Eleventh General ConferenceOf the

International Association of Universities,

Durban, South Africa.August 2000.

University Governance and the "Stakeholder Society"

Ismail SerageldinVice-President,The World Bank

Introduction.

It is a rare privilege indeed to be with you and I thank you all and of course, Martin Meyerson,you who have been my teacher. I am honoured to be here. I learned much by your writings,by your example, and that is what teaching is all about. Ladies and Gentlemen, thediscussion today is about the "Stakeholders".

(Slide 2)

But I don’t think we can discuss "Stakeholders" without understanding something about the"Stakes", so my comments there I have broken them up with a starting from an unusualpremise, which is Understanding Sustainability.

Why I start from there, you will see in a moment. Next, I will say a few words about theChanging World, about the Challenges to Universities, and specifically the challenges todeveloping countries. I will then turn to some proposed solutions at the macro/sector leveland at the institution level. I will say something about Centres of Excellence, amongst which,the Library of Alexandria. Indeed. this is why I have resigned all my international posts to goand help launch the Library of Alexandria which is a Centre of Excellence about to be

created.

Ladies and Gentlemen, let me start, therefore, with our further ado. I am using slides to covera lot of material. Every time you see a blue slide like that, you know that I am getting closer tothe end.

(Slide 4)

From Needs to Opportunities.

Simply stated, after the Rio de Janiero Earth Summit Conference of 1992 when we were allconcerned about Sustainable Development, we said development has to be economicallysustainable, socially sustainable and ecologically sustainable. But we really had no way oflinking all of these together. One way which we tried to change that situation, was to changethe notion of sustainability itself from meeting needs towards providing opportunities for thefuture.

Revised Definitions.

Our revised interpretation was that sustainability should offer future generations manyopportunities, if not more than we have had ourselves.

Now, this re-definition gives us an operational way of measuring such opportunities. Onepointer is, fundamentally, to give future generations more capital purpose, taking into accountpopulation growth, than we have today. If my son has more capital than I, he has moreopportunities to generate an income and service stream. The question is, of course, what kindof capital?

(slide 7)

If we go back to the diagram we saw earlier on, we may look at each of the components inturn,

(slide 8)

Four Types of Capital.

First, we have Man-made Capital, which is the conventional product. As it is included inEconomic Sustainability, the protection of that capital becomes important.

(slide 9)

Then there is Natural Capital. Natural Capital are forests, water and land, and are includedunder Environmental Sustainability.

(slide 10)

Within the heading of Social Sustainability, we discovered two dimensions:

first, Human Capital, which is that which is embedded in the individual, health, education andso on.

(slide 11)

And, second, Social Capital ­ that is, the values that bring people together and the bondsthat make people stand together. In other words, taken together, there are: Man-madeCapital, - Rolling-Stock, Buildings, furniture, equipment. Natural Capital, Human Capital -embedded in the individual. Social Capital - that brings people together.These four types of Capital will, predictably, change over time. So it does make sense toextract a ton of irreplaceable copper from the ground in Zambia and invest in educating littlegirls. You do not have to keep everything for ever in each of these forms of Capital.

(slide 12)

Their composition and weighting will change over time.

Now, this change over time we were able to measure. At the World Bank, I was involved in

this exercise, and lo and behold, here are the results. This study was done twice in 1995 forthe whole world, and once again in 1997 at a global level.

(slide 13)

What is most striking is that the bulk of wealth does not come from produced assets. Thoseassets amount to about twenty per cent in total, no matter what you do. But, it is mostly in theHuman and Social dimensions where the bulk of wealth resides. Conventional economics,however, spends its time refining the measurements of that twenty per cent. It ignorescompletely the bulk of 80 per cent of the real wealth of nations comes from Human and Socialcapital. More recent efforts to redo this calculation in 1997 produced once again the sameresults. Even amongst the poorest countries, over sixty per cent of the Wealth of Nationscomes from Human and Social Capital.

The Central Role of the University.

