Online Extra: Q&A with Richard Descoings

How do countries keep a competititive edge in the global economy? Low interest rates are important. So is a lack of red tape. A swift and fair judicial system is also essential. But human capital -- making sure an economy has enough innovative, knowledgeable workers -- is probably the key ingredient. And that means good educational systems.

Europe -- whose colleges and universities once set the pace -- can unfortunately no longer keep up. University systems are largely controlled or bankrolled by governments, which in this age of fiscal austerity is a sure recipe for chronic underfunding. Although a few attempts to set up independent universities have been make, nothing in Continental Europe approaches America's independently endowed research behemoths like MIT, Stanford, and Harvard.

Richard Descoings, the director of Paris-based elite Institut d'Etudes Politiques de Paris -- better known as Sciences Po -- is leading a crusade to shake up the bureaucratized world of French higher education. From his offices at Sciences Po, he paused to talk recently with BusinessWeek European Editor John Rossant. Edited excerpts of their conversation follow:

Q: Why do you think European and French education have to be reformed?

A: Because the big question is whether we Europeans will be able to build a European system of higher education and research that can compete with those 20 or so centers of excellence in the U.S. We have a system which is still very statist. The problem is that French don't want competition. The trade unions, the bureaucrats, the student groups all think it's very good to have no competition.

This is a shame, because education is a sector where international competition is very strong. American universities attract a growing number of foreign students. They can choose the best, and they can pay for them. This is a key factor in spreading the influence of the U.S. in the world.

Q: But France now has very good independent management school, like INSEAD.

A: At the level of management education, I'd say that France is completely at sea. Young professionals now would go almost anywhere but France. INSEAD -- the problem is that it's not a university. It's in isolation. When you go get a Harvard MBA, you're part of Harvard.

Q: What's the most biggest factor holding things back, then?

A: Money. Look at the level of pay for researchers and professors, and the funds we devote to research. Then you understand why research is now a catastrophe in France. At the very end of his career, a tenured professor in France makes little more than 5,000 euros a month. And a young tenured professor earns about 3,000 euros.

This is a catastrophic differential compared to pay levels in other countries, especially in the U.S. Our best professors are now courted by the best universities outside France. And secondly a good professor, to make up for his small salary, has to find other work, so he spends less and less time within the university.

Then there are the working conditions. At the Sorbonne, professors mostly don't have their own offices. The very few who do don't have secretaries. The computer equipment is practically useless. Any professor of quality now, of course, has an international network. But in our country there isn't the money to pay for air travel.

France isn't Togo. But the gap with the U.S. and others is increasing. The main problem is that there is no way to improve the system when government doctrine refuses the idea of competition in a domain where you can only have competition.

Q: How can you get more competition?

A: One way is to increase tuition. At Sciences Po all our grads find jobs that are good and highly paid. Yet our tuition fees are 1,050 euros a year. In fact, 10 years ago, they were only about 200 euros a year. The real cost is around 15,000 euros a year. And the student union wants to lower fees now to 200 euros again.

In the name of equality there's a sort of hypocritical consensus that universities should be free. But in fact, "freeness" benefits the haves -- not the have-nots. It means universities don't have the means to buy books, and so in the end it's the poorer students who suffer.

Because of budget constraints, governments in Europe can no longer back universities in their development. So we have a mortal menace for the university system.

Q: How do you look at the prestigious Ecole Nationale d'Administration (ENA), the public administration school?

A: ENA was created in 1945 to train bureaucrats to help reconstruct France. Slowly the companies stepped in and took up graduates. But the courses at ENA didn't even change until early 1980s. Since then, we've had globalization, construction of Europe, liberalization of the economy. But it has all passed ENA by. Are they ready to confront the world as it is? Companies see they need [ENA graduates] less, so there's a big identity crisis for ENA.

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