Executive summary

Portugal aims to ensure that its higher education and public research system contributes to the growth of a more innovative and productive economy. Progress towards this goal, achieved through growing investment and research performance, was halted by the global recession. As a consequence of the 2011-14 Economic Adjustment Programme for Portugal, sharp reductions were made to public investments in knowledge and innovation. Private investment fell as well. With the resumption of sustained economic growth, Portugal has set its sights on further development of the nation’s higher education, research and innovation system as a catalyst for economic growth and social inclusion. Further public investment in higher education, research, and innovation can be most effectively used with attention to the following challenges:

Governance, strategy, and funding in the higher education, research, and innovation system

Portugal needs a comprehensive and coherent national strategy to guide public higher education, research, and innovation in the mid- to long-term

Portugal has a crowded and fragmented strategic policy framework that limits the effectiveness and efficiency of public investment in research and innovation activities, and does not assist in building critical mass in areas where the country can excel. Portugal should adopt an overarching national strategy that provides clear mid- to long- term guidance to public bodies that fund and steer higher education, research and innovation.

Improved co-ordination across government is needed to support the development of a comprehensive policy strategy and priorities

Horizontal co-ordination mechanisms within government are not sufficient to ensure that departments and policies for higher education are coherently linked to research and innovation policies, or that both are suitably linked to broader economic, social and regional development policies. Establishing a high-level task force at the inter-ministerial level could support high-level, strategic, cross-ministerial co-ordination, planning or decision-making. Such a body could also lead the development of an overarching and coherent national strategy for higher education, research, and innovation.

The future of State Laboratories within Portugal’s research system is unclear

The prominence of State Laboratories as research institutions has been reduced over the last 20 years. However, they continue to obtain a significant investment of public resources. The absence of an overall strategy and limited interministerial co-ordination hinder the State Laboratories’ work, limiting their engagement with important new scientific and social challenges, such as climate change, an ageing population, and food security. As part of its national knowledge strategy, Portugal should consider defining the future role of the State Laboratories, and identify how they can best contribute to these new challenges.

The resources allocated to higher education, research and innovation are not aligned to an overall strategy, or to policy goals guiding the work of government

The ambitious European convergence goals set by the government in 2018 – reaching 3% of R&D intensity by 2030 – will require that public R&D expenditures double, and that private R&D expenditures quadruple. Although expenditure on research and development has rebounded after the financial crisis of 2008, achieving these goals requires a rate of growth in spending that Portugal has not previously achieved, even prior to the financial crisis. Experience shows that R&D intensity targets must be credible and widely embraced if they are to be implemented by policymakers. Moreover, growth in spending needs to be complemented by reforms that support the capacity of firms to engage in knowledge-based innovation, and reforms in the governance of the public research sector. It is also important for Portugal to ensure sufficient stability in the levels and methods of public funding, while reducing the administrative burden for firms to obtain funding.

Funding allocation processes at agency level limit the implementation of national priorities

The Portuguese Foundation for Science and Technology (Fundação para a Ciência e a Tecnologia) (FCT) is the leading public funder of research at the institutional, project and individual researcher levels. It follows a bottom-up approach to research funding, without ex-ante prioritisation of research domains and disciplines. This results in the dispersion of research resources and limits the alignment of the higher education, research, and innovation system to national development goals. Addressing these issues will require a reform of the FCT, increasing its capacity to effectively balance national research priorities and the priorities of the nation’s scientific research communities.

The missions, profiles and use of resources of higher education institutions

The profiles and missions of Portugal’s public higher education institutions, viewed as a system, are not well aligned to national and regional needs

There is scope for improving Portugal’s higher education system to ensure that the nation has a diversified network of institutions, the missions of which are well-aligned to national and regional needs. Better balance can be achieved with a strategically guided process of review and approval of new educational programmes to ensure they are well-aligned to the mission of institutions in each sector, and to the institution’s own strategic profile. Further, the legal basis for polytechnic institutions could be revised to permit the carefully controlled award of doctoral degrees by polytechnics. This could be permitted in applied research fields where institutions have a clearly demonstrated capacity to provide doctoral training, and where there is a strong economic rationale for the offer of doctoral awards.

