Private external funding of universities: Blind alley or new opening?

Of late, the problems of private external, or third-party funding of universities have been the subject of much debate, even at universities of economics and business. Given the constraints on government funding, politicians are looking increasingly to this source, with university leaders (rectors, deans, department heads) frequently being set targets for increasing income from it. Yet it is important to distinguish between different types of external funds. Moreover, their advantages and potential drawbacks must be weighed up. This paper seeks to do that, against the background of the author’s more than 13 years as Rector of Vienna University of Economics and Business (WU). Much of the paper thus draws rather less on theory than on that practical experience.