Yet, universities are central, both in the domain of Human Capital, in terms of investment inhuman capital and to Social Capital particularly in terms of the socialization function and thevalues which the university upholds and transmits. But, I will submit, they are also central inpromoting the attitudes that sustain us in protecting the environment and also such attitudesas thrift and the ability to manage that enable us to have an impact on this issue. But, even inthe highly direct, rather the indirect impacts, universities have a very central role to play in thesocieties concerned, and today, far more than they are being given credit for.

A New Justification.

It is upon this premise, therefore, that I take the position that we should not be defensiveabout the role of universities nor how much are being spent on them. Indeed, we should bechallenging countries to do more. Now, in this age, often presented as the age ofinstantaneous communications, is perhaps best captured in the cartoon about the New Year.As the Old Century quits the globe and traditionally makes its greetings to the incoming theNew Century, it says "Can you e-mail it to me?" That certainly captures very well our presentstate as we move towards the future.

Towards the Knowledge-based Economy.

We are moving towards the integration of global markets and moving also towards the so-called ‘knowledge-based’ economy. What does that mean? It means that lands have movedcloser together. And, there is a trillion dollar market for everything. Capital is moving at ever

faster pace 24 hours a day, non-stop. But, the result has been, unfortunately, that the wealthyare turning on the poor. In fact, the development of this economy is leaving a lot of peoplebehind, even in the industrialized countries.

Inequities are rising. They are rising to such a degree that it is not just the wealth ofindividuals like Bill Gates, but it is the total wealth in the world as a whole that looks reallystunning. Inequities are rising within countries and between countries. The assets of theworld’s three richest people exceed the combined GDP of the poorest forty-eight countries.The assets of the world’s fifteen wealthiest individuals exceed the GDP of all of Sub-SaharanAfrica with 600 million people. These are the inequities we are talking about. Here is thechallenge - if the universities stand for anything - to turn this technology, which is bothenormously powerful and which, in fact facilitates access, lowers entry barriers to the benefitof the poor. Still, the impact of globalization we see before us has also brought many goodthings in its train. And, Mr Gates, that epitome of proprietory science, is far from being myhero. I think I would like to mention my hero. It is Tim Burnsely, who developed the WorldWide Web, gave it freely to humanity and, thus generated the true revolution of an opennature. The Internet, for this reason, poses a new challenge to any institution that deals withknowledge.

Opportunities and Challenges.

In 1999, 830 million web pages were available. By 2005, we expect 8 billion or more. Theyare accessible freely through the Internet for anybody who has a connection and by 2005probably the cost of connections will drop dramatically.

So, the challenge to universities, as we have heard, is important indeed and impressive, aswe move on in this changing world with its rising inequities, but its enormous opportunities.

The IAU has rightly pointed out the fundamental principles for which the university muststand. I do not think anybody could improve on that. You have also said that you have aresponsibility to promote through teaching and research the principles of freedom, justice,human dignity and solidarity. I hope that it will also include, when we talk about justice, suchissues as human rights, women’s rights, which are part of human rights, diversity and all sortsof better, understanding between peoples.

(slide 22)

You have talked also about through International Co-operation. I have also highlighted thatbecause I will call on you at the end of this presentation and challenge you on this aspect of

International Co-operation to improve the material and moral assistance to strengthen HigherEducation in general.

The Functions and Values of the University.

(slide 23)

Here, I will summarize some of these functions which deal with the search for truth, thefunctions of socialization, of value transmission and of certification that universities perform.Taking truth first, what does it mean? Agreed, it is a nice slogan. But, in reality, it requires thepromotion of fundamental values that I have referred to here as the values of science, butwhich could also be called the values of scholarship.

These, of course, begin with the word truth, because whilst a scientist can be forgiven formisinterpreting the data, he can never be forgiven for manipulating his logbooks or his data.The British psychometrician, Burt was struck posthumously from the records for having donejust that.