Higher education institutional autonomy and responsibility have expanded, but remain insufficient

Portuguese universities and polytechnics enjoy a moderate level of institutional autonomy in organising their internal management and structures. However, national legislation governing public sector employment, public procurement and financial management are burdensome, and limit the ability of institutions to plan and manage their operations efficiently and effectively. Foundation status for universities was expected to widen the scope of institutional autonomy; however, the take-up of foundation status has been limited, and its effects more restricted than anticipated. Full implementation of the foundation status for all well-managed public higher education institutions should be the aim of policymakers, and a series of reforms to public accounting and budgeting provisions should be adopted to expand flexibility in financial management and procurement for public higher education institutions.

Public spending is provided in a way that hampers sound financial management by higher education institutions

Multi-annual and performance-based funding of higher education institutions has been proposed or adopted in the past, but not successfully implemented. Institutions receive public funding for operations on an historical basis, and may be subject to mid-year budget reductions in budgets to balance public accounts. Portugal should aim to develop a higher education funding regime with multi-year commitments, and deliver balanced institutional funding. Its institutional funding scheme should predictably fund the core activities of institutions, reward institutions for performance in a way that is recognised to be fair, and provide incentives for the development of forward-looking institutional profiles. Portuguese authorities should aim for the development of a funding methodology that allocates approximately 80%-15%-5% of institutional resources across activity, outputs, and future profiles, respectively.

Funding and steering policies do not encourage institutional profiling and division of labour

The Portuguese government does not require nor encourage higher education institutions to develop profiles in line with their respective strengths and weaknesses, and to situate those within a clear national policy framework. This leads to a lack of specialisation, inefficient duplications, missed opportunities for collaboration and weak alignment of activities with national priorities. Dedicated institutional funding should be linked to institutional profiles, and should assist public higher education institutions in strengthening the professional and administrative capacities of needed establish strategic profiles. Further, public research funding should be delivered in a way that supports the capacity of institutional leaders to set and implement a co-ordinated research profile.

Higher education provision, access and support mechanisms

Differentiation and flexibility in modes of provision and pedagogical approaches remain limited, jeopardising Portugal’s attainment goals

Portugal has a binary system of higher education, and has endeavoured to create greater diversity in higher education offerings. However, flexible and innovative study programmes that are adapted to the needs of non-traditional students are not frequently offered. Further improving the diversity of the educational offer and provision will be particularly important to cater to a more diverse student population. The on-going reform of the quality assurance system, based upon institution-level review, could be an opportunity to encourage greater diversification and innovation in the development of new types of programme, instruction methods, curriculum and delivery modes.

Pathways from secondary to higher education limit further widening and social diversification of higher education access

The current entry regime for higher education is transparent and cost-efficient, but unnecessarily hampers wider access to higher education. The national competition for higher education entry is based upon the curriculum of scientific-humanistic upper secondary programme, rather than the upper secondary education professional education curriculum. Widening entry to higher education will require revising the higher education entrance examination system to ensure it is appropriately adapted to students from upper secondary professional education.

Financial and academic support for students needs improvement to achieve attainment goals

Portugal aims to raise higher education attainment by encouraging enrolment among young adults who completed upper secondary education and directly entered the labour market, or enrolled in higher education but left prior to completion. However, eligibility requirements for student support are not adapted to this population. Moreover, academic support and guidance services that can help student persist in their studies are not extensively developed by its higher education institutions. Improvement in both higher education entry and completion can be achieved through the re-design of student financial support policies, and support for academic and social support delivered by institutions.

Doctoral training

The funding and delivery of doctoral training is not well configured to prepare doctoral graduates for today’s research roles

Portugal has succeeded in greatly expanding its capacity to train doctoral candidates in the last two decades. However, FCT’s demand-driven allocation of PhD scholarships does not allow the prioritisation of fields based on institutions’ missions and areas of strength, and in line with national priorities. The considerable instability and unpredictability in the volume and the type of instruments used to allocate funding, compounded by decreasing success rates for applications, has also made it harder for institutions to plan post-graduate training in a strategic way. The concentration of public funding and decision-making responsibility in the FCT also contrasts with the current international patterns, where greater responsibility is typically granted to universities in selecting candidates and attributing scholarships. There is room to direct more public funding for PhDs to higher education institutions through reformed support for doctoral programmes.

