In Brazil the For-Profit Giants Keep Growing: The World View, Inside Higher Education

See original post here.

In 2015, the Brazilian for-profit private sector in Higher Education registered a net income of R$ 49.3 billion (around US$ 14 billion). About 36% of this number comes from the 12 biggest educational groups. The relative size of these companies based on their share of total higher education enrolments are: Kroton (16.4%), Estácio (7.0%), Unip (6.0%), Laureate (4.3%), Uninove (2.4%), Ser Educacional (1.8%), Cruzeiro do Sul (1.3%), Anima (1.2%), Unicesumar (0.9%), Ilumno (0.8%), DeVry (0.7%), and Grupo Tiradentes (0.7%).

Several of these giant for-profit companies are moving towards mergers and consolidation as government cutbacks threaten a key source of financing for their students, which has depressed their stock value. Recently, two of these companies made competing offers to merge with Estácio Participações SA. The country´s biggest education operator, Kroton Eucacional SA, announced its interest in acquiring Estácio for about R$ 3.5 billion (around US$ 1 billion) in stock. Two days later, Ser Educacional SA sent a competing non-binding proposal that would result in the largest education group offering traditional classroom-based, private higher education in Brazil.

Kroton, currently enrolls around 1 million students, compared to Estácio’s 590 thousand students and Ser Educacional’s 150 thousand students. Kroton has operations operating in the South, Southeast, and Center-West of the country, while Estácio has campuses in states throughout the northeast, the far north, and has a particularly strong presence in the Southeast. Ser is currently the largest player in the Northeast region.

After Estácio announced that it had created a committee to evaluate the offers, both companies raised their proposals. Finally, on July 9th, 2016, the administration board of Estácio announced that they decided for the offer made by Kroton, and the shareholders´ meeting should occur soon to approve the merger.

Meanwhile, the possibility of additional mergers has attracted the attention of the House of Representatives in Brasilia, that had already planned a public hearing to discuss the issue. The new education giants would unbalance the higher education sector, creating not only a company significantly larger than any of the competitors, but also would concentrate the majority of government student loans in the private sector. Furthermore, the merger must be approved by the Economic Defense Administrative Council, (CADE), the Brazilian regulatory agency that evaluated the merger between Anhanguera and Kroton in 2013. CADE approved the merger with some pre-conditions, including the stipulation that Kroton sell off it’s interests in Uniasselvi, its on-line operations that had been purchased for R$ 510 million by Kroton in 2012. In Februrary 2015 Kroton sold Uniasselvi for R$ 1.1 billion to Carlyle and Vinci Partners, that assumed control of that on-line education endeavor as of March 1st, 2016. In fact, if approved, the new company Kroton/Estácio would have 5 out of each 10 students of the 10 bigger companies of the private sector.

Brazil is undergoing a period of deep economic crisis and one of the consequences has been a strong reduction in the availability of students loans provided by the Student Financing Fund (Fundo de Financiamento Estudantil or FIES) program that is subsidized by the federal government. Several for-profit players, including Estácio, experienced a significant financial hit as a result this reduction in student financing, leading to a willingness on the part of management to merge with a competitor and opening an attractive opportunity to the other for-profit companies. The mergers are reshaping the private higher education sector in Brazil

The mergers and growing influence of the for-profit education sector fuels the ongoing concern over the quality provided by these giants. For-profit logic often privileges operational and management issues to the detriment of quality. Indeed, it is extremely difficult to keep growing at such a pace and maintain an acceptable level of quality—worse still as incentives to demonstrate quality have diminished given the current scenario of reduced competition. It is worth emphasizing that most of the students in this sector are enrolled in low-cost careers, where the profit objective would favor larger classrooms, high turnover of underpaid faculty, and reduced academic expectations and standards to avoid drop-outs (and the subsequent loss of revenue). This trend is clearly unsustainable in the medium and long terms, not for the companies themselves, but for the higher education sector, and consequently, to the country as a whole.

Nanomagnetism: Seminar at the Waterloo Institute of Nanotechnology

In May 2016 I presented a seminar at the Waterloo Institute of Nanotechnology (WIN). The whole seminar can be seen HERE.


The challenge of building a research university

The challenge of building a research university; Marcelo Knobel and Renato HL Pedrosa, University World News, Issue No:411.

Read full article HERE.

The University of Campinas, or Unicamp, is a state-funded, comprehensive university. When it was founded 50 years ago, it was the second such university to be established in the state of São Paulo, the most populous and developed region of the Brazilian federation. It has distinguished itself in all academic areas, both in Brazil and internationally.

