TOWARDS A NATIONAL INNOVATION STRATEGY FOR COMPETITIVENESSVOLUME 1Coverage and quality, in any case, are intimately related. Both, in turn, are related to the funding factor.Giv<strong>en</strong> that the school system has already reached over 99% coverage in primary education and 92% insecondary education 17 , the way to substantially improve schooling is to increase coverage of third leveleducation (technical, university and adult), an aspect in which the country, despite its rec<strong>en</strong>t advances, asindicated earlier, is not advancing suffici<strong>en</strong>tly quickly. Firstly, because there are young people, with th<strong>en</strong>ecessary skills, who cannot <strong>en</strong>ter higher education due to funding problems. Secondly, because to dramaticallyincrease third level <strong>en</strong>rolm<strong>en</strong>t the problems of quality that persist in our primary and secondary education mustbe tackled: increasing the number of young people <strong>en</strong>tering third level education will only be effective andeffici<strong>en</strong>t if they have the basic compet<strong>en</strong>ces to take full advantage of that opportunity, and in turn they willprovide the country with a real leap forward in productivity-<strong>en</strong>hancing human capital.This quality deficit has two lines of solution.The first dep<strong>en</strong>ds on a significant managem<strong>en</strong>t-level improvem<strong>en</strong>t that increases the effici<strong>en</strong>cy of the useof resources. This requires: i) an adequate level of governability for the system, through a correct organizationof the Governm<strong>en</strong>t, which is the mandator for most of the primary, secondary and third level educationinstitutions of the country ii) a clear relationship and the accountability of the educational ag<strong>en</strong>ts to theirmandator, both in the use of resources as well as in the results, and iii) a solution to the failures of informationthat, apart from the relationship of the mandator with the educational ag<strong>en</strong>t, allow for an effective control bythe users of the system (which are on occasion joint-mandators, wh<strong>en</strong> there is shared funding, or a singlemandator, as in the case of private non-subsidized education) 18 .The second corresponds to the need for greater resources. In fact, the OECD indicates that differ<strong>en</strong>ces inthe accumulated sp<strong>en</strong>ding per stud<strong>en</strong>t account for 54% of the variation in the average performance amongcountries in the PISA test. Let’s see how Chile fares comparatively concerning funding.17 According to the 2003 CASEN survey.18 All these aspects lie at the c<strong>en</strong>tre of the discussion in Chapter 3 and are applicable both to the problems of education and to othermarkets. Highlighting these three aspects does not imply ignoring, for example, that the cont<strong>en</strong>t provided by the educational systemneeds to be more pertin<strong>en</strong>t in its later stages to the reality of the world of work; or the urg<strong>en</strong>cy of improving teacher training systems.35
TOWARDS A NATIONAL INNOVATION STRATEGY FOR COMPETITIVENESSVOLUME 1A new <strong>en</strong>deavour in educationA look at the international figures for total sp<strong>en</strong>ding on education as a perc<strong>en</strong>tage of GDP leaves Chilestanding well (6.8% of GDP), ev<strong>en</strong> surpassing the average for the OECD (6.35%) [See Figure 7]. This appar<strong>en</strong>tlysuggests that the defici<strong>en</strong>cies of Chile in coverage and quality are due to problems of effici<strong>en</strong>cy andgovernability, and as such any reform in this area must begin by tackling those aspects.Nevertheless, ev<strong>en</strong> though there is a lot of truth in the above, which is why we started by emphasisingthe need to improve effici<strong>en</strong>cy, it is equally necessary to analyze this data in more detail before reachingdefinitive conclusions, because total sp<strong>en</strong>ding as a perc<strong>en</strong>tage of GDP does not any shed light on the problem.For example, it is necessary to consider the demographic differ<strong>en</strong>ces among the various countries and theirdistinct levels of developm<strong>en</strong>t. This requires a special emphasis on the performance of the country in terms ofsp<strong>en</strong>ding per stud<strong>en</strong>t.A look at the annual sp<strong>en</strong>ding per stud<strong>en</strong>t in Chile indicates that we fall far below the OECD average(US$2,900 versus US$7,550 per person) [See Figure 7], precisely because in Chile there are proportionately morepeople of school-going age than in the countries of comparison, which means that the resources have to beshared among a greater number of b<strong>en</strong>eficiaries, and because the Chilean GDP is smaller than that of manynations of the sample, which implies that with a smaller perc<strong>en</strong>tage of GDP targeted at education, the richercountries can effectively sp<strong>en</strong>d much more money per stud<strong>en</strong>t than Chile.However, obviously, comparing Chile to rich countries is an unfair comparison. Thus, it is logical tomeasure sp<strong>en</strong>ding per stud<strong>en</strong>t, controlling for per capita income. Unfortunately, in this measure, Chile also lagsbehind other countries such as Poland and Hungary, nations that fall into the same income level as Chile.Nevertheless, the analysis is still not complete, because an additional problem must be tak<strong>en</strong> intoaccount: the composition of education sp<strong>en</strong>ding according to the origin of resources: public or private.The evid<strong>en</strong>ce indicates that the contribution of the private sector to education in Chile, as a perc<strong>en</strong>tageof the total, is proportionately much higher than the average level in the countries measured by the OECD (infact the proportion is the highest at all levels) and, in addition, it is very conc<strong>en</strong>trated in the best-off sectors ofthe population. It is also evid<strong>en</strong>t that the sp<strong>en</strong>ding on education rises as family income rises; in fact, thesp<strong>en</strong>ding per stud<strong>en</strong>t of the richest 20% of the population is nearly three times higher than that of the poorest20% (Ch$1,703,132 versus $Ch590,764 per annum). On top of this, the sp<strong>en</strong>ding on the education of the 20%lowest-income stud<strong>en</strong>t population is 85% funded by the State; the equival<strong>en</strong>t perc<strong>en</strong>tage for the best-off 20% isonly 16%. [See Table 1] All of this implies, as revealed by the CASEN 2003 survey, that over 70% of Chilean36