The second, of course, is honour. The second worst crime that a scientist/scholar can commitis plagiarism and that too is unacceptable and for which there are other activities done. But, inscience we also value creativity and imagination, and that requires openness and lookingbeyond what exists today and this, therefore, comes with that constructive subversion, whichis built into the very heart of scientific enterprise. We advance only by overthrowing thepresent status quo. We advance only by overthrowing prevailing theories. That Einsteinoverthrew Newton, does not diminish our respect for Newton. This is the most importantdifference between proving somebody wrong and building on others. Perhaps it was best saidwhen Newton was told "You have seen further than most people have ever seen." To whichhe replied, "If I have done so, it is because I have stood on the shoulders of giants". This kindof thinking is important. It means that we must not just respect seniority, but also be open tonew ideas. That involves us, therefore, with a tolerance of engagement. The craziest ideadeserves to be heard provided we can, therefore, arbitrate disputes. I am sure that whenEinstein first started speaking about curved space and time, it sounded very crazy indeed formost people - so alien did it seem to our common-sense experience.

There is a way of arbitrating disputes by evidence, by debate, by discussion,. This I venture tosay, are not only the values that are required to promote good science and good scientificresearch inside the university. There are societal values worth protecting. Can you imagine ifpoliticians were held to the same standards? Can you imagine if journalists were held to thesame standards? And, at any time, they were caught lying about the fact they would be

ostracized for ever. That would be quite a change.

So, socialization and values of the university constitute, not only to its own community, but tothe whole community, a central part of what it does. But, let us move to the certificationfunction, which seems to predominate in the discussion and expectations of everybody.

The Obsolescence of the Linear Model.

(slide 25)

I submit that the linear model of education at tertiary level is obsolete. It assumes 12 years ofschool, 4 years of university, then a degree or certification, which is a fundamental point in aperson’s life, 40 years of practice and retirement. That is not only impossible in today’s world.The market says differently. In the super dot net economy that we are now living through, wefind not only that it is not working, but even the best universities have been failing.

Unflattering Portraits.

Here is one of my favourite pictures which I usually show to businessmen. It is the MicroSoftCorporation 1978, governed not by graduates of elite universities, but by drop-outs. There isBill Gates in the corner. I asked the businessmen "Would you have invested in this bunch ofhippies?" Many of them, of course, would not. It is an important point. You have to be open toideas. But these people were not formed by the university system. They emerged despite theuniversity system. They are not the only ones. It is not a matter of money.

(slide 29)

This Graph is a projection from the skills gap between Europe’s demand and the supplywithin Europe, of network specialists. As you can, see demand far exceeds supply. The abilityof the universities to produce these kinds of graduates is falling further and further behind. Asa result, we are seeing governments now contracting with India, for example, to send workersoverseas from the elite schools that exist in India, like the Indian Institute of Technology.

Continuing Education.

So, continuing life-long education is required, but that means there are different functions,different institutions and different partners for each function.

(slide 28)

If it is a matter of producing people for the market place, that is a certain type of certificationfunction, which you can do and redo. It requires a different kind of institution than a university,that has the more august and noble goals that we set forth in terms of true socialization,values and certification,.

The University, I submit, has to be replaced by the idea of nodes, networks, of learning andexperience. In fact, the universities would lie at the very centre of these nodes of learning andexperience. They have the ability to pull together the best that is going on all over the worldand to disseminate it in a way where. Not everything is done within the university campus.Rather it is done everywhere. Universities, however, are the hub of that learning system.

Developing Countries.

In the developing countries, the universities share the same functions, but they have specialchallenges.

The most important of these is not to be dissociated or disconnected from the reality of theextreme poverty in which they are embedded and with which they have to deal. They alsohave five specific challenges: Demographic pressure. Institutional constraints. Knowledgecontent. The socializing function of universities. The technology of learning.

Demographic Pressure.

On demographic pressure, not only do we have about a billion youngsters in schools rightnow who will be pressing forward to higher education. We have another billion and a halfbehind them, all in developing countries. Already, we have many young adults looking forwork.

This picture shows a train going to Bombay carrying young people, many of them drop outsfrom High School. Some have even done a year or two of college, looking for work. This is areality, which we have to deal with. The sad thing is we know there is a gap between rich andpoor. But what perhaps has not been sufficiently appreciated is that it is growing.

(slide 32)

The growth in income as of 1980, between low income, middle income and high income, andhere they are in 1996,. As you can see, where the low income has moved from 4 to 5 percent, the high income has moved from 34 to 58 per cent.