More needs to be done to create quality employment opportunities for doctoral graduates in Portugal

PhD graduates in Portugal face a difficult situation, as the academic sector often offers precarious, grant-based post-doctoral positions and the private sector, populated largely by micro enterprises in low and medium-technology sectors, still has limited demand for highly-trained workers. Although recent initiatives aim to alleviate these problems, the significant ‘brain drain’ experienced by Portugal, in particular since the financial crisis might persist if the availability and attractiveness of career opportunities in Portugal in the academic and private sectors is not made a core element of future research and innovation policy initiatives. To create quality employment opportunities for doctoral graduates, Portugal should develop tailored selection and quality criteria for doctoral training programmes in the business or wider public sectors. There is scope for strengthening and expanding the practice of awarding ‘mixed’ and professional PhD scholarships, to allow doctoral candidates to gain practical experience abroad and in Portugal. To inform effective policy-making, it is important to improve data collection about the career paths of doctoral candidates and graduates, including those who move abroad.

Academic Careers

Problems of queuing and in-breeding in academic careers are extensive

The increasingly difficult access to academic careers in Portugal has resulted in an increase in the number of doctoral graduates moving through a succession of precarious post-doctoral positions. The recent initiative to offer formal employment contracts to post-doctoral fellows may perpetuate unrealistic expectations about the likelihood of obtaining a permanent academic post and could divert individuals from exploring job opportunities outside academia. It will be key to improve information and guidance to prospective academic staff and ensure that post-doctoral positions allow post-docs to gain skills and experience that can be exploited outside academia. Moreover, the high level of ‘in-breeding’ in the system, whereby students go on to work in the universities where they study, risks undermining academic excellence and innovation.

The structure of careers is marked by weak differentiation and limited performance-based rewards

The comparatively detailed national legal and regulatory frameworks that structure academic careers create rigidities in the system, in particular in relation to the way staff use their time and profile themselves. Portugal must ensure institutions and academic staff have flexibility to allocate staff time efficiently and to follow distinct career profiles. Moreover, policies should encourage institutions to implement transparent and merit-based procedures for staff performance review that are aligned to institutional mission, and support differentiation in pay and rewards.

Low career mobility and late retirement hinder innovation and diversity

The limited mobility of academic staff reduces the range of experience gained by individuals and the innovation and development benefits of diversity for institutions. Moreover, older staff often remain in post beyond pensionable retirement age, limiting opportunities for career progression for younger staff. Inbreeding and the comparatively static nature of academic careers in Portugal also contribute to the comparatively low level of internationalisation among academic staff in the country. To address this challenge, Portugal should promote near-term measures to increase inter-institutional mobility and timely retirement, while, in the long-term, adopting reforms that increase domestic and international mobility.

High-skilled employment, co-operation with HEIs and innovation in the business sector

There is a need to support low and mid-tech businesses to develop their internal innovation capacity

The innovation capacity and output of Portuguese businesses have remained at a low level in international comparison, partly due to the dominance of SMEs and the weight of traditional sectors in the economy. Although more could be done to promote engagement with industry among academic institutions and staff, at present, there are only a limited number of companies with sufficient ‘absorption capacity’ to collaborate effectively with academic partners. It is therefore important to support more low and mid-tech businesses that do not yet innovate significantly and serve mainly regional markets to develop their internal innovation capacity and exploit the opportunities offered by co-operation with the academic sector. This could be done through ‘regional innovation platforms’ that provide domestic SMEs easy access to resources such as information, expertise, and equipment that allow them to upgrade their innovation capabilities.

Mismatches between the supply and demand for qualified staff may be hampering innovation

Although Portugal has improved the level of qualification of its population over recent decades, some mismatches between graduate qualifications and industry needs persist. Specifically, there appears to be an over-emphasis on academically-oriented PhDs in comparison to more professionally-oriented PhDs. There is still room to upgrade polytechnics and regionally-profiled universities, supporting their capacity to engage in ‘practice-based knowledge-intensive institutions’ dedicated to local development.

Further support for intermediary organisations in low technology industry and service sectors is needed

The government has progressively created a diversified system of intermediary organisations to fulfil a wide range of business knowledge transfer and service needs, including those related to science-based, incremental and problem-solving innovation. However, most of these organisations operate with fragile business models without systematic public support. The institutional funding planned in the recently launched Interface Programme, if maintained over a period of several years and subject to regular evaluation, could have a significant effect on the upgrading of domestic firms’ innovation capacity.

The knowledge transfer infrastructure should be strengthened

Technology transfer offices and science and technology parks often have limited financial and human resources, which hinder their ability to support SMEs upgrade their innovation capacity and collaborate with academia. New approaches such as technology transfer alliances could help strengthen knowledge transfer institutions and reach critical mass and higher quality of services.

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