Advanced Tools tofinance the Development of Higher Education System

Abstract

Higher education institutions (HEEs) as market actors have to compete for access to financial resources, to deal with negative factors of external and internal environment, take measures to strengthen its own economic potential, improve management mechanism etc. Like elsewhere in the Ukrainian economy, higher education is affected by the financial crisis restricting access to higher education funding. Search for new tools for financing of higher education is, therefore, an important and relevant research problem in Ukraine.The objective of the study is to outline problems of higher education financing andsubstantiate new financing mechanisms for Ukrainian HEEs in the conditions offinancial and economic crisis.The study is based on a detailed review of statistical data on financing of higher educationin Ukraine from the consolidated budget, numbers of НЕЕ students in Ukraine by financing source, comparison of average annual expenses per student in Ukraine in selected OECD countries; a review off our major models of higher education financing used in developed countries, including OECD; a review of the institutional framework for higher education inUkraine.The recommendations to solve the problems of higher education financing are given:to increase the competitive level of university R&D by allocating additional budget fundsin university R&D projects to be selected on competitive basis in the framework of the state science & technology programs, public procurement for new technologies and grantfunding;to optimize the numbers of HEEs financed from the budget by external evaluation of theirR&D results, personnel and facilities; to introduce external science & technology expertreview of the projects with expected budgetary funding, to invite more foreign experts forthe review purposes; to simplify procedures ofpublic procurement on R&D, and procedures for obtaining R&D grants from international organizations; to use economic incentives for business investment in university R&D.