Universities must embrace cultural change

Universities are among the most successful institutions created. They do not however accept change lightly. But what role do universities need to play in the knowledge society of tomorrow to continue their success. This question grows more pressing for the western welfare states as their dominance in research and innovation is being challenged by globalization and the dynamics of the emerging economies.

The example of the US, which like no other nation, has been able to benefit from universities as drivers of growth, makes this abundantly clear. For a long time America has combined cutting-edge university research with strong science and engineering and entrepreneurial-oriented business schools. This has allowed the country to promote groundbreaking innovations.

Yet, in an era of major shifts in information flows and communication practices, there are increasing doubts about whether the concepts that allowed previous innovations remain sympathetic to the challenges and research priorities of the future.

The advance of biotechnology and social sciences absorbs almost half the research funds of US universities. Add the expansion of national security and military research, and universities have lost important drivers for the industrial use of new scientific insights. Instead, the ivory towers, which were once believed to have been abandoned, have re-emerged. Tackling the giant US budget deficit, will also require new structures and processes in research and teaching at universities.

In Europe, Germany may appear to be in better shape to innovate, with its broad mix of industrial and service-related leadership and its strong and flexible small and medium-sized businesses. However, this should not obscure obvious weaknesses. What has been achieved through a drive for excellence and high-tech initiatives, for which the government has provided competitive university funding and more autonomy in recent years, may be lost once more. Ideological campaigns declare either that universities are not and should not be subject to economic rules, or express fears about standardized expectations, which are said to lead to a commoditization of higher education.

Universities must deliver on accepted performance measures yet differentiate themselves sufficiently to attract scarce resources under competitive conditions.

Germany and the US face similar problems. So far the American and the German university system have learnt from each other in a time-delayed fashion. Now, due to mounting competitive and financial pressures, universities need to learn from each other simultaneously. University success is not about tearing down the ivory towers. Instead, it is about opening their windows as far as possible to other disciplines and to new markets.

While freedom of teaching and research must be defended, at the same time bridges for mutual transfers of knowledge and best practices have to be built.

We need Alexander von Humboldt’s ideas to be applied to the 21st century. The university of the future is only viable if best research and best teaching go hand in hand with best knowledge transfers. To achieve these goals, universities need reliable funding to generate innovative ideas through research. Interdisciplinary links, a close integration with the environment (both social and natural) as well as research relevance are also necessary.

All this calls for a major cultural change on both sides of the Atlantic. For new scientific knowledge to be used more rapidly in universities and businesses, the university approach to knowledge generation, transmission and application needs to be rethought. More risk capital, new business models and efficient intermediary organizations are needed in order to build a bridge over the valley of death, in which so many basic research contributions have perished before they could become innovations.

Such efforts would be worthwhile. It is not only about wealth and employment; it is also about the development opportunities of each individual and the defense of intellectual freedom.

Written by Michael Czinkota and Andreas Pinkwart and originally published in the Financial Times, August 2011.

Visiting Munich

I recently concluded a visit in Munich for research planning with my former student Valbona Zeneli, who is now leading professor of security studies at the Marshall Center in Garmisch. Congratulations on your success!

Here are a few papers we have written together:

Lunch with Dr. Theo Weigel

On the first of October, Professor Michael Czinkota hosted a private lunch with Dr. Theo Weigel at the McDonough School of Business, in collaboration with the Washington D.C. office of the Hanns-Seidel Foundation. Dr. Weigel served as the German Minister of Finance from 1989 to 1998, in the Cabinet of Chancellor Helmut Kohl. He was instrumental in the creation of the European monetary union, and the common currency. He was accompanied by a team of delegates that included his wife, Irene Epple-Weigel, the former alpine skier and Olympic medalist, and their son, Konstantin, a law student in Munich. Also part of the delegation was Richard Teltschik, the Director of the Hanns-Seidel Foundation in Washington. Georgetown University was represented also by Professors Thomas Cooke, Ricardo Ernst, Charles Skuba, David Walker, and Lee Pinkowitz. Also in attendance were three students – one from the McDonough School of Business, and two Masters candidates from the Walsh School of Foreign Service. Additional visitors came from the Hanns-Seidel Foundation and the German Embassy.