So, the gaps are growing wider and wider. But, not for everybody.

(slide 34)

We find that in East Asia, countries have been able to overcome that difficulty. Countries thatwere together in the divide in 1965, like Korea, for example, have caught up with the highincome countries in terms of tertiary enrolment ratios. It is possible, with determined policy, tochange the situation.

(slide 35)

And many of the countries and groups in East Asia have enrolment ratios in technical fieldsthat exceed the OECD average. This is an important point to remind ourselves you are notlocked out simply because of being in a poor country. You can do more.

Institutional Constraints,

They certainly exist. Most people in developing countries assume that it is money. But it is notjust money. It is true there is chronic under-funding. There is also escalating demand forhigher education. There are poor incentives and few rewards for the teachers in theuniversities. There are many under-qualified faculty and the full potential is not realized.

(slide 37)

It is my contention that each of these constraints can be partially overcome by carefullyselecting partners with whom to address that constraint, including funding.

(slide 38)

Partners would include international agencies, national government, community groups,foundations and the private sector. The different alliances that have to be built bring us backonce again to the functions we are trying to address that will enable us to soar to the fullpotential and allow our students to do what they need to do.

Knowledge Content.

(slide 39)

Knowledge content, however, remains problematic. The enormous weakness of the schoolsystem on which the university builds has not been sufficiently mentioned in the last few days.I would like to mention it here.

We all know that the quality and the foundation you get, especially in science andmathematics at a young age, makes all the difference later on. Yet, these are the conditionsof schooling in many parts of Africa, where I have had the privilege of working for twelveyears. In many cases, we refer to students being in school, even though there is no furniture,no equipment, barely a pencil and paper to write with. The quality of education they receiveleaves much to be desired. A certain type of authoritarian rote-learning is being employed inmany cases. Hence, the question becomes: When these students graduate through thatsystem and arrive at university are they indeed ready for the kind of challenges that we aretalking about? If not, how do universities deal with this situation?

The next challenge, of course, in knowledge content is keeping knowledge up-to-date.

(slide 40)

The emphasis is on specialization, which is on-going, on the needs for liberal education inorder to uphold the values we are talking about; on the need to have responsive institutions;and to recognize that free information flow benefits all in societies that tend to be authoritarianand to stifle the free flow of information. We have witnessed a knowledge explosion. Thespeed and amount of information available today boggles the mind. It is unbelievable that atthe time of the Renaissance people imagined that one could really grasp all of knowledge andbe expected to read as much in philosophy, as in science, as in literature. Today it is, ofcourse, impossible.

The Problem of Proprietorial Science

But, more problematic, for us in the South, for us in the developing countries, is the turntowards propriety science. Increasingly, knowledge is not up there for free. It is patented. Andpatenting tends to favour the few.

Here is a big break in this figure. It simply shows that in 1999 the number of patents grantedto one company ­ IBM - exceeded all those granted to 134 countries. IBM alone hadmore patents than 134 countries from all Africa. This shows you the degree of concentrationcurrently taking place.

Take another situation, which I know very well - agricultural research. Here you find this is thequality of an agricultural research lab in the advanced world and in many of the bigcompanies, like Monsanto and DuPont and so on. Contrast this with a rice farmer in Asia2000 years ago and with a rice farmer in Asia today.

Now, if we do not, rise to what is happening with propriety science, I suggest, we are facingnot a world of equity, openness and collaboration, but a world of scientific apartheid wherethe "haves" and "have nots" would be replaced by the "knows" and the "know nots. He or shewho has access to universities and information has a role to play in this scenario.

(slide 42)

The universities have an essential role to play in developing countries to counter this trend byturning those countries into learning societies, able to absorb the best of the knowledge, toadapt it and to be producers of knowledge themselves.

The Socializing Function.

There is the socializing function of universities. They are not in the business of merelyproducing clones like ants to work into some sort of factory in drab and worthless lives. Theyare the custodians of past heritage. They are the transmitters of values. They are alsocommunities of scholars. When we talk so much about being business-like and aboutbusinesses, this is something we must never loose sight of.

