study on the degree of diversification of university budget and the share of competitive funding: European university funding and financial autonomy. Authors: Laura de Dominicis, Susana Elena Pérez, Ana Fernández-Zubieta. Editor: European Commission.
Executive Summary
European higher education systems have experienced important changes over recent decades, leading to higher autonomy in most cases. The more autonomous a university is, then it should, in principle, be able to better compete in obtaining funds from different sources, such as competitive funds, contracts with private companies, and donations from the non-profit sector. This could make institutions less dependent on one single stream of income and more able to adapt to a changing environment.
The main objective of this report is to investigate the structure of the budget in a sample of research-active European universities and to analyse to what extent the level of financial autonomy effects the diversification of their budget and the amount of competitive funding they receive.
The study covers 200 research-active universities from 33 European Research Area (ERA) countries (27 Member States and Croatia, Iceland, Israel, Norway, Switzerland and Turkey) within the framework of the 'European Observatory of Research-Active Universities and National Public Research Funding Agencies' (UniObs). The criteria followed to select the list of universities in the sample are based on research performance and country representativeness.
The main findings of the study are as follows:

• Looking at the general budget, 70 % of the total university income comes from government allocations. Sources from private companies represent about 6%, around 3% comes from non-profit sectors and approximately 2% is from abroad. The remaining 19% belongs to a residual category 'Other'.
• Considering only public funding coming from government (national and regional) we observe that, on average, about 20 % is assigned on a competitive basis, with UK institutions and, in general, technological universities having the highest shares of competitive funds.
• We observe large within-country variability in the shares of government competitive funds, which could be attributed to the strategic behaviour of single institutions in acquiring funds or to their ability to compete successfully against other institutions. Examples of these are the University of Cambridge in the UK, the University of Karlsruhe in Germany, the University of Florence in Italy, and the universities of Leiden and Wageningen in the Netherlands.
• Most institutions with highly diversified budgets are located in the UK.
• University research budgets vary considerably between institutions. Research funds coming from regional authorities are considered important for institutions operating in countries with a more decentralised government structure such as Belgium, Germany or Spain.
• Institutions that declare to be completely autonomous are the ones that have the most diversified budget.
• The share of competitive-based government funds increases with increasing levels of institutional financial autonomy.
• National or institutional settings which do not allow universities to act in a fully financially autonomous way appear to be less likely to produce a real change.

Funding data show that universities, generally, have less than 10% of their budget coming from industry. Only in the case of institutions in France, Greece and Croatia, more than 10% of the total budget comes from the private sector.