Ranked 42 in the 100 under 50 rankings of the Times Higher Education World University Rankings, today about 98% of the 1,900 faculty members at Unicamp have a PhD degree and 90% work full time.

In the federal assessment system, its graduate programmes have earned the highest average score of all Brazilian universities and grant around 800 PhDs and 1,200 masters degrees per year.

The university’s researchers have contributed to 7% of the Brazilian-authored papers published in indexed journals – with 2,714 publications in 2014, according to InCites/Thomson Reuters – and it leads all the other comprehensive universities in Brazil in per faculty scientific productivity and per publication citations.

One third of its published papers have international co-authors. Furthermore, Unicamp is among the leaders in Brazil in terms of patent registration – even including industry.

How did it arrive at where it is today so fast? Its accelerated trajectory started with a transformative leader, Zeferino Vaz, who created solid foundations for sustainable growth that have been strongly supported by Unicamp’s ability to attract the best talent.

São Paulo established its public higher education system in 1934, when the University of São Paulo, or USP, became the first bona-fide university in Brazil, more than 400 years after the Portuguese first colonised the country and more than a century after Brazil had become an independent nation.

Even after the establishment of USP, which was modelled on a mix of German and French features (with basic sciences given a high profile, while PhDs followed the French Doctorat d’État system), another generation went by before, in the 1960s, the idea of a modern doctorate system and departmental structure started to be considered in the budding federal system. This was based on institutions that had been developing since the beginning of the 20th century.

A transformative leader

In the early 1960s, Zeferino Vaz, a USP graduate and medical doctor and researcher with an interest in institutional development, was able to convince the state leadership of the need for a new institution in São Paulo with a clear mission to become a modern research university.

He was one of the few leaders in Brazilian higher education at the time to have a clear view of what a research university might look like. He knew that without a highly qualified faculty, technical staff and student body there was no way of building a good research institution.

The main campus of the university was founded in 1966 in the city of Campinas, 100 kilometres northeast of the state capital, on a former sugar cane farm. Vaz was able to establish a good dialogue with the military regime and, simultaneously, to protect the basic academic freedoms of the budding university community.

During his tenure, which ran from 1966 to 1978 and was characterised by strong leadership but also a very high level of centralisation, the university attracted leading intellectual and scientific individuals from Brazil and other countries. Some had fled harsher political conditions in places like Chile and Argentina. In doing so, he established the foundations for what would become some of the best academic departments in Brazil.

By 1978, Unicamp was already a modern comprehensive university with an emphasis on the basic sciences and technology, but with very good humanities and social sciences departments as well. It was able to compete in most areas for the status of best Brazilian university.

Soon after Vaz left office, Unicamp went through a serious crisis, triggered by the intervention of the state governor who wanted to control the selection of the next rector. At this point Brazil was still under military rule.

Over the next 10 years the university went through a transition from its previous over-centralised command and control system to a new, more inclusive and process-oriented system, which culminated in the implementation of a stable governance system across the university.

At the end of that decade, in 1989, the São Paulo administration granted state universities full administrative autonomy, which further enhanced their ability to keep advancing academic excellence. Today, the three state universities in São Paulo lead the country’s higher education system in terms of research and PhD education.

Disruptive initiative

The legacy of these initial ideas persists to this day. Recruitment to the university is always carried out on a public basis and the prestige of the university makes this process extremely selective, enabling Unicamp to hire the best faculty and staff. A similar phenomenon occurs for both graduate and undergraduate levels. For example, the last entrance exam run by the university had 77,760 candidates for 3,320 places on its undergraduate programmes.

Unicamp and the surrounding Campinas Metropolitan Area form an important high-tech hub in Brazil. Here one can see outcomes that cannot be found elsewhere in the Latin American context. For example, in the last 20 years, around 290 companies have been founded by former students, staff or faculty members from Unicamp, creating more than 19,000 jobs and around US$1 billion in revenue.

Of course, there are many challenges facing Unicamp if it wants to maintain its current position or climb higher up the very competitive international higher education ladder. In particular, Unicamp’s governance system, including how faculty are hired, its wage policies and the salaries it pays may hinder its ability to climb much further up the global rankings.

Furthermore, Brazil’s innovation infrastructure is relatively fragile, leading to modest results in terms of partnerships and cooperative research with companies. Many countries and universities are developing deep reforms to address these issues. How their leadership will respond to such challenges will determine whether Unicamp will move forward and at what speed.

Indeed, an emerging economy such as Brazil’s needs more disruptive initiatives like Unicamp, which is now 50 years old. The recent expansion of the public higher education system is being compromised by a lack of financial resources and was built following the same governance system and salary structure as that used in the general public administration system. Many see this as an obstacle to further progress of public universities.

