University challenge

Japanese universities face unprecedented challenges in the years ahead, due to the shrinking number of young people - a result of the declining birth rate. In six years, there will be 1.2 million 18-year-olds, down from 1.4 million today. If, as has happened in recent years, 60 per cent take the university and college entrance exams, there will be a place for everyone. For universities, the arrival of the zen-nyu (all-can-enter) era means a fierce battle to attract students. This is in marked contrast to previous decades, when students had to go through 'exam hell' to gain entry.

Some universities with a poor reputation are already suffering a shortage of students and a few have been forced to close. This year, 28 per cent of private universities failed to reach their enrolment capacity. From next year, universities are required to publish a third-party assessment that includes details of academic performance, the quality of facilities and campus life, and the job-placement ratio of graduates.

'It is literally going to be a matter of survival,' said one administrator at Keio University, one of the top private universities in Tokyo.

University administrators are also seeking new ways to ensure financial backing. Tokyo's Hosei University, for example, is one of the first to have acquired a corporate rating. This was certainly a factor in helping it win five billion yen (HK$350 million) of low-interest loans from outside institutional investors to expand its campus facilities. Waseda University, meanwhile, has begun to release its financial results on a quarterly basis.

But it is the 89 national universities, which have been financed with taxpayers' money, that have come in for the biggest shock. These former 'imperial universities', state-run since 1886, are scheduled to become 'independent administrative corporations' in April 2004.

Under the new system, national budget allotments will be replaced by government grants, which will be subject to greater scrutiny. Administrators - and faculty members - will no longer be civil servants, assured a job for life. Uniform policies on tuition fees or staff salaries will disappear and university presidents will be expected to bring in corporate chief executive-style management skills.

These national universities will be forced to join the race not only for students but also for government grants, as well as funds from corporations and foundations. A number of prominent faculty members are eagerly proposing research projects to garner funding from corporations, local governments or trade organisations.

The question is: will all this deregulation be good for Japan? Opinions are divided. Some welcome free competition that gives more options to aspiring students. Others warn that the government will be free to exercise greater control by choosing which establishments should receive the bulk of funds. And some scholars do not want to see academia run by managers eager for short-term profits - and the glory that will accompany such fiscal success.