Hong Kong's universities are under pressure to develop new streams of income as the government plans to make cuts to its higher education budget.
Investment in the sector has fallen by 10 per cent over the past five years and further cuts are expected as the government struggles to contain a massive budget deficit and a moribund economy.
Universities are being asked to focus on their academic strengths and look to the private sector to supplement funding.
Only £1.1 billion in grants - 5.8 per cent of total government expenditure - was budgeted for Hong Kong's eight universities in 2001-02, compared with 6.5 per cent in the previous year.
Arthur Li, secretary for education and manpower, said: "Changes to the funding methodology will be introduced so that institutions focus on their mission and their areas of strength, and compete for resources by performance."
Under the government's recommendations, universities would be expected to use most of their limited financial resources to promote their strongest academic areas. The Hong Kong Institute of Education, for example, would be expected to focus on its teacher training programmes, while Hong Kong University would be encouraged to concentrate on research.
By doing this, the government hopes to achieve the goal of creating world-class specialist universities within ten years while saving costs by reducing overlap among institutions.
"There will not be fierce competition for limited funds if there is role differentiation among institutions," said Alice Lam, chairwoman of the University Grants Committee.
However, not all academics welcome university specialisation. C. W. Chan, vice-chairman of the Federation of Hong Kong Higher Education Staff Associations, said: "It is an attempt to rank and differentiate universities by artificially dividing them into two categories - research institutions and teaching institutions. This will result in downgrading and the impediment of development in the latter."
Finding funds from the private sector is no simple matter, either. Hong Kong has never had much of a donation culture. That lack, coupled with the fact that many of the middle class and elite attended universities overseas, means that private donations from alumni (which are not tax deductible) are very low compared with institutions aboard.
Baptist University, for example, started formal alumni relations activities only in 1994. Hong Kong University established its alumni association in 1937, but the concept of alumni relations-building is still new to Hong Kong's universities. More than 300 senior university administrators and academics attended a one-day conference on institutional advancement organised by the UGC last month. Titled "From the community, for the community", the event featured seminars and workshops on how to build support with the local community and how to raise funds from the private sector.
If there still is not enough money, the government may even consider raising tuition fees, currently £3,300 a year for a bachelors degree.
"The tuition fee level might have been adequate before, but when the economic circumstances have changed, you cannot stick to the old ways," Dr Lam said.
It remains to be seen how the cultural shift in university funding will affect teachers and workers in Hong Kong's universities. Many professors have already suffered a loss of income under the government's civil service salary reductions, and the next few years are likely to present them with even more uncertainty.