineers and scientists here, and that despite seeming high unemployment there are millions of high-tech jobs with nobody to fill them.

Guess what ad flashed on TV on the Bloomberg business channel early this morning?

A plea from the government of Germany for highly skilled to please come and work for them. Here is a report on Germany’s plight.

Posted by Peter Quennell on 01/25/12 at 05:25 PM | #

Italy essentially invented universities. Bologne’s is the oldest in the world and three others (Medina, Padua, and Naples) are in the oldest top ten.  My own take is that they are all pretty lost in their attempts to relate themselves to Italy’s growth comeback.

Economics is essentially about equilibriums in the face of scarcity and has problems operationalising its few recent insights into growth. It is mostly more of a nuisance than a help as it over-dominates ministries of finance, central banks, the IMF and the World Bank and leads to massive lobsidedness.

For fast growth, it is vital that three huge areas of expertise are done right. Economics is actually only a small part of one. Universities everywhere are behind the curve in all three: value, systems, and the change processes to put the new systems in place to induce new value surges. (Apple is right now an example of an induced value surge.)

Economic tools dont show this - you have to use a different kind of math (google EVA, MVA and VBM) - but almost all of Europe has been shedding value, and the same down through nations, cities, industries, and corporations. Their systems are mostly like albatrosses, and their effective change processes are almost non-existant.

Throwing money at such a slow-growth situation makes it WORSE.

It wrecks the value equations, takes the heat off of system upgrades and replacements, and makes those in change processes behave silly (cause of the US dotcom crash in the late 90s from which the US is still groping for a recovery.)

Italy and its universities (which could and should be real powerhouses of change) need to get on top of all three.

They need to figure out how to create more and more value surges of the kind its fashion and car industries have been so good at. Value surges can happen in what might seem very mundane areas (check the meteoric Japanese retailer Uniqlo) and not all flow from high-tech innovation.

They dont happen just by throwing in more money.

The common Euro currency system as it stands is the biggest albatross, preventing Italy as a whole from settling on its natural value in currency terms so it can sell at good prices. Best to either dump the Euro or push Europe to go way further in central making of fiscal and monetary and regional policy.

Watching European leaders grapple with Greece and Italy and Spain in seeming total ignorance of these key insights above is like watching monkeys driving a bus. Italy’s universities have an opportunity here that is HUGE. (Same with India’s, Chami!)

Posted by Peter Quennell on 01/26/12 at 02:07 PM | #


You have hit the nail right on the head with:

Throwing money at such a slow-growth situation makes it WORSE.

But Italian universities too have accumulated lots of dead wood it need to get rid of fast, real fast. It is easier said than done, Italians are politically very aware, perhaps the most in Europe.

It is best to diversify.

Between India and China we have a billion pair of unskilled hands.  And the job market is sick and we can only do menial service jobs for the US and Europe multinationals.  We (India and China) need to develop semi skilled and skilled labour force and also train people to think ...

More than Japan, you need to take a look at South Korea.  If the US economy suffers, Germany and Japan will also go down with them. Italy, Spain, Portugal, Greece (I have never been to Greece) would be on the recovery curve by then. What? I am just telling that US is not yet sick, but it could become sick soon. The worst is not yet over.

I personally do not think that euro is the problem- it is the problem with the bus driver. Sanity is needed urgently. Both France and Germany have their own agenda and they are acting like middle age tribals. Time for them to think globally.

Yes, Italian universities can lead on values and changes. Italians are orthodox somewhat but are intellectually flexible and can adjust to changing times much better than others.

But I admire US universities; I joke about them sometimes but they know business.

Dear Lord: Please make my words sweet and tender, for tomorrow I may have to eat them.

Posted by chami on 01/26/12 at 05:55 PM | #

I have experience some education at a French university as well as most of my education at US institutions.  The difference was striking.

While I or my parents paid a fortune for my US education, I definitely felt like I got my money’s worth.  This was at relatively high level universities which were hard to enter, needing high grades and test scores.  The professors were brilliant, motivated and skilled.  The campuses were beautifully maintained, and had great facilities.

Even the relatively low level colleges I see in the US have beautiful grounds and nice buildings.  I don’t know about the professors as I haven’t attended there.

While at the French university the professors complained about their low pay, seemed to just go through the motions, the campus was dead ugly, full of graffiti, and not maintained as there was no budget.  But the students paid nearly nothing to attend.

Low-income families in the US can get scholarships, often for vast amounts, for a child/good student to attend.  Those who are well-off just bite the bullet and pay the high cost in hopes that it will pay off with the young adult able to enter a higher paying profession or marry someone with a high paying profession.  It is the entry to the upper or upper middle class.

There are big differences in entry requirements and I can’t really compare the two systems perfectly.  But from what I understand, the European system depends more on a weeding out process to get rid of the less promising students after a couple of years, as otherwise it would not be possible to educate so many of them at such low tuition fees.

I don’t know which system is better or worse.  However I find it laughable sometimes when European students complain about their fees being raised a few hundred euros, when it can cost from $20,000 to $50,000 per YEAR to attend a better US university.  So that’s upwards of $200,000 in total for the better ones, unless you have some great scholarships.  Other less wealthy students will attend a lower cost college and work part-time and eventually many of them are not able to finish their degrees.  And this is just the start.  After the four years of undergraduate degree, you really need to get a masters degree to get the best jobs, so that is 1-3 more years of this kind of cost. 

No wonder so many students now in the US have huge student loans which they can not pay off.  Some medical students have over $200,000 in student loans when they start their paying jobs.  Many other students default on their loans.  I’m not sure what happens then.  I haven’t heard of any of them going to jail.

Anyway it is interesting to compare the systems. 

With automatic free health care in Europe, as well as generous pensions, good food and beautiful historical sights, is it any wonder that Amanda wants to return to Italy?  Things in the US are not that great these days with over 8% unemployment still, no health care benefits with many jobs, no guaranteed pension, home values which have dropped dramatically, so many people are struggling.

Posted by believing on 01/29/12 at 03:00 AM | #

I had my education practically free from the beginning but I have seen the cost of education in Europe (Sweden, Germany and Italy) and also in the US- I am talking of university education here. if you consider the return on investment, US does poorly. The classes in the US university are quite large and students are somewhat less motivated. They have come for a degree.

In Sweden and Germany the standard is not so bad- the state picks up the tab- and they are improving everyday.  The US standard of education is not improving and today I will put them “about the same.”

French had the same attitude for a very long time- laisse faire. I do not know how they manage to get anything done at all. But somehow they have hold on to the same level for a long time.

In terms of the work output, the french are the highest paid. And the US the lowest. But grumbling does not hurt!

A university faculty is 500 egotists with a common parking problem.

Posted by chami on 01/29/12 at 10:17 PM | #
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