A radical way forward

There is a movement campaigning for the modernisation and diversification of the higher education sector. Among the options, there is a rather new legal entity in Brazil known as Social Organisations, or Organização Social, which could be used to radically adapt university governance in a way that would make institutions better able to achieve these goals.

The formula for this is quite simple and straightforward. It involves a contract, signed between the government entity and the corresponding social organisation, whereby the government entity is subject to the management and governance structure of the Organização Social.

The contract establishes objectives and goals to be reached within specific timeframes and can typically assign limits to how much of the budget can be allocated to internal functions such as administrative, human resources, internal investments and other areas.

It can also impose criteria regarding the amount of resources that are assigned to the different areas the entity is supposed to serve (or promote) as part of its mission, although those can be negotiated with a certain degree of flexibility with the government entity responsible for financial resources.

Within this framework, the state has a certain amount of discretion in setting out the scope and magnitude of its desired objectives and can suspend investment depending on performance or results. The contract of employment to which researchers, managers and staff in general are subject in an Organização Social follows a policy that confers much more flexibility regarding the recruitment or laying off of staff.

More flexible

Some research institutions, like the National Center for Research in Energy and Materials or CNPEM in Campinas, São Paulo, and the National Institute for Pure and Applied Mathematics or IMPA in Rio de Janeiro, already function under this kind of institutional arrangement and their performance has shown how the system could be an option for universities as well.

For example, IMPA, which has a very strong PhD programme, recently had one of its alumni and current researchers, Artur Ávila, awarded the Fields Medal, the highest scientific prize in mathematics. His position at IMPA has been guaranteed by a private endowment, something that is not yet available at public universities.

That is only one aspect where a change in institutional governance, including financing, could have a positive impact if public universities followed a different, more flexible institutional model.

Maybe these institutional changes will not follow exactly the model described above, owing to some peculiar aspects of Brazilian bylaws, but movements in this direction seem inevitable since they provide an effective way to give public universities the mechanisms they need to compete globally and to produce world-class knowledge.

Unicamp has come a long way since Zeferino Vaz first outlined his vision for a new type of research university. It has been transformative in the region. Broader changes in Brazil’s higher education infrastructure are now needed so that it can have a greater global impact.

High-stakes Entrance Examinations: A View from Brazil

Schwartzman, S. and M. Knobel (2016). “High-Stakes Entrance Examinations: a View From Brazil.” International Higher Education 85 (Spring, 2016): 19-20.

In Brazil, the growing dominance of the national exam for secondary education as a massive, unified entrance exam for higher education has several detrimental consequences. Besides effectively shaping the high school curriculum, with clear disadvantages for those who will not attend college, it restricts the diversity and regional characteristics of the higher education sector. Similar criticisms apply to other countries that use national entrance exams. Some suggestions for possible changes are given.

Innovation in the Curriculum (in Spanish)

Interview to Rhonda Broussard: One Good Question

One Good Question

This post is part of a series of interviews with international educators, policy makers, and leaders titled “One Good Question.”  These interviews provide answers to my One Good Question (outlined in About) and uncover new questions about education’s impact on the future.

Estimation of Peer Effects with Predicted Social Ties: Evidence from Two Universities in Brazil and Russia

Higher School of Economics Research Paper No. WP BRP 30/EDU/2015

Oleg Poldin
National Research University Higher School of Economics

Tania P. Simoes
Universidade Estadual de Campinas (UNICAMP)

Marcelo Knobel
Universidade Estadual de Campinas (UNICAMP)

Maria Yudkevich
National Research University Higher School of Economics (Moscow)


Social interactions with peers during learning have a significant impact on university students’ academic achievement. As social ties are voluntary, an empirical estimation of peer effects is exposed to a potential endogeneity problem. To overcome this issue, we propose to define the peer group of an individual as their predicted friends. The specific features of the learning environment in higher education institutions may affect dimensions along which friendship ties form. To test the presence of peer effects in different educational and cultural contexts, we use data on students studying in two universities located in two different countries, Brazil and Russia. We assume that friendship is affected by homophily in student attributes, such as having the same region of origin, the same gender, and sharing the same study group. In both institutions, we find positive externalities from having high-ability peers.

Boletim da SBPMat / People from our community: interview with the scientist Marcelo Knobel.

Sorry, this entry is only available in Português do Brasil.

Jornal da Unicamp: How Much is a Full Professor Worth?

Jornal da Unicamp No. 632, 2015
Full Article HERE>.

Agência FAPESP: NanoAdventure is awarded in the Mercosul prize of Science and Technology

Elton Alisson | Agência FAPESP – See the full news (in portuguese) HERE