The lunch was inaugurated by Professor Czinkota, who gave a welcome address that included an introduction of Dr. Weigel’s many accomplishments. Following this, Dr. Weigel addressed the attendees of the lunch. He discussed his experiences with the creation and establishment of the Euro, relating both facts and anecdotes. One such story was of how the common currency came to be known as the “Euro,” rather than the other alternatives under consideration at the time, such as the Frank, Mark or ECU. He vehemently denied the common perception that the Euro was Germany’s reward of others for support of reunification, asserting that the two momentous events were planned and executed separately. Dr. Weigel talked about the fall of the Berlin Wall and the reunification of West and East Germany, at what was the eve of the 25th anniversary of the reunification. Yet it was not only German history that was discussed at the lunch, but also contemporary German politics and European current affairs. The issue of the refugee crisis in Europe was explored by Dr. Weigel as well as the other participants. Dr. Weigel believes that Germany can absorb the current volume of incoming refugees, approximately 800,000, for one year (possibly two). This will help the German economy, which is currently facing a demographic shortage of working-age and job-seeking citizens. Any absorption of refugees beyond this number, however, would end up harming the German economy.

For more than an hour, issues such as U.S.-Germany relations, collaborations and perceptions by the youth of the two countries, and Germany’s leadership role in the world were addressed in the question and answer session following Dr. Weigel’s speech.

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Berlin bans car service Uber

BY BETHAN JOHN for Reuters

Berlin has banned car service Uber, which allows users to summon a ride on their smartphone, for not offering drivers and vehicles licensed to carry passengers, or full insurance cover, the German capital said.

The ban takes immediate effect and Uber risks fines of up to 25,000 euros each time it violates the city’s Public Transport Act, Berlin authorities said in a statement.

Uber said on Thursday it would appeal against the decision, accusing Berlin of denying its people choice and mobility.

“As a new entrant we are bringing much-needed competition to a market that hasn’t changed in years. Competition is good for everyone and it raises the bar and ultimately it’s the consumer who wins,” said Fabien Nestmann, German General Manager at Uber.

Uber Technologies Inc is a hugely successful San Francisco-based company valued at $18.2 billion. It says that it is nothing more than a company which puts people in contact with each other – a marketplace, not a transportation service.

Drivers have to be over a certain age, have a valid driving license, and undergo background checks before they can pick up any passengers.

“Protecting passengers takes priority. As the supervisory and regulatory body, the agency for citizen’s affairs and public order cannot tolerate, that passengers… are entrusted to unlicensed drivers or vehicles, and where in the case of an accident they are not insured,” Berlin authorities said.

Uber has faced regulatory obstacles in some cities and lawsuits from taxi companies hoping to keep new competition out.

The service uses smartphones to connect local drivers with people in need of a ride in 80 North American cities, 24 in Europe, 7 in the Middle East, 4 in Africa and 27 in Asia.

Taxi drivers across Europe caused chaos in June by protesting against the Uber app.

Uber was ordered by a Paris court in early August to change its invoicing system if it wished to continue operating there.

Last month a court in the northern German city of Hamburg suspended a ban on Uber imposed by local regulators, while it considers a complaint by the ride service against the ban.

Ten Commandments Of The Honorable Merchant

In September of 2010 Berlin Museum of Economics and Business administration: scholars rummaged up a yellowed cardboard with the inscription “The Honorable Merchant” in a dusty chamber named “Department of Stored Concepts.” Inside, they detected 10 tablets, each inscribed with a single sentence in ancient handwriting.

  • One goes: “The honorable merchant respects the interests of the owners.”
  • Another one: “The honorable merchant supports the common welfare in the society.”
  • This one’s also nice: “The honorable merchant aims his actions to virtues that create long-term confidence.”

Certainly, anybody today will define current incidents on each of these old-fashioned Words-Of-Wisdom: Hostile takeoversHouse banking scandalHealth care fraud … you can find seemingly endless lists of considerable companies that are convicted of felony offenses, and they’re still in business – or to say it in better words: still busy in corporate crime. In today’s markets economy the antiquated doctrines above seem to be not very useful. The moldy cardboard is probably at the right place, slowly rotting in the department of stored concepts.

Are practices that are morally reprehensible the contemporary vision of our global management caste?

The term “The Honorable Merchant” originates from the 12th century, shaped in the German Hanseatic League and Italy. It was a guiding principle in those ages, but buried in oblivion for the last centuries. Currently it is on everyone’s lips, i.e. the Humboldt University in Berlin (the guys who found the cardboard) now seriously wants to reintroduce the “Virtues Of The Honorable Merchant” in today’s faculties for Management and Business economics — as they declare, not for moral reasons, but because of the stability of society!

My two cents: As an entrepreneur, one should always be conscious about the virtues of decent trade and correct action, anyway. Who is cheating has no customers. But I’m just a bod, the man on the street.

Author: Mathias Roth
Published: September 29, 2010 at 5:32 pm