(slide 45)

It is a worthwhile endeavour. Whether we do it with pomp and ceremony - as in the past - orwe do it differently, universities interact with the present, embrace the new, invent the future,within their campuses. They have to cope with the diversity of societies, with themulticulturalism, that is asserting itself in every country in the world, all of which poses realchallenges to the degree of tolerance that the university must express.

These roles, including gender roles, are changing dramatically in our times. These societiesare coping with difficulty with these changes. Yet, it is on the university campuses that thesechanges have, in effect to be forged. So what are the values? They promote the values ofscience, scholarship. They are forged by teacher example and student practice. They valuecommunity and human rights, citizenship and participation, as we were remined by KaderAsmal in his opening address. They cherish the value of traditional liberal education, which Iam re-emphazising today, at a time where everybody is talking about specialization and themarket place. They recognize global values and national values and they deal withmulticulturalism first as a single culture.

The Technology of Learning.

The technology of learning offers many opportunities.

(slide 47)

It has been said more than once. The emergence of the virtual university is onemanifestation. But, many faculty members are scared of the new technologies. They seethem almost like the shark-infested film ‘Jaws’ - about to destroy them,.... There are examplesof success.

BRAC training in Bangladesh is now giving training in computer science. It is an NGO,

(slide 49)

the African Virtual University. Many other examples exist.

Macro Solutions.

Let me talk briefly about macro solutions. At the sector level, what should countries in thedeveloping world do?

First, we have to recognize, as Elmandjra and others mentioned earlier, that today theknowledge sector contributes more and is growing faster than the business sector in theconventional definition of the term in most developed countries.

Now for the desolating part however. I have some complicated graphs, which I havesummarised into this simple number.

If you take the rich countries and compare them to the low income countries, the income percapita is 42 times greater whilst the research investment is 218 times. It is not proportional.The gap will to continue to grow, unless the poor income countries recognize that investmentin research and scholarship is a central part of that development.

(slide 53)

This, of course, is reflected in the power of human capital, researchers and engineers per10,000; 78 in Japan, 69 in the US, 40 in the EU, 6 in China and 0.5 in the non-Asiadeveloping countries.

(slide 54)

Next we come to who is connected in terms of telephone lines per thousand population in lowincome to high income countries.

(slide 55)

Even worse is the situation of computers per 10,000 population: 1 in low-income countries,1,800 in the OECD. Now, in this set of data, not surprisingly we find who is connected to theWeb.

(slide 56)

The developed world with fifteen per cent of the population, has 88% of those connected tothe Internet whilst the developing world with 85% of the population has but 12% of theconnections to the Internet.

The gaps are there and growing and while we say that potential for equalization is alsopresent, the potential is far from being realized without a very forceful programme ofaffirmative action being undertaken by North and South together.

(slide 57)

E-mails are a dramatic version of this growth. In the US, 260 million pieces of postal mail wentby day and 2.2 billion e-mails on the same day. E-mail volume is growing at ten per cent per

month. This is an impression of what is happening.

(slide 58)

On the sectoral level, the answer to that growing abyss is, I submit, to strengthen the lowerlevels of schooling and to support diversification, differentiation and specialization in thehigher education sector. A few large universities, possibly of a multiple campus format forgeneral liberal education and, in addition, many changing, specialized technical institutions.

(slide 59)

Institutional Level Solutions.

This brings us to what you do at the institutional levels the single university.

Here, I think, the issue turns around university governance, the protection of itsindependence, its ability to provide a sense of community and participation. Sense ofcommunity, whether it is done in a very formal and ritualistic way, or in a very informal way, isnot that important.

(slide 61)

What is important is that decision-making really involves others. Administrators and thefaculty must co-operate. They should bury the hatchet, as the old saying goes and recognizethat they are in the same boat and the boat does not sink because of one party only.Together, they sink or together they swim..

Students should have an important voice and external actors should be invited as partners,but not if this puts at risk the values of the university. Can we have a smooth transition fromthe current rigidities to a flexible future? Yes, if you have leadership at each university.Leadership is going to be required. It is not going to happen automatically. Technology doesnot make it happen.

