Investing efficiently in education and training

The purpose of this communication is to provide a more efficient system of investment in education and training in Europe. It invites Member States to put in place partnerships and incentives for greater and sustained investment from enterprises and individuals.

ACT

Communication from the Commission of 10 January 2003 - Investing efficiently in education and training: an imperative for Europe [COM(2002) 779 final - Not published in the Official Journal].

SUMMARY

In order for education and training systems to play a key role in achieving the strategic goal set at the Lisbon European Council, i.e. to make the European Union (EU) the most competitive and dynamic knowledge-based economy in the world, Member States are called upon to invest sufficient resources and to ensure that these are targeted and managed in the most efficient way.

In a highly competitive and dynamic international context, the policy of investment in education and training must take account of the new requirements of the knowledge society. At present, the EU seems to be lagging behind the United States, as illustrated particularly by its inability to attract and keep talent in Europe. The productivity gap between the EU and the USA continues to get wider. Reversing this trend calls for greater investment not only in research and development and information and communication technologies (ICT), but also in the European education and training system as a whole.

Achieving a substantial increase in total investment in education

Europe seems to be suffering from under-investment in human resources. Although the EU Member States, like the USA, spend just over 5 % of their GDP on publicly funded education and training, there is still a clear deficit in private funding. While private sources have always been regarded as an addition to, rather than a substitute for, public funding in the European social model, an increase in private funding is necessary in view of the new challenges of globalisation.

There are major discrepancies between the EU and the USA in the level of private funding of education and training, and these are increasing. Private expenditure on educational institutions has been increased very little in the EU since 1995 (from approx. 0.55 % to approx. 0.66 % of GDP), while in Japan the figure is almost double (about 1.2 % of GDP) and in the USA it is almost three times higher (1.6 %).

This deficit is particularly evident in key areas for the knowledge economy, such as higher education, adult education and continuing vocational training. In total, the EU invests significantly less in higher education than the USA, which spends more than twice as much as the EU per student. 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 (R&D), where the figures are 1.9 % of GDP in the EU and 2.7 % in the USA. It is European universities which pay the price.

The other area where there is a clear need for more private investment is continuing vocational education and training and adult education, where are still great differences from one country to another. Only 40 % of European employees participate in continuing vocational training courses (23 % in small and medium-sized enterprises, SMEs) and only 62 % of all employers provide any type of training for their staff (56 % of SMEs).

Although, in the European social model, private funding from companies and individuals complement public funding, the current situation requires new targeted public investment and higher private contributions in addition to public funding. This poses a major challenge for several new Member States in view of their budgetary constraints and the already high proportion of public expenditure devoted to formal education.

Spending existing resources more efficiently in a European context

To ensure that funding is allocated as efficiently as possible, this Communication also calls on Member State to tackle areas of inefficient spending, such as high failure, dropout and graduate unemployment rates, excessive duration of studies and low attainment levels, and it proposes focusing on the training of education staff, new basic skills, lifelong learning, ICT, active citizenship and information.

As for ways of mobilising additional human and financial resources, the Communication highlights the importance of establishing a partnership approach involving companies and individuals. This should be done by managing existing resources more efficiently and decentralising the management of resources and programmes to regional level. This decentralisation, together with greater coordination between the national ministries, must of course take account of the European dimension of investment decisions.

In order to allow education and training to play a full role in the European Employment Strategy and the Lisbon strategy, this Communication calls upon Member States to:

• provide the level of public investment called for by the European social model;
• put in place partnerships and incentives for greater and sustained investment from enterprises and individuals;
• focus funding on the areas where it is most likely to produce results;
• undertake reforms concerning curricula, quality and recognition with a view to maximising their efficiency in the European context.

Background

In line with the detailed work programme on the objectives of education and training systems, which includes the objective of making the most efficient use of resources, this Communication looks at the issue of investment in education and training, paying attention in particular to the research, lifelong learning and employment dimensions.

RELATED ACTS

Communication from the Commission of 20 April 2005 - Mobilising the brainpower of Europe: enabling universities to make their full contribution to the Lisbon Strategy [COM(2005) 152 final - Not published in the Official Journal].

Communication from the Commission of the 5 February 2003 - The role of the universities in the Europe of knowledge [COM(2003) 58 final - Not published in the Official Journal].

Last updated: 11.05.2006