Higher education across Europe is being reshaped by forces that are largely outside of institutions’ control – forces such as constrained public finances, intensifying regulation, geopolitical forces, and rapid technological change increasingly driven by artificial intelligence (AI). Yet I believe that the greatest risk facing universities today is not disruption itself, but passive adaptation – the quiet acceptance of policy instruments that have the potential to reshape an institution’s purpose without sufficient stakeholder debate and input.
At stake is whether Europe’s universities, and indeed universities across the globe, remain strategic leaders in realising the true purpose of higher education as articulated by Humboldt dating back to the late 18th Century – a synergistic approach which outlines the essential link between scientific research and teaching preparing future leaders (Marshall 2025, p 129) – or become delivery mechanisms for short-term economic and political priorities.
In the Global Governance Institute’s forthcoming roundtable, key European leaders will discuss four important challenges facing universities in Europe today through the lens of global leaders offering case studies of their nation’s approaches, and the subsequent impact.
Across Europe, higher education funding is increasingly considered through performance, efficiency, and measurable outcomes, echoing wider European economic concerns. While accountability is necessary, my concern is the growing reliance on outcomes-based funding which risks narrowing institutional missions.
Evidence from international experience is important to consider. Performance-based funding models, such as those implemented in Ontario, Canada1, have increased financial volatility without resolving structural underfunding. Institutions already under pressure from frozen tuition and declining public support face intensified workforce precarity and rising student/staff ratios. Crucially, such models answer the question “what can be measured?” rather than “what matters?”.
Similar tensions are visible within Europe and Scandinavia. For example, funding incentives that prioritise rapid degree completion can conflict directly with employability outcomes in high-demand sectors, as demonstrated by recent Finnish experience2. When students work alongside their studies, as they do in Finland – often in response to labour shortages aligned with national industrial and digital strategies – completion metrics have worsened even as societal impact improves. In these cases, government interventions are at odds with societal needs.
The policy dilemma is clear: are universities being funded to maximise throughput, or to maximise long-term public value? Strategic leadership in higher education requires challenging funding metrics that reward short-term aims over long-term ambition and longevity, and finding that sensitive sweet spot.
Higher education in Europe strongly promotes internationalisation through instruments such as the European Education Area, European Universities Initiative, and Erasmus+, while simultaneously urging institutions to diversify income and expand lifelong learning in line with the European Skills Agenda.
Yet diversification can easily slide into dependency. The pandemic exposed the fragility of international student markets. For example, institutions that treated digitalisation as a strategic capability – not a contingency plan – proved more resilient. At Queen Mary University of London3, coordinated leadership investment in digital infrastructure and staff capability enabled continuity, quality assurance, and income protection across global borders throughout the pandemic and beyond.
More structurally, European University Alliances such as CIVIS are experimenting with diversification using micro-credentials as flexible learning units embedded across degrees and lifelong learning pathways. This aligns closely with European Union ambition for stackable credentials, digital recognition and upskilling. However, micro-credentials also raise uncomfortable questions including:
Leadership matters here because micro-credentials are not merely technical innovations but can necessitate a reconfiguration of the basic operating model of higher education.
European and global higher education institutions are experiencing a steady expansion of regulatory oversight. Justification follows further to questions of public accountability, value for money, and social cohesion.
For example, in England, freedom of speech legislation has significantly increased compliance burdens and politicised governance. In Australia4, system-wide reform has required higher education leaders to navigate and balance deeply contested terrain involving universities, vocational education, and workforce planning.
Within Europe itself, similar dynamics to Australia are visible through quality assurance reform, research security debates, migration controls and alignment with labour-market planning. And, reforms in Croatia5 demonstrate how rapid legislative change can overwhelm institutional capacity, even as it expands formal academic autonomy.
Participatory governance can help mitigate conflict but also reveals the difficulty of reconciling decentralised autonomy with strategic coherence. The lesson is uncomfortable but unavoidable: autonomy can no longer be assumed – it must be actively negotiated and defended, now a key competence for executive strategic leaders.
European initiatives on digital transformation such as the AI Act and the Digital Education Action Plan, place universities at the centre of Europe’s technological future. Yet digitalisation without strategic intent and intelligent embedding risks compromising academic purpose.
The University of Helsinki’s6 post-pandemic renewal offers a counter-model. By embedding the UN Sustainable Development Goals across education, research, and operations, and aligning digitalisation with sustainability and global responsibility, the institution reframed technology as a mission enabler rather than a cost-saving device. Continuous monitoring and staff engagement ensured that the transformation remained values-driven.
Similarly, purposeful digital education at Queen Mary University of London, including through the creation of a new Centre for Excellence in AI in Education7, shows that a focus on inclusive, interdisciplinary and globally connected learning can bring about alignment of strategic intent, organisational capability, and cutting-edge pedagogies.
Across funding, regulation and technology, a consistent message emerges: higher education leadership is becoming inseparable from political judgement. Leaders are required not only to implement policy, but to interpret, negotiate, and, when necessary, resist policy instruments that undermine long-term institutional vision, missions and values.
For higher education across Europe, the question for senior strategic leaders is not, therefore, how to comply more efficiently, but how to engage more strategically and assertively. This premise will be explored more at the upcoming Global Governance Institute’s Roundtable discussion, which I am proud to be chairing, where the panel and participants will be invited to consider ‘How can European higher education leaders work productively with powerful EU and national policy instruments while safeguarding academic values, human wellbeing, and long-term societal impact?’.
The answer will shape not only the future of universities, but Europe’s capacity to govern knowledge, democracy and innovation in an increasingly unstable world.
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Photo Credits: alamy.com
Professor Stephanie Marshall is Senior Fellow in Global Education at the Global Governance Institute, and Vice-Principal for Education at Queen Mary University of London.