Institutional flexibility

(slide 62)

Such flexibility would mean working with different "stakeholders" for different programs, usingthe new technologies and changing the cost structure of the university. In so doing, onealways ask who pays and who benefits? This is a very enlightening set of questions. Most ofthe time, you will find that subsidies are taken from the taxes of the poor and the benefits goto the rich. When exposed in such class language as I am using right now, people may finallydecide that they should do it differently.

Centres of Excellence.

(slide 63)

What should we do for Centres of Excellence? I believe that we should not be afraid ofattacks on elitism. We should ensure open access on merit. There should be no compromise

on quality. We ensure a basis for sustained funding. The key is going to be the quality ofgovernance in these Centres of Excellence, not money.

The Bibliotheca Alexandrina.

I will say a word about the Bibliotheca Alexandrina.

(slide 65 about here)

I have had the privilege of being asked to help re-launch it . As we all know, the old Library ofAlexandria was, for six centuries, the centre of world learning. The best in the world camethere: Euclid came to write his elements of Geometry. Eratosthenes, Librarian of Alexandria,not only calculated the circumference of the earth. He also designed the calendar that JuliusCaesar later adopted as the Julian calendar. Archimedes was there. All of these people wentthere. They gave us Museion - the name of Museum, because it was in the Temple of theMuses, who were present there, where scholars could meet in the courtyard, that the wordmuseum was first coined?

Complaints and protestations.

I have also recorded complaints. Since all of you are administrators of universities, I have toshare these two complaints with you. In my historical research, I found the first complaintagainst spending on research and scholarship goes back to 200 B.C.. Tymon of Athenswrites:

‘How can they spend so much money on useless things like bringing bookworms togetherto scribble in the courtyard of the Muses?’

And, for those of you who have posted people overseas as expatriate experts, the firstcomplaint is recorded in 125 B.C. A bourgeois from Alexandria writes to the Governor:

‘How can the King bring people for their supposed expertise and give them these hugesalaries on which they pay no taxes?’

(slide 66)

A Window on the World and for the World.

So over 2000 years ago, we were there! Today, we want to create a new Library ofAlexandria, which will be a window on Egypt for the world and the region, a window on theworld for Egypt and the region. It will deal with the challenge of the digital age. What does itmean to design a Library and a Research Centre in the age of the Internet? Looking back to1980, who could have predicted a billion pages on the Internet by 2000? We look forward to2020. What will we be doing with the multiplicity of tools that we must have accumulated interms of book and internet access etc in the intervening period?

(slide 67)

Above all, to be true to its spirit, the Library has to be a vital centre of intellectual debate, a

space of freedom, a true centre of excellence for dialogue between individuals and betweencivilizations. The building is there. It is beautiful. It was a result of a UNESCO sponsoredcompetition. It is under construction. There is a Library. There is a School of InformationScience and a huge Convention Centre, where you can see the Library, School of InformationScience, the Museum and other planetarium here at the Convention Centre. It is underconstruction. It is almost finished. It is rising majestically next to the sea. You are all invited tomake it a true Centre of world learning. Remember that second part of the IAU definition ofthe functions and the obligations of international university co-operation. Make it a trueinternational facility serving the university and scholars of the whole world. Promote thevalues of the university in this age of global knowledge. Who knows? Maybe this will be thesite of the next IAU General Conference! You are all invited to that too.

(slide 68)

People ask me, "How do you hope a Centre of Excellence will have an impact?" There aredifficulties in creating centres of excellence: limited funds. What difference will a small amountmake? ‘ To them I say, the difference between Man, - I chose Jacob Bronowski as aspecimen of Man - and a chimpanzee, is less than 2% of DNA. No more! If we can makecentres of excellence, those 2% in the educational system, in the firmament, - like that 2% ofDNA which transformed the world - we in the educational communities must dare to dream.We must be bold and find the centres of excellence. With that 2% , we can transform the DNAof higher education and education in societies themselves, and create a better world, wherewe reach the so far unattained, include the excluded, think of the forgotten, give hope to theforlorn and by our actions today, create better